Four Ways to Build Organizational Purpose

 Purpose is often cast aside as a non-essential to an organization’s success. Finances, IT, sales and product are discussed far more often than purpose. Yet purpose is the driver – without an employee feeling a sense of purpose, the salesperson would be listless and the product engineer would lose creativity. In times of crisis, purpose is more important than ever. It inspires employees to move beyond inertia to action. But what is organizational purpose and how can a manager strengthen it?

What is Purpose?

David Packard, Co-Founder, Hewlett-Packard said:

“Purpose; it’s like a guiding star on the horizon —forever pursued but never reached. Yet although purpose itself does not change; it does inspire change. The very fact that purpose can never be fully realized means that an organization can never stop stimulating change and progress.”

So, what does that mean in real life? Well, have you ever had to drag yourself out of bed, to go to a job that you hated? It’s like pushing a heavy rock uphill.

But when purpose is motivating your actions, everything feels very different. You have a kind of lightness, even when things are intense, or tough. And the same thing is true for organizations. You can feel when an organization is animated by purpose. And that’s a feeling that people want to have. It’s also a feeling that drives better performance.

Annie McKee, the founder of Teleos Leadership Institute, studied dozens of big organizations, and interviewed thousands of people who work there. What she learned is that when we feel negatively about work, we don’t process information well. We don’t think creatively or make the best decisions. But when our feelings about work are positive, the opposite is true. McKee also found that the thousands of people she interviewed listed three things that made them feel good about work.

Things that makes people feel good about work:

1.    First is a meaningful vision of the future. People want to contribute to a future that matters to themselves and others.

2.    The second thing that makes people feel good about work is great relationships. Whether people are leaders, managers or employees, “close, trusting, and supportive relationships” are a big part of what motivates them to contribute.

3.    The third thing that made McKee’s subjects feel good about their work was — wait for it! — a sense of purpose. And if their personal purpose is intertwined with their organization’s purpose — whether it’s ending hunger or creating better widgets — that’s even more positive.

What is Organizational Purpose?

So, if purpose is so important, what exactly is it? An organization’s purpose is not the answer to the question “What do you do?” which typically focuses on products, services and customers, but rather the answer to the question “Why is the work important?” It conveys what the organization stands for in historical, ethical, emotional and practical terms. In other words, purpose is central and enduring to an organization’s culture.

Purpose, Mission, Vision and Values

It’s easy to confuse the difference between purpose, mission, vision and values. Here is a simple way to remember:

Purpose	=	Why	:	Why the organization exists
Vision	=	Where	:	Where the organization aspires to go in the future
Mission	=	What	:	What business the organization is in
Values	=	How	:	What the organization values and how those values are manifested in a workday

Here’s an example for a fictional startup called Connecto:

Purpose	:	Create a globally connected community
Vision	:	Connect 23% of the world by 2025
Mission	:	Build an online platform that allows people to post local news
Value	:	Speak Up! (this allows people to speak up and disagree if they see something going astray)

Why is Purpose Important?

Now that we know what purpose is, why is it so important?

Many studies have shown a strong link between purpose and performance. When employees embrace purpose—when the organization lives it, and not just creates colorful posters about it—the performance shoots up. A survey of the leaders, employees and customers of 50 companies in the fields of technology, media and telecommunications; consumer products; and financial services was carried out by the Boston Consulting Group.

The results of this survey were analyzed using measures such as total shareholder return (TSR), revenue, and EBITDA growth. The results showed that when the organizational purpose was truly ingrained, it correlated strongly with ten-year TSR.

Another reason that purpose is important is because employee expectations are changing. Along with it, the demands of always-on transformations have exposed the limitations of using carrots and sticks to influence employees. To counter this, organizations are understanding the need to appeal to head and heart with not only the extrinsic motivators but intrinsic motivators as well. These Intrinsic motivators include employees’ desire for meaning, connection, and joy in the work, as well as the desire to contribute, develop, and achieve. Purpose is one of the most powerful intrinsic motivators because it speaks to both the head and the heart.

Benefits of Purpose

A 2016 poll by the Gallup Organization shows that only 13% of employees worldwide are engaged at work. The reason why most engagement efforts fall short is that they’re designed to cultivate employees’ commitment in generic, general ways and not attach any purpose to them. Employees must internalize the organization’s purpose, so they make decisions that clearly support those priorities. Ultimately, they design and deliver on brand customer experiences that strengthen the brand’s competitive position and build equity in the brand.

Below are four benefits of organizational purpose:

1. Instill Purpose in Employees

Employees may be very good at compliance, but in today’s global competitive marketplace, going through the motions is not good enough. Organizations need employees who are engaged and come to work with a sense of purpose that comes from knowing that what they do matters to others. When employees are engaged in their work, they enjoy what they do and tend to be more productive.

2. Provide Clarity

Fearing ambiguity leads to narrow thinking and reactionary behaviors. Embracing clarity can open the door to allowing employees to see possibilities that they wouldn’t have otherwise seen. Purpose then drives clarity because it “connects the dots” for employees. They know what is expected of them and why.

3. Stimulate Innovation

Knowing what an organization stands for can open the door to purposeful teams. It enables employees to think of new ways of doing things for a reason — that is, to meet the mission of the organization. That depends upon purpose.

4. Groom the Next Generation of Leaders

Organizations that survive more than a generation are typically those that have developed a leadership cadre who inherited the mission and have been shaped by core values. Purpose leads to intentional employee development.

What Does Purpose Look Like?

You may wonder what organizations claim for their purpose statements. Here are some examples:

“The purpose of Disneyland is to create happiness for others. And you see, the beautiful thing about saying, “We’re going to create happiness” was then I could say, “Look, you may park cars, clean up the place, sweep the place, work graveyard and everything else, but whatever you do is contributing to creating happiness for others.”

– Van Arsdale France, Founder, University of Disneyland

Purpose is like the roots of a tree. Strong roots — strong purpose — provide the tree with nourishment, good health and the ability to sustain itself. If the roots go deep, your tree, and its entire corner of the forest, will prosper. But if roots are shallow, and starving — because you never feed them with purpose — eventually, your tree will fall down. And it won’t just fall down by itself. It’ll take other trees down with it.

We would love to hear from you! What’s your organizational purpose? How is purpose driving your motivation levels and enhancing the business performance? Let’s share experiences. Leave a comment below, send us an email, or find us on Twitter.

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Beyond The Covid19 Crisis – The Future Of Work

 

There are many articles discussing the impact of Covid-19 on the workplace, ranging from how to go back to work, when to go back to work and what is the new normal.

I understand these concerns. And, I think leaders need to shift their focus and look past this crisis to the future. Let me explain.

There are three phases of Covid-19’s impact on the workplace:

• Phase One: Work from Home (WFH)
• Phase Two: Return to Work (RTW)
• Phase Three: Future of Work (FOW)

Phase One

Phase one was about “How to WFH?”. Every organization asked, “How the heck do we all work from home full-time?” Video calls replaced face to face meetings while home and work merged in to one. There was personal stress and employee stress as the world navigated change, market uncertainty, business continuity, job security, child and elder care and reduced revenue. Organizations used tools to work from home as well as innovative ideas to manage the new norm. Basic organizational practices such as onboarding a new employee had to be recreated into a new virtual system. New communication strategies were subject to constant iteration.

Phase Two

The near future is Phase Two as people consider returning to work and questions such as “Which job category must be done in an office and which does not? What office re-design is needed to meet the mandated guidelines? What are the liability issues to consider? Why do we even need to work in the same physical space?”

Most organizations still wrestle with the needed decisions for this phase, including managing employee mental health, driving innovation while socially isolated, and maintaining strong organizational culture and employee engagement.

According to Deborah Tannen, a Georgetown University linguistics professor, in “Corona virus will Change the World Permanently. Here’s How”, “the comfort of being in the presence of others might be replaced by a greater comfort with absence, especially with those we don’t know intimately. Instead of asking, ‘Is there a reason to do this online?’ we’ll be asking, ‘Is there any good reason to do this in person?’

Organizational leaders will have an enormous challenge re-acclimatizing their employees, both those who return to the physical building as well as those who continue to work from home. By understanding the employee challenges, organizations will be able to identify the potential problems with their RTW plans. Effective two-way communication between the organizational leaders and the workforce can turn this crisis into an opportunity to bolster the organizational culture, increase engagement levels and improve productivity over a long run.

Finally, in addition to the safety issues in this phase, we need to consider a name change. We constantly see the phrase ‘Return to Work’, yet that assumes we are not working when we work from home, which is incorrect. Many people are now working longer hours at home than before the pandemic struck. So, Phase Two is not returning to work; it is returning to the physical office building. I often say that words matter, so what do we call this phase that describes the benefits of collaborating in the same physical, bricks and mortar space? I suggest ‘Collaborate in Person’.

Regardless of what you name this phrase, be sure to communicate clearly and often in this phase. Double down on your communications so your teams understand what to expect.

Phase Three

Focusing on Phase Three is vital to a leader’s success. Why? Because Phase Three is the strategic reshaping of the future of work. I do not mean office redesign; I mean business redesign. There are three sets of questions to ask now in preparation for this phase.

1. Products and Services

The key phrase to remember here is enduring change. What current changes will endure so a product shift is needed? And what current changes will not endure in the future? Where will the organization be in 4-6 months? What products or services need to sunset because they are no longer relevant or in demand? What new products or services can be created thanks to the Corona disruption?

2. Talent

Once the products and services are determined, think about your staff. If some of your staff were hired for a product you will no longer offer, how will those people be retrained for future work? And if you create a new product or client solution, what are the skills and abilities your staff need to innovate and sell that new product? How will you hire and develop those new staff when hiring is no longer restricted to your geographic region and you can literally hire anyone in the world because of WFH? Finally, once they are hired, what are the new team charters and norms that will create a wildly successful team?

3. Organization and Culture Shift

After determining the staffing needs for the future, it is time to codify those changes with a new organizational structure. That’s the easy part. The harder part will be managing the organizational culture shift that will occur with the new product solutions, teams, and organizational design. In times of crisis, you find out what type of culture you have. What pieces of your culture do you want to leverage and what cultural artifacts may need to shift to meet the future of your work? How can you communicate the organizational purpose in ways that excites and engages your employees?

Phase Three demands meaty questions that need to be discussed now. I know organizations are in crisis mode and it’s hard to find the white space to hold these conversations. Yet the organizations that think strategically now will jump ahead of the crisis. So set your future vision, communicate it, and commit to it now. There is no time to waste.

We would love to hear from you. How is your organization managing Phase One (Work from Home)? How do you plan to cope with challenging in by Phase Two (Return to Work)? What plans do you have for the Future of Work (Phase Three) in your organization? Let’s share experiences. Leave a comment below, send us an email, or find us on Twitter.

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A Human Capital Strategy to Help America Thrive

 

No one would argue against the idea that, to thrive in today’s global economy, nations must grow their capital. But many people don’t realize that “capital” comes in two very different forms.

We often think of capital as tangible things — physical assets like factories, farms, roads, highways, and even warships.

But what about intangible capital? These are also critical for success, and include such competitive advantages as creativity, motivation, loyalty, and trust. These intangible assets are called human capital — and in How to Grow Human Capital During Hard, I argue that investing in human capital is the best choice right now.

I also posit that, although the branches of our military services have benefited greatly from human capital strategies, our nation has never tried to implement a national strategy to marshal and grow our most important asset: people.

What Would a U.S. Human Capital Strategy Look Like?

National human capital strategies grow out of human capital policies; both the policies that are consciously adopted by a country, and those that are so deeply embedded in its DNA that we take their impact on our lives for granted.

There are five policies that I believe are essential for maximizing human capital at the national level. Some of these are areas in which the U.S. proudly leads the world. Others are areas in which we’ve arguably fallen to last place among other wealthy, industrial nations.

They are:

1. Education and Training
2. Enforcement of Contracts and Property Rights
3. Balance of Risk and Safety
4. Freedom
5. Agility of Government and the Private Sector

Let’s look at each of these policy areas to see how they do or don’t support a U.S. national strategy to maximize our human capital.

Education and Training

Although education can be its own reward, many advanced societies offer rewards and incentives to encourage their populace to pursue more education and/or more formal skills training.

The U.S. clearly doesn’t offer such an organized incentive structure. While college graduates often earn more money than those without diplomas or degrees, the skyrocketing cost of a college education is born by individuals or families, which explains in large part why, over the past 50 years, the percentage of Americans with four-year degrees has grown by a paltry 5%, from 25% of adults to 30%.

Our grade schools and high schools are also not optimized to produce the best outcomes for most U.S. citizens. Because local schools are controlled by local school boards, the best predictor of the quality of your education is the zip code where you were born.

Enforcement of Contracts and Property Rights

The strong U.S. protections for owners of both physical and intellectual property provide a tremendous incentive for economic growth. Owners know that if they successfully expand and nurture their assets, they will reap economic benefits and — most importantly — be allowed to keep them.

This basic tenet of the U.S.’s social contract has fueled periods of tremendous growth and innovation by allowing us to invest in both human and tangible capital to produce future growth, confident that we “know what’s ours is ours.”

Balance of Risk and Safety

Every nation has rules about what risks will accrue to individuals and families, and what risks will be managed on their behalf by society. The social safety net adopted in the U.S. following the Great Depression ushered in a long period of property and growth that benefited Americans from all walks of life and allowed many citizens to develop themselves and contribute to society.

By contrast, countries like Japan (where families are expected to provide the safety net, and 65% of elders live with their children), can expect that adult children — and particularly women — will do significant care-taking during their prime years of productivity, with a consequent diminishment of positive economic activities.

Freedom

In America, citizens have the freedom to decide where they will live, what job or professional field they’ll choose, who and when they marry, how big of a family they’ll have, whether or not they’ll move for advancement, how much they’ll work and when they’ll stop working. And while these decisions can be daunting and hard, they’ve allowed many in the U.S. to develop their own human capital to a high degree — to invest in themselves and garner the rewards.

Agility of Government and the Private Sector

How quickly can a country’s government and its private sector adjust to the reality of a changing world? How smoothly can they coordinate their responses to challenges like economic disruption, artificial intelligence, new technologies, terrorism, or even a global pandemic?

In a world of accelerating change, the ability of nations to increase their human capital depends on the agility and effectiveness of both government and private sector responses to those changes. And here, the U.S. has a mixed record: Some technologies, like social media, have developed rapidly and had a tremendous impact on society. Others, like stem cell research, have languished because government could not be agile on the policy side, and the vision of industry was thwarted at great potential cost.

Can the U.S. Create a National Human Capital Strategy?

That answer is clearly complicated. An effective national human capital strategy requires clarity and coordination between government and industry, across a wide range of policy areas.

In some of these areas, the U.S. excels. In others, our success has been limited.

One thing is clear, however: Because of the nature of global competition, it is time for nations to look hard at their current human capital strategies and take actions now to optimize the sum of our human capital. Our future will depend primarily on how well, how effectively, and how fast we learn to maximize our human capital.

Let’s share experiences. Leave a comment below, send us an email, or find us on Twitter.

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Human Capital Trends: Diversity Takes the Spotlight

69% of executives rate diversity and inclusion as an important issue (up from 59% in 2014).

In 2017, the proportion of executives who consider inclusion as a top priority has risen 32% from 2014.

These statistics are just a few from Deloitte’s global research, which included 10,400 business and HR leaders across 140 countries. The global surveys were split between large companies (more than 10,000 employees), medium-sized companies (1,000-10,000) and smaller companies (less than 1,000 employees). The resulting 2017 Deloitte Global Human Capital Trends report provides an informed view into the future of work—and what some consider to be the Fourth Industrial Revolution.

One of the nine trends identified is the reality gap between diversity and inclusion (D&I) efforts and results. Today we’ll take a look at that trend, discuss why things need to change and why diversity and inclusion are taking center stage, review the old ways versus the new ways of approaching diversity and inclusion, and lay out steps you can take to shorten the gap.

Snapshot: Diversity and Inclusion Today

Research shows that diverse teams are more innovative, engaged and profitable. But today’s diversity and inclusion needs are more than just profits and productivity. In today’s world, D&I impacts brand, corporate purpose, and performance.

We’ve seen scrutiny of lack of diversity on the news, and now that scrutiny is coming from within the companies themselves. More people are champions of diversity and inclusion, and the Millennials see it as an essential part of corporate culture. This moves beyond building diverse teams, to insuring that everyone has a voice and is heard. The next generation, Gen Z, will be the most diverse to date, and companies will need to make way.

Despite the increased scrutiny, and increased awareness of unconscious and explicit bias, results are appearing too slow. The most popular way to address these issues is training, and while helpful, it appears that making people aware of diversity and inclusion issues is not enough. Organizations must take a larger stroke, by implementing data-driven solutions and increasing transparency. They also need to immerse executives in the world of discrimination and bias so that they can truly understand how they affect decision-making, talent decisions, and business outcomes. As Deloitte says, “A set of ‘new rules’ is being written that will demand a new focus on experiential learning, process change, data-driven tools, transparency, and accountability.”

The era of HR filling a quota to meet diversity goals is over. Ownership of diversity and inclusion efforts now fall into the laps of leadership, with senior leaders holding leaders at all levels accountable to make concrete, measurable progress with diversity and inclusion efforts. Why the shift?

Five Reasons Diversity and Inclusion Are Taking Center Stage

1. The Global Political Environment

Employee sensitivity is up due to immigration challenges, nationalism, and fear of terrorism appearing frequently in the press. Employees are personally concerned with these issues and want their employers to offer perspective. In this way, D&I now touches issues of employee engagement, human rights and social justice.

2. Organizations are Becoming Global Entities

As large organizations increasingly define themselves as global entities, religious, gender, generational and other types diversity issues become a greater reality.

3. Diverse and Inclusive Teams Outperform Their Peers

There are many studies showing the benefits of diverse teams and inclusive cultures. Deloitte reports, “Companies with inclusive talent practices in hiring, promotion, development, leadership, and team management generate up to 30% higher revenue per employee and greater profitability than their competitors.”

4. Gender Pay Equity in the Spotlight

Gender pay disparity is increasingly in the public eye. Companies and even government administrations are taking the necessary steps to make improvements. For example, Salesforce analyzed 17,000 employee salaries and identified a gender pay gap; they then spent roughly $3 million to even it out. On a governmental level, Canada’s Justin Trudeau appointed a gender equal-pay cabinet in 2015.

5. Baby Boomers Staying in the Workforce Longer

Career trajectories have changed due to Baby Boomers remaining in the workforce longer. That delay in retirement means a workforce with generational diversity like we’ve never seen before.

As you can see, the shift in how diversity and inclusion is approached needs to expand. It’s helpful to look at Deloitte’s following table which how D&I was approached in the past, versus how it needs to be approached now.

Four Ways to Start Amping Up Your Diversity and Inclusion Efforts

So if you’re an organization who is just getting ramped up for diversity and inclusion efforts that extend beyond training, where do you begin? Do you toss your training programs and start fresh? Here are the first four steps to take.

1. Share Research With Leadership

Providing data on the value of diversity and inclusion can get top leadership on board. But being on board is just the first step. Then they need to be held accountable through metrics and reports on diversity in promotion, hiring and compensation.

2. Use Analytics

Human Capital Analytics can identify patterns of racial bias, inequity in compensation, and bias in hiring and promotion much easier (and significantly faster) than any HR department can. After these patterns are identified, a more targeted plan can be implemented.

3. Extend Efforts Beyond HR

Diversity and inclusion should be on par with compliance, IT and security, practiced by everyone and owned by leadership. It is not just an HR responsibility—it’s a business responsibility.

4. Pay Attention to Global Differences

Remember that as organizations become more global, the diversity and inclusion needs will vary by region. The problematic areas you address and plans you put in place for the U.S. won’t necessarily be the same as the problems and plans in the Middle East. Listen to your employees’ interests and concerns, then decide what needs to be measured from there.

Expansion and Agility

As global networks expand and technology transforms the workplace, D&I models will continue to evolve. There isn’t a strategy organizations can develop today that will still apply in a decade. However, when diversity and inclusion is considered part of the corporate infrastructure, leaders can take the same agile approach to closing the gap that they take to surviving a world in constant flux.

Have you noticed an increase of buzz around diversity and inclusion in your workplace? We’d love to hear about any initiatives you’ve experienced.

Let’s share experiences. Leave a comment below, send us an email, or find us on Twitter.

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