Let start with an illustration, to dive in to understanding the purpose of organisation , Sandler O’Neill and Partners, a midsize investment bank. The company was successful in its niche and focused on the usual goal of maximizing shareholder value. However, on September 11, 2001, disaster struck. Located in the Twin Towers in New York, the company felt the full brunt of the terrorist attack. Jimmy Dunne, soon to lead the firm’s executive team, learned that over one-third of Sandler’s people, including its top two executives, were dead, and the company’s physical infrastructure was devastated. Many of its computers and customer records were gone.
As the crisis unfolded, despite the exceptionally heavy demands of attending to business, Dunne made the decision that a Sandler partner would attend the funeral of every fallen employee. As a result of witnessing so much suffering, he began to realize that the purpose of his firm was not only to satisfy customers and create shareholder value but also to treat employees like valued human beings.
That led to some sharp departures from protocol. For example, he asked his CFO to pay the families of all the dead employees their salaries and bonuses through December 31, 2001—and then asked if the company could do the same for all of 2002.
If your purpose is authentic, people know, because it drives every decision and you do things other companies would not, like paying the families of dead employees. Dunne told us that often an organization discovers its purpose and values when things are going badly—and that its true nature is revealed by what its leaders do in difficult times. He said, “You judge people not by how much they give but by how much they have left after they give.”
Companies that enjoy enduring success have core values and core purpose that remains fixed while the business strategies and practises endlessly adapt to changing world. Purpose captures the soul of the company. It is companies reason for existence.
Truly great companies understand the difference between what should never change and what should be open for change. Purpose (which should last at least 100 years) should not be confused with specific goals or business strategies (which should change many times in 100 years). Whereas you might achieve a goal or complete a strategy, you cannot fulfill a purpose; it is like a guiding star on the horizon—forever pursued but never reached.
One powerful method for getting at purpose is the five whys. Start with the descriptive statement, we make X products or We deliver X services, and then ask, Why is that important? five times. After a few whys, you’ll find that you’re getting down to the fundamental purpose of the organization.
For example, in case of a market-research company. The executive team first met for several hours and generated the following statement of purpose for their organization: To provide the best market-research data available. When asked the following question: Why is it important to provide the best market-research data available?
A further discussion let team members realize that their sense of self-worth came not just from helping customers understand their markets better but also from making a contribution to their customers’ success. This introspection eventually led the company to identify its purpose as: To contribute to our customers’ success by helping them understand their markets. With this purpose in mind, the company now frames its product decisions not with the question Will it sell? but with the question Will it make a contribution to our customers’ success?
I have listed some of the companies purpose below, Notice that none of the core purposes fall into the category “maximize shareholder wealth.” A primary role of core purpose is to guide and inspire.
|Purpose is a company reason for being
3M: To solve problems innovatively.
Mckinsey & Company: To help leading corporations and governments be more successful
Cargill: To improve the standard of living around the world
Merck: To preserve and improve human life
Nike: To experience the emotion of competition,winning, and crushing competitors.
Hewlett-Packard: To make technical contributions for the advancement and welfare of humanity.
Sony: To experience the joy of advancing and applying technology for the benifit of the public.
Walmart: to give ordinary folk the chance to buy the same things as rich people.
Disney: To make people Happy.
Maximizing shareholder wealth does not inspire people at all levels of an organization, and it provides precious little guidance. Maximizing shareholder wealth is the standard off-the-shelf purpose for those organizations that have not yet identified their true core purpose.
It is a substitute—and a weak one at that. When people in great organizations talk about their achievements, they say very little about earnings per share. Hewlett-Packard people talk about their technical contributions to the marketplace. When a Boeing engineer talks about launching an exciting and revolutionary new aircraft, she does not say, “I put my heart and soul into this project because it would add 37 cents to our earnings per share.”
As Peter Drucker has pointed out, the best and most dedicated people are ultimately volunteers, for they have the opportunity to do something else with their lives, companies more than ever need to have a clear understanding of their purpose in order to make work meaningful and thereby attract, motivate, and retain outstanding people
Once leaders at the top and in the middle have internalized the organization’s purpose, they must help front-line employees see how it connects with their day-to-day tasks. But a top-down mandate does not work. Employees need to help drive this process, because then the purpose is more likely to permeate the culture, shaping behavior even when managers aren’t right there to watch how people are handling things.
One of the best illustration on this is from KPMG, where employees were encouraged to share their own accounts of how they were making a difference. This evolved into a remarkable program called the 10,000 Stories Challenge. It gave employees access to a user-friendly design program and invited them to create posters that would answer the question “What do you do at KPMG?” while capturing their passion and connecting it to the organization’s purpose.
Each participating employee created a purpose-driven headline, such as “I Combat Terrorism,” and under it wrote a clarifying statement, such as “KPMG helps scores of financial institutions prevent money laundering, keeping financial resources out of the hands of terrorists and criminals.” Beneath the statement, the employee would insert his or her picture. Each poster carried the tagline “Inspire Confidence. Empower Change.”
In June company leaders announced that if the staff could create 10,000 posters by Thanksgiving, two extra days would be added to the holiday break. Employees hit that benchmark within a month. But then the process went viral—after the reward had already been earned. Twenty-seven thousand people produced 42,000 posters (some individuals made multiple submissions, and teams produced them as well). KPMG had found a brilliant way to help employees personally identify with its collective purpose.
Once the firm’s overall transformation had taken root, surveys showed that employees’ pride in their work had increased, and engagement scores reached record levels. The firm eventually climbed 31 places, to the number 12 spot, on Fortune’s 100 Best Companies to Work For list, making it the highest ranked of the Big Four. Recruiting improved, and as turnover decreased, costs dropped.
Robert E. Quinn Anjan V. Thakor (JULY–AUGUST 2018) Creating a Purpose-Driven Organization, : Harvard Business Review.
James C. Collins and Jerry I. Porras (n.d.) Building Your Company’s Vision, : Harvard Business Review.
The ideas, views and opinions expressed in the article represent my own views in my private capacity and not those of any of my current or previous employer, any institutions. The article is a research work based only the limited, dated and open source information. For the sources the statements have been quoted with the authors name. This article is only for the reading pleasure and while I invite the feedback and comments on the article, I will not be responsible or liable to any such comments as the same belong to the responder.”