After 28 years of research at Harvard and Northwestern, Ranjay Gulati is convinced: Purpose is one of the most underused and misunderstood concepts in business.

It wasn't always that way. When Gulati first started as a business school professor, he saw purpose as a form of organizational wallpaper. "It was this thing that every company had, but no one did anything with," Gulati, now a Harvard Business School chaired professor of business administration, said on Tuesday during Inc.'s Purpose Power Summit 2021 stream event. "I believed that too. Like, 'Oh, really, a mission statement? Whatever.' And I've come to realize: What an underutilized resource."

Defining an organizational purpose--a mission that goes beyond the company's everyday business--is all about building emotional connections between your employees and their work, Gulati said. It forces you to think clearly about what you actually want your company to do. It helps you attract employees who are passionate about working for you, rather than simply collecting a paycheck, resulting in a more focused and productive workforce. And you filter out less-loyal customers while engaging more deeply with your community at large.

Sometimes you can achieve that effect by creating a companywide rallying cry around a specific cause--say, diabetes research. Other times, you can try to help employees pursue their individual passions, even including simple hobbies, alongside their day-to-day work lives. The key to making it work, according to Gulati: making sure it's heartfelt. "It has to feel personal to the leader," he said. "It's not just a concept that seems like a good strategy--it's an extension of who you are. So to create purpose, leaders tell personal stories about why that purpose is meaningful for them."

Similarly, Gulati issued a warning for any jaded leaders trying to shoehorn purpose into their company: You can't ever see it as putting a tax on doing business. "That's such an incorrect and, I would say, myopic view of purpose," he said.