Gone are the days when organisations could focus on “maximising shareholder value” only. Profit alone isn’t a purpose, it is a resultof purpose, according to Simon Sinek, author of the bestseller “Start with Why”. This is, in fact, backed up by Harvard Business School professors John Kotter and James Heskett in their book “Corporate Culture and Performance”, which shows that, over a 10-year period, purposeful, value-driven companies outperform their competitors in stock price by a factor of 12!
This comes as no surprise to organisations who are struggling with employee engagement or loss of talent. Employees who derive meaning from their work report almost twice the job satisfaction and are three times more likely to remain with their organisation. 88% of millennials want to work for a company whose values reflect their own, according to PWC’s Workforce of the Future survey. Given that in 10 years’ time, three quarters of the world’s workforce will be millennials, we had better take it seriously. Even members of my own Generation X, who in the 1980s and 1990s joined the corporate world looking to build a “solid” career and financial stability, are now searching for more consciousness, sustainability and meaningful experience in their (work) lives.
“Human: a being in search of meaning.”
Purpose is more compelling than promise
Increasingly, both employees and customers are no longer satisfied with “being promised” something, be it a cool workplace or a clear conscience when they buy “fairtrade”. Soon, it may not be enough anymore to simply feel good about your organisation’s purpose. A noticeable shift is happening from the more passive “What can you do for me?” to the proactive “What can we do together?” People are not only looking for meaningbut also want to contributeand feel alive doing it. They want to belong to something bigger, to influence and to engage. They want to co-create and be in community with like-minded people and organisations. Employees, customers and increasingly investors want to share their purpose and align with similar value systems.
Progressive companies such as the sustainable-values driven outdoor gear company Patagonia, are aware of this. Last year, Patagonia launched a new digital platform “Patagonia Action Works” connecting customers with grassroots activism. The aim is to encourage people to learn more about local environmental issues and get involved with events, petitions, fundraising and volunteering in their area. “The biggest question I get from our community and customers is, ‘What can I do to save the planet?’” says Rose Marcario, CEO of Patagonia. “This platform makes it easy to connect with organisations in your neighborhood who are working every day on local issues. We have decades of experience with these groups and our collective grassroots actions can add up to the change we need to make a better world. With the threats we face, we need everyone in this fight.”
The Patagonia example also illustrates that purpose is not static but evolves over time, through listening to the needs of the wider organisational ecosystem, i.e. employees, customers, stakeholders (including planet Earth). Patagonia is fulfilling its creative potential, using business to connect with and protect nature, while honouring the original initiative of its founder, mountaineer Yvon Chouinard. This is the notion of “evolutionary” purpose.
Values are the tenets of organisational culture
While purpose is “the reason for being” or the “why”, values are like a behavioural compass for the people in an organisation, guiding “how to” fulfil the purpose. Values can help shape the culture in an intentional way and loosen the grip of the “control and command” paradigm. Along with the purpose that organisational values can help fulfil, they become guiding principles for growth and innovation in the organisation. This is exemplified by Volvo’s commitment to the electrification of its vehicles. Volvo’s announcement that every model from 2019 onwards would have an electric or hybrid engine is a natural next step congruent with the company’s core values: Safety, Quality and Care for the Environment – Protecting what’s important. Making people feel special. And taking pride in helping the world become a better place for all.
Bringing purpose and values to life
In order to make values real, however, many companies face serious, often costly, challenges to the way they are structured and make decisions, HOW they source raw materials and produce (and WHAT they produce), how they listen to employees and customers. It comes as no surprise that in many organisations values remain lofty ideals that never get operationalised. In the following we outline some practical ways to bring purpose and values to life in organisations.
• Make values prominent
Employees need to be aware of values and how they are relevant in their day to day. Recently we worked with an organisation on a mentor training programme. One of the first things we did was to invite participants to reflect how mentoring could strengthen the organisational values. Using values in daily communication is key – new projects can be started by explicitly linking them back to organisational purpose and values, key decisions can be taken using the values lens as selection criteria. Purpose and values can be anchored visually through illustrations in conference rooms, offices, canteens etc.
• Convert values into specific behaviours
It is recommended to spend some time distilling values into observable behaviours. While the overall intention behind the value should be honoured, specific behaviours can vary for individuals, teams, or geographical regions. Key questions could be: “What does value xy mean for my everyday work life?” and “How can the benefit of this value be felt?” At Zappos, the online shoe and clothing retailer, “Deliver WOW through service” translates into these questions for employees: “What are things you can improve upon in your work or attitude to WOW more people?” and “Have you WOWed at least one person today?” In project teams, Team Charters are a great way to agree and visualise explicit principles for collaboration, decision-making, transparent communication and conflict resolution.
• Share stories that reflect purpose and values
We humans thrive on stories – they connect us and tap into deeper parts of our psyche. Many organisations use their origins to powerful effect, for example, Elvis & Kresse, the sustainable luxury goods manufacturer. “In 2005 we had a chance encounter with the London Fire Brigade. When we learned that London’s damaged decommissioned hoses were headed to landfill we mounted a rescue. We set up Elvis & Kresse to save it.” Just like Elvis & Kresse, share your stories during meetings, on blogs and in retreats and conferences. Create a “story bazaar” in cooperation with clients and partners, using videos and testimonials of impact. This way employees can connect with why they do what they do, and what that means for the client.
• Model values
If an organisation values, for example, continuous learning or innovation, it must encourage team members to dissent in discussions without fear of negative repercussions. There has to be space for reflection and exchanging experiences across different parts of the business. Leaders and managers must be mindful of their own biases in relation to the values. What is their own stance towards failure, risk and learning? To what extent do they give their teams space to experiment? What do they do on a daily basis to promote value-based behaviour in their teams?
• Recruit, reward and promote value-led behaviour
When hiring people, be mindful of how they fit with the values that you are wanting to promote. For instance, if one of your core values is “entrepreneurial”, the candidate’s attitude and ability to be enterprising should be tested in keeping with the overall job profile, i.e. “entrepreneurial” may look different in human resources than in marketing. Ensure that your reward and promotion processes are congruent with your values. For example, it is counterproductive to have a value relating to team work when all your renumeration principles are focussed on individual and not team efforts. Some organisations have their employees vote for teams or individuals who have demonstrated value-driven behaviours during the month.
We have seen that many corporations use explicit purpose and value statements to resonate with people’s intrinsic values and sense of meaning – and to increase loyalty and profit margin. In order to become more than mere declarations of intent, purpose and values need to be shared, demonstrated and felt across the organisational ecosystem. While this is undoubtedly challenging for organisations and may require investment and time, it looks like the choice is not “if” but “when”.