In January, Canadian Prime Minister Mark Carney Directing his speech to Davos He said what many business leaders were already feeling but had not yet mentioned. “Let me be direct,” he told the room. “We are in the midst of a rupture, not a transition.” He described it as the end of a pleasant fairy tale – decades of deepening global integration built on the assumption of mutual benefit – and the beginning of something harsher, less predictable and significantly more important.
This week, as leaders meet again in the summer of Davos in Dalian, China, under the slogan “Innovation at Scale,” Carney’s formulation becomes clearer in its importance. The agenda reflects a world that is being redrawn in real time: changing commercial and industrial realities, energy markets destabilized by conflict in the Middle East, and artificial intelligence restructuring the nature of knowledge faster than organizations can adapt. The question that is asked during these sessions is – How can you build and expand in such a volatile environment? – is a question that most leaders answer with the wrong tools.
The instinct to tear apart is to reach for more: more scenario planning, more technology, more agile frameworks. What’s always overlooked is the one thing that really makes it all work: a clear and active sense of organizational purpose. Not a statement of purpose. Activated purpose. The difference is everything.
When the map dissolves, the target is the compass
The business world has invested heavily in Target over the past decade. Most large organizations now have one – a carefully crafted statement of why they exist, revealed somewhere off-site, printed in the annual report and then quietly passed over by the urgency of the next quarter.
The research is unequivocal about the cost of this gap. Companies that truly align their business practices with their stated purpose Average profit before tax growth of 31% In 2024. Companies with purpose statements but no real activation: 3 percent. This 28-point difference cannot be explained by sophistication of strategy, technology investment, or talent. He explained this through the discipline of following through.
In stable conditions, organizations can tolerate the gap between stated values and actual decisions. Stakeholders are tolerant, markets are predictable, and the performance cost of misperformance is slow and pervasive. In case of rupture, it accelerates. When business relationships collapse overnight, when artificial intelligence makes competitive advantages achieved last year obsolete, and when geopolitical shocks force rapid strategic pivots, organizations that know precisely what they are there to do are those that can move quickly and coherently. Everyone else risks being accelerated in multiple directions at once: impressive in movement, incoherent in impact.
This is exactly what Summer Davos is grappling with in Dalian. The question of how to harness technology to achieve results in the real economy – one of the meeting’s five main themes – cannot be answered by technology alone. AI can generate strategic options, model scenarios, and identify opportunities faster than any leadership team can process them. What you can’t do is tell the leader what the organization actually needs to achieve. This requires clarity of purpose, which most organizations claim to have, but which very few have truly operationalized.
Activation gap
In our work with boards and executive teams across multiple sectors and continents, we map the journey from stated purpose to lived purpose in a six-stage life cycle: wake up, act, express, align, amplify and ensure. Most organizations complete the first three and call it “done.” The last three – where true competitive advantage is built – are where momentum stops.
The alignment stage is the most important and is frequently skipped. It’s where the target becomes an active candidate for decision-making: what investments to fund, which to stop, who to hire, and how to evaluate performance. One of our clients, a government organization, conducted a complete inventory of all the projects on board at this stage, mapping them according to purpose alignment. The following year, they completed 30 percent of those projects. This was not a cost-cutting exercise. It was an exercise in clarity, and it created an organizational focus that made everything else faster and more efficient.
In an age of disruption, this kind of clarity is not a pretty thing. It is the mechanism through which organizations avoid the paralysis produced by volatile conditions.
What it looks like when it works
Kiwibank, New Zealand’s state-owned bank, has built its purpose activation around three outward-focused pillars with clear, time-bound commitments. Since 2021, its balance sheet has grown consistently ahead of the market, with lending and deposit growth outperforming competitors during some of New Zealand’s most challenging economic conditions. CEO Steve Jurkovich was frank about the mechanism: “We get performance through purpose. Once we figured out what purpose really meant to us, it became a win-win – not a trade-off.”
Places for People, a British social enterprise working in housing and community development, has united 20 companies under one goal—Because community matters-Then they did the hardest structural work: aligning every major decision with it. The 2024 engagement survey had a completion rate of 94.9 percent. Their impact framework reported £334 million of social value generated in financial year 2024. These results did not come from a statement of purpose. They came from the years of disciplined work that followed.
The leadership question Dalian should ask
The Davos Summer Agenda explores how enterprises can thrive amid changing business and industrial realities, how they can harness technology to deliver real economic outcomes, and how they can create jobs and opportunities in the next phase of growth. These are the right questions. But they all have a precondition that rarely appears on the agenda: that leaders need to know what they need to do before they can respond well to any of them.
Carney’s framing of rupture is useful precisely because it removes the comfort of incremental thinking. In the transition, you can adapt. If it tears, you can rebuild. Rebuilding strategy, operating models, and relationships with employees and communities requires a foundation that will hold up when everything else changes.
This purpose foundation is activated. Not as an aspiration, but as an operating system. Not as something to be communicated, but as something to be lived – one decision, one trade-off, one honest accountability conversation at a time.
Organizations that leave Dalian with a clearer answer to this foundational question will not only be better positioned to innovate at scale. They will be the ones still standing when the next rupture arrives.
Jenny McLaughlin He is the founder and CEO of Purpose Purpose led transformation and former EY partner. Sarah Rosentoler He is a certified psychologist, leadership consultant, and author of books including… Powered by purpose. Together, they work with boards and executive teams globally to drive meaningful activation.
