Purpose. Impact. These terms are thrown around more than ever these days, including in some unexpected places, like one of the world’s largest investor’s annual letter. Purpose statements are printed on everyday objects and impact investing or sustainability are as likely as gross margins to be discussed over lunch in some offices.
We have yet, though, to pay as much attention to the concept of ‘meaning,’ at our collective peril. This oversight is a root cause of companies’ and investments’ inadequate progress toward becoming better for the people and planet around them.
Why do we need to develop this third, perhaps apparently overlapping, concept? Without meaning, impact is neutral: defined as ‘a marked effect or influence,’ by the Oxford English Dictionary. Similarly, purpose without meaning is an ambitious mission that fails to engage or motivate the people required to get it done. Purpose, impact, and meaning are closely related, but they are not synonyms or substitutes. We need all three to fulfill our human potential and build a healthier, more equitable version of capitalism.
We are living in the time of peak purpose – where your dish soap or toothpaste label is as likely to have a purpose statement as a not-for-profit’s annual report. This is a good thing, and arguably not surprising: humans are evolutionarily predisposed to do things that contribute to some outcome larger than our own survival. And now that our careers and purchases are so intertwined with our identity, we have even higher expectations that the companies we work for and buy from to have this same sense of purpose.
We get anxious when we don’t understand the larger goal that our daily efforts are advancing. Indeed, ample research has shown that identifying and pursuing a purpose improves individuals’ physical and mental well-being. Other studies have shown organizations to perform better (financially and in other terms) when they have a purpose AND employees are clear about what that purpose is and how they contribute to it. But none of these benefits are felt if the purpose isn’t anchored by specific impacts and the meaning that they have to each individual participant.