In 2015, shortly after I became chairman of Best Buy (in addition to being the company’s CEO), I decided to visit all board members. I headed to Michigan to sit with Patrick Doyle, who back then was the CEO of Domino’s Pizza, and one of his colleagues. The most memorable moment of that visit, which also turned out to have the biggest impact on Best Buy, was a question from Patrick’s colleague at the end of our discussion. He asked me, “Have you watched Simon Sinek’s TED Talk about how great leaders inspire action?” I had to admit I had not. Shortly afterward, I did watch it. As Sinek put it, “People don’t buy what you do; people buy why you do it.”

This was an “Aha!” moment for me. For many years, I had been pondering the purpose of companies, as well as work’s role in our individual, human quests for meaning. Although my philosophical exploration had convinced me of the power of both personal and corporate purpose, Sinek’s ideas reminded me that it was critical at that time for Best Buy as a company to articulate its “why.”

Today, most company leaders believe that their firms’ larger purpose is to make a positive difference in the world — not just to maximize shareholder value. More than eight in 10 executives, for example, think that a strong sense of shared purpose drives employee satisfaction, facilitates business transformation, and helps boost customer loyalty. Most executives also understand that purpose helps companies navigate a volatile and unpredictable environment and delivers higher and more sustainable performance.

Defining a corporate why and making sure it guides decisions and operations has therefore become a cornerstone of doing business. Best Buy’s purpose has been central to the way the company has grown and evolved — and continues to. It’s what helped inspire previously discouraged and anxious employees and boosted the company’s share price about tenfold since 2012.

I know from experience that it’s easy to understand the idea of a company guided by purpose — and it’s much harder to turn that into reality. The first step is to articulate the right purpose. Once I decided that Best Buy needed to focus on defining its own why, there was only one question: How should we approach this? From that experience, I learned that the following five considerations are critical for defining a powerful corporate purpose.

[Here is the first.]

#1: Look for your company purpose at the intersection of four circles.

While a lot has been said and written about corporate purpose, what it actually is isn’t always well understood. So first, let me offer this as the definition of the purpose of a corporation: It is the ultimate goal of the business, the essential reason why it exists, and how it contributes to the common good. For example, Google’s original purpose was to “organize the world’s information.” Netflix has defined its purpose as “entertaining the world.” Explicit in this definition is the view that business can and should be a force for the common good, rather than merely a vehicle whose only objective is to maximize shareholder returns, as Milton Friedman argued.

You might have noticed that there also isn’t a lot of information about how to find corporate purpose, either (unlike, for example, how to define a business strategy). Of course, there’s more than one way to proceed. But here is mine, inspired by author Andres Zuzunaga’s approach to finding personal purpose: Look for your company’s purpose at the intersection of four circles, as shown in the following figure.

To land on a meaningful, authentic, credible, and powerful purpose, explore all four circles thoroughly. Here are some factors to consider:

• What the world needs: What specific, important unmet needs exist in the world? How critical is it to address these needs? What difference will it make?
• What people at the company are passionate about: What drives people at the company? What difference are they keen to make in the world? (These apply to senior leadership as well as the overall employee population.)
• What the company is uniquely good at: What are the unique assets that allow it to address certain needs in a way others can’t? How do they need to evolve/be augmented to address the chosen needs in a way others aren’t?
• How the company can create economic value: What business opportunities stem from these considerations? How attractive are the associated potential profit pools? Can the company capture enough of this value?

After my meeting with Patrick Doyle, my team and I started reflecting on how to articulate Best Buy’s purpose during one of our quarterly senior leadership meetings. What defined the company, and what could the company be? We piggybacked on the strategy work that was already underway and deployed some analytical research. We realized, for example, that although technology offered exciting opportunities, it was also a source of frustration for most consumers, who needed help to use it fully to improve their lives.

But the work really progressed when we were able to also tap into the creative and emotional dimensions. For example, during one of our two-day leadership offsites, we spent time over dinner sharing our life stories and personal purposes, which helped us gradually define what we were collectively passionate about. Overall, what fundamentally drove most of us boiled down to making a positive difference in other people’s lives. It’s the combination of the analytical and the emotional that is powerful.