Making Purpose Real

Over the past decade Harvard Business Review has published articles, interviews, and books exploring alternatives to the shareholders-first model of capitalism. Internally we refer to that work by a simple shorthand: “fixing the system.” In August 2019 Business Roundtable came up with a fix of its own: It issued a landmark statement that the purpose of a corporation is to promote an economy that serves all stakeholders—a clear shift away from shareholders first. We applaud that shift—and the increasing debate around it. But we recognize a problem: Too often, discussions of managing with “purpose” can be frustratingly vague. What exactly is purpose? It sounds great in an annual report, but how do leaders actually use it, day by day, to make difficult trade-offs, engage customers, energize employees, and attract investors? This issue’s Spotlight, “Making Purpose Real,” aims to bring specificity to those questions. In the lead article Jonathan Knowles and coauthors delineate three kinds of purpose: competence (“the function that our product serves”), culture (“the intent with which we run our business”), and cause (“the social good to which we aspire”). “Cause-based purposes tend to receive the most attention,” they write. “But any of the three types can be effective when pursued appropriately.” Here at HBR we sometimes talk about our purpose using another simple shorthand: “to rid the world of bad management.” I hope the articles in this issue help you advance toward that goal.

Making Purpose Real

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