I’m a passionate believer in purpose. Whether personal or corporate, purpose fuels us in a way that is difficult to describe.
Ranjay Gulati is the former head of the Organizational Behavior unit at Harvard Business School. He is an author, speaker, and frequent media guest. His book, Deep Purpose: The Heart and Soul of High-Performance Companies , is written after extensive research on the fatal mistakes leaders make in this area.
I recently spoke with him about his research and book.
“Leaders practice deep purpose when they commit to a reason for being that encompasses both financial and societal goals.” -Ranjay Gulati
What is “deep purpose” as opposed to “convenient purpose”?
Leaders practice deep purpose when they commit to a reason for being that encompasses both financial and societal goals. Defining that purpose in a statement is just the beginning for these leaders. They make sure to embed their purpose in the very operating system of their organizations. They know that for deep purpose to take hold, both their daily actions and long-term strategic plans must be consistent with the overarching purpose.
Deep purpose leaders understand that this way of operating will inevitably lead to short-term trade-offs among stakeholders, including customers, employees, suppliers, investors and society at large. They have the strength to hold firm in the face of conflict, confusion and criticism, with their purpose serving as a beacon in difficult times.
Unfortunately, many leaders view purpose as little more than a convenient PR tool. Rather than make purpose an integral part of their organizations, they deploy their announced purpose in superficial and peripheral ways, and they may abandon it altogether if they perceive that it will damage their short-term financial interests. In the book I offer a taxonomy of convenient purpose companies that range from outright fraudulent efforts to those that simply make purpose to be something at the periphery of the organization.
“Deep purpose provides focus and consistency when the path ahead is unclear.” -Ranjay Gulati
A clear and deep purpose can enhance results. Tell us what your research shows about this.
Based on my research, I have found that when leaders practice deep purpose, their long-term financial performance actually improves in comparison with their convenient-purpose counterparts. This is because deep purpose provides focus and consistency when the path ahead is unclear.
Yes, short-term results may sometimes take a hit and certain stakeholders may temporarily feel dissatisfied, but in the long run deep purpose leads to lasting health, both financial and otherwise. Deep purpose organizations understand how to address the siren song of quarterly profit expectations while also building an organization for the long run. I was pleasantly surprised to find that deep purpose causes short- and long-term goals to work in tandem more often than not.
“Productivity and innovation soar when employees are inspired by a purpose that aligns with their own values.” -Ranjay Gulati
You talk about four specific levers for superior performance. Would you talk a little about these?
I have found that deep purpose operates in four dimensions, all of which serve to deliver long-term benefits.
The first is directional: Purpose acts as a kind of North Star to help guide strategy and innovation.
The second is relational: A clear and consistent purpose builds stakeholder relationships that withstand the test of time.
The third is reputational: Deep purpose engenders loyalty and trust among customers and others.
The fourth is motivational: Productivity and innovation soar when employees are inspired by a purpose that aligns with their own values.
“Purpose acts as a kind of North Star to help guide strategy and innovation.” -Ranjay Gulati
I love the discussion of leaders as both plumbers and poets. How do leaders best develop these skills?
Leaders deal with the “plumbing” of their organization when they make rational economic and operational decisions. Those skills are taught in most business classes and reinforced through work experience and include getting the right strategy, building an effective organizational design, and then focusing on building processes and metrics to deliver on those strategies. But true leadership means going beyond the numbers and the operational details. It means expressing the “poetry” – in other words, the meaning, values and purpose – of an enterprise. These ideals are the message that connects all its stakeholders around a common understanding of the purpose of the enterprise.
Leaders become poets by developing a “Big Story” that captures the ideals and essence of their organization. Through their powerful storytelling, they succeed in captivating the partners in their ecosystem. Unlike leaders who view purpose mainly as a marketing exercise, deep purpose leaders understand that creating an authentic master narrative is vital to inspiring employees, instilling customer loyalty and building long-term ties with all stakeholders.
Leaders must make sure their master narrative operates on three levels, according to the political organizer Marshall Ganz. First, they must link the master narrative to their own personal history and struggles (the Self level). Then they must amplify the story so that it resonates with all stakeholders (the Us level). And finally, they must show how the Big Story connects with a challenge that the organization is currently facing (the Now level).
“Research has shown that when organizational and personal purpose are aligned, performance skyrockets.” -Ranjay Gulati
Tell us about the “me” in purpose. How do leaders strike the right balance between the organization and the individual?
Deep purpose leaders find out what their employees value most, and do their best to connect those values with the organization’s goals. Research has shown that when organizational and personal purpose are aligned, performance skyrockets. Employees are much more likely to feel inspired to go beyond the limits of their job descriptions, resulting in increased productivity, creativity and innovation.
Committing to the “me” in purpose means accepting and nurturing employees’ individual purpose – and maybe even their eccentricities – as long as their behavior and underlying motivation is consistent with the organizational purpose. When employees feel connected to their own life purpose, they are more receptive to connecting to their organizations’ purpose. As the CHRO of Microsoft Kathleen Hogan told me, “You don’t really work for Microsoft until Microsoft works for you.”
One leader who knows how to connect personal and organizational purpose is Pete Carroll, coach of the Super Bowl-winning Seattle Seahawks. Rather than take an authoritarian approach, the way many coaches do, Carroll accepts a certain amount of nonconformity among his players because he recognizes that individual purpose and team purpose are deeply intertwined.
“Deep purpose leaders find out what their employees value most, and do their best to connect those values with the organization’s goals.” -Ranjay Gulati
You have many examples in the book that bring all of the concepts to life brilliantly from LEGO to Pepsi to Boeing to Starbucks. Which one of the many that you share most resonated with you during the research and writing of Deep Purpose?
One of the most inspiring companies I studied was LEGO, the toymaker based in Denmark. In 2004, the company was struggling as more children showed a preference for video games and electronic toys over LEGO’s colorful construction blocks. At first the company responded by expanding its product line, which caused it to lose focus and profitability.
The company named a new CEO, Jorgen Vig Knudstorp. who decided that in order to move ahead he first needed to look backward, to rediscover the company’s foundational essence. His “Big Story” emerged out of the founder’s original motto: “Only the best is good enough.” Guided by this ideal, the Knudstorp realized that LEGO needed to simplify rather than complicate its product line, and that by focusing on greatness, the company could prosper.
In the years after Knudstorp took over, the company became profitable again and some of this turnaround can be attributed to their purposeful approach to redefining their strategy. I was struck by how much the company’s expression of deep purpose galvanized LEGO’s employees and resonated with its customers. LEGO’s story made me realize that leaders can make meaningful strides by immersing themselves in their organization’s history.
What are some of the biggest mistakes leaders make when they embark on the journey to focus on organizational purpose? How do leaders future-proof purpose?
In the course of my research, I discovered four potential derailers of purpose.
The first is the personification paradox. This is when a founder-leader champions purpose but does little to make sure it outlives his or her tenure at the company. Purpose is thus personified in their own presence. Leaders must make sure that purpose is a key part of succession planning. As the Starbucks CEO Kevin Johnson told me, his challenge was to take the company he took over from Howard Schulze and go from being “founder-led” to “founder-inspired.”
The second is what I call death by inadequate measurement. Yes, it’s important to use metrics to track purpose, but too often companies don’t know exactly what to measure when it comes to such a seemingly ineffable concept. This can skew their understanding of how purpose adds value. Organizations are still finding their way on this tricky issue, but some are getting much better at measuring human and social impact in addition to financial results.
The third derailer is what I term the do-gooder’s dilemma. This is when leaders go so all-in on the societal impact of deep purpose that they neglect their basic duties to shareholders. Granted, the opposite problem is what I normally see. But some well-meaning leaders must recognize that they cannot veer too far away from the commercial as opposed the social logic of their business.
And the fourth potential derailer I have seen is the purpose-strategy split. This is when organizations fail to connect their stated purpose with their long-term strategy and then fall into the seductive arms of convenient purpose. The best leaders, understanding how easy it is to go astray, build in binding public commitments that make them accountable to others in maintaining their deep purpose.
For more information, see Deep Purpose: The Heart and Soul of High-Performance Companies .
Image Credit: Jamie Street