In my last post I wrote how important Organizing Around Purpose is. We all want to be part of something bigger, and organizations function at their best when guided but strong purpose. In this post I’ll write about what makes a purpose a Strong Purpose.
A Strong Purpose is one that allows it’s members to feel like they are answering to a higher calling. It guide’s peoples behavior and serves as a rallying point in time of crisis. Purpose server as filter to which we can make decisions, and a moral compass that shapes organizational values.
Hierarchy Of Organizational Purpose
A reasonable metaphor, albeit an imperfect one, is to think of Organizational Purposes like Maslow’s famous hierarchy of needs. It can be a lot harder to think about a higher purpose when organizations are struggling to simply survive. Although it is fair to state that organizations that attend to higher purpose look at survival as an after thought. Like I said not a perfect metaphor, but a good visual to describe increasing strength of purpose.
Profit as Purpose
When asked what is the purpose of their organization, many leaders will answer simply “to maximize profit” even if subconsciously. This is perhaps the poorest form of organizational purpose. When profit is the sole motive we get cynical, and even craven, decision making. Joost Minnaar and Pim de Moree discuss the limitations of profit as purpose in their inspirational book, Corporate Rebels. According to Corporate Rebels, when work is just about making money, then morbid, short term thinking is the result. We get management that makes short term decision. Decisions that may bring swift return on investment, but are often at the expense of sustainable value over time. Decisions that result in poor user experience, decisions that frustrate and anger people working on the front line. The result are decisions that are not good for the world and demotivating for everyone involved.
Likely at least some of you are rolling your eyes, how can profit not be the ultimate purpose of an Organization? How can an organization survive without profit? The obvious answer is an organization can’t. Even public organizations require funds that can be-reinvested back into the service they provide. Profit is important, it is critical in fact to organizational existence. But profit to an organization is like food and water to a human. We can’t survive if we don’t eat, but I think most of us would agree that we humans have all answered to a higher calling than the consumption of food for at least a couple of centuries.
Likewise most organizations don’t survive without profit, but profit is fuel for purpose. Organizations that look at profit as a means to achieving purpose outperform organizations that accomplish outcomes solely to achieve profit. A popular saying in the Lean / Agile community is if you make money in order to run your business you will make money, but running a business to make money wont keep you in business.
There is plenty of research that profit is a poor motivator as well, with a recent paper in The Journal of Business Ethics, one that is backed by numerous studies, showing that the motivation of employees improved between 17 to 33 percent when profit is not the primary objective of the organization. We can say similar things about other critical levers of most businesses, growth, market share, competition, etc all of these are necessary to run a large organization, but none of these are sufficient for an organization and the people in it to excel.
The Market Purpose
There are plenty of examples of organizations that define their outcomes in terms of their impact to one or more market outcomes. The ability to deliver great experiences, goods, and services are a common theme. Some reasonable examples include:
- continually raise the bar of the customer experience by using the internet and technology to help consumers find, discover and buy anything – Amazon
- to lead in the creation, development, and manufacture of the industry’s most advanced information technologies, including computer systems, software, networking systems, storage devices, and microelectronics – IBM
- Become essential to our customers by providing differentiated products and services to help them achieve their aspirations – American Express
These mission statements are an improvement to defining purpose solely through profit. When purpose (and a big if) is carried forward into the structure and behavior of the organization, people can and do rally around changing outcomes based on that purpose. Market Purpose makes it easier to re-orient people in the organization towards an outward facing perspective, something many organizations continue to struggle with. We can have a honest discussion about moving organizational power structures away from internal looking functional departments, and towards structuring people around market outcomes.
More Meaningful Purpose
Yet, an organization guided solely by market purpose can fall short in several ways. This is especially true in times of volatility and uncertainty. When an organization is guided by a higher purpose, people are able to more effectively rally when faced with crisis or conflict. An easy improvement on the classic market oriented mission statement is to restate purpose of the value it brings to the community at large that the organization interacts with. For instance:
- give people the power to build community and bring the world closer together. People use Facebook to stay connected with friends and family – Facebook
- give everyone the power to create and share ideas and information instantly without barriers. Our business and revenue will always follow that mission in ways that improve – and do not detract from – a free and global conversation. – Twitter
The organizational purpose of Facebook and Twitter are more compelling because they emphasize the impact and power they provide to their customers. They are less focused on the products and services they create. An emphasis on community and a focus on customer empowerment can act as a much stronger rallying cry in the face of adversity and extreme volatility. Goods and services can easily lose relevance in a times of crisis, and leaders can easily make the wrong decisions for their employees and customers when market success is the sole guiding compass. Having people that believe in the organizational mission can serve as a rallying point in the face of extreme volatility. A meaningful purpose can have a profound impact on the willingness of people in all levels of the organization to engage in the difficult discussions required to stay on course.
Defining Purpose Is Never Enough
Of course there is no guarantee that simply having a more compelling purpose statement will always lead to a better decision, purpose must carry forth into the organization’s mindset. Facebook has repeatedly gotten into hot water over privacy concerns. Even more troubling is Facebook’s handling of what many deem to be hate speech on its platform. Now it can be said that many employees have very publicly protested their position, likely because these employees believe in Facebook’s purpose. But this has not led to any real change in stance by Facebook. How does allowing plainly dishonest and hateful material help bring the world closer? How does invading privacy bring about a community?
How many of us have worked in organizations where it’s leaders took us along for the purpose hype train ride? A noble purpose and corresponding outcomes are defined, at the top with input from consultants. HR / Communications rolls out the internal propaganda in the form of posters, emails, and conference halls. Marketing rolls out an add campaign to public at large. No behavior changes, or when behavior does change, it reverts at the first sign of crisis. And motivation and morale is worse of than others, as people defend against a sham that insults their intelligence, and offends their sensibilities.
Again, for purpose to matter it needs to frame organizational values and behavior at all levels of the organization, what I will frequently refer to as organizational mindset. I’ll will talk more about this later, in fact there will be a chapter on this. On a positive note to the hate speech story, Twitter appears to make decisions that are much more reflective of it’s purpose and values.
Moving to a Higher Purpose
As we move from profit, to market, to impact we start describing purpose in a way that allow us to answer to a higher calling, for instance:
- to unlock the potential of human creativity—by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it – Spotify
Now we are getting somewhere! I was genuinely excited when I read Spotify’s mission statement. Now I am not going to pile on to the long list of coaches and consultants that represent Spotify as a magical place that can do no wrong, I am not close enough to the organization to make such claims, but every interaction I have had with Spotify employees has led to me with a sense that this is an organization where it’s people believe in the mission, and that purpose is indeed reflected in their every day actions.
When people are organized around a purpose that is world changing we have the potential to create an organization with resilience, something that can survive our current world of increasing uncertainty. Organizing around such purpose does not preclude the organization from making a profit, nor from achieving market growth, or from engaging in a competitive landscape. What these more compelling mission statements do is frame the pursuit of the activities in answering a higher calling, a higher calling that serves as the foundation for an organizational culture so vital for today’s world.
It would be fair to say that only a minority of large organizations use a higher, world changing purpose as a driving force for the values and moral compass of it’s people. But where we can find these examples, they are extremely compelling. In my next post on Purpose, I’ll share some of these examples, and get into some ideas of how to get started on strengthening purpose.
Like this article stay tuned as I add more content like this to my next revision of my book Organize Forward.