Article: What's the Higher Purpose of your organization?


What's the Higher Purpose of your organization?

CEOs today will not be judged by market capitalization or share value but by the impact they have on the society.
What's the Higher Purpose of your organization?

When a company defines its Higher Purpose, it must go back into history – to trace the reasons it was created, to revisit the values and ethos of those who created it.


High growth companies are led by people who are determined to make a positive difference in the communities they operate in.


“There is no more strategic issue for a company, or any organization than its ultimate purpose. For those who think business exists to make a profit, I suggest they think again. Business makes a profit to exist. Surely it must exist for some higher, nobler purpose than that.” – Ray Anderson

Most organizations today have mastered the art of defining their vision and mission statements. Everybody talks about having the best-performing, most profitable, most efficient, most client-oriented, most sustainable and the most ethical organization. But even with these words, companies are setting the bar too low. A Higher Purpose needs to articulate the reason for being. The questions that it should address are – what is my ultimate purpose in the world and what will the world miss if I cease to exist? The inspired organization needs to have a higher purpose; profit is a result.

When a company defines its Higher Purpose, it must go back into history – to trace the reasons it was created, to revisit the values and ethos of those who created it. McKinsey holds the top rank in consulting firms even today, sustaining its position over multiple decades. It owes its astounding success to the principles set down by Marvin Bower. “If you looked after the client, the profit would look after themselves.” What he looked for in new hires, he said, was “outstanding character, intellect, responsibility, initiative and imagination”. Bower created what became known as “the McKinsey way” – giving people responsibility and compensating them well. For him, people and their intellect were the firms’ greatest assets and that’s what he invested in. His values and words are still found in the firm’s mission and values statement. He was clear about why the firm existed and he not only articulated it, he ensured that the concept was tied into the firm’s strategy and its implementation. Only a few organizations have been able to integrate the vision with the strategy and then ensure its implementation in the business plan.

The beauty of a vision is its permanence – particularly critical in a world that is rapidly changing. A vision is highly adaptive and has no expiry date. When you keep your vision in sight, you are able to continuously innovate to achieving the purpose that you want to achieve. Steve Jobs, one of the greatest innovators of modern times, had said, “The only way to do great work is to love what you do.” So what is it that will make people love their daily work? What is it that will motivate them to come to work every morning with energy and positive spirit? What is it that will drive them to give their best at work and you work beyond the call of duty? You need to know why you do what you do. The goal is to hire people who believe what you believe in. Money would be a simple answer but its not. We all need meaning and purpose in our lives. Purpose inspires and motivates us, purpose keeps us strong and tough when through tough times, purpose gives us the determination and resilience to work through all problems in life and feel a sense of achievement, which is beyond the satisfaction of having met your business goals. An organization that has managed to define this purpose for their stakeholders has landed the prize. Having a higher purpose will bind all the people connected with the company – shareholders, customers, suppliers and employees.

An organization that has a higher purpose and truly lives it is able to attract higher quality talent and loyal customers. Our compensation is like our current account and the values that define us and mould us are our capital account. Companies such as Unilever, IBM and Mahindra & Mahindra have been able to define the higher purpose of their existence and link individual day-to-day jobs to it. When you are able to create the link between a company’s higher purpose and belief and fundamental human values, you are able to connect with people. The higher purpose defines your brand and clarifies what you and your people stand for and believe in. Shared values transform the company into a collective and cohesive force – all-moving together in a common direction. The purpose also helps as a reckoner for decision making. If decisions you make align with your purpose, then you’re on track. It cuts the clutter and gets to the heart of the matter. Businesses are not run just with brains and financial acumen. Businesses that succeed are those that have hearts and demonstrate care for the ecosystem; it’s no more about shareholder value but stakeholder value.

It would be an understatement to say that leaders play a key role in building companies with a higher purpose. It is a statistically proven fact that high growth companies are led by people who are determined to make a positive difference in the communities that they operate in. They are like painters for whom the expression of their art is defining the purpose and then ensuring that it is weaved into the fabric of daily work in the company. They realize and publicly acknowledge that no business can exist without a life-sustaining ecosystem, motivated employees, faithful customers and suppliers, believing financers and supportive communities. They understand that their role is to propagate and serve the purpose of the organization. They work really hard to create and sustain a culture built on values and principles that connects the stakeholders to each other and to the company’s purpose. They understand that it’s both a moral obligation and in the self-interest of the businesses to share values and to share wealth and to improve the ecosystem in which they operate. They realize the importance of building long-term, sustainable relationships, even if they feel like they are losing in the short term. They don’t talk the language of just numbers and money, these alone will not suffice to motivate people, drive great performance or keep top talent onboard. These leaders spread the message of common good and underlying values.

The leaders’ message must be simple, clear and consistent. There must be clarity about what is non-negotiable. It must have the ability to be translated across divisions, functions, business units and must speak to universal human instincts, hopes and values. The message must be inculcated into the entire value chain of the organization. From the time a person is hired, their goal setting, performance evaluation, compensation and rewards must be linked to the higher purpose. Care must be taken to appoint the right leaders as companies expand across the world – the new leaders must buy into the vision and be ambassadors of the higher purpose. The role of the HR function in this respect has become more important than before. They must be the CEO’s partners in ensuring that each business unit of the company, across every part of the world lives and breathes the higher purpose. The vision and higher purpose is not simply a set of beautiful sounding words, they must be demonstrated in every way the organization conducts itself – whether is a matter of routine or in terms of crisis. In today’s day and age of media exposure, deceit and deception will soon be exposed and rejected by the community. No business can afford that. Let’s take the case of Johnson & Johnson. In the space of a few days starting Sept. 29, 1982, seven people died in the Chicago area after taking cyanide-laced capsules of Extra-Strength Tylenol, the painkiller that was a best-selling product.

The world predicted that the Tylenol brand, which accounted for 17 per cent of the company’s net income in 1981, would never recover from the sabotage. But only two months later, Tylenol was headed back to the market, this time in tamper-proof packaging and bolstered by an extensive media campaign. A year later, its share of the $1.2 billion analgesic market, which had plunged to 7 per cent from 37 per cent following the poisoning, had climbed back to 30 per cent.

What set apart J&J’s handling of the crisis from others? It placed consumers first by recalling 31 million bottles of Tylenol capsules from store shelves and offering replacement product in the safer tablet form free of charge.

The world today needs leaders who follow a moral compass that points in the right direction. Now this is a great time for companies to become inspirational and attract those who value integrity and believe in adding value to their communities and the greater world. In today’s world, the CEOs will not be judged by market capitalization or share value but by what impact they are having on society and how many lives they have touched.

“The businesses that aspire to a higher purpose will outperform businesses that focus on the bottom line. People aspire to be part of something bigger than themselves. Give them something to align with to create a sense of belonging. Give them something to talk about. Give them a reason to share experiences.” – Brian Solis

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Topics: Culture, Strategic HR, #BestPractices, #HRInsights

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