…Many conversations about purpose, however, stall because of a lack of understanding about what it means. The most common trap that leaders fall into is to confuse purpose with strategy. If leaders think that expanding their company through acquisition (a strategy) is a purpose, then growth for growth’s sake takes over. The collapse of construction giant Carillion in 2018 showed how maximising profit instead of providing a quality service becomes problematic. A good starting point is to reach a mutual understanding about what purpose is. My own definition of being powered by purpose is: Having a clear, compelling and authentic purpose that contributes to long-term wellbeing, guides day-to-day decision-making, and engages and energises people to do great work. Embracing and embodying this definition reduces the risk of ‘purpose wash.’ Despite the success and strong financial results of purpose-driven companies, cynicism continues. In organisations where consultants have tried to make purpose a marketing exercise, people are left with purpose fatigue.
As part of my series about the “How To Take Your Company From Good To Great”, I had the pleasure of interviewing Sarah Rozenthuler, a chartered psychologist, leadership consultant and pioneer of purpose-led leadership. She has over 15 years international experience consulting to many different organizations including BP, Spencer Stuart, Standard Chartered Bank, IUCN and the World Bank as well as numerous SMEs and not-for-profit organisations, including Choice Support and Booktrust.
As the author of How to Have Meaningful Conversations: Seven Strategies for Talking About What Matters Most (Watkins, 2012), Sarah’s work has been widely featured in the media including the Huffington Post, the Sunday Times, the FT, Guardian, Psychologies Magazine and the BBC Business online.
Sarah works with CEOs and leaders who want to create positive change by having the conversations that matter most. Increasingly these conversations are all about purpose. She founded Bridgework Consulting Ltd in 2007 to enable leaders to engage and energize their people around great work, with the intention of transforming organisations to become a force for good in the world.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
When I was 21 years old, I graduated in psychology with flying colours from the University of Nottingham, UK. I’d completed a four-year degree course, with the encouragement of my parents who’d been keen for me to jump a year at school and fast track to a successful career. I was fortunate enough to spend my ‘industrial placement’ year working for a top consultancy where I loved working directly for clients to improve performance by applying insights from business psychology.
After I finished my degree, instead of doing the sensible thing by accepting the offer of a graduate job from the consultancy, the spirit of adventure got the better of me. I rode off into the sunshine with my boyfriend in an old camper van with the plan to teach English for a year. After driving through the Alps and doing day work on yachts in Antibes, we had enough cash stashed to drive south to Spain. Friends from university who’d set up home in Valencia told us of fiestas, fun and sun. Our happy reunion came to an abrupt end, however, when we discovered that while we’d been out having cervezas our camper van had been broken into. We lost virtually all our possessions — the little money we had, all our clothes and our much-loved stereo too.
With no fixed address and no clothes to wear except old t-shirts and scruffy denim shorts, we didn’t get a single interview at a language school. We soon found ourselves without a job nor a peseta in our pockets (this was over twenty years ago, pre-Euro.) Hanging out in plazas, we soon met other ‘travellers’, or ‘Thatcher’s refugees’, as some liked to call themselves, who were adept at earning a living on the street. To avoid having to borrow money from my parents and returning to the UK with my tail between my legs, I set out learning to busk.
The plan to spend a year teaching English turned into four years living on the road. I learnt how to juggle three balls, three plastic clubs, followed by three fire clubs and finally three knives. A turning point came when an American magician, a seasoned street performer, taught me how to pull a crowd, entertain them and pass the hat.
The turning point came when, after four years of full-on adventure and hard graft, I had my first successful season doing a solo show. As the long days shortened to autumn, my spirits started to sag. Although I’d ‘made it’ as a busker, having saved up enough money for a winter of not working, I began to feel really down. After several weeks of going to bed crying and waking up crying, I bought a flight back to the UK and went to visit my parents. My Mum and I had what turned out to be a life-changing conversation and the turning point on my journey of feeling so lost.
“You’re not happy because you’re not fulfilled. And you’re not fulfilled because you’re not using all your talents,” Mum said.
My self-esteem was so low, I couldn’t actually figure out what my talents were. I guessed that I probably wasn’t using all of them. I knew that whilst I enjoyed making people smile and children laugh, I sensed that there was more to life than this. There had to be more to work than this. There had to be more to me than this.
After some heart searching, I left my itinerant life and moved back into my parents’ home. The funds that would have seen me through a winter hibernating in Spain suddenly seemed very small. I was 25 and life had never felt so challenging. It had been tough on the road, but this inner pain was different to the hunger I’d felt on the streets. The same thoughts went round and round my head:
‘Everyone has a life apart from me.’
‘I’ve burnt all my bridges.’
And… again and again –
‘Is this it?’
My ‘crash’ turned out to be hugely instructive. I had wandered off my path and my internal radar knew it. I gradually came to accept what my Mum had seen so clearly. I hadn’t been using the abilities I had that were so effortless I hardly even noticed I had them: communicating with diverse people, synthesizing different information and asking provocative questions. In their absence, a light had gone out inside.
It took over a year to write my CV, go to some interviews and find a job. I was eventually offered a position in what is now the Department of Work and Pensions at their head office in Sheffield. I travelled around to different job centres — Wigan, Barnsley and Cardiff — testing staff on newly developed recruitment tests to check that they didn’t have adverse impact on women or people from minority backgrounds. Hardly my dream job but I was grateful to have been given a break. By returning to my passion — helping people and organisations to thrive — the light inside started to shine again.
Since then, I’ve seen time and time again how individuals who are in touch their passion have a wellspring of energy. Their eyes are bright, their presence is magnetic and their vision is energising for others. When people believe in what they do, they not only have a purpose, they embody it too.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
When I was first starting, I booked a venue for my first workshop and, as it was my launch event, I went for a venue that was right at the top of my budget range. I wanted my participants to feel comfortable and well cared for. I pulled in quite a crowd, which was great, and I ran the event in a light and airy room with good food and lots of space to move around.
But when the invoice arrived for the room hire, they’d added VAT and I’d totally forgotten to take VAT into my calculations. And so when I paid off the VAT that completely eradicated my profit margin. I made zero money on my first event and felt rather foolish.
My lesson from that is to really pay attention to the finances, and not just people’s comfort and wellbeing, which is what I tend to prioritize. A business needs cashflow to sustain itself not just good feelings!
What do you think makes your company stand out? Can you share a story?
My company’s name, Bridgework, captures people’s imaginations. I am often asked about the title of my company and how it came about. Some people crack jokes about whether I do dental services and others are curious about whether I’m an engineer that designs bridges across rivers.
Their intrigue is helpful because it gets the conversation started. I share that the leadership development work I do is all about building bridges to a better future by making work more meaningful. I also build bridges between leaders, teams and organisations that have come apart and need to be re-connected.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
When you’re dealing with a complex array of stakeholders — your boss, your clients, your team members — remember that you are also one of your stakeholders. Make sure you carve out time for self-care: do some exercise, take time to meditate, take a walk in the park. Make sure you get enough of what nourishes you in your life.
I work with many people who are very dedicated to their jobs and I encourage them to make sure that work doesn’t become the only thing in their life. There’s psychological research that says the happiest people have usually got about six different dimensions to their life. Family, friends, sport, music, faith, and your local community can also be important too. We need a diversity of dimensions to be happy and that stops us from burning out.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I do have a mentor who has helped me along the way for well over 20 years. She’s called Tricia and she’s always believed in me. When we first met, it was years before I started my own business and even back then, Tricia somehow saw something in me that I didn’t see in myself.
The standout thing about Tricia is that she’s able to challenge me in a very supportive way. I always trust where her questions come from. On one occasion, around the time I had turned forty, Tricia observed that I wasn’t really meeting my potential because I was shying away from working with CEOs and C-Suite level executives. It resonated. I knew deep inside that I was underselling myself and my services but it took someone other than me to voice this in order for me to wake up. Since then, I’ve coached many CEOs and their senior leadership teams and found that not only am I able to do it, I enjoy doing it too!
Ok thank you for all that. Now let’s shift to the main focus of this interview. The title of this series is “How to take your company from good to great”. Let’s start with defining our terms. How would you define a “good” company, what does that look like? How would you define a “great” company, what does that look like?
A good company is one that provides a good service or product. It’s sustainable, profitable and competitive. Customers give it good enough ratings and staff are satisfied but not scintillated.
Customers love a great company because its people are energized to do great work. They are willing to go the extra mile because their work feels meaningful and they have a sense of belonging.
Team members feel well taken care of and that they’re growing as human beings. Because of that, they’re motivated to serve a whole range of stakeholders — customers, suppliers, investors, shareholders, their local community, perhaps even future generations and the environment. When people feel that their organization really makes a difference in the world, it lights them up on the inside and this ‘warm glow’ differentiates a great company from its competitors.
Based on your experience and success, what are the five most important things one should know in order to lead a company from Good to Great? Please share a story or an example for each.
1. ENERGISE YOUR PEOPLE
To engage their people, an organisation must have a wider purpose. Profit maximisation is not a true motivator but a compelling ‘why’ is. At Unilever, during the 10 years that Paul Polman was CEO, he took the organisation on the journey to be purpose-driven, which inspired employees, customers and suppliers; it also strengthened business performance. Unilever’s shareholder return was nearly 300 per cent, well ahead of the FTSE 100 index.
At the heart of a purpose-led approach are the human relationships that an organisation creates. Leadership is about being tough on issues and easy on people. Purpose fosters more positive behaviours as it clarifies what really matters. When there is a meaningful reason to exist, people feel that they belong and there is a flow of positive energy among people who pull together to achieve extraordinary results.
One outcome of the pandemic has been that it has brought purpose into sharp relief. Many businesses are wrestling with the question: How is the world a better place by us being here? With the general public becoming less and less tolerant of companies profiteering from the crisis, some organisations have a clearer sense of the value they add. When Johnson & Johnson announced that its prospective covid-19 vaccine will be available not-for-profit, there was a 6.5% increase in its share price.
More and more leaders are starting to see the benefits that a purpose-beyond-profit brings.
Whether it’s to feed the nation, provide hospitals with ventilators or research a vaccine, a ‘true purpose’ contributes to the timeless good of people and the planet. With purpose, people feel part of a bigger story. They are energised to do great work. They have a guiding light that illuminates their path forward.
2. FOCUS ON A BETTER FUTURE
People love purpose-driven brands because of the positive change they create in the world. At Brompton Cycles the purpose is to ‘change the way people live in cities.’ At Danone the purpose is to bring ‘health through food.’ At Lego, they have a long-standing purpose to ‘inspire and develop the builders of tomorrow.’ Customers are engaged when a brand takes a stand on something that people care about — the wellbeing of people and the planet.
Many conversations about purpose, however, stall because of a lack of understanding about what it means. The most common trap that leaders fall into is to confuse purpose with strategy. If leaders think that expanding their company through acquisition (a strategy) is a purpose, then growth for growth’s sake takes over. The collapse of construction giant Carillion in 2018 showed how maximising profit instead of providing a quality service becomes problematic.
A good starting point is to reach a mutual understanding about what purpose is. My own definition of being powered by purpose is: Having a clear, compelling and authentic purpose that contributes to long-term wellbeing, guides day-to-day decision-making, and engages and energises people to do great work.
Embracing and embodying this definition reduces the risk of ‘purpose wash.’ Despite the success and strong financial results of purpose-driven companies, cynicism continues. In organisations where consultants have tried to make purpose a marketing exercise, people are left with purpose fatigue.
A true purpose acts as a North Star by focusing people’s energy on creating a better tomorrow. The outdoor clothing company Patagonia made global headlines in 2016 for pledging to donate 100% of its Black Friday profits to grassroots environmental groups working to protect our air, water and soil. Patagonia had anticipated making $2 million — they beat this five times over when they made a staggering $10 million in sales. Their purpose — Patagonia is in business to save our home planet — is the lodestar pulling them forward.
A compelling organisational purpose is sometimes encoded into the organisation’s founding energy. Unilever, Boots Opticians and TSB Bank have all evolved their purpose by re-examining the reason that their founders created the organisation. Lifebuoy soap — one of Unilever’s most successful and profitable brands — dates back to the vision of William Hesketh Lever. Concerned about cholera spreading through the slums of Liverpool, Lever created a bar of soap that would be available to the masses who were at risk of dying — a mission that is still consistent with how the soap is marketed in India today. Purpose lights up the future horizon, attracting people who resonate with building a better tomorrow.
3. MAKE DIALOGUE AUTHENTIC
One of the chief reasons that purpose is absent is because leaders fail to set aside the quality time needed to have a conversation about it. Leadership teams often spend excessive hours on spreadsheets, slide decks and strategy but scant time on purpose. This oversight is costly as everyone misses out on the creative opportunity of doing great work.
Teams that land a powerful purpose usually set aside one or two days to have a dialogue about it. For an organisation, it can take longer. It takes time for a potent purpose to come into view because it is not an intellectual exercise. Generating a potent purpose involves slowing down, sharing stories and strengthening relationships. It is in an atmosphere of openness and reflection about what feels meaningful that purpose is most easily revealed.
At Standard Chartered Bank, leaders gathered over several months to have conversations that explored questions such as: What does the Bank stand for? If the Bank ceased to exist tomorrow, who would care, and why?
From these dialogues, the Bank defined its purpose: ‘Driving Commerce and Prosperity through our Unique Diversity.’ This purpose statement reflects what differentiates the Bank: the diverse people that intimately understand the local clients and markets in which they work.
Senior leaders then engaged their people to answer the question: ‘If we are to bring our purpose to life in a human way, how do we do this?’ They crowdsourced and analysed the responses of 70,000 people with the help of smart machine learning and defined the behaviours they most valued. ‘Never settle’ connected with the ‘Driving’ element of their purpose. ‘Do the right thing’ brought ‘Commerce and Prosperity’ to life. ‘Better together’ is how the Bank harnessed ‘unique diversity.’
Several leaders I coached reflected that, had it not been for a safe space in which to do some sense making, they might have exited. When leaders are able to voice their vulnerabilities, it can make the difference between a decision to stay or go. By engaging people in an authentic dialogue about the reason the Bank existed, the Bank not only clarified its purpose but retained some of its top talent at a time of turbulence and change.
4. DEMONSTRATE YOUR COMMITMENT
To close the gap between purpose being an inspiring North Star and a touchstone for daily decision-making, leaders need to make it tangible. Research shows that whilst 79% of business leaders think that purpose is central to business success, only 34% use purpose as a guidepost for decision-making of their leadership team.
One simple way to make purpose practical is to write it down. Whilst this is commonplace for purpose-driven organisations, many teams miss this opportunity. The watch-out is that it doesn’t become an exercise in word-smithing. The team purpose statement is less important than the shared understanding and deeper relationships that a dialogue about a team’s purpose generates.
There are several benefits to shaping purpose into words. A purpose statement:
- Creates alignment, shared understanding and improves relationships
- Enables a team or organization to hold itself accountable
- Makes it easier to evolve the purpose, when needed
- Provides the opportunity to engages stakeholders in meaningful dialogue
- Creates a basis for innovative thinking
- Builds resilience during turbulent times
Some organisations are going one step further to signal their commitment to being purpose driven. In June 2020, Danone hit the headlines after its shareholders voted almost unanimously to become a so-called enterprise à mission or purpose driven company. This legal status requires Danone not only to generate profit for its shareholders but to do so in a way that will benefit its customers’ health and the planet. During a video-streamed meeting where the news was announced, Emmanuel Faber, CEO, was widely quoted as saying:
“You have toppled the statue of Milton Friedman here today.”
In 1970, the Nobel-prize winning American economist Milton Friedman wrote a seminal article with the title ‘The social responsibility of business is to increase its profits’ to debunk the idea that corporations should also do good. With the growing success of companies such as Whole Food Markets, Honest Tea and Etsy, ‘doing well’ and ‘doing good’ are becoming increasingly understood as intertwined. These companies make a difference and they make a profit, successfully.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. Can you help articulate for our readers a few reasons why a business should consider becoming a purpose driven business, or consider having a social impact angle?
The growing ‘B-Corps’ movement reflects the momentum towards purpose-driven business. Over the past decade, almost 3,000 organisations have become B Corporations, including Patagonia, Abel & Cole, Ella’s Kitchen, Cook and Natura & Co. Independent monitors assess whether their ESG practices meet the rigorous standards laid down by B Lab, a not-for-profit group in the US, who make the results public. B Corps commit to act in the interests of all stakeholders, not just shareholders.
In the UK, B Corps enterprises include a purpose in their articles of association and provide measures to prove it is being fulfilled. By proactively choosing to go through this process of stringent assessment, business leaders are adapting to a changing global consciousness that places people and the planet as the priority rather than a sole emphasis on profit
What would you advise to a business leader who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth and “restart their engines”?
Unilever, over the last decade or so, has gone on a journey to become purpose driven under the leadership of the former CEO, Paul Polman. Unilever re-examined their purpose, which is currently articulated as ‘making sustainable living commonplace.’ It’s evolved into that from being about ‘adding vitality to life.’ This reflects a changing global consciousness about our climate crisis and the need for business to play its part in tackling environmental degradation and biodiversity loss. From time to time, a company needs to pulse check its purpose to see if that purpose reflects what the marketplace now needs. Unilever’s pioneer sustainable living brands, which focused on purpose, in 2016 grew 50% faster than the rest of the business and accounted for 60% of the company growth.
Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?
I think one of the things about having a clear and compelling purpose is it enables day-to-day decision making. It sharpens decisions about what you do and what you don’t do. I’ve turned down consulting work when it’s presented me with an ethical dilemma and not felt on track with my purpose, (which is about strengthening leadership in organizations that want to be a force for good in the world.)
When I’ve been asked to work for an organisation and I feel their social impact is dubious, I’ve said no. Looking back, I can see how this clear ‘no’ left space open for me to say yes to something else that did feel more on purpose.
This year, during the pandemic, learning to flex has also been crucial. I’ve had to get to grips with adapting my work coaching leadership teams to be fully online. It wouldn’t have been my choice as I’m often dealing with delicate interpersonal issues and it’s harder to unpack them on screen. But team coaching is what my clients wanted and so I bit the bullet. I attended sessions where I was a participant first, and I gradually learnt how to facilitate in a remote setting. Updating your skills and adapting to our digital world is critical even in a business like mine which is ‘high touch’ and all about human dynamics.
In your experience, which aspect of running a company tends to be most underestimated? Can you explain or give an example?
In the early days, there is a real need for the founder to be a good all-rounder and nobody ever really spelled that out for me. As the founder, you’ve got to be willing to turn your hand to do a bit of everything. I can remember learning how to get to grips with software in order to send out a newsletter and sweating over that because tech stuff isn’t my strong suit. I also had to learn how to complete spreadsheets to calculate VAT return once a quarter and initially that felt quite beyond me. I’ve had to learn to be my own PA, my own boss, Head of Sales and Director of Business Development. And then there’s been the challenge to let go of those roles and delegate them to someone else who sometimes has a very different approach.
As you know, “conversion” means to convert a visit into a sale. In your experience what are the best strategies a business should use to increase conversion rates?
Build a real relationship with your potential client. Cultivate a genuine curiosity about that person’s world, their problem and what they’re seeking help with. Be as present as you can with them — ask them questions, draw out their thinking, challenge them to see their situation in a new way. Leave them feeling more lucid as a result of your conversation.
Don’t be too attached to making a sale. Be much more focused on understanding them, building trust and establishing rapport. If there’s a sale that wants to happen, it will happen. It might not happen immediately; sometimes I’m contacted months later, sometimes even years later, by someone who then turns into a paying client. What people remember is how you make them feel not your business spiel.
Of course, the main way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways that a business can earn a reputation as a trusted and beloved brand?
You’ve got to deliver a great product or service, something that people remember. You’ve got to inspire so that you create an impact that is different to what other people have done. At the same time, you need to be seen reliable, trustworthy and deliver what you say you’ll deliver. This combination of sparkiness and steadiness really wins the day.
Great customer service and great customer experience are essential to build a beloved brand and essential to be successful in general. In your experience what are a few of the most important things a business leader should know in order to create a Wow! Customer Experience?
You have got to be present so that when you’re with the customer, you’re fully in the room with them — whether it’s the Zoom room or the actual meeting room. You need to have cleared your mind so that you’re available to be with others fully without being distracted.
You also need to create a psychologically safe environment where people want to step forward, experiment and try things out. When people have fun and feel playful, they learn quickly and come up with fresh ideas. You can get a wow!
What are your thoughts about how a company should be engaged on Social Media? For example, the advisory firm EisnerAmper conducted 6 yearly surveys of United States corporate boards, and directors reported that one of their most pressing concerns was reputational risk as a result of social media. Do you share this concern? We’d love to hear your thoughts about this.
I think how a company engages on social media is of increasing importance. We all get checked out. There’s the Google test — what happens when your name or your company’s name is put into Google and up come the results for all to see.
Learning how to be responsive, not reactive, on social media is key. I’m always mindful that we can probably never delete anything that we send out into the ether. It’s good to be authentic and honest, and to take our time to respond, if we’re able to, so that we don’t regret what we say.
What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?
Not taking enough time out, not doing enough self care and not getting enough sleep. If we’re not exercising and not eating well, it’s a false economy as our energy won’t be sustainable in the longer term. At times you do need to out clear boundaries in place so that you take care of you.
CEOs need to keep an eye on how the marketplace is changing, what their competitors are doing and what’s happening with potential collaborators. Having a mentor or trusted ally, with whom you can have regular conversations, helps to make sure you’re not missing important developments.
Thank you for all of that. We are nearly done. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
#MeaningulMondays. Start your week by asking yourself: what’s the most meaningful thing I can do this week? Capture that idea and make sure it’s the one thing you achieve that week. Where your attention goes, your energy flows.
How can our readers further follow you online?
This was very inspiring. Thank you so much for the time you spent with this!