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.

Four Phenomena That Can Derail Purpose

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.

Leadership Approach: Flattening Organizations and Unlocking Collaboration

The best way to activate deep purpose is to increase the care you show to individual employees.

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: Rooting Purpose In The Past

Companies can deliver exceptional value to stakeholders and elevate themselves beyond a merely commercial logic by energetically and inconveniently pursuing a reason for being.

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. Purpose in their minds 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 is the underlying logic used for decision making at all levels, creating “moral communities” of workers and partners drawn to and motivated by it.

The North Star Of Purpose

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.

Leadership Approach: Moving Beyond Slogans To Stories

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: Unleashing Individuals

Four ways that deep purpose delivers superior business performance:Directional—Purpose guides the company’s growth. Bühler, for example, proactively sought to slash waste and energy and water usage at its customers’ plants, which unlocked deeper partnerships and focused its innovation efforts.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 purpose, employee engagement climbs.

Superior Business Performance Using Deep Purpose

Deep Purpose directly addresses many of the pressing leadership questions of our time—including how to weigh financial performance and societal impact, how to talk about purpose most effectively, how to establish a strong culture, and how to successfully have individualist and inclusive workplaces. The right approach is to avoid profit-first approaches if they don’t deliver social value and steer clear of purpose-driven solutions if they can’t one day be profitable as well.

One Solution To Many Problems

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.“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 shareholders’ primary benefit.

Convenient Purpose Isn’t Enough

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 recruiting and retaining talent over the past year.But what does it really mean for a company to have a purpose? And what are the best kinds of purpose to have? We find out in the book summary.

Deep Purpose: The Premise

Deep Purpose offers a compelling structure for thinking about how to pursue business performance and societal good.

A distinguished Harvard Business School professor offers a compelling reassessment and defense of purpose as a management ethos, documenting the vast performance gains and social benefits that become possible when firms manage to get purpose right. Few business topics have aroused more skepticism in recent years than the notion of corporate purpose, and for good reason. Too many companies deploy purpose, or a reason for being, as a promotional vehicle to make themselves feel virtuous and to look good to the outside world. Some have only foggy ideas about what purpose is and conflate it with strategy and other concepts like “mission,” “vision,” and “values.” Even well-intentioned leaders don’t understand purpose’s full potential and engage half-heartedly and superficially with it. Outsiders spot this and become cynical about companies and the broader capitalist endeavor. Having conducted extensive field research, Ranjay Gulati reveals the fatal mistakes leaders unwittingly make when attempting to implement a reason for being. Moreover, he shows how companies can embed purpose much more deeply than they currently do, delivering impressive performance benefits that reward customers, suppliers, employees, shareholders, and communities alike. To get purpose right, leaders must fundamentally change not only how they execute it but also how they conceive of and relate to it. They must practice what Gulati calls deep purpose, furthering each organization’s reason for being more intensely, thoughtfully, and comprehensively than ever before. In this authoritative, accessible, and inspiring guide, Gulati takes readers inside some of the world’s most purposeful companies to understand the secrets to their successes. He explores how leaders can pursue purpose more deeply by navigating the inevitable tradeoffs more deliberately and effectively to balance between short- and long-term value; building purpose more systematically into every key organizational function to mobilize stakeholders and enhance performance; updating organizations to foster more autonomy and collaboration, which in turn allow individual employees to work more purposefully; using powerful storytelling to communicate a reason for being, arousing emotions and building a community of inspired and committed stakeholders; and building cultures that don’t merely support purpose, but also allow employees to link the corporate purpose to their own personal reasons for being. As Gulati argues, a deeper engagement with purpose holds the key not merely to the well-being of individual companies but also to humanity’s future. With capitalism under siege and relatively low levels of trust in business, purpose can serve as a radically new operating system for the enterprise, enhancing performance while also delivering meaningful benefits to society. It’s the kind of inspired thinking that businesses—and the rest of us—urgently need.

personaldevelopment

Personal Development

corporateculture

Corporate Culture

business

Business

books

Books

Forbes, Best Business Books of 2022The Next Big Idea Club, Best Leadership Books of 2022Thinkers50 Top 10 Best New Management Books for 2022A distinguished Harvard Business School professor offers a compelling reassessment and defense of purpose as a management ethos, documenting the vast performance gains and social benefits that become possible when firms manage to get purpose right.Few business topics have aroused more skepticism in recent years than the notion of corporate purpose, and for good reason. Too many companies deploy purpose, or a reason for being, as a promotional vehicle to make themselves feel virtuous and to look good to the outside world. Some have only foggy ideas about what purpose is and conflate it with strategy and other concepts like “mission,” “vision,” and “values.” Even well-intentioned leaders don’t understand purpose’s full potential and engage half-heartedly and superficially with it. Outsiders spot this and become cynical about companies and the broader capitalist endeavor.Having conducted extensive field research, Ranjay Gulati reveals the fatal mistakes leaders unwittingly make when attempting to implement a reason for being. Moreover, he shows how companies can embed purpose much more deeply than they currently do, delivering impressive performance benefits that reward customers, suppliers, employees, shareholders, and communities alike. To get purpose right, leaders must fundamentally change not only how they execute it but also how they conceive of and relate to it. They must practice what Gulati calls deep purpose, furthering each organization’s reason for being more intensely, thoughtfully, and comprehensively than ever before.In this authoritative, accessible, and inspiring guide, Gulati takes readers inside some of the world’s most purposeful companies to understand the secrets to their successes. He explores how leaders can pursue purpose more deeply by<ul><li>navigating the inevitable tradeoffs more deliberately and effectively to balance between short- and long-term value;</li><li>building purpose more systematically into every key organizational function to mobilize stakeholders and enhance performance;</li><li>updating organizations to foster more autonomy and collaboration, which in turn allow individual employees to work more purposefully;</li><li>using powerful storytelling to communicate a reason for being, arousing emotions and building a community of inspired and committed stakeholders; and</li><li>building cultures that don’t merely support purpose, but also allow employees to link the corporate purpose to their own personal reasons for being.</li></ul>As Gulati argues, a deeper engagement with purpose holds the key not merely to the well-being of individual companies but also to humanity’s future. With capitalism under siege and relatively low levels of trust in business, purpose can serve as a radically new operating system for the enterprise, enhancing performance while also delivering meaningful benefits to society. It’s the kind of inspired thinking that businesses—and the rest of us—urgently need.