"He who has a why to live can bear almost any how "- Friedrich Nietzsche
In business or for that any kind of entrepreneurship, meaning and purpose both are the most critical factors. But how do you connect these with the business objectives?
During the Singapore Human Capital Leadership Summit, Prof Jhon Almandoz, Associate Professor of Managing People in Organizations, IESE Business School, University of Navarra shares examples of organizations that have converted Mission, Meaningful Work and Better Managers into business outcomes and profitability.
While he chairs the conversation, he states that ‘purpose’ alone is not enough and organizations need clarity of direction for this to translate into profitability and superior financial performance.
Here are three case studies of companies that integrated the three elements mission, meaningful work and the role of the manager.
Clear mission and consistent culture
Prof Almandoz presented the Da Vita’s case study. DaVita, a leading provider of dialysis services in the United States, was providing services for patients with chronic kidney failure and end stage renal disease. The organization had a history of three poorly integrated mergers that led to many challenges for the company. In 1999, when the organization was at the verge of insolvency, Kent Thiry took over as CEO of the company that was marred by 52% annual turnover, poor patient experiences, flat revenues, and reeling profits. But Thiry wanted to create a community-like culture in the organization and wanted it to be the differentiator. It took Thiry six years to turnaround the company’s finances. For the organization, in the first three years, revenue increased 73%, from 1.5 billion to 2.6 billion, and staff turnover plummeted from 52% to 17%; they achieved the highest clinical outcomes in their industry, and staff turnover was cut in half (from roughly 52% to the low 20s). Their stock price also reflected this dramatic progress; during the first five years of our engagement, DaVita’s stock price rose from $2 to $70, and has since risen to approximately $130 per share — This is an example of how mission translation to culture can help organizations turnaround.
Culture at DaVita was transformed bringing elements of fun, belonging and service – their goals was to be “a community first and a company second”
In another reference, Almandoz presented the case study of La Fageda as a great example of bringing meaning to work by building a business from the community needs — social integration. La Fageda cooperative was founded by a psychologist Cristóbal Colón in 1982 with the aim to overcome the social integration problems of mentally disabled people living in a particular part of Catalonia, Spain. Colón realized that work was the key to achieving integration and handicraft projects aimed at entertaining patients within the confines of hospitals or care-oriented workshops. People needed to be given real work: paid jobs that were meaningful and involved making products recognized by the market. And the only way to accomplish this was through setting up a real company with real processes and products and compete freely in the open market – a social project with exacting commercial structures, where workers would feel involved and be the true owners of the enterprise.
Since its establishment in 1982, the organization has aimed to integrate the mentally disabled by providing meaningful jobs and dignified salaries.
Cultivating better managers
In the panel discussion, Joydeep Bose, President, Global HR Head, Olam shared one more case study on the importance of managers and how CEOs drive it from the top down. Olam as an organization is driven by the importance of reimaging global agriculture to generate economic prosperity, contribute positively to social wellbeing and provide sustainable agricultural products and food ingredients. In Olam, the CEO spends 4 days with new joinees personally to share what Olam is all about and the importance of their roles. Every business unit or function needs to come out with purpose for themselves. The company has 75,000 employees out of which 62,000 are from the community the company serves. So how does the company know more about their employees and their needs? Olam’s HR purpose is to help them in a discrete ways each year and keep moving up.
These are inspiring examples of companies that show how purpose-driven businesses can bring a change and transformation to the community and also enable businesses to flourish.