Thoughtful business leaders today recognize that the social and environmental challenges the world now faces require nothing short of a fundamental reorientation of the company. Business purpose must flip from maximizing short-term profit to using profit as a means to solving the existential world challenges that we now all face.

Over the past decade, the ideas of sustainability and societal purpose have become increasingly prominent in the public rhetoric of companies. But while purpose statements and sustainability goals abound, serious investments in portfolio and business strategy transformation are still few and far between, and few are integrated into long-term corporate strategy, investment priorities, and operating plans.

How can companies meaningfully embed corporate purpose as the authentic guiding principle of the firm? In this article, drawn from my book, Beyond Shareholder Primacy: Remaking Capitalism for a Sustainable Future, I develop a practical framework and approach for truly embedding societal purpose, drawing upon the experience of several innovative companies. By embedding a higher societal purpose as the core of business pursuit and committing to advocate for larger system change and institutional redesign, business leaders can help catalyze a truly sustainable form of capitalism designed to confront the existential challenges we face in the 21st century.

The House of Transformational Sustainability

Most corporate efforts to embed societal purpose involve a relatively small number of senior people — C-suite, functional, and business leaders. The potential of fully engaging and aligning the entire organization, including middle management and front-line employees, thus remains unfulfilled. Without focus on organizationwide transformation, there is a risk that the head of the organization (that is, senior management) becomes disconnected from the body (organizational members), rendering the entire effort ineffective and potentially counterproductive.

To understand the nature of this disconnect in greater depth — and how best to address it — my colleagues Priya Dasgupta, Kate Napolitan, and I took a close look at some truly innovative corporate outliers — a selection of 15 companies that we identified as pushing the envelope when it comes to societal purpose, sustainability, and corporate transformation.1 We found that articulating a clear purpose is necessary but not sufficient to the task of focusing company attention on the actual challenges that the company seeks to address.