Hard-coding the ‘why’ into how
Expect more, demand more
Earlier this year, Deloitte released their fifth annual Millennial Survey which — besides confirming what many are experiencing around the significant reduction in average tenure, and feelings of loyalty that this generation have towards employers, with 44% looking to walk in the next two years — also surfaced this generation’s seemingly holy grail of attraction and retention: organisational purpose.
According to the survey, millennials take a very dim view of organisations that focus solely on profits as their reason for doing business, and feel strongly that for long-term sustainable success, organisations should prioritise creating value for their own people and customers rather than focussing on increasing short-term shareholder value. As millennials get older, becoming the largest demographic in an organisation’s employee base and indeed moving into leadership positions, it is becoming increasingly hard to dismiss this as the ‘idealism of youth’. Expecting more from employers than a mere job must instead be viewed as a fundamental shift in the generational mindset, which employers would do well to take seriously.
To this end, last week Dan Pontefract released his latest book, The Purpose Effect, as a follow-up to his thesis on culture & engagement, Flat Army. In the book Dan puts forward his own theories when it comes to purpose. Dan does not limit his thoughts to millennials, preferring to look at humans more collectively, and in it he explores what he calls the ‘sweet spot’ of purpose. This is his term for what can happen when three identified areas of purpose — personal, organisational and role — are aligned. He argues that if just one of these areas are out of kilter with the others, it is like a one leg of a three-legged stool becoming compromised. It can cause at best a wobble, and at worst a complete collapse. The book calls upon individuals and organisations to demand more from themselves and their employers than just going through the motions — because the more ‘sweet spots’ that can be created, the better organisations can serve their employees, customers and wider society in general.
So far, so silicon-location-of-choice (Valley, Roundabout, etc). There are many in long-established organisations that may cry that it is all well and good to espouse idealistic concepts such as purpose if you are building a start-up from scratch, but it is just not possible to maintain this as companies scale. Indeed, much has been written on the pitfalls of successful start-ups scaling, as they fall victim to what Dan highlights as the adverse effects of corporate law’s ‘best interests of the corporation principle’. This is a legal doctrine that assumes that those who manage the business will have acted to continue to prioritise the financial interests of the firm above all other decisions, making it very hard for executive leaders to move an institutionalised hard-coded bias away from considering anything other than the bottom line, especially when times are tough. Against such adversity, you would be forgiven for thinking that striving for more than corporate profits seems a futile cause.
Shifting the bias
Instinctively, most of us know that as individuals we crave more in our jobs than just a salary. Otherwise, pay and rations all being the same, we would all be equally happy to work as cleaners as we would as astronauts (no judgement here on preference). Additionally, the growing societal swell calling for organisations to offer more than shareholder value alone is becoming increasingly harder to ignore. But, at the end of the day, businesses cannot exist if they do not make money, so how do we balance these seemingly opposed philosophies?
The good news is that they do not have to be opposed to one another — in fact, one can drive the other. Studies have shown that purpose-driven companies return more than companies that are non-purpose driven. For example, John Kotter has shown that companies that lead through purpose return 10 times more than those that do not, over a 10 year period, meaning that choosing to focus on purpose does not mean choosing not to care about profit. Indeed, making the first choice is seemingly a more effective way to achieve the desired outcome of the second choice. Clay Parker Jones articulates this choice well when he uses his even overmodel. Applying this model provides that being purpose-driven and being profit-driven do not have to be mutually exclusive — it is just that you are making a conscious choice to prioritise one over the other whilst acknowledging the importance of each.
Although this distinction can be extremely useful at an individual and team level, the most crucial question for organisations (regardless of size) wanting to become more purpose-led is: how do we shift our institutional and systemic bias to favour the ‘purpose’ side of the spectrum? In short, if you view the organisation’s ways of working as its operating system, how do you hard-code its purpose — the ‘why’ — in?
As with any change that involves collective behaviour, this is not something that can be solved by simply delegating a flashy campaign to a comms team, or through a half-hearted CSR strategy. The relatively easy part is articulating what your purpose is. The tough, often missed next step to becoming truly purpose-led (whatever that purpose is) involves the organisation operating and demonstrating some very specific attributes, without which the purpose becomes yet another discarded mission statement by another name. The first step towards becoming purpose-led is to identify which of these attributes your organisation needs, and start considering what steps you can take to develop them and is an approach I’ve developed and successfully tested earlier in my career. These attributes (and some starting points for the shift) are:
- Alignment: First and foremost, this should involve alignment at an individual level. Honest introspection to discover what truly makes you tick as an individual should be an ongoing development process for successful and fulfilled employees — Harold Jarche talks about this as part of his concept of Personal Knowledge Mastery. But secondly, this requires alignment at the organisational level — so that everyone has clarity of the purpose, understands how they can contribute towards it and can link arms to achieve it. Achieving this is not just done through communication campaigns, but going further by involving employees in creating and evolving the purpose, such that they feel they have contributed and are personally invested in it. It is crucial also to follow up with aligning mechanisms that can encourage actions that shift the organisation towards — rather than away from — their purpose, e.g. by incentivising purpose-led achievements.
- Integrity: Linked to alignment, it is simply no good to have the organisation aligned behind a purpose, if when times are tough these principles fall by the wayside. Creating an organisation that has integrity around its purpose is the attribute that most contributes to purpose being more than an empty word. When digging below the surface of integrity you find the behaviours of openness and candour, so a good starting point to cultivating integrity in an organisation is to create more open communication channels, and to favour sharing of information even over restricting it. Not only does this apply inside-out, but also outside-in. After all, organisations that have integrity should have little that truly needs hiding.
- Accountability: To be able to operate with integrity, an organisation needs to be self-aware enough to be able to become truly accountable for its actions. Again, openness is a behaviour that will develop this attribute through practices like working out loud, and giving employees the responsibility and the freedom to demonstrate accountability, by removing bureaucracy that leaves them hamstrung and instead delegating authority as far down the organisation as possible, ideally to those closest to the information. Inspiration can be taken from organisations such as Johnsonville Sausage, cited in The Purpose Effect, where all employees publish their commitments each quarter, and update on their progress. These are visible to all and therefore can be held to account by all. This taps into intrinsic motivations not to let each other down and sour colleague-to-colleague relationships, rather than more traditional accountability consequences using extrinsic, often centralised carrot and stick methods.
- Enabling: Finally, as a natural follow on to the previous attribute, in order to be accountable employees must also be enabled. This involves trust, particularly from leaders, to be a central value in the organisation’s ways of working. However, this does not necessarily mean leaders are prevented from having oversight or input into tasks, as there are ways this can be done without undermining an employees delegated authority. One example comes from Pixar’s Braintrust process, which is their version of an academic peer review. They bring together a group of peers, who are not directly working on the project but have expertise, whose function is to review work done so far and raise the bar of the film being made. To do this they must give critical honest feedback, but with the sole motivation of improving the quality of the end product. At the end of the process the director of the film is under no obligation to incorporate any of the feedback — they crucially still get final say — but it allows for peer-to-peer improvement and quality control whilst still maintaining the employees’ autonomy.
None of this is a quick-fix or can be solved by any one team. As Dan puts in his book:
“Purpose is hard work. It takes a team. It takes individual effort. Put simply, purpose is not a one-way street of responsibility.”
However, through embedding ways to encourage these attributes in your organisation, becoming purpose-led becomes more than a nebulous pipedream confined to the next digital disruptors, and can instead become grounded in practical shifts to the practices of established corporations and their ways of working. That is where I believe that society as a whole will see the greatest benefits.