Short-term profit is tempting, but it can lead to fragile businesses and lost opportunities.
Why purpose is the ultimate growth engine for tomorrow’s leaders.
A focus on purpose builds a more resilient and valuable business, while strategies fixated on short-term profit often yield fragile, less competitive organisations. Short-termism—the chase for immediate financial gains—may provide a temporary boost, but it risks compromising long-term survival.
The Dangers of a Short-Term Focus
Profit-driven CEOs who prioritise quarterly earnings often:
-
Cut R&D and innovation spending, starving future growth
-
Under-invest in employees, increasing turnover and losing top talent
-
Engage in financial engineering, such as stock buybacks, creating the illusion of growth without real improvement
These tactics may briefly spike stock prices, but leave companies vulnerable to market disruptions and reputational damage.
How Purpose Drives Sustained Growth
Businesses grounded in a clear purpose—their reason for existing beyond making money—use it to guide strategy and daily decisions, leading to sustainable success by:
-
Attracting and Retaining Talent: Employees today seek meaningful work. Purpose creates a sense of mission, boosting morale, engagement, and innovation.
-
Building a Resilient Brand: Consumers increasingly buy from values-aligned brands. Purpose builds trust and loyalty that endure economic downturns.
-
Fostering Innovation and Adaptability: Purpose acts as a decision filter, guiding investment in aligned technologies and business models, creating long-term resilience.
-
Driving Financial Performance: Research shows purpose-driven firms outperform peers—not by sacrificing profit, but by improving efficiency, reducing risk, and enhancing brand value.
Why Purpose Outperforms: Evidence From Research
My doctoral research with SSBM Geneva confirms these findings. Long-term growth depends on integrating people, planet, and purpose alongside profit, rather than chasing short-term financial returns alone.
The Pitfalls of Overemphasising Short-Term Gains
Companies focused on quick profits are hit hardest by external shocks such as policy changes or recessions. A lack of broader purpose leaves them ill-prepared, undermining future growth.
Embedding Purpose Into Growth Strategy
Leaders must embed purpose across four critical areas:
-
Business Strategy: Define a clear “why” beyond profits. Align product launches, market expansion, and key decisions with that purpose.
-
Culture: Communicate purpose relentlessly and empower employees to live it daily. Shared mission drives productivity and innovation.
-
Talent Management: Hire for purpose alignment and reward behaviors that advance it—valuing purpose alongside financial results.
-
Measurement: Track KPIs beyond finance—employee satisfaction, environmental impact, and social value—and report progress transparently to build trust.
What’s your view?
How is purpose shaping growth strategies in your company or industry? I’d love to hear your stories and insights.
