Purpose stimulates and drives a business forward. Yet many business leaders do not express purpose explicitly in their strategic statements and are thereby not able to communicate it properly to exploit its power.

Purpose answers why we are in business and what society need our business is there to serve. We frame the answer in the so-called purpose statement—a clear, pithy, and inspiring conviction—that aims to communicate our company’s existential why to everyone inside and outside the company: “We exist to accelerate the planet’s transition to sustainable transport.” Tesla; “Entertaining the world.” Netflix; “Organize the world’s information.” Google’s first purpose.

Unlike the mission statement that tells of what our company will do and for what customers, and unlike the vision statement that expresses our aspirations as to where we aim to reach, purpose tells of our reason for business not from the inside-the-company view but from the outside, from the society’s vantage point. It precedes all the other company statements and, very importantly, serves to guide and infuse them with its spirit.

Not every kind of purpose will do the job. Purposes that a company drafts to be in vogue and that are used only in wall signs, what HBS prof Ranjay Gulati calls “shallow purpose”, will not work. Companies need as Ranjay says, “deep purposes”, purposes that reflect why the company exists and that are communicated to and shared by everyone in the company. People, regardless of position or rank, understand and embrace the purpose, remember it every time they put themselves to work, and get inspired knowing that they work for a purpose that has its roots in the needs of their society.

Purpose is not making money nor is it only applicable to social institutions. [...]