Strengths-based leadership, employee engagement, and growth mindset. Recent years have been fruitful for management guru’s and the consulting firms that promote their ideas. As a team leader participating in the rollout of those three ideas (and many other fads during the 1990’s and early 2000’s), I’ve observed a similar pattern:
- Articles and books start appearing about a new idea, and their numbers multiply rapidly.
- Consultants appear pitching the idea as “the answer” to corporate growth.
- Contracts are signed, task forces are formed, surveys are taken, and workshops are held.
- There is little or no change in people’s behaviors or organizational performance.
- Rinse and repeat.
A quick Google search shows the idea of a ‘purpose-led’ or ‘purpose-driven’ organization to be on an upward trajectory, reminiscent of those earlier mentioned ideas. From pitches by BCG and E&Y to articles in Fast Company, Forbes, and as recent as the July-August 2018 edition of HBR, the idea of connecting organizational purpose to performance and profit is gaining traction. Like many of the ideas before it, there is considerable research that demonstrates the importance of a clear, compelling organizational purpose. The question for leaders is: how do you break the rinse-repeat cycle? The answer requires a deeper understanding of why purpose is essential, but insufficient, to drive organizational and individual success; and, how to identify the actions that can move an idea like being ‘purpose-led’ from the next management fad to daily reality.
Purpose – What Really Matters
You don’t need much of a sense of humor to appreciate the irony of academics, management gurus, and consultants selling their services to the executives of companies to help them discover what already exists.
Every organization (by default) has a purpose. Moreover, if you ask people in that organization about its purpose, they will have an answer. You don’t need much of a sense of humor to appreciate the irony of academics, management gurus, and consultants selling their services to the executives of companies to help them discover what already exists. The proposition from the consultants is that they will assist the executive team in developing an “authentic and compelling” organizational purpose. With that new purpose chiseled into the stone tablets, the consultants help spread the word throughout the organization, with the promise that once the people “buy into it” the resulting awakening will lead to a significant impact on the bottom line.
Sound good? Just get out the corporate checkbook.
In their large-scale study of Corporate Purpose and Financial Performance, Claudine Gartenberg and her colleagues collected feedback from almost 500,000 employees across multiple industries over several years. The authors reached several significant conclusions:
- An organization’s purpose is not characterized by a formal announcement, but instead by a set of common beliefs that are held by, and guide, the actions of employees.
- Companies with strong purpose are characterized by employees that, in aggregate, have a strong sense of the meaningfulness and collective impact of their work.
- Organizations that demonstrate strong clarity of purpose among their knowledge workers and team leaders (first level leaders and middle managers) exhibit superior accounting and stock market performance.
What really matters is that people experience their work as being meaningful to themselves and to others important to them such as co-workers, customers, and the person’s immediate leader. And, that their purpose is clearly aligned with the greater purpose of their team and the organization. People who experience their work as connected to a purpose greater than themselves demonstrate higher job performance, organizational citizenship behavior, and greater team commitment. They do this because the need for finding meaning and purpose in one’s work is a core psychological need and motivational driver. The question for organizational leaders, and especially team leaders, is how to link that human need and drive for purpose with motivation and performance.
Linking Purpose to Performance – Three Actions
In the world of work, it is essential for leaders to understand what motivates individuals and teams. One of the most widely tested and cross-culturally validated frameworks of motivation at work is Self-Determination Theory (SDT). Self-determination theory describes the conditions under which people realize their potential and optimize their development and performance. It identifies people’s basic psychological need for purpose, competence, and autonomy in their work. For team leaders, understanding these core needs, and taking these three actions to satisfy them, is the key to linking purpose and performance.
- Ensure that every team member can articulate clear meaning and purpose for their work. Help them describe how their work contributes to the purpose and goals of the team, the broader organization, and the aspirations of the individual.
- Identify the competencies and skills that each team member needs to realize the purpose of his or her role. There is a strong relationship between competencies, confidence, and results. Invest in developing the capabilities that lead to your team having confidence in their ability to realize their purpose.
- Last, foster the appropriate level of autonomy. Give each team member the freedom to do his or her role at a level that is consistent with their competencies. Ensure that team members have the freedom to determine how to deliver results. This autonomy is essential to keeping talented people energized and engaged.
What’s your Purpose?
Team leaders, your purpose is to coach each member of your team in finding clear purpose and meaning in their role, developing the competencies to achieve that purpose, and providing the appropriate level of autonomy to pursue it. It is crucial that each person can answer the question “what’s your purpose?” in terms of both where they find personal meaning in their work and how it aligns to the purpose and goals of the team and the broader organization. Those are the actions that will move the idea of a ‘purpose-led’ or ‘purpose-driven’ organization to a daily reality.
The key to avoiding the rinse and repeat cycle is to recognize that “purpose” is only one dimension of what motivates people to achieve higher levels of performance. You must work together with your team to balance those three actions. To create balance, think of the three actions (purpose, competence, autonomy) as representing the sides of an equilateral triangle. By identifying gaps in the length of the sides of the triangle, and taking steps to close those gaps, you will link purpose together with the other core psychological needs that drive motivation and performance. No large checks to consulting gurus required.
Deci, E. L., & Ryan, R. M. (1985). Intrinsic motivation and self-determination in human behavior. New York, NY: Plenum.
Gartenberg, Claudine Madras and Prat, Andrea and Serafeim, George, Corporate Purpose and Financial Performance (June 30, 2016). Organization Science. Available at SSRN: https://ssrn.com/abstract=2840005 or http://dx.doi.org/10.2139/ssrn.2840005