A 5 Part Series - Part 3
In 1970, University of Chicago professor Milton Friedman was published in an acclaimed New York Times essay titled, “The Social Responsibility of Business Is To Increase Its Profits,” that most certainly focused all attention on shareholders, and the sole focus of any organization and its leadership on maximizing profits.
In more recent statements, Business Roundtable redefines the purpose of a corporation. That purpose including the promotion of an economy that serves all Americans and the benefits all stakeholders; that includes customers, employees, suppliers, communities, and shareholders.
Companies who are setting themselves apart and excelling themselves into greatness are moving away from the archaic notion that profits come first and shifting towards corporate social responsibility (CSR), in which enriching the lives of all stakeholders, and integrating purpose within the strategy and culture is priority. In fact, data has found that companies with high levels of purpose outperform the market by 5-7% each year. Purpose-driven companies have more engaged employees, they inspire innovation, experience increased brand trust and loyalty among customers; all creating a stronger competitive advantage, and in turn increasing profits.
So how does an organization shift their focus to enriching lives and leading with purpose?
Discover the purpose
This doesn’t mean gathering the companies leadership in the board room in order to draft a document representing what they believe the organization’s purpose is or shall be. Rather, it is about discovering it through empathy and understanding, through connecting with your workforce, asking questions, and listening to their opinions and desires. Additionally, keep in mind that there is a difference between mission and purpose. The mission is about what you do and for whom you do it, while the purpose goes a bit deeper and provides insight into why you exist as an organization; it is more about making those you are trying to impact, really feel it. A good example is Kellogg's whose purpose is “nourishing families so they can flourish and thrive.” In order to inspire staff and increase their engagement, it is critical to find a way to express the organization’s impact on the lives of customers, clients, students, patients, to make them feel it and understand their role. In fact, millennials (a large percentage of the workforce) want their work to have purpose; they want to share goals and values with their employer and be able to contribute in ways that help the company, and contribute to something in the world. More surprising, a recent study revealed that 75% of millennials would take a pay cut to work for a socially responsible organization. If you don’t have a defined purpose, start listening to your workforce, and if you do have a purpose, take a real close look at it, and start listening to your workforce.
Understand the importance of authenticity
Once a purpose has been established and an organization communicates that purpose, however, the words do not actually guide the behavior of leadership, those words ring on deaf ears. This is easily recognized by all employees, they become increasingly disengaged and harm is done. It is important for an organization to identify that purpose and to lead and live that purpose with full integrity. In order to best demonstrate, consider an organization outlined within one of HBR’s 10 Must-Reads for HR Leaders Collection, Sandler O’Neill and Partners, a mid-size investment bank located in the Twin Towers. The company was primarily focused on maximizing shareholder value until disaster struck on 9/11. Despite the demands of attending to business, leadership made the decision that a Sandler partner would attend the funeral of every fallen employee. As a result of witnessing so much suffering, the purpose of the firm became evident; the purpose of his firm was not only to create shareholder value but to treat employees like valued human beings. This led to subsequent departures from protocol including the continued payment of salaries and bonuses to the families of the deceased employees. Ultimately, if your purpose is truly authentic, this is clear, people know; it drives every decision and fuels the organization and the individuals who are a part of it. And I get it, authenticity does just happen with the snap of your fingers but it possible through an established purpose and living that purpose through integrity.
Make the connection
And finally, once the purpose is established, the leadership and decision making is authentic, it is now time to really connect those who are a part of the organization to the purpose. This is not a top-down mandate, this is an integration into the organization's culture. It is important to help individuals understand how the purpose is related to their day-to-day. Let us look at Kellogg’s and their purpose of “nourishing families so they can flourish and thrive” as an example. Kellogg’s could invite the employees to indicate on posters the way in which each individual supports this purpose. Examples could include a Quality Control Manager stating, “I ensure that products are safe and of the highest quality for the families that consume our brands”, or a Sales Associate declaring “I ensure that the public has access to this necessary nutrition.” These could be represented across the office among common areas or within the individual workspaces each employee serving as a daily reminder. Volunteer days could also be utilized; perhaps a food drive within the local community, clearly supporting the purpose to nourish families. The ideas are endless here. The goal as you see, however, is to help make the connection and allow employees to identify with the collective purpose more personally, and to help employees feel that that they are contributing in a way that matters. KPMG has found incredible success in implementing things like this. Their surveys as a result have shown that employees pride in their work has increased and engagement scores reached levels they had never seen before.
People who find purpose and meaning in what they do give more and do better. Organizations who understand that are at an incredible advantage to shift the primary focus from money and shareholders, to enriching lives and living and leading with purpose, completely transforming the organization and excelling it into greatness.