Purpose driven strategy has become a prime topic of management in the last decade due in no small part to the popular books like Start with Why by Simon Sinek; Firms of Endearment by Raj Sisodia; Leading with Purpose by Mark Koehler; Purpose: The Starting Point of Great Companies, by Nikos Mourkogiannis; and the Progress Principle by Teresa M. Amabile & Steven J. Kramer. Executive seminars are held about it, business models are built on it, and consulting companies have established whole practice lines dedicated to it.
This is a fundamental change to the approach expressed by Milton Friedman when he said:
“There is one and only one social responsibility of business-to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.”
The dancing landscapes of complexity are the game changer. The world is much more interconnected and interdependent in the time since Friedman said this just a few decades ago. We have recognized that purpose is a driver of success in complex systems, people, and organizations and have even begun to see this as its own field of study.
In a sense, this is a new type of Humanism where organizations don’t just work for their shareholders but for the betterment of all the stakeholders and the community at large. But, not to worry Milton, they do it with the profit motive in mind.
What we are learning is that under a Complexity Lens is that purpose driven strategies are more adaptive and more successful. Purpose acts as an attractor and aligns across the organization by permeating the value system, creating the rules and enabling good judgement. It is a powerful enabler for emergence. Moreover, a purpose attracts the kind of talent that thrives in complex environments. Survey after survey shows that today’s top talent wants to know that they are contributing. They don’t want their legacy simply be a full bank account or a monument with their name on it but to know that they have been a part of achieving a sustainable good.
The challenge is how to actually instill purpose into the organization and make it meaningful. Many companies have sought to establish their purpose (or pay consultants to do it) only to spend weeks wordsmithing a watered down statement to hang in their office only to see it easily forgotten. Few see it really start to align and motivate their people. This is because Purpose cannot be captured in statements that are easily memorized. If purpose is true and impactful, it shows up in the actions of the leadership and the staff in real and very practical ways.
Over the last few months, I have been meeting with a number of leaders in companies around the southwest United States to understand their purpose driven strategies and how they drive it into organizations. Each of these organizations has an incredible record of growth and low turnover. They include:
- Pinnacle Technologies – A medical tissue bank that gives people longer, more productive lives
- Infusionsoft – A technology firm that empowers entrepreneurs and enables small businesses
- Able Engineering – An engineering firm that is out to create a healthy, self-esteem building home for their employees and their families
- A for-profit educational institution that has job creation and improving the standard of living in their community at the center of its strategy
Based on these visits and some personal experience I have gathered working for organizations with successful (and failed) purpose driven strategies, here are some simple guidelines:
Make Your Purpose Clear & Simple: Each of the originations that I met with has a very clear purpose. Some organizations take a bit of a shotgun approach, but multiple causes create confusion and fail to align people’s motivations. It is better to have a single clear idea to rally around and discuss it ad nauseam. Once that Purpose is established and understood, all subsequent plans should start with how they support it.
Be Sincere: For successful organizations, their purpose is not just words on a wall. Real passion for the cause builds, supports, and motivates. Opportunism debilitates. I can tell you I have sat in many meetings with companies who were looking for something good to do so they could tick it off and send out a press release, but the cynicism showed through and the employees rarely felt that organization was doing more than posturing.
Align Purpose & Mission: Often leaders will confuse purpose with mission. While a mission is what the company does, purpose is why it exists. The distinction can be subtle, but it is an important one that should not be taken lightly. At the same time, aligning purpose and mission is essential. The purpose should be found in the daily activities of the business and the employees. They should be able to track their tasks to the ultimate result.
Measure Performance: Creating corporate- wide metrics infuses the purpose throughout the organization and rewarding behaviors that drive the purpose shows the organization’s dedication. Many companies make this maybe 5% or 10% of their overall metrics, but if it is aligned properly with the Mission, it should show up in 80-100% of what they do. However an organization measures performance, it should be made very clear how the company, division, and individual performance are aligned with the purpose.
Invest Organizational Time & Resources: While incorporating your daily activities toward your purpose is essential, so is setting aside specific time and resources. This, again, shows an organization’s dedication. This should be on company time and should enable everyone to participate at some level. Time outside of work is OK on a volunteer basis, but scheduling all efforts after hours, on breaks or on weekends sends the signal that the purpose is ancillary to the organization.
Hire Believers: Bringing in new people who support the purpose is essential. Assessing the true nature of the employee’s motivation should be part of the hiring process. Have they dedicated time and energy to this purpose in the past? Do they list this purpose as a reason they want to join the organization? Each of the companies I talked to stated that they focus on this and that their biggest mistakes were when they made an exception or were uncertain of the person’s motivation.
Take Care of Your Own: Each of the companies I visited were highly focused on the success of their employees. They realize that there is no sense to the organization’s Purpose if their people are valued at least as much. Infusionsoft went so far as to have employees list their dreams and hire a person dedicated to helping them realize them (even when it meant the result would take them away from the company). When people were sick or injured or had family issues, the companies I visited made a point of stepping forward even when it seemed impractical. Both Able and Pinnacle described situations where employees had been injured outside the workplace and the company supported their recovery, contributed to their families, and guaranteed the employee a position when they returned. They understand that if the basic needs of the employees are not met, they cannot focus on the higher Purpose of the organization.
Caveat – Purpose is a good thing when used correctly. At the same time, it can be scary if used wrongly. I have seen it used as an excuse to delve into the personal lives of employees, draw moral judgments, and to pursue oppressive policies. Clearly this creates a negative impact on the organization. At the center of the new humanism is its people first ethic. It cannot not justify a tyrannical approach. As with most things related to complexity, the key is balance.
Purpose is a powerful tool. It can align all agents and help drive emergence creating an organizational value much greater than the sum of its parts. It values all stakeholders and the external environment it serves. This is a new, humanistic approach that not only appeals to the top talent, but also supports the profit motive of businesses. Purpose is not simply reflected in statement on the wall but in sincere belief and practical action. Like all powerful tools, it should be wielded with caution and with an eye on maintaining balance.