When you build a team with people who believe in your purpose, they are engaged and excited to be part of your organization. Similarly, when you build a team around core values aligned with your purpose, those values are held in high regard and must remain consistent for its members to feel as though they fit. Alignment begins with an understanding of how an employee’s performance is connected to the company’s core purpose and values and, thus, is vital to its success. An organization’s purpose and core values are immutable. To change either or both would be analogous to betrayal. Purpose defines why the company exists and brings opportunity and meaning to people’s lives. Core values define what the company stands for and are the fundamental “cult-like” beliefs that determine whether employees stay and thrive or leave [hopefully] quickly.
As entrepreneurs our goal is to create sustainable businesses that have positive impact while producing economic value. Purpose is not economic value; it is far greater than that. Purpose defines how our organizations intend to impact the world. It guides and inspires people throughout the organization. When you think about great purpose, what companies come to mind? For me, those companies include 3M, for its innovation; Apple, in its search for the perfect user experience; Mary Kay, for its pursuit of unlimited opportunity for women, Disney for its purpose of creating happiness; and Southwest Airlines for democratizing air flight. Companies with a strong sense of purpose have strong cult-like cultures, which make them great. In fact, it is unlikely that you will find an exceptional, high-performing company without a great purpose and accompanying core values. Without them, you would be hard pressed to attract and retain the best like-minded talent to help you excel.
Culture is the outcome of aligning a team around a great purpose and a great set of core values. Jim Collins, in his book “Built to Last,” refers to purpose and values as Core Ideologies. From six years of research into 3500 public and private companies from various industry sectors, Collins identified only 18 “visionary” companies that built their teams around purpose and values and, thus, excelled. The 18 companies Collins studied were built on core ideologies that were unchanging and sustainable. Furthermore, business writer Pat Lencioni observed, in his book, “Competitive Advantage”, that many companies were able to compete well intellectually, but few were able to leverage the competitive advantage of “healthy teams”. The leaders of “healthy teams,” as Lencioni described, were each aligned around a core purpose and values that enabled trust, cooperation and healthy conflict. Lencioni pointed out that those teams were driven by something bigger than themselves. As such, their companies consistently outperformed industry peers. Lencioni also recognized that without healthy conflict it was not possible to get to the root cause of problems. He understood the value that comes from being able to challenge one another in search of the truth. Similarly, Jim Collins, in his later book “Good to Great,” credited Level 5 leadership with being the difference in the remarkable success of 11 out of 1435 companies studied. Collins identified Level 5 leaders as displaying a powerful mixture of personal humility and indomitable will. They had incredible ambition, but their ambition was first and foremost for the organization and its purpose rather than themselves. When asked about the importance of Level 5 leadership, Jim Collins stated, “Of 1,435 companies that appeared on the Fortune 500 in our initial candidate list, only eleven made the very tough cut into our study. In those eleven, all of them had Level 5 leadership in key positions, including the CEO, at the pivotal time of transition.”
Purpose drives the economic engine of a company. It is the motivating force that rallies employees around higher initiatives. Although profit is essential to an organization’s success, it is not the primary motive for running a business. Often is the case where leaders are educated in economics, net returns and shareholder value; essentially their focus is on profitability. From this perspective, it is easy to view purpose as rhetorical. However, in order for a company to thrive, its leaders must find greater meaning than economic growth. Whether it’s sourced in a passion for the customer, the betterment of an industry, or the greater good of humanity, a clear and consistent purpose is exceedingly important to enable employees to focus their efforts on something they can believe in. Oxygen, food and air are essential for humans to live; but it is not the point of living. Likewise, profitability is essential for sustainability and growth; but it is not the point of the company’s existence. History tells us that companies focused on a greater purpose perform extremely well economically. In fact, purpose-driven companies are continually recognized for economically outperforming their industry peers by a long shot.
Research conducted independently by both Gallup and Google have concluded that the number-one factor affecting employee engagement is how purposeful their relationships are with their employers. Performance is directly dependent on employees’ belief that they are contributing to something greater than themselves. Similarly, consumer spending by newer generations tends to favor purpose-driven brands. Purpose is a critical, foundational rock found in strong organizations with high economic value. In its in-depth study of great managers titled, “First Break all the Rules: What the World’s Greatest Managers Do Differently,” Gallup reported that people don’t leave their companies, they leave their direct supervisors. Gallup found this distinction important because companies were more inclined to struggle departmentally than universally. Often, the struggle happened when an employee was elevated to a position without understanding or agreeing with the purpose established by leadership.
While a company’s great purpose attracts top performers and answers the employee engagement question, “What is my reason for being here?” It must be followed up with a clear understanding of each employee’s role and how it relates to the core purpose of the organization; i.e., how it helps the team win. As with the success of any operating system, which depends on individual components being fully connected to its infrastructure, the successful execution of any strategy depends on the individual players being connected to its core purpose.
I coach entrepreneurial clients on their ability to keep employees fully engaged and connected to their purpose. For example, early in the relationship, one of the companies I coached found it difficult to align with its purpose mainly because one of the four partners in the organization could not agree with the other three. Eventually the other partners bought out the fourth, which enabled them to formalize a purpose statement and communicate it throughout the organization. Within a year, employee engagement reached new heights. As part of the process of clarifying their purpose and value statements, I recommended that the owners re-invite people into their newly aligned positions, aka “seats on the bus” as Jim Collins describes roles in “Good to Great.” Regardless of their years on the job, each employee was asked, “Do you get this job? Do you want this job? Can you deliver as an ‘A’ player in this position?” The invitations were necessary because the clarifications had the potential of affecting the purpose and values that employees believed in. The leaders of the organization needed to learn whether their team members agreed with and were inspired by these core ideologies.
Whatever reason you may have for revisiting your company’s purpose statement, do not assume that it will be fully accepted without performing the due diligence of onboarding each member of your organization. Whether they’ve been with the company days or decades, your employees deserve the opportunity to respond to the purpose they’ve been called to uphold. Provided their response is a resounding “Yes!” you will have done your job as their leader and can expect their full cooperation. If, however, their response is “No,” then they must reconsider their fit with your organization, perhaps choose another role, or move on. A decision regarding each employee must be made: they are either “in” or they are “out.” Once you’ve achieved agreement with everyone, the coaching process continues as you commit to helping the people on your team become the best ‘A’ players they can be.
In addition to being purposefully aligned, coaching is essential to individual performance. People whose roles involve a high level of cognitive thinking are especially motivated by a clear and meaningful purpose that inspires them to mastery and autonomy. Unlike the coaching of sports, however, business coaching seldom provides the opportunity to observe players in action. Therefore, a minimum of weekly coaching sessions and quarterly reviews are required to maintain a steady connection and forward-moving momentum. Leaders who combine role alignment with consistent coaching score high in employee engagement. Better engagement, retention and productivity translate into greater economic value.
As Daniel Pink described in his book, “Drive,” a clear sense of purpose inspires mastery which leads to autonomy; i.e., empowerment to make decisions and contribute as an organization’s thought leader. High performers who are engaged at these levels are motivated to stay and invite other high performers to join their organization. We all aspire to be the best in the world at “something.” Whatever that “something” is, defines our purpose. When companies, leaders and teams are driven by purpose, everyone wins… And usually BIG!!!
Look forward to the next issue where I’ll discuss “Purpose and the Transitioning CEO.”