December 3, 2020

TPL Insights: Building Peak-Performance Cultures #44 — Why Corporate Purpose Initiatives Fail

By Rob Andrews


By Rob Andrews with paraphrased content from Lisa Earle McLeod’s December 2, 2020 article in Harvard Business Review.

I read Lisa Earle McLeod’s article on Purpose in today’s HBR with great interest. Lisa notes that many organizations are shifting to what she refers to as a purpose-driven strategy, which as she states, can be an effective north star in helping guide employees. She goes on to say that as the purpose movement goes mainstream, the pressure for organizations to deliver on their purpose is high.

“An effective organizational purpose acts as the strategic north star for the organization. It defines how you make a difference to your customers and the world. Yet too often purpose gets slapped onto a T-shirt and relegated to HR or social responsibility teams and fails to deliver the financial return that copious amounts of research have shown is possible. As a growing chorus of customers, employees, and investors ask organizations, “Do you have a purpose, or do you just sell stuff?” leaders find themselves challenged to make their purpose more than a tagline.”

McLeod, who has worked in the area of Purpose for a decade observes three stumbling blocks that cause purpose initiatives to fail.

  1. A lack of qualitative metrics,
  2. A failure to infuse purpose into the sales function, and
  3. Missing the opportunity to activate purpose in your employees.

I am in complete agreement with Lisa’s research and applaud the way she articulates these three stumbling blocks. I’d like to make a few important observations from our research around purpose going back to 1970.

I don’t like referring to Purpose as an initiative. Initiatives are typically acts, strategies, or fresh approaches intended to improve an organization or situation. Thinking of purpose as an initiative suggests that it is something that can be implemented, and I don’t think that’s the case.

For example, our firm’s Purpose is To Enhance the Lives and Effectiveness of our Associates, Clients, and Stakeholders. Everything we do is driven by purpose. All of our solutions are based on Total Performance Leadership (TPL), which is the result of Allen Austin’s commitment to making this world a better place. With 90% of the world’s workforce disengaged, and a broken executive hiring process that results in almost 50% failure, we believe this work is desperately needed. Clearly, the opportunity is significant to make a better, more productive global workforce. And we decided as a group that we have the ability, and indeed the responsibility, to help break the cycle. It is literally the reason we exist.

Tulsa-based QuikTrip, quite possibly the best run small box retailer on the planet, has a simple but powerful Purpose, To Provide Opportunities for Employees to Grow and Succeed. Dallas-based Southwest Airlines’ Purpose is to Connect People to what’s important in their lives through friendly, reliable, low-cost air travel, and have fun doing it. In both cases, these companies exist to fulfill their purpose, and every single thing about them, including their vision, values, and strategy flow from their core purpose. Purpose then is more about being, rather than doing.

No amount of reading or studying can take the place of becoming totally immersed in your own process, and spending time with those who have lived and experienced the benefits of practicing these principles. The things that we’re learning from incredible leaders who’ve led their own organizational transformations are astounding. And what’s even more amazing is that this group of phenomenal leaders has been willing and eager to share their “secret sauce” because they fully support our effort to help others build extraordinary organizations. One CEO I interviewed in 2014 said of leaders who aspire to drive their organizations with purpose, “I know they don’t get it when they ask me how long it’s going to take to implement this”. Purpose is not an initiative you implement, rather it is something that has to be discovered and then lived.

Our research confirms that driving your business with purpose can produce extraordinary results and deliver superior shareholder returns. The findings are irrefutable: organizations that are truly purpose-driven outperform their next best peers by 25% or more, deliver substantially higher customer satisfaction, have employees that are engaged and satisfied, experience dramatically lower workforce turnover, a higher degree of strategic clarity, and much more effective execution.

Leaders of purpose-driven organizations have made a commitment and a decision to start a journey that never ends. They’ve discovered a purpose greater than just making money. They’ve conceived and instilled vision, mission, values, and strategy that energize and engage the entire workforce, not just the shareholders. They’ve figured out ways to measure the things that matter most including employee engagement and customer delight. They’ve committed to being the best in their sector and they’ve removed cost from their enterprises where the customer can’t see it.

We reject that people work only for pay and extrinsic rewards; that they need close monitoring, constant supervision, rules, and confining policies. We know, through our research, observation, and study, that when organizations share a purpose greater than just making money, and engage their entire workforces, they produce substantially higher returns for their shareholders and have a lot more fun doing it. Purpose-driven organizations place their customers and employees first, and shareholders next. They lead with values and standards, not rules and policy manuals. They measure things that matter, and lead to superior shareholder returns: Leadership, Employee Engagement, Customer Delight Strategic Clarity and Execution Excellence.

Purpose-driven organizations look and feel good; the deeper you look, the better the view. Beyond exceptional returns, you’ll see trust, smiling faces, exceptionally low turnover, spirited and healthy debate, systems that are driven by purpose, frontline employees who sound like company spokespersons and delighted, evangelistic customers. TPL organizations have frontline employees and customers who tell stories about them and are in fact their most effective salespersons.

It’s tempting to think of purpose as a corporate communication that cascades down. But leaders must go beyond messaging to activate purpose in the hearts and minds of their teams. EY CEO Carmine Di Sibio notes, “We have ingrained our purpose (‘Build a better working world’) into what every individual is doing on a day-to-day basis.” For example, an auditor can look at his or her daily tasks and identify how each one makes the working world better. You can do the same with your team. Ask your people: How does our work make a difference? How do we positively impact our clients, our team, and our community? What role do you play in delivering on our purpose?

Asking people to identify their own connection to your purpose (versus telling them) takes your purpose from corporate mantra to personal ownership. This creates a mental map of a connection to a higher calling that your team members can use to reset themselves during times of change and uncertainty.

Helping companies large and small, private and publicly-owned, discover their purpose, vision, mission, values, and strategy is something we’ve done for a while. We go a step further and stick around to help them implement and execute their strategies and fill key leadership roles within their organizations.

For more information on building purpose-driven cultures of peak performance, please give me a call.

Warmest Regards,