Understanding business purpose is fundamental to the long-term success and sustainability of a company. The business purpose is, beyond profit, a company’s raison d’être. It is why it was founded and what leadership hopes to accomplish over time.

A strong business purpose can be the basis for the development of a solid business culture, exert influence over all company decisions, and provide employees with a sense of belonging and a clear understanding of mission, goals and values. All these can lead to greater employee engagement and motivation and greater productivity and efficiency.

The business purpose is also important for attracting and retaining customers: when a company has a clear, inspirational purpose, it can generate an emotional connection with its customers. Customer loyalty has at its foundation shared values and beliefs with a company and a strong emotional connection with its brand.

Furthermore, the business purpose can help the company differentiate itself from its competition. With a distinct purpose it can stand out in the market, cultivate a loyal customer base, and create an inimitable competitive advantage.

The business purpose can also have a positive impact on society and the environment: when a company has a purpose that promotes social and environmental responsibility, it can foster that same disposition among employees and the wider community, leading to greater all-around satisfaction and a superior company reputation.

For the business purpose to be effective, it must be authentic and sustainable. A purpose is not merely an inspirational, feel-good phrase emblazoned on company letterhead, but an integral part of the business culture  that guides all company actions and decisions. Moreover, the purpose must be sustainable and oriented toward the long term, so that as the company achieves its objectives it ensures a lasting positive impact on society.

To develop a strong and authentic business purpose the company must involve all employees in its construction. This may include group brainstorming sessions and consultations with customers and the community. When all employees feel part of the purpose-building process, they are more likely to “get behind it,” buying into it as an essential part of their business culture.

In sum, the business purpose is fundamental to the success and sustainability of a company over the long term. It can help build a solid business culture, attract and retain loyal customers, differentiate the company from the competition, and have a positive impact on society and the environment. To be effective, the purpose must be authentic, sustainable, and involve all employees in its elaboration.