Today, businesses around the world are eager to define their reasons for existence and impact on society, and many are working hard to develop a statement of corporate purpose.

As you do this for your company, though, it’s worth going back to the U.S. Business Roundtable’s statement on corporate purpose, which says: “While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders.” The statement identifies these stakeholders: customers, employees, suppliers, the communities in which companies operate, and investors.

A company’s purpose needs to have something for all these groups, and what it offers each should be clearly measurable, because measuring something draws attention to it. What’s more your organization will be held accountable by a range of stakeholders, commentators, activists, as well as traditional and social media. If you make big claims in your purpose statement, being able to point to results will give you credibility. As you craft your statement, therefore, I suggest that you:

Identify your key stakeholders.

As a result of the push towards corporate purpose, businesses are broadening the range of stakeholders they regard as “key.” These were once narrowly defined as customers, employees, and shareholders. Now the list more frequently includes suppliers, who have been habitually overlooked by businesses but who, in most industries, are key.

To be sure, purpose statements have expanded in scope in the last few years. As one example, take Woolworths, Australia’s largest supermarket chain with more than 200,000 staff and more than 3,000 stores. A few years ago, it stated: “We are focused on shareholder returns.” It now reads: “To create better experiences together for a better tomorrow.” But with the inclusiveness often comes a certain vagueness.

Ideally a purpose statement will identify all key stakeholders.  Take Rio Tinto, the world’s third largest mining company, operating in about 35 countries, with more than 60,000 employees. In his contribution to the latest annual report, Dominic Barton, the incoming chair explicitly recognizes all five groups of stakeholders:

Through our products, people, partnerships and technologies, we aim to help enable a decarbonising world, while maintaining our focus on capital discipline, pursuing growth, and delivering attractive returns to shareholders … Building even stronger relationships with our customers, partners and local communities will be an important part of this journey, and something that I am particularly passionate about. I am also keen to ensure that we create a safe, respectful and inclusive work environment.

You’ll have your own industry language for stakeholders, of course, and you should stick with that, e.g., “clients” or “patients” or “students” instead of customers. Also, not all five categories of stakeholders from the Business Roundtable will be relevant. For example, if you’re a not-for-profit or volunteer organization you probably won’t have shareholders. If you’re a professional service firm, suppliers may only provide incidentals and hence not be key.

Ensure your impact metrics align with stakeholder categories.

It’s not enough to just recognize that you depend on a stakeholder. You have to track what you’re giving them. Many companies, even if they do explicitly recognize all their key stakeholders, don’t actually have metrics for them.

By Rio Tinto’s own admission “the needs of our customers are central to our operational decision making” and “quality relationships with our suppliers are vital to ensure that we remain at the forefront of technological and market developments.” Yet the company’s impact on customers and suppliers aren’t monitored by any of the company’s listed “key performance indicators.” Of the company’s nine key performance metrics, one, “greenhouse gas emissions,” is relevant to stakeholder communities, and there are safety and gender diversity measures for employees.  The other six are all financial.

In fact, of the eight large Australian companies I looked at, only one, Woolworths, provided a full house of stakeholder measures.  As shown below, they tracked three for each of the Business Roundtable five stakeholder groups. Customer metrics, for example, included a net promoter score, employee metrics included a diversity rating, and communities metrics included a carbon emissions and recycling measures.

. . .

Employees and other stakeholders are looking to organizations to address results beyond narrow corporate financials. This trend is a modern and ever-present phenomenon. The corporate world, represented by the BRT, has realigned to take this into account. It’s time to test your purpose statement and corporate metrics via the questions I’ve applied here.

When introducing new strategies in response to the ever-shifting business landscape, executives must take care to align them with the larger picture of where their organization is heading — the company’s “vision.” That’s because when vision and strategy are at odds, employees, shareholders, and customers may lose confidence. To achieve this alignment, executives need to evaluate whether proposed short-term strategic shifts are consistent with the longer-term vision and resist the pressure to those strategies that run counter to it.

Given the time and effort it takes to develop and execute new strategies, it’s best not to introduce them too often. But there are instances when short-term strategic shifts are unavoidable — especially in today’s ever-changing business context. Take, for example, the need to respond to calls for social change or demands from investors to turn around poor financial results.

When responding to these kinds of pressures, executives must take care to align the strategic shifts they introduce with the larger picture of where their organization is heading and what it aspires to accomplish in the future — the company’s “vision.” After all, strategy — overarching decisions about priorities and resource allocations — should be all about translating that vision into action. When vision and strategy are at odds, employees, shareholders, and customers may lose confidence that management has a coherent and consistent plan for moving the company forward.

To achieve this alignment, executives need to evaluate whether proposed short-term strategic shifts are consistent with the longer-term vision and resist the pressure to those strategies that run counter to it. This process itself can help leaders assess whether their vision is sufficiently clear and compelling or may need to be sharpened or revised.

Let’s look at how this plays out in different contexts in practice.

Responding to Social Change

Connecting short-term strategic responses to a long-term vision is particularly important when companies are responding to social movements. These can put pressure on companies to act quickly and publicly. But when company leaders implement strategies that aren’t tied to a larger vision, those strategies can wither on the vine.

For example, in the summer of 2020, after the murder of George Floyd, many firms raced to come up with strategies to convince their people and their customers that they stood firm against systemic racism. But the results of their efforts have been decidedly mixed. While some have pointed to the inefficacy of widely implemented anti-racism training as the culprit, I believe that these strategies fell short of their companies’ rhetoric because they were not supported by a larger vision of how the companies themselves needed to change.

Take a counterexample: For some companies that already had a robust vision for building inclusion and diversity, the new strategies were supported by a pre-existing framework, and have proved more successful. At Johnson & Johnson, for example, by the summer of 2020, the pharmaceutical firm already had a detailed vision — “to maximize the global power of diversity and inclusion, to drive superior business results and sustainable competitive advantage” — and was actively engaged in initiatives that would move the company in this direction. So in November of 2020, when J&J responded to the increasing awareness of social injustice by pledging $100 million to address racism and health inequities, the strategy — which included support for mobile health clinics in communities of color, and a 50% increase in hiring people of color into leadership positions in J&J — was clearly part of an ongoing commitment, and not a one-time, knee-jerk response to social pressure. This consistency is perhaps one reason that employees from often-marginalized categories feel highly positive about the company’s culture and work environment, putting it in the top 10% of companies with over 10,000 employees on Comparably, a workplace rating site.

Leaders whose companies feel compelled to take immediate strides in response to social action should consider whether they have this kind of longer-term vision in place as well. If not, they should develop that vision in parallel with their more immediate strategies. PepsiCo’s response in the summer of 2020 was future- and big-picture focused in this way. The company vowed to add 100 associates of color to its executive ranks within five years and has already achieved at least a quarter of that goal. The company also said that it would double its spending with Black-owned suppliers in five years and has made tangible progress in that direction.

Responding to Business Pressure

Aligning short-term strategies with a longer-term vision also is critical in responding to financial pressures, as executives often feel like they have no choice about pursuing change when the numbers demand it.

A case in point is GE which, starting in 2005, had a compelling, long-term vision for reducing environmental impact at a global scale called “ecoimagination.” This vision drove GE towards investments in wind and water and initiatives to lower carbon emissions technologies for jet engines and other products. The vision was generally well received. But the pressure to maintain and grow revenues led GE to a strategy of selling the water business in 2017 and doubling down on acquisitions in the non-renewable energy sector (see, for example the $9.5 billion 2015 purchase of Alstom’s power business, including the manufacture of coal-fueled turbines, and the 2016 merger with Baker Hughes, which provides services and equipment for oil drilling). These deals gave lie to GE’s green image and mired the company with an unmanageable debt load — problems that could possibly have been avoided by staying true to ecoimagination.

In contrast, Merck CEO Ken Frazier kept his company’s actions focused squarely on the company’s ultimate vision despite immense pressure in the early 2010s from shareholders to cut back on research and development as a strategy for increasing profitability and share price. Frazier pushed back on that strategic shift and even budgeted more for R&D because he saw it as key to the company’s long-term vision to “use the power of leading-edge science to save and improve lives around the world.” Despite taking short-term heat for his decision, Frazier kept the company focused on the vision — a strategy that led to the development and approval of a blockbuster immuno-oncology drug, a robust research pipeline, and, by the time Frazier retired in 2021, a stock price that had more than doubled.

Use Change to Accelerate Your Vision

No matter where the pressure to change your strategy comes from, think not only about whether you can align the changes with long-term vision, but also how you can do it in a way that accelerates your company’s pursuit of that vision.

For example, a large technology firm that had a long-term goal of attracting more women to its high-tech jobs used the abrupt move to remote and hybrid work as a way of proactively speeding up its gender diversity vision. From previous studies and observations, executives at the company had realized that women, who still bore the brunt of childcare, often had a hard time breaking into the company’s onsite tech teams where men stayed late or went out together after work; and that many women valued flexible work hours more than camaraderie. Driven by these insights, they intentionally leveraged the lessons from the remote and hybrid work arrangements necessitated by the coronavirus pandemic to make the co-located office teams less essential; and they are now empowering managers to continue creating flexible work arrangements both for new and current employees. Although it’s too soon to know for sure, early indications across the industry are that this is making it easier to recruit and retain women.

Check Your Vision

Aligning your strategy with your long-term vision of course presupposes that you have one. But that’s something you should test — especially when you are faced with the pressure to change your strategy.

A quick way to do this is to first ask yourself how, in the next 3–5 years, your company (or department of unit) will set itself apart from the competition, attract great talent, and be financially or operationally sustainable. See if you can put this down on paper in no more than a few sentences. Then ask three of your direct reports and a few other stakeholders (like a board member, a key customer, or a partner) to answer the same question.

If you can’t articulate the vision easily, or you don’t get a reasonably consistent response from others, then either you don’t have a clear and exciting vision, or it hasn’t been well communicated or understood.

If indeed your vision doesn’t pass this test, then take some time (even if it’s just a few days) and try to clarify the longer-term vision. There are various ways to do this that I have written about previously in the HBR Leader’s Handbook; if you’re not the CEO, then you can still go through a similar process just for your area. In either case, putting your long-term vision front and center is a critical first step for incorporating short-term strategic shifts into your plans.

Without a vision to guide you, responsive strategic shifts will get you somewhere, but not necessarily where you want to go.