Milton Friedman, noted economist and adviser to Ronald Reagan during his presidency, wrote in 1962, “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits.”
Over a period of time, this doctrine has become the de facto habit for a majority of corporate leaders in the Western world. It’s problematic because this way of thinking often gets in the way of employee development and overall levels of organizational engagement.
In a 1970 edition of The New York Times Magazine, Friedman took his thinking a step further: “In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society.”
8 Ways to Find Core PurposeAs part of a team-building session in Europe to help foster a more positive culture at Novartis Pharmaceuticals company, then-CEO Thomas Ebeling arranged for the group to visit a nearby Tibetan monastery. Upon arrival, the monk seated the group in a meditation hall and immediately engaged them in a provocative conversation.His first question to the group: “How many days do you have left to live?” He got a few answers, and then asked, “If you only have so many days, do you want to waste any of them with frustration, anger or not living with purpose?”This existential question is a reminder of how a purpose-fueled strategy for working and living can transform a person and those around them.Core purpose frames life and career experiences into a meaningful whole. When employees understand their — and the organization’s — purpose, challenging work experiences serve to forge identity, character and meaning.It can be a crucial variable in personal and leadership effectiveness. Purpose is transformational, and can convert average-performing teams and organizations into highly effective, spirited ones. With purpose, managers become leaders.The following principles will help master leading with purpose:
- Get in touch with what’s important. Values are guideposts to purpose. Understand what gives meaning to a person’s life to find purpose.
- Act on purpose. Most people have an intuitive sense about their purpose in life. But they may treat it as a dream, when following that dream is the most practical thing people can do with their lives.
- Find team core purpose. While personal purpose is transformative for leaders, team purpose is powerful for the enterprise. When a team’s purpose supports results, great things happen.
- Do not mistake the path for the goal. Leaders should be careful not to simply adopt other people’s views as purpose. Finding purpose is finding that essence or calling in life, not just adapting someone else’s belief systems.
- Focus on service. Purpose is not purpose without adding value to others. Focus on expressing gifts to improve the lives of everyone and everything a person touches.
- Be purposeful in all domains. Too many purposeful leaders have lost their sense of purpose because they are not using their gifts in their personal lives, or because they are not expressing their deepest values at work. Congruence of purpose in all domains of life is the aspiration of purpose mastery.
- Learn from failure. Failure is a subjective label we apply to unintended or unexpected experiences. The next time something unintended happens, people should ask, “What am I supposed to be learning from this?”
- Be flexible. Like an orchestra interpreting a symphony, the expression of purpose will change. For instance, someone’s real purpose may be to guide and nurture others. At different stages of the life cycle, this will be expressed differently — as a child, a parent a professional or retiree. Individuals need to be open to expressing internal purpose in different roles and life circumstances.Kevin Cashman is senior partner at Korn Ferry, leadership and talent consultancy, author of “The Pause Principle.” To comment, email editor@CLOmedia.com.
Thanks in part to Friedman’s handiwork, the Western world’s organizational leaders were hooked by the end of Reagan’s presidency. Friedman preached individualism, and it became the cancer that spread unabated in many organizations. When profit began to trump purpose, not only did society suffer and individual greed increase but also employees became disengaged and promising, innovative careers turned into paycheck mindsets. The “profit before purpose” mantra has become the standard way to run a business, and employees’ development and emotional attachment is being stunted.
Profit Before Purpose
Far too many employees feel as though they are merely occupying a “job mindset” akin to collecting a paycheck and nothing more. Instead of feeling as though they are contributing to a greater purpose in the organization that employs them, employees remain disengaged, and their opportunities for a role whereby they may flourish wane.
Craig Dowden, president and founder of Craig Dowden and Associates, a Toronto-based consulting firm, agrees. Research he spearheaded indicated employees who possess such a job mindset were never “always engaged” in their work.
Put differently, if employees believe their role at work is merely a paycheck, the chances of being engaged are minimal. It’s not difficult to understand the incredible effect a disengaged or uncommitted employee can have on customer relations, employee interactions, productivity and career development, let alone bottom-line business results.
“Meaning is becoming increasingly important in today’s workplace,” Dowden said. “Employees are spending more time figuring out their ‘why.’ Research continually shows that employees and organizations who are clear on their purpose benefit from higher levels of engagement, which positively impacts their bottom line. People have lots of choices in terms of where to work. Most of us want to contribute to something beyond ourselves. Those companies who tap into that need will really benefit.”
But how do leaders help employees develop if the organization is fixated on profit and power? How can employees instill a sense of purpose into their roles? If a new playbook was written, what might the organization and its leaders do to get things started?
The Purpose Playbook
The manifestation of a purpose mindset for employees comes when the organization isn’t fixated on profit and when employees are empowered to help deliver a sense of purpose to its customers. When employees are empowered to help, innovate and collaborate — be it with one another, customers, the community or any other type of stakeholder — both the organization and the employee benefit. Further, it’s not about employee happiness; it’s a quest for recognized self-worth in one’s work that benefits others, primarily its customers.
Thus, an obvious step for senior leaders is to redefine the organization’s purpose. It’s a tall order, but it can pay huge dividends, particularly if it’s done with the employees and not secretly in the executive offices. By establishing a purpose-first mission that serves all stakeholders’ interests, and not just shareholders, an organization will have far greater buy-in from employees.
For a firm and its employees to be successful in the future, managers have to be clearer about their organizations’ larger purpose, said Rick Wartzman, executive director of the Drucker Institute at Claremont Graduate University. “It begins with a clear understanding of who their customer is, what the customer values and needs, and how the organization is fulfilling that need.”
In 2010, Telus Communications Co. instituted the Customers First philosophy, which defined why the telecommunications company is in business and who it serves, and demarcated its organizational purpose (Editor’s note: The author works for Telus).
Leaders outlined in a declaration, “We’re on a journey to build on your trust by being clear, helpful and dependable. In other words, at Telus, we put you first.” From there, leaders implement leadership, learning, career, recognition and talent initiatives that employees used to fuel their own sense of purpose at work, in concert with the company’s Customers First ethos. Parenthetically, employee engagement rose to 85 percent from 53 percent, and various other business metrics also increased.
Wartzman has studied, written and spoken about purpose for years. For example, in Fortune magazine, he wrote, “In an era in which cultivating talent is increasingly essential, building a deep and authentic sense of purpose could be a company’s ultimate competitive advantage.” The line was written in response to his discovery that consumer-products company Unilever landed the No. 3 spot on LinkedIn’s “most sought-after employers in the world” list. Unilever’s quest to ensure a sense of purpose in the organization is on par with its obligations for profit and is somewhat unique, but so too is its insistence that employees are treated fairly and that talent development programs align to its “purpose first” mission.
Quicken Loans Inc. is also a rare breed. The United States’ largest online retail mortgage lender and second largest overall retail lender believes purpose balanced with profit is the key component to employee and organizational health — and this is a financial lending company.
The organization encourages its employees to “chase the skills that will make you great at what you are doing or what you are building” and not to chase money because, “then, and only then, do the better numbers or the good money follow you.” The firm not only believes customers are its primary focus, but also its purpose includes employee development in a way that reinforces a “money doesn’t come first” distinction.
Similarly, Nathan Sloan, national talent strategies leader at Deloitte Consulting, discovered in research the firm conducted that organizations focusing on a “culture of purpose” end up increasing and building overall employee confidence. “Respondents who work for an organization with a strong sense of purpose, are consistently more likely to say their organization will increase investments in the areas of employee development and training and leadership development,” he said.
He said once an organization redefined its purpose, managers have a responsibility to make direct connections between daily work and the organization’s overall mission; this includes not only clarifying role expectations but also interpreting and sharing that mission.
Promoting People and Purpose
To ensure purpose is a two-way street between leader and employee, Wartzman said he recommends a tool drawn from Peter Drucker’s 1954 classic, “The Practice of Management.”
Drucker advocated that employees write a twice-a-year or quarterly letter to their direct leader. “In this letter — Drucker called it “The Manager’s Letter” — the employee spells out what he or she sees as the boss’ objectives, which should align with the organization’s broader purpose and objectives,” he said. “He or she then puts down his or her own objectives — which, of course, should align with the boss’ and the organization’s overall objectives.”
The beauty of this process is the resulting dialogue. Once the letter is submitted to the employee’s leader, the two sit down and discuss the contents. It’s not a performance review; it’s an alignment discussion. If the employee thinks the leader or organization’s purpose is misaligned, one might expect an interesting conversation. If, however, there is alignment between employee, leader and organization with respect to purpose, good things usually follow.
“The Manager’s Letter becomes the charter under which the employee operates, and it helps to ensure everyone is on the same page in terms of purpose and objectives — the individual employee, the supervisor, and the organization overall,” Wartzman said.
Leaders need to consider the merits of both purpose and profit in their organizations, and not close their eyes to their mutual importance. Employees yearn for such a balance, and it’s incumbent upon leaders to help deliver it.
When employees believe in the company they work for and can deliver a sense of purpose while working, the paybacks are far-ranging. Indeed, customers, employees, owners and society alike all become the benefactors of such a scenario. This ought to be the moonshot for humanity in 2016 and beyond.Filed under: StrategyTagged with: development, learning, organizational development, talent management