Deep Purpose – Ranjay Gulati
Deep Purpose offers a compelling structure for thinking about how to pursue business performance and societal good.
Deep Purpose: The Premise
Workers are attracted to companies and stay at them when they feel like they’re connected to a motivating purpose, surveys have shown. And so managers have turned to “purpose” as a tool to deploy amid challenges in recruiting and retaining talent over the past year.
Convenient Purpose Isn’t Enough
Convenient Purpose is when organizations talk about making the world better because it makes it easier to recruit, retain, and motivate employees or market to customers, but their practices are detached from that rhetoric.
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“Win-win” approaches claim to maximize both profit and social good, which is often not possible.
Forced to choose between financial performance and social good, leaders at these firms usually wind up operating the enterprise for the shareholders’ primary benefit.
The North Star Of Purpose
When pursuing deep purpose, leaders orient their organizations existentially around the “North Star” of purpose, articulating a conscious intent to conduct their business in a more elevated way.
In their minds, purpose is a unifying statement of the commercial and social problems a business intends to profitably solve for its stakeholders.
At such organizations, purpose is not just a tool but the underlying logic used for decision making at all levels, creating “moral communities” of workers and partners drawn to and motivated by it.
Superior Business Performance Using Deep Purpose
A few ways that deep purpose delivers superior business performance:
- Directional: Purpose guides the company’s growth.
- Relational and Reputational: Having a long-term purpose fosters trust with clients and partners and boosts the reputation of firms.
- Motivational: Research shows that when companies take meaningful actions in line with their purposes, employee engagement climbs.
Leadership Approach: Rooting Purpose In The Past
Knudstorp discovered a mantra carved in wood during Lego’s early days, “Only the best is good enough,” and used the phrase to evoke the continuous improvement needed to turn the company around. A forward-looking purpose rooted in an organization’s history carries extra weight.
Leadership Approach: Moving Beyond Slogans To Stories
A fundamental task of leadership is telling a “Big Story” or “master narrative” that critiques the status quo and issues a rallying cry toward a desired future. One narrative model is to interweave “self, us, and now.” That involves telling stories of defining moral decisions in your life, defining “choice points” for the organization, and highlighting a current challenge and a strategy for addressing it. to
Leadership Approach: Unleashing Individuals
Individuals thrive when they can identify their own personal purpose and express it through their work. Seattle Seahawks coach Pete Carroll is known for welcoming nonconformity among players, focusing on their individual performance, and forging trusting relationships with them.
Leadership Approach: Flattening Organizations and Unlocking Collaboration
With an organization unified around purpose, there is greater trust and momentum. That allows for increased employee autonomy and focus on loosening tight bureaucratic structures to allow for collaboration across the company.
Four Phenomena That Can Derail Purpose
- Personification—The departure of a founder can leave a company adrift if the new leadership doesn’t succeed in looking both back and forward.
- Death by inadequate measurement—It’s often hard to measure execution against long-term societal purpose. That means leaders need to work harder to manage them.
- “Do-gooder’s dilemma”—Investors can have higher expectations of purpose-driven companies and hold them to account for financial performance.
- A purpose-strategy divergence—If leaders don’t start with purpose when discussing strategy, they often pursue opportunities that aren’t aligned.
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Companies can deliver exceptional value to stakeholders and elevate themselves beyond merely commercial logic by energetically and inconveniently pursuing a reason for being.