Some thirty-five years ago, a series of deadly explosions destroyed Chernobyl’s reactor No. 4. It was reported that several hundred employees and firefighters tackled the blaze which burned for about ten days and emitted radiation around the world. More than 50 emergency workers and people engaged in nuclear reactor lost their life in the immediate aftermath. However, the traumatic experience did not end here. Currently, many re-settlers are unemployed and it is believed that they have little control over their own lives.
Further, as a result of resettlement and voluntary migration from the affected areas, a large proportion of skilled and entrepreneurial people left the region which has hampered disproportionately the chances for economic recovery.
The Chernobyl disaster clearly sent a strong and clear message to the world that businesses must integrate the interests of their current and future stakeholders —and there will be a place only for “purpose” driven organizations.
The conscious citizens of the world are making two observations:
- Who is making the shift to a stage enabled by a company’s purpose?
- Who is integrating meaningfully the new driving force (purpose) for engagement of stakeholders to continuously transform, innovate and grow?
It means, today “purpose” —more commonly, “values” and “meaning”, are being considered as a strategic resource and a must for organizational agility. It is said that “purpose” becomes a North Star, a guiding force in a good or difficult time. Nelson Mandela’s North Star was about liberating people from the continuing bondage of poverty, suffering, gender, and other discrimination.
Similarly, purpose prompts organizations to think “why do they exist”? This question may seem simple, however, finding a convincing and durable answer needs a huge amount of soul searching and also societal confirmation for it to sustain meaningfully.
Today the senior leaders are speaking a language of “purpose” –that engages employees and customers in new ways, inviting their insights for innovation and business growth.
This is clearly indicating an emergence of a new era of ‘’open-sourced value creation’’ – promoting shared values that invite the stakeholders --employees, customers, suppliers, regulators, and others to recognize a stake in the growth path of an organization, more like an outside-in approach.
In this context, let us look at Red Hat, an American multinational software company founded in 1993 and it is the largest open-source company in the world. The philosophy of Red Hat is quite interesting: “We build and support open source products from open source projects. We give back to the projects and communities we engage in.
With open-source, we equip our customers for success. We take community-built code and harden its security, add features, and make it enterprise-ready and scalable. Then we push these improvements back out to the original project to benefit the community as a whole.”
It is also important that we talk about organizational agility to enhance organizational agility i.e. their capacity to adapt and respond to an increasingly uncertain, dynamic, and complex micro & macro business environment. The engagement of stakeholders is becoming increasingly significant for innovation and driving sustainable business growth.
One of the finest examples of engagement of customers in business is Stitch Fix, an online personal styling service in the United States. It uses recommendation algorithms and data science to personalize clothing items based on size, budget, and style. The company was founded in 2011 and had an initial public offering in 2017 with a valuation of $1.6 billion. Their advertisement on the internet reads like this – “Get style that’s 100 percent inspired by you. Tell us about your one-of-a-kind style, fit & price range in your quiz. We’ll curate pieces for you and listen to your feedback—so you always look and feel your best.”
While discussing stakeholders’ engagement, the subject of ‘’employee engagement’’ becomes quite vital. In this context, we may look at what W.L.Gore & Associates (an American multinational manufacturing company specializing in products derived from fluoropolymers and it is best known as the developer of waterproof, breathable Gore-Tex fabrics). From 1984 to 2017, this company appeared in Fortune magazine's annual list of the U.S. "100 Best Companies to Work For”.
An important factor in this recognition is Gore's unique culture. It slowly evolved from the company's success with small teams during its formative years. As described, W.L. Gore’s approach to business was based on Bill Gore's long and successful experience with "task force teams" while he worked at the DuPont. Such groups were created at DuPont on an ad-hoc basis to attack and solve complex problems and issues; usually multidisciplinary and operated for short periods outside of the company's formal hierarchy, and that made the team so effective.
When Satya Nadella took the helm as CEO of Microsoft in 2014, he instituted a “Growth Mindset” strategy, emphasizing the importance of a cultural obsession with customer satisfaction and a commitment to lifelong learning. This is simply about the company’s engagement with customers as one of the key stakeholders. Microsoft has also stated its mission which talks about stakeholders’ engagement – their mission is ‘to empower every person and every organization on the planet to achieve more.’ To accomplish this, CEO Satya Nadella has asked each of Microsoft’s employees to take responsibility to fulfill this mission by becoming more ‘’customer-obsessed’’ in a way. The mission statement is an appeal to employees to engage with customers…the very ‘’purpose’’ of Microsoft.
Let us turn the page and look at a management model. Successful organizations (very much like successful leaders) are normally high on self-awareness—but how do they know if they are really seeing their 'self'' clearly? How do they build self-awareness into their DNA? We may use Johari Window Model to reflect on this and let us see HOW – it is simple.
In the above model, ‘’purpose’’ driven organizations may substitute - KNOWN TO SELF with KNOWN TO THE COMPANY & KNOWN TO OTHERS with KNOWN TO STAKEHOLDERS – and open dialogues and discussions with stakeholders (individually or in a combination of multiple stakeholders) on issues concerning employees, customers, products, markets, channel, vendor & suppliers, compliances, risk management, the interest of communities, sustainability, etc. A very powerful method of purpose-driven engagement of stakeholders.
NASA very much includes in their ‘’purpose’’ statement the safety of human beings. Yes, they engage them in science and research but at the same time, take complete responsibility to return them safely back to their family and society.
President John F. Kennedy had announced on May 25, 1961, to ‘’Perform a crewed lunar landing and return to Earth’’…Apollo Lunar Module Eagle landed humans on Moon on July 20, 1969, and splashed down safely in the southwest of Hawaii on July 24, 1969, with Neil Armstrong, Michael Collins and Buzz Aldrin aboard.
To sum up, it’s crucial today to redefine an organization’s identity which is embedded in the outward-facing declaration. It reassures the stakeholders about their engagement in decision making which may relate to business models, strategy, market, talent management, etc. And finally, ‘’purpose drives profit’’ is on the watch list of all the stakeholders.