Episode 107
What is the purpose of a company’s purpose? | with Hannah Grove & Jonathan Knowles
Purpose has become a hollow marketing device for many organizations. Hannah Grove and Jonathan Knowles break down why authenticity matters, how to build purpose that actually drives culture and retention, and why most companies get it wrong.
Episode Key Takeaways
Purpose comes in three distinct forms—competence (doing what you do exceptionally well), culture (how you treat people and make decisions), and cause (contributing to a social mission)—yet most organizations default to the cause model, which doesn’t fit every business. B2B companies especially struggle because their role in changing the world is often invisible, making a competence or culture-led purpose far more authentic and sustainable.
The biggest misstep is relegating purpose to the marketing department. When strategy and purpose live in separate silos, the result is window dressing that employees see through immediately. Purpose must be inextricably linked to business strategy and aligned across four stakeholder agendas: customer demand, employee meaning, sustainable behavior, and commercial viability.
The gap between what you espouse and what employees actually experience is where purpose dies. Hannah and Jonathan point to WeWork as a cautionary tale: a company claiming to elevate consciousness while employees experienced chaos. Conversely, State Street succeeded by defining a competence-focused purpose—creating better outcomes for investors—and executing it consistently, without needing to own a broad social cause.
Authenticity is measurable. If you spend more marketing your good works than funding them, you’ve already lost. Jonathan cites examples like Coke spending more on polar bear campaigns than actual conservation, and Home Depot outspending their Habitat for Humanity work on promotion. The grapevine inside your organization is far more powerful than any external campaign.
Start within, not from the top down. Listen to employees about what the company does well—collaboration, development, transparency—and build purpose from there. This bottom-up approach surfaces real differentiation and creates genuine alignment, whereas top-down purpose exercises typically end up as posters and screensavers with no behavioral change.
Frequently
Asked
Questions
What are the three types of company purpose?
Competence (excelling at your core function, like Mercedes’ ‘First Move the World’), culture (how you treat people and make decisions, like Zappos’ ‘Delivering Wow’), and cause (contributing to a social mission, like Patagonia or Tesla). Most organizations default to cause, but competence and culture often drive stronger, more authentic alignment.
Why do companies fail when they try to adopt a social purpose?
They either lack authentic connection to their business (Hellmann’s claiming food waste reduction when they make mayonnaise) or fail to align internal behavior with external messaging (WeWork’s ‘elevate consciousness’ while employees experienced mismanagement). The gap between espoused values and lived experience undermines credibility and damages retention.
How should companies communicate their purpose without appearing inauthentic?
Spend more on the work than the marketing. Let employees discover and share purpose stories organically through the internal grapevine rather than orchestrated campaigns. Focus messaging on how you do business ethically and responsibly, not on philanthropic claims. This approach builds trust because it acknowledges that companies exist for commercial sustainability first.
What's the first step to building an authentic company purpose?
Recognize that purpose can take three forms, then identify alignment across four business agendas: customer demand, employee meaning, sustainable behavior, and commercial viability. Involve the right cross-functional stakeholders—not just marketing—and listen to employees about what the company already does well before crafting external messaging.
How does purpose connect to talent retention and hiring?
Employees leave primarily due to culture misalignment, not just salary. When purpose is authentic and lived daily, it becomes a powerful magnet for aligned talent and a repellent for poor fits. Bridgewater’s radical transparency and data-driven culture attracts people who thrive in that environment while filtering out those who don’t, creating sustainable retention.