Are Your Company’s Purpose Initiatives Working?

In recent years, corporate purpose has captured the attention and imagination of leaders worldwide. Companies have embraced purpose beyond profit, hoping to address societal and environmental challenges while building deeper connections with stakeholders. Yet, in 2025, a growing backlash is forcing leaders to rethink these strategies. Public criticism, customer boycotts, political controversies, and investor skepticism have created a volatile environment for organizations navigating the purpose journey.

For many, the question is no longer whether purpose is important — it’s when, how, and even if their organization should pursue it. Through our research, recently published in the Journal of the Academy of Marketing Science, we’ve uncovered a practical framework to guide leaders in answering these questions. Based on three years of in-depth interviews with 33 senior leaders across industries and geographies, our findings reveal that companies approach purpose along two critical dimensions: impact substance and impact signal. How an organization rates along these two axes can help it determine whether their initiatives should be abandoned, need adjustment, or are driving lasting value.

A Framework for Navigating Purpose

Organizations can be categorized into four common archetypes when it comes to integrating purpose into core business, depending on their level of signaling (communication about their purpose) and substance (tangible actions regarding purpose). The types are: profit-centric, profit-masking, transitional purpose, and deep purpose. Our figure also details a “muddy middle,” an unsettled state that many organizations currently find themselves in. Understanding where your company falls on this chart can help determine the best moves forward — or backward — when it comes to purpose initiatives.

1. Profit-centric
   
   These companies prioritize profitability above all else, engaging minimally in societal issues beyond legal compliance. Leaders in profit-centric organizations often view purpose as a distraction from core business objectives or even as a potential threat to operational efficiency. However, they recognize that maintaining this approach is becoming increasingly difficult as stakeholder expectations evolve.

2. Profit-masking
   
   Organizations in this quadrant invest heavily in communicating purpose but lack substantive operational changes to support their claims. For example, a company may release bold marketing campaigns about sustainability while making minimal adjustments to its actual practices. While this approach may offer short-term gains in reputation, it carries significant risks of public backlash and accusations of “purpose washing.”

3. Transitional purpose
   
   Here, companies focus on substantive changes but deliberately minimize external signaling to avoid accusations of inauthenticity. This cautious approach allows them to build credibility gradually. Leaders often adopt this posture as a means to experiment and refine their initiatives before making bold public commitments.

4. Deep purpose
   
   At the ideal end of the spectrum, these firms fully integrate purpose into their organizational logic, identity, and strategy. Deep-purpose organizations use purpose as a guiding principle, shaping not only what they do but also who they are. This alignment helps these firms create transcendent value for stakeholders while fostering long-term competitive advantages.

Identifying Your Organization’s Position

Understanding your company’s current position within the framework requires an honest evaluation of its actions and messaging. Leaders can begin by examining their organization’s investments in impact substance and impact signal:

• Impact substance: Assess tangible commitments to societal and environmental goals. For example, does your company implement meaningful changes in its supply chain, develop new sustainable products, or achieve third-party certifications such as B Corp or Fair Trade?

• Impact signal: Evaluate resources devoted to purpose-driven marketing and public commitments. Are your company’s messages aligned with its actual practices, or do they outpace substantive efforts?

Consider Target, which, in 2023, initially emphasized its commitment to inclusivity during Pride Month but later scaled back displays amid customer backlash. While its messaging was strong, its follow-through raised questions about consistency and authenticity, situating it in the profit-masking quadrant. Contrast this with Wild Planet Foods, which has taken a transitional purpose approach by focusing on meaningful operational changes, such as sustainable sourcing, while deliberately avoiding over-promotion.

Common Pitfalls

Organizations embarking on the purpose journey often find themselves in what we call the “muddy middle” — a challenging transitional phase where purpose initiatives face significant internal and external pressures. Leaders navigating this terrain encounter competing priorities, unclear benchmarks for success, and heightened scrutiny from stakeholders. They must understand these pitfalls to navigate the landscape effectively:

Over-reliance on signaling.

Organizations in the profit-masking quadrant often prioritize external messaging over internal changes. This may lead to accusations of inauthenticity, eroding trust with stakeholders. For instance, companies that market “green” products without substantial investments in sustainability expose themselves to damaging scrutiny.

Lack of internal alignment.

Purpose strategies can falter when employees are skeptical, disengaged, or fearful about disruption to their established workflow and job security In 2017, for example, General Motors announced a significant shift towards electric vehicles, aiming to phase out internal combustion engines by 2035. This ambitious sustainability initiative faced resistance from employees concerned about job security, as EVs require fewer parts and could lead to reduced labor needs. During the 2023 UAW strike, a significant point of contention was the impact of the EV transition on labor, including causing potential job insecurity.

Ambition outpacing execution.

Purpose initiatives that overpromise and underdeliver risk eroding stakeholder trust. Unilever’s retreat from climate targets illustrates the difficulty of balancing ambitious goals with operational realities.

When to Turn Back—and When to Press On

For companies questioning whether to continue their purpose journey, our framework provides a guide to making informed decisions. Here’s how leaders in each quadrant can evaluate their next steps:

Profit-centric: Stay the course or adapt?

Organizations in this quadrant must consider whether their traditional profit-first strategies are sustainable in a world of evolving stakeholder expectations. While some may choose to stay the course, others might explore incremental investments in purpose-driven activities to future-proof their business.

Recommendation: Start small. Pilot purpose initiatives that align with your existing strengths, such as creating environmentally-friendly versions of current products or improving workplace diversity.

Profit-masking: Shift focus to substance.

Leaders in this quadrant should redirect resources toward operational changes that align with public commitments. For example, Walmart and Kohl’s paid $3 and 2.5 million, respectively, in civil penalties after the Federal Trade Commission found they had engaged in “greenwashing,” or falsely advertising products as sustainable and eco-friendly, when they were not.

Recommendation: Invest in internal audits and third-party partnerships to ensure actions align with messaging. Focus on building systems that support long-term substantive changes.

Transitional purpose: Balance humility and visibility.

Organizations in the transitional quadrant often adopt a “humble” approach to avoid overpromising. While this caution is wise, it can limit opportunities to inspire stakeholders.

Recommendation: Identify strategic moments to increase visibility, particularly when your organization has made demonstrable progress. Proactively share milestones with stakeholders through transparent channels.

Deep purpose: Sustain momentum.

For deep-purpose organizations, the challenge lies in sustaining long-term commitment. Patagonia exemplifies this approach by embedding purpose into every aspect of its operations, from leadership decisions to employee engagement.

Recommendation: Continuously measure and communicate the impact of purpose initiatives. Develop adaptive strategies to evolve with stakeholder expectations and market conditions.

What Deep-Purpose Companies Do Differently

Companies that want to strengthen and sustain their commitment to purpose — and find themselves within the deep purpose quadrant — will need to do more than produce isolated actions or campaigns. This kind of purpose alignment demands structural changes to harmonize impact substance and signal, which will in turn allow companies to maintain and scale purpose initiatives over time. Our research found that these seven factors characterize deeply purposeful companies:

1. Organizational alignment.
   
   Purpose must extend beyond marketing departments to permeate strategy, operations, and culture. Deep-purpose companies aim to align employees’ personal values with the organization’s overarching purpose. This alignment fosters engagement, innovation, and authenticity, ensuring purpose is more than a top-down mandate.
   
   Salesforce provides a compelling example of how organizations can embed purpose into their culture. The company’s purpose initiatives are designed not only to address global challenges, such as sustainability and equality, but also to resonate with employees on a personal level. For instance, Salesforce offers its employees paid days off to volunteer for causes they care about, encouraging them to connect their personal values to the company’s broader goals. This approach amplifies employee engagement and aligns individual efforts with Salesforce’s overarching mission of driving meaningful change through business.
   
   Additionally, Salesforce uses its technology to further its sustainability goals, offering tools like the Net Zero Cloud, which helps clients track and reduce their carbon footprints. By demonstrating its commitment to both internal and external stakeholders, Salesforce reinforces its authenticity and deepens organizational alignment.

2. Transparent metrics and accountability.
   
   Transparent, actionable metrics build trust with stakeholders and provide a clear roadmap for progress. Danone has pioneered this approach by developing detailed sustainability and social impact dashboards, publicly reporting its progress and inviting external audits.

3. Capability-building within teams.
   
   Purpose-driven strategies require new skills and mindsets across the organization. Leaders must invest in training programs that equip employees with the tools to implement and innovate around purpose initiatives. For example, Newmont Corporation trained its workforce to understand and address sustainability challenges specific to the mining industry.

4. Collaborative partnerships.
   
   In many cases, achieving purpose goals requires collaboration beyond the boundaries of the organization. Leprino Foods exemplifies this approach through its partnerships with industry peers and regulators to establish sustainability standards in dairy production.

5. Leveraging technology and data.
   
   Technology plays a critical role in scaling purpose. Companies can use AI, big data, and IoT to monitor and improve their impact. For instance, Patagonia leverages supply chain analytics to ensure transparency and compliance with environmental standards.

6. Long-term leadership commitment.
   
   Leadership continuity and commitment are vital for embedding purpose into the DNA of an organization. Take the example of The Body Shop’s journey over the years. In 2006, when it was was acquired by L’Oréal, critics highlighted L’Oréal’s history with animal testing, which clashed with The Body Shop’s cruelty-free stance. This led to consumer boycotts and accusations that The Body Shop had compromised its founding principles. In 2017, L’Oréal sold The Body Shop to Brazilian cosmetics company Natura & Co. While this acquisition was initially seen as a return to ethical alignment, it has lost its edge as a leading ethical brand. Their journey highlights the need for a consistent vision to maintain core values.

7. Adaptive purpose strategies.
   
   The external environment evolves, and so must purpose strategies. Companies like DSM have adopted flexible frameworks that allow them to pivot as societal expectations, technologies, and regulations change.

A Purposeful Path Forward and Sustaining Impact Over Time

The path to purpose is fraught with challenges, but the rewards are worth the effort. Emerging evidence from industry and academia has shown that companies committed to purpose experience measurable benefits: A study by Deloitte found that purpose-driven companies report 40% higher levels of workforce retention and 30% greater innovation levels compared to their peers. Firms exhibiting both high purpose and clarity also have systematically higher future accounting and stock market performance.

Anticipating possible pitfalls and building long-term capabilities are essential for organizations committed to deep purpose. By proactively managing critical inflection points and developing systems that align substance with signal, companies can navigate the complexities of purpose with confidence. These efforts not only mitigate risks but also unlock opportunities for competitive advantage, stakeholder trust, and meaningful societal impact.

Copyright 2025 Harvard Business School Publishing Corporation. Distributed by The New York Times Syndicate.

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