Article: Brand purpose: the buzzword that refuses to die

Brand purpose: the buzzword that refuses to die

By Kim Cramer, PhD & Alexander Koene | Founders of BR-ND People

In this article: Brand purpose is everywhere; on slides, on mugs, in annual reports. But beneath the marketing froth lies a fundamental question: what does a company actually exist for? This article dives into the tension between Friedman's shareholder value and Mayer's stakeholder thinking, dissects purpose washing through the Unilever saga, red-teams the most popular purpose claims, and shows how B Corp certification anchors purpose in law. Drawing on Schein, Kahneman, Piketty and the 23plusone method. Not a poster, but a compass.

Brand purpose: from pretty statement to living compass

Brand purpose is the fundamental answer to why an organisation exists, beyond making a profit. It's not about what you sell or how you do it, but about the unique contribution you make to people's lives and society at large. Defining your brand purpose gives an organisation its deepest source of direction, relevance and resilience.

Let's be honest. If you've attended even one management conference in the past decade, you've been drowning in purpose. Purpose on slides. Purpose on mugs. Purpose in the annual reports of companies that simultaneously route their tax payments through Ireland. The word has been repeated so often it's nearly lost its own meaning; a semantic satiation not unlike saying the word 'spoon' a hundred times in a row.

And yet. Yet defining a brand purpose isn't a fad you can wave away with a cynical hand gesture. Beneath the marketing froth lies a fundamental question that has occupied Western economics for decades: what does a company actually exist for?

That's not a question for a poster. That's a question that determines how we live together for the next fifty years.

What is brand purpose; really?

Simon Sinek popularised the concept with his Golden Circle and the now thoroughly clichéd line "People don't buy what you do, they buy why you do it" (Sinek, 2009). But Sinek wasn't first. The roots run deeper; to organisational psychologist Edgar Schein, who described in the 1980s how the deepest layer of organisational culture consists of unconscious assumptions about an organisation's reason for being (Schein, 1985). To Peter Drucker, who stated that "the purpose of business is to create a customer" (Drucker, 1954). And to philosophers like Charles Taylor, who described the human need for meaningful frameworks long before the business world turned it into a PowerPoint.

The distinction between purpose and related concepts:

• Purpose (why) ; your reason for being. What gap would exist in the world if your organisation disappeared tomorrow?
• Vision (where to) ; the ambitious future picture. What does the world look like when your purpose is fully realised?
• Mission (what) ; the operational mandate. What do you do every day to realise that vision?
• Values (how) ; the moral compass. What behaviour do we expect of each other?

These four form the strategic DNA of an organisation. Purpose drives vision, vision drives mission, mission is carried by values. Remove one and the structure wobbles.

The great debate: does a company exist to make profit or to solve problems?

The tension between shareholder value and stakeholder value is the central debate behind every purpose discussion. On one side stands Milton Friedman (profit maximisation as the sole responsibility), on the other Colin Mayer, professor at the University of Oxford and author of Prosperity (2018), who argues that companies exist to solve societal problems profitably.

Team Friedman: profit as the only responsibility

In 1970, economist Milton Friedman published his notorious essay in The New York Times: "The Social Responsibility of Business Is to Increase Its Profits". His argument was crystal clear: a business has precisely one responsibility, and that is maximising shareholder value. Full stop. Managers who pursue social goals with shareholders' money are, according to Friedman, practising a form of taxation without democratic mandate.

The assumption behind this thinking is elegant in its simplicity: when companies focus on efficiency and profit maximisation, they generate prosperity. That prosperity trickles down through taxes, philanthropy and consumer spending to the rest of society. The wealthy shareholder pays taxes, donates to good causes, and the invisible hand of the market sorts out the rest.

For decades, this was the dominant paradigm. It shaped MBA curricula, compensation structures and every CFO's reflex to choose the short-term course when in doubt.

Team Mayer: companies as problem solvers

Colin Mayer, professor at the Saïd Business School of the University of Oxford and author of Prosperity: Better Business Makes the Greater Good (2018) and Capitalism and Crises (2024), articulated the counterargument perhaps most sharply. He states: "The purpose of business is to produce profitable solutions to the problems of people and planet, and not to profit from producing problems for people or planet."

Mayer opens up the debate by showing that the limited liability corporation was historically never designed as a profit machine for shareholders. The first corporations; think of the Dutch East India Company, the British East India Company; received a charter from the state to achieve a specific societal goal. Profitability was the means, not the end. Somewhere along the way, we forgot that.

His argument isn't naive. Mayer acknowledges that profit is essential for continuity. But he inverts the hierarchy: profit is the fuel, not the destination. A company that enriches its shareholders by impoverishing society isn't a success story; it's a bill that someone else is paying.

The trickle-down illusion

The Friedman model rests on an assumption that has become less convincing over the past fifty years: that prosperity naturally trickles down. Economists such as Thomas Piketty (Capital in the Twenty-First Century, 2014) and Mariana Mazzucato (The Value of Everything, 2018) have shown that this doesn't happen automatically. The gap between rich and poor is growing. Ecological costs are being externalised. And the promise that the market self-corrects feels increasingly like the fairy tale it is.

That's not a political statement. It's data.

The Business Roundtable; 181 CEOs of America's largest companies, including Apple, Amazon and JPMorgan Chase; acknowledged this in 2019 by officially abandoning the shareholder primacy model. Their new Statement on the Purpose of a Corporation declares that companies must deliver value to all stakeholders: customers, employees, suppliers, communities and shareholders.

Whether that was more than a PR gesture, more on that later.

The uncomfortable truth: purpose washing

Purpose washing is one of the greatest risks for organisations that use purpose as a communication tool without anchoring it in policy and behaviour. The Unilever saga under and after Paul Polman illustrates how quickly a purpose-driven strategy can erode under shareholder pressure.

What is purpose washing?

Purpose washing is the phenomenon where an organisation claims a societal goal without backing it up with concrete policies, behaviours or investments. It's the difference between purpose as a guiding principle and purpose as a marketing tool. And it's everywhere.

A beautiful purpose on the website while you squeeze your suppliers. A sustainability report full of green graphs while your lobbyist in Washington fights climate legislation. An employer branding campaign about inclusion while your leadership team consists of the same five men who were there twenty years ago.

Purpose washing isn't just ethically problematic; it's also strategically stupid. Consumers and employees see right through it. Faster every year. And the damage extends to your employer brand; our article on how employer branding cuts recruitment costs by up to 50% shows how quickly inauthenticity erodes your ability to attract talent. Social media functions as a collective bullshit detector with a response time measured in minutes. And no, a ping-pong table in the lobby won't fix it. See also our earlier article Purpose is not just a branding trick and our analysis of greenwashing vs. impact branding.

The Unilever saga: an instructive tragedy in three acts

No case illustrates the tension between purpose and shareholder pressure better than Unilever.

Act 1: The Polman era (2009-2019). Paul Polman took the helm at Unilever and did something radical: he scrapped quarterly earnings guidance for shareholders and launched the Unilever Sustainable Living Plan. Entire supply chains had to become sustainable. Cradle to cradle became the mantra. And it worked; Unilever grew, the brand became stronger, and Polman became the figurehead of purpose-driven leadership. He proved you could serve shareholders and stakeholders simultaneously.

Act 2: The attack (2017). Kraft Heinz launched a hostile takeover bid of $143 billion for Unilever. The goal: cut costs, boost margins, distribute value to shareholders. Short-term thinking versus long-term thinking, personified in a single corporate battle. Polman managed to fend off the takeover, but the message was clear: financial markets had little patience with purpose unless it cashed out quickly.

Act 3: After Polman. After Polman's departure in 2019, the centre of gravity shifted. Under CEO Hein Schumacher (2023-2025), ESG targets were scaled back, deadlines extended and the focus shifted to growth and shareholder value. The pledge to halve food waste? Scrapped. Hiring more disabled staff? Scrapped. The sale of The Vegetarian Butcher and the spin-off of the ice cream division (Ben & Jerry's) fitted a strategy of streamlining, not impact. In February 2025, Schumacher himself was replaced by CFO Fernando Fernandez; the finance man.

Polman responded publicly: Unilever should be careful not to blame its underperformance on sustainability. (See also Paul Polman & Andrew Winston, Net Positive, 2021.)

The lesson? Surviving purpose is harder than launching it. The moment shareholder pressure increases, purpose is often the first casualty. That tells you something about how deeply that purpose was truly embedded.

The red team perspective: honest criticism of the purpose phenomenon

The four most important criticisms of brand purpose are: (1) purpose as self-deception for marketers (Mark Ritson), (2) weak scientific causality between purpose and financial success, (3) purpose as a smokescreen for unchanged business behaviour, and (4) the democratic deficit in formulating a purpose. A scientist who doesn't test their own convictions is just a marketer with a reading list. So let's put purpose under the microscope, honestly.

Criticism 1: purpose as self-deception

Professor Mark Ritson, one of the sharpest voices in the marketing world, has been warning for years that purpose has become a "comfort blanket" for marketers who'd rather save the world than sell their product. His point: not every brand needs a societal purpose. Some companies simply make really good screws. And that's fine.

The obsession with purpose can lead to what we might call 'purpose inflation': companies inflating their reason for being to cosmic proportions while their core activity is entirely earthly. A cleaning company claiming to 'make the world a more beautiful place' isn't inspiring; it's simply not credible.

Criticism 2: the measurability of fine words

The scientific evidence for purpose-driven success is less clear-cut than purpose evangelists claim. The widely cited Stengel 50 study, which claimed that purpose-driven brands outperformed the S&P 500 by 400%, is methodologically disputed. It selected brands retroactively based on success and then attributed that success to purpose; a classic case of survivorship bias.

Raj Sisodia's Firms of Endearment (2007) demonstrated stronger long-term performance, but here too the causality is hard to isolate. Do these companies perform better because of their purpose, or do they have the luxury of formulating a purpose because they're doing well?

Honesty demands we acknowledge: the direction of the data is consistent. Meaningful organisations structurally outperform. But the mechanism is more complex than a simple 'purpose = profit' story.

Criticism 3: purpose as smokescreen

The cynic in us (and that cynic deserves a seat at the table) sees how purpose sometimes functions as a smokescreen. While the communications team builds a beautiful narrative about societal impact, procurement carries on squeezing suppliers and the finance team maximises bonus structures. Purpose as corporate alibi.

This is precisely what Edgar Schein meant by the difference between espoused values (what we say) and underlying assumptions (how we actually think). Our article on translating core values into concrete workplace behavior explores thirteen proven approaches for closing that gap. If purpose hasn't penetrated that third layer; the unconscious beliefs about power, success and humanity; it's decoration, not transformation.

Criticism 4: who actually determines the purpose?

A less discussed but crucial point. In most cases, purpose is formulated by the board, often with the help of an external agency (yes, sometimes that's us). But if purpose is meant to express the deepest driving force of an organisation, who has the mandate to define it? Five people in a boardroom? Or the 5,000 people who do the work every day?

We believe in the latter. That's why we always start with research into what truly drives people, rather than starting with a creative session about what sounds good.

The tension: no simple answers

The core question is not whether a company should be profitable, but how that profit is generated and in service of whom. Let's stop preaching for a moment and be honest about the complexity.

The truth is that the tension between shareholder value and stakeholder value cannot be resolved with a slogan. It's a permanent balancing act that every organisation must find anew, every single day.

A company that doesn't make a profit ceases to exist. Full stop. And a company that ceases to exist solves precisely zero societal problems. Profit is oxygen; you don't live for it, but you die without it.

At the same time: a company that exists solely to generate profit for a small group of shareholders externalises its costs onto society. Environmental pollution, employee burnout, social inequality; these aren't side effects. They're invoices someone else is paying.

Colin Mayer puts it elegantly: it's not about whether a company should be profitable, but about how that profit is generated and in service of whom.

We don't take the position that every organisation must dogmatically have a societal purpose. That would be just as empty a claim as the purpose statements we criticise. What we do maintain: every organisation that wants to remain relevant in the coming decades needs a clear and honest answer to the question of why it exists. And that answer must go beyond 'to make money for the owners'.

Not because it's morally required (though there's something to be said for that). But because it's the only strategy that works in the long run. The data, despite methodological caveats, is consistent on this.

B Lab and B Corp: purpose with legal teeth

B Corp certification, issued by non-profit B Lab (founded 2006), is the most concrete attempt to anchor brand purpose in law. As of 2025, there are more than 9,500 certified B Corps across 102 countries that demonstrably meet high standards for social and environmental impact, transparency and accountability.

But the most interesting thing about B Corp isn't the certification itself. It's the legal requirement. Certified B Corps are legally obliged to consider the impact of their decisions on all stakeholders; employees, communities, customers, suppliers and the environment; not just shareholders. In most cases, this requires amending the company's articles of association.

This is fundamentally different from a purpose statement on a website. This is purpose with legal teeth. It means a CEO who makes decisions aimed solely at shareholder value is acting in violation of the company's own governing documents.

BR-ND People is B Corp-certified ourselves. For a deep dive into what the certification process actually entails, see our article how to become a B Corp certified company. Not because we thought it looked good on our letterhead, but because we believe the structure of a company should reflect what it claims to be. If you promise you're more than a profit machine, codify it. Otherwise it's; there's that word again; washing.

B Lab's definition is clear: "B Corps are companies verified as meeting high standards of social and environmental performance, transparency, and accountability." It's a measurable, verifiable, legally binding interpretation of purpose. Not a pretty poster. A contract.

How do you define a brand purpose that actually lives?

If purpose isn't a poster and isn't a marketing campaign, then what is it? How do you turn it into a living compass that provides direction every day?

Step 1: start with truth, not ambition

Most purpose journeys begin wrong. They start with the question: "What do we want to be?" instead of "Who are we, really?"

We use the 23plusone method to scientifically map the fundamental drivers of the people in an organisation. This method, included in the SWOCC Selection of Brand Management Models, doesn't measure what people say they value (System 2; the rational, socially desirable layer), but what actually moves and drives them (System 1; the unconscious, emotional layer).

The difference is crucial. Nobel laureate Daniel Kahneman showed in Thinking, Fast and Slow (2011) that 95% of our behaviour is driven by the fast, intuitive System 1. We explore how this mechanism shapes brand preference in B2B contexts in our article why B2B buyers decide with emotion. A purpose that only appeals at the rational level; a beautifully formulated sentence that makes logical sense; lacks the emotional resonance needed to actually change behaviour.

Step 2: change the structure, not just the screensaver

A purpose that doesn't filter into compensation structures, decision-making processes and investment choices is decoration. Edgar Schein's three layers of organisational culture (artefacts, espoused values and underlying assumptions) teach us that real change must happen at the deepest layer.

Concretely: if your purpose states that employee wellbeing comes first, but your bonus structure only rewards quarterly revenue; the bonus structure wins. Always. Without exception. Yours included. People don't do what you say. People do what you pay them to do.

Mayer took this a step further in the report Enacting Purpose Within The Modern Corporation (Saïd Business School, Oxford, 2020), written with a coalition of academics and practitioners. The core message is as simple as it is uncomfortable: purpose doesn't belong in a PowerPoint from the communications department, but in the articles of association of the corporation. With measurable KPIs. With board accountability. With consequences when it doesn't happen. Not an inspiration poster in the lobby, but a legally binding document that governs how the company is run. (More on this report in our article Purpose Within The Modern Corporation.)

This is why the legal anchoring that B Corp provides is so valuable. It makes purpose enforceable, not optional.

Step 3: make it small enough to live

A purpose like "We strive for synergistic value creation for all our stakeholders" is a sentence that nobody remembers, nobody finds inspiring, and that even the author wouldn't dare read aloud to their mother.

The best purposes are specific, human and small enough to feel every day. A brand culture playbook is the instrument that translates that purpose into daily behavior, rituals and decision-making frameworks. Tony's Chocolonely: "Together we make 100% slave-free the norm in chocolate." Patagonia: "We're in business to save our home planet." No abstract corporate language. A promise you can test.

Step 4: dare to choose (and therefore also to decline)

A purpose that encompasses everything encompasses nothing. Choosing a purpose also means turning down certain opportunities, markets or clients that don't fit your reason for being. That's scary. It might cost revenue in the short term. Your CFO will have questions. Your sales team will sigh. But it builds the one thing that can't be copied in the long term: authenticity. And authenticity is the one thing no competitor can outspend.

The science behind the compass

For the enthusiasts (and we hope that's you): this is where it gets nerdy. The scientific foundation under purpose-driven organisations is broader and deeper than popular management literature suggests. Put your reading glasses on.

Psychological foundation. Self-Determination Theory by Deci & Ryan (2000) demonstrates that people have three fundamental psychological needs: autonomy, competence and relatedness. Organisations that fulfil these needs perform better on motivation, creativity and retention. A clear purpose primarily addresses the need for relatedness; the feeling that your work matters.

Neuroscientific foundation. Antonio Damasio proved in Descartes' Error (1994) that emotion isn't an obstacle to good decision-making, but a prerequisite. Without emotional markers, we simply cannot choose. A purpose that only appeals rationally lacks the neural hardware to change behaviour.

Organisational psychology foundation. Edgar Schein's model of organisational culture (1985, revised 2010) explains why purpose initiatives fail when they only address the surface layers (artefacts and espoused values). Real transformation requires work at the layer of underlying assumptions. Organizations that scale rapidly face this challenge acutely; our article on how to preserve culture during rapid scaling explores how to protect purpose and culture during hypergrowth.

Economic foundation. Colin Mayer (Prosperity, 2018; Capitalism and Crises, 2024) provides the macroeconomic framework: the modern corporation has drifted from its original societal function. Restoration requires not only cultural but also legal and governance changes. His report Enacting Purpose Within The Modern Corporation (Saïd Business School, 2020) translates this into concrete governance recommendations: anchoring purpose in the articles of association, measuring via KPIs, and assigning accountability to the board.

What this means for your organisation

You don't need to become a B Corp tomorrow (though we'd heartily recommend it). You don't need to rewrite your articles of association by next week. But you can start tonight with three questions that are more uncomfortable than they look:

1. If our company ceased to exist tomorrow, who would miss us; and why? If the answer is exclusively 'our shareholders', you have a problem.
2. Could our employees write down our purpose without searching for it on the intranet? If not, it doesn't live.
3. What decision did we make last year that cost us money but aligned with our purpose? If you can't think of one, the purpose is a poster.

Purpose isn't a final destination. It's a compass. And a compass is only useful when you hold it while you walk; not when it hangs on the wall.

Want to read more about how purpose translates into brand strategy and positioning? Or how culture development and employer branding anchor purpose in the organisation? Or how change communication takes people along on the journey?

Frequently asked questions about brand purpose

What exactly is brand purpose? The shortest honest answer: why do you exist, when you stop looking at your revenue figures for a moment? Brand purpose is the unique contribution you make to people's lives and society. Not your slogan, not your mission statement; the answer to the question of what gap would exist in the world if you ceased to exist tomorrow. A strong purpose acts as a compass for all strategic decisions; from product development to employer branding.

What's the difference between brand purpose and mission? The difference between purpose and mission is that purpose is about why your organisation exists, while mission describes what you do every day to deliver on that purpose. Purpose is the destination, mission is the route. A mission without purpose lacks direction; a purpose without mission remains abstract.

What is purpose washing? Purpose washing is claiming a societal goal without backing it up with concrete policies, investments or behaviours. It's the variant of greenwashing that targets purpose claims. It damages your brand's credibility, because employees and customers see through it faster every year.

Does every company need a purpose? No. And anyone who claims otherwise is probably selling you a purpose workshop. Not every company needs to save the world; some companies simply make excellent screws. But every company that wants to remain relevant needs a clear and honest answer to why it exists. That answer can be pragmatic, but it must go beyond 'maximising shareholder value'.

How do you define a brand purpose that actually lives? By starting with people, not the boardroom. Scientifically grounded methods like the 23plusone method map the fundamental drivers that lie beneath the rational surface. Only a purpose rooted in what truly moves people will change behaviour.

What's the link between purpose and financial performance? The data consistently points in the same direction: purpose-driven organisations outperform over the long term. But the causality is complex. It's not 'purpose = profit'. It's more like: organisations with a clear reason for being make better strategic decisions, attract better talent and build stronger client relationships.

What went wrong at Unilever after Paul Polman? Under Polman, Unilever was the poster child for purpose-driven leadership. After his departure, shareholder pressure shifted the focus back to short-term growth and margins. ESG targets were scaled back, sustainable brands divested. It shows that purpose only endures when it's anchored legally and structurally, not just culturally.

What is B Corp and how does it relate to purpose? B Corp is a certification from B Lab that verifies companies on social and environmental impact, transparency and accountability. Crucially: B Corps are legally required to consider their impact on all stakeholders. It makes purpose measurable and enforceable, rather than voluntary.

Is brand purpose only for large companies? Absolutely not. In fact, the smaller you are, the easier it is to get it right. Try 'installing' a purpose in an organisation of 5,000 people who've been working the same way for twenty years. Start early, start honestly, and let it grow with you.

How do you know if your purpose is real or purpose washing? One question will do: has your organisation made a decision in the past year that cost money but aligned with the purpose? If so, it lives. If not, it's a poster. And posters, however beautifully framed, don't change behaviour.

References

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• Deci, E.L. & Ryan, R.M. (2000). The 'what' and 'why' of goal pursuits: Human needs and the self-determination of behavior. Psychological Inquiry, 11(4), 227-268.
• Drucker, P.F. (1954). The Practice of Management. New York: Harper & Brothers.
• Friedman, M. (1970). The social responsibility of business is to increase its profits. The New York Times Magazine, September 13.
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• Taylor, C. (1989). Sources of the Self: The Making of the Modern Identity. Cambridge, MA: Harvard University Press.