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Organizational Excellence : The Power of Purpose

Posted by kevinb on 11/26/18 (118 reads)

Building a Strong Business Foundation

One of the most memorable experiences I had during my corporate years was doing consulting work with a non-profit organization as part of a management development program. My cohort was asked to bring our experience and skills to help a group of nonprofits more effectively achieve their mission.

What impressed me the most was the level of passion the volunteers demonstrated for the work they were doing. It was truly a labor of love. Although my colleagues and I had the resources that come with for-profit companies, we were envious of the level of enthusiasm and commitment that powered the efforts of the nonprofits. It was eye-opening.

And it made me reflect on whether a for-profit business could ever inspire the same level of passion and dedication. For a long time, I didn't think it was possible; but lately I've changed my mind. I think it is possible - through the power of purpose.

Understanding Purpose

The Oxford Dictionary defines "purpose" as "The reason for which something is done or created or for which something exists". Purpose is related to, but distinct from, the other foundational elements of organization strategy like vision, mission and values.

You may be thinking, "Isn't the purpose of a business to make as much money as possible"? The answer is a resounding "NO". Profit is necessary to STAY in business, but it's NOT the reason a business exists.  

Ed Freeman, University of Virginia Darden School of Business professor and Conscious Capitalism, Inc. trustee put it best when he said, "We need red blood cells to live (the same way a business needs profits to live), but the purpose of life is more than to make red blood cells (the same way the purpose of business is more than simply to generate profits)."

To go a step further, higher purpose is the difference a person or organization makes in the world. It is the "why", as described by Simon Sinek in his book Start With Why.

Creating Passion and "Magic" in a Business

The source of human, and therefore organization, performance is ENERGY; and a clearly articulated higher purpose is much more likely to inspire, engage and energize people than an impersonal goal of "making a ton of profit for our shareowners". The "magic" is activated when employees embrace a vision of a more hopeful future state and believe they can make a meaningful contribution; they are much more inclined to put in discretionary effort. It's just human nature.

As in architecture where a masonry foundation is built by placing all other stones in reference to the cornerstone, so it is with organizations. Higher purpose must be established as the cornerstone of the business and all the other elements must flow from it.

A Familiar Example

To help make it real, let's look at Southwest Airlines. Their purpose, which is easily found on their website, is to "Connect People to what's important in their lives through friendly, reliable, and low-cost air travel". (While you are there, also check out their vision, values and mission - it's a great example of how those elements inter-relate with purpose.)

This higher purpose has been in place since the founding of the airline, and it is aligned and integrated with every facet of the company:

  • Humorous in-flight announcements (friendly)
  • Quick turn gate processes (reliable)
  • Low or no-fee policies (low-cost)
  • Competitive fares (low-cost) made possible through lower operating costs from innovations like a fleet of 737-only aircraft (reliable)

Having the integrity to stay true to their origin story and purpose results in a legendary organization culture and brand that attracts and retains engaged employees. Southwest has always been known for hiring practices that focus on matching people to the culture. Those energized and engaged employees then provide excellent service to customers, who in turn remain loyal and generate consistent and long-term value creation for shareowners.

This is not to say that Southwest is perfect. Organizations, especially large ones, are complex and always in a state of flux so monitoring and ongoing course corrections are needed; however, having a living, breathing purpose is the True North that leadership can always draw on to guide the company forward.

If You Aren't Convinced Yet

Now familiar data from Gallup shows only about 30% of the workforce is actively engaged, while a full 20% is actively disengaged! With the remaining 50% being not engaged, estimates put the cost of lost productivity at $550 billion a year. Imagine the potential if those numbers could be shifted to higher levels of engagement!

Achieving that level of energized performance will take more than salary increases and better benefits.  It takes hard work by leadership, and it starts with a clearly articulated and consistently deployed higher purpose that appeals to human emotion and the desire to be part of something bigger.

 

Thanks to Diane Janovsky, Strategic Partner with HPI Solutions for her work on this article.


Tags: purpose, passion, employee engagement, employee disengagement, culture, company culture

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