From KPIs to IPIs: why many businesses measure more than money
Warren Partners
For decades, conventional business wisdom preached a simple creed: focus on maximising shareholder value and everything else would follow. Today, that mantra is looking increasingly outdated. Investors, employees, customers and communities are all raising their expectations – and the businesses that thrive will be the ones that recognise profit and purpose are no longer opposing forces, but fundamentally intertwined.
Indeed, at Warren Partners, as a certified B Corp, we believe the future belongs to organisations that put long-term impact at the heart of decision-making – not as an afterthought, but as a central measure of success.
A short history of purpose in business
The idea that companies have responsibilities beyond the balance sheet isn’t new. Quaker-founded businesses like Cadbury and Lever Brothers were early pioneers, providing housing, education and healthcare for workers in the 19th century. Yet for much of the 20th century, corporate priorities shifted, with shareholder returns taking centre stage — a philosophy famously championed by economist Milton Friedman.
Change began stirring again in the late 1990s with the rise of Corporate Social Responsibility (CSR) initiatives. In the decades since, CSR has evolved into broader Environmental, Social and Governance (ESG) frameworks – and now, for many organisations, an integrated purpose strategy that touches every part of operations. Movements like B Corp certification have formalised what many progressive leaders instinctively knew: businesses don’t operate in a vacuum.
The business case for purpose
Study after study has shown that companies with strong ESG credentials tend to outperform their peers over the long term. BlackRock’s CEO, Larry Fink, has repeatedly stressed that “profit and purpose are inextricably linked,” highlighting how stakeholder trust underpins sustained growth.
Purpose also matters in the talent market. Younger generations expect employers to stand for more than quarterly profits. Research shows purpose-driven companies attract and retain top talent more successfully and enjoy higher levels of employee engagement and innovation.
Customer loyalty, investor confidence, employee motivation – all are increasingly influenced by an organisation’s authenticity and impact. But while the case for purpose is clear, measuring it meaningfully is where the real challenge lies.
From KPIs to IPIs: rethinking how we measure success
Most businesses are comfortable with KPIs: Key Performance Indicators that track financial health, market share or operational efficiency. But if organisations are serious about purpose, they must also track their broader impact.
This is where a new lens is emerging: IPIs, or Impact Performance Indicators. As Donna Okell, founder of B Corp consultant UK for Good, says: “KPIs can drive what is measured and managed. However, they are often short-term and internally focused and may not reflect an organisation’s external impact.” IPIs expand the field of view – measuring outcomes such as community investment, carbon footprint reductions, employee wellbeing and supply chain ethics.
“Embedding IPIs into business strategy ensures that positive impact becomes part of an organisation’s DNA, not just a side project,” Okell explains. In other words, purpose must be measured with the same rigour as profit – because what gets measured, gets managed.
Purpose in action
Across sectors and sizes, organisations are proving that purpose isn’t a drag on performance – it’s a catalyst. Patagonia, the outdoor apparel brand, famously channelled its profits into environmental causes and restructured its ownership model to serve the planet. In 2019, Unilever revealed that its “Sustainable Living” brands, focused on social and environmental leadership, consistently outperformed the company’s wider portfolio. Closer to home, emerging B Corps like Oddbox and Olio show how mission-led businesses can attract investment, talent and loyal customer communities from day one.
The common denominator is that they embed purpose into strategy, not just storytelling. They track their impact, stay accountable – and build resilience by doing so.
“Purpose isn’t about trading profit for principle,” says Warren Partners Managing Director Kirsty Dougan. “It’s about building organisations that are commercially strong because they are values-led. Performance and impact are two sides of the same coin.”
In a world where scrutiny is sharper, competition fiercer and stakeholder expectations higher, the organisations that endure will be those that lead with both head and heart.