Why Having a Purpose Driven Business is Not Enough
There has been a growing call to enterprises to become more “purpose driven” over the last few years. People recognise that there has to be something more noble to doing business than just maximising the return to owners. A purpose driven business is a business that sincerely pursues a Benevolent Intent. It is clear that a business which claims to be there to serve its market would trade very differently from a business that is there purely to enrich owners.
The Benefits of a Purpose/Benevolent Intent
Paradoxically, articulating the intent of the business to be there to serve customers and clients is actually in the interest of owners because it is that intent that translates into profit. If the customer experiences that there is no sincere intent in the business to serve their interests, the customer is likely to take their business elsewhere, or at least wish they could take their business elsewhere.
Moreover, it is this intent to serve that gives the leadership of the organisation licence to call on the discretionary contribution of employees. If I worked for a pharmaceutical manufacturer I would have a very different commitment to work if I thought the business was in the business of saving lives as opposed to being in the business to make shareholders shamefully rich. I would be much more committed to making a discretionary contribution for the former than I would be for the latter.
It is this intent by employees to make a discretionary contribution in pursuit of business objectives which translates into the profitability of an enterprise. An enterprise that produces a profit has produced a surplus. A surplus happens when the people in the enterprise work together in such a way that the total product that was produced was bigger than what each person in the business individually took out.
Having a Purpose/Benevolent Intent is NOT Enough
Unfortunately articulating the purpose of the enterprise in a benevolent, customer centric way is not a sufficient condition to call on the discretionary effort of employees. There are at least two other conditions that need to be met for this call to serve to be experienced as legitimate and authentic. Firstly, this intent has to be seen to be lived in how peers deal with each other in work teams and secondly it needs to be implicit in how bosses deal with subordinates in reporting relationships.
Peer Relationships Need to be Healthy
The intent to give or serve translates into the degree to which peers in an organisation are spontaneously collaborative. One could imagine any organisation to function like a team sport where there is a task that is being passed from player to player. This suggests that each point of contact between two individuals in the group could either be fundamentally collaborative or competitive.
It is fundamentally competitive when both of the people in the engagement go into the engagement the with intent to win or to come first or get something out of the other. The engagement only becomes collaborative when at least one person in the engagement deliberately deals with the other person in order to set that other person up for success. Teams fail when each person is trying to be the star. They thrive when team members try to set colleagues up to be stars.
Leaders Need to Earn Trust
In my experience the most significant variable that accounts for the discretionary contribution of employees is the leader. More than anything, people go the extra mile for people. It is precisely here where most organisations botch the possibility of soliciting a discretionary contribution from employees. When one asks most leaders to define what they mean by the word leadership they would say something consistent with the view that leadership is about achieving a result through people. The intent of this view is clearly to take. It is one that reduces people to resources to achieve outcomes.
Don’t ask the employee to go the extra mile for a boss who is just there to take from him. If you want to cultivate a giver in the team then the boss has to be there to give. In order to achieve that, the boss needs to invert how he/she currently sees the role of being a leader. She/he has to understand that it is not her/his job to achieve a result through people, but rather to achieve people through results. When the boss has achieved this she has changed the intent of the reporting relationship. She is no longer there to get something from the subordinate, but is rather there to give.
To make sense of this inversion consider the role of a coach in a team sport. If the coach had the view that the players were his resources and it was his job to produce a result the players would be very disgruntled because they would feel used. This view does violence to what is actually happening, because it is the player who produces the result. This does not mean to say that there is no role for the task being done or for the result. The coach watches the game and keeps tabs on what is on the scoreboard to do his job, which is to coach the player. He literally uses the task and the result as his means whereby he produces a player. He achieves people through results.
It therefore stands to reason that leaders in an organisation only have licence to call on people to make a discretionary effort if they see that their product is the excellence of the people in the business and that the business serves as a gymnasium to make people excellent. This changes the intent of the reporting relations from the boss being there to take to being there to give.