Stop Focusing on Profits Right Now! Instead, Build a Community on Purpose and Values
Globally, we visited over 50 organizations that have a radically different perspective on how to successfully organize work. They challenge our thoughts and assumptions and have successfully cracked the code and created a workplace where people love to work. During our worldwide search to these pioneers, we have uncovered what sets these organizations apart.
In our blog series Rebel Trends we discuss these 8 trends one by one. In this first episode we bust the old money-making paradigm and describe the move from empty profits to an inspiring purpose and values.
PROFIT ALONE WON’T DO IT
We have found that profit maximization doesn’t seem to be the main goal of inspiring workplaces. Money is not what drives them and it is not what makes their workforce highly engaging. Why not? Because they prefer to focus on intrinsic motivation (i.e. purpose, mastery, autonomy) rather than extrinsic motivation (i.e. money, fame, grades) to engage their employees. Their organization is about something bigger than just making money.
This doesn’t mean that profit is seen as being unimportant. Profit is important but it is simply not the reason why the organizations exist. The organizations exist for more inspiring reasons. Making money is just seen as the necessary condition for pursuing the higher purpose of the organization.
Jean-Francois Zobrist described it to us beautifully: “Money should not be the goal of the company, but it should be the main source. Like breathing is the main source of life. Money is for the organization what breathing is for the human being. Because without making money the organization will not live long.”
FROM MAXIMIZING SHAREHOLDER VALUE TO AN INSPIRING PURPOSE
Therefore, the places we visited are driven and motivated by aspiring a bigger purpose rather than just profits. A purpose that provides employees with lots of energy, passion and motivation to get out of bed in the morning. It has the power to overcome bureaucracy, silos and egos and helps to unleash the full potential of the organization.
But let’s be clear. When we talk about an inspiring purpose we are not talking about those boring mission statements that no-one in the company can recite. We are talking about a crisp and clear cause that unites and activates all people within the organization. An inspiring mission that does best for the organization, the employees, the customers and the world in the long-term.
Patagonia’s inspiring purpose clearly illustrates their reason for being: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”
The inspiring purpose is the organization’s fundamental reason for existence. It’s like the north star that guides and inspires people on their way to success. The purposes we encounter are often stable for long periods of time and seldom or never change. The Bucket List companies clearly show that operating with an inspiring purpose creates a competitive advantage.
THE PURPOSE PARADOX
The strange thing about purpose-driven companies is that the most profitable companies are not the most profit-focused. Various research studies show that purpose-driven organizations outperform their competitors. In his book Firms of Endearment, Raj Sisodia concludes that purpose-led companies outperform the S&P 500 by 10 times between 1996 and 2011.
Another study by Nielsen found that “55% of global respondents are willing to pay extra for products and services from companies that are committed to positive social and environmental impact—up from 50 percent in 2012 and 45 percent in 2011”. Therefore, an increasing amount of consumers are willing to pay more if they relate to the organization’s purpose.
FROM STANDARD OPERATING PROCEDURES TO A CLEAR SET OF CORE VALUES
Besides having a strong purpose, inspiring workplaces clearly define who they are, how they treat each other, where they stand for and what they are all about. However, they don’t bother capturing this in detailed standard operating procedures and protocols. Instead, they establish a clear set of core values that describe the organization’s way of working.
The core values are essential for the organization and used by its people as a set of guiding principles. It seems a pragmatic choice because to fully be able to benefit from the collective intelligence of everyone, organizations should get rid of most of the rules, procedures and other bureaucratic instruments that slow down organizations.
A clear set of core values provides employees with guidance to help them to use their best judgement. It provides employees with a framework to act in the right way with the right mindset, without the need of extensive bureaucracy.
Doug Kirkpatrick on the importance of guiding principles: “At Morning Star it all starts with two main principles. First, people should not use force against others; all interactions should be voluntary. And second, people should honor the commitments they make to others. Without these principles we are doomed to fail”.
To be clear, a set of core values is not meant for corporate propaganda to fill annual reports or as decoration for corporate buildings. They should be ‘lived’ authentically and in a high extent throughout the entire organization. Everyone in the organization is supposed to find solutions, make decisions and behave consistently with the ruling set of core values. The set of core values seldom change. The practices to support them and bring them to life, however, do.
HOW TO BRING YOUR PURPOSE AND VALUES TO LIFE?
We are convinced that everyone can profit from having an inspiring purpose and a clear set of core values. And this doesn’t necessarily have to be a company wide effort. You can start to pioneer within your own team, your department or your division.
If you don’t already have an inspiring purpose and a clear set of core values we encourage you to make serious work to define them. At first, let people define their own inspiring mission statements that reflect who they are and what they will contribute to the organization’s success. Think about what your reason of being is. And what would happen if your team, department or organization ceases to exist.
1. DEFINE YOUR PURPOSE AND VALUES
- Envision your purpose by dreaming, feedback, and adapting (Zingerman’s)
- Translate the purpose from organizational level to departments, teams and individuals (Morning Star)
- Determine values & guidelines together with all employees (Spotify, Cyberclick)
Be careful that they don’t end up as corporate decoration. So, once you have defined an inspiring purpose and your set of core values it’s time to look for ways to make them come to life. A great way to do this is through tangible practices.
2. BUILD PRACTICES AROUND THEM
Translate the purpose and values into concrete actions and practices. Let them guide and inspire your daily work. Use them during the hiring process, to make decisions, to behave accordingly and let them guide the organization in times of glory and in times of crisis. Here’s some great examples of the pioneers we’ve visited:
- Measure impact, track progress and make the purpose visible (Patagonia)
- Put your money where your mouth is (Patagonia, Cyberclick)
- Make values & guidelines visible and part of daily decision making (UKTV, Spotify)
- Award for demonstrating values (UKTV, Cyberclick)
We have seen the power of purpose & values at various pioneers around the globe. By focusing strongly on their purpose and values, they are able to build a community of like-minded people. It brings together employees, customers, suppliers, and others who invest time, money and effort into fighting for the same cause.
The motivation, drive, and commitment that are unleashed are unlike those of organizations that focus solely on profit. It’s time to move away from the old money-centered paradigm and move towards organizations that build communities and rally around a common purpose and values.
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