For years I have worked with an accomplished economist named Anjan Thakor. Once we were talking about an experience I had running a positive organization. I described a culture focused around a higher purpose. As the people pursued the higher purpose, they were fully engaged and unified in authentic relationships. They had a sense of contribution, positivity and growth. The organization performed at a high level.
As I shared the story, Anjan told me I was making claims that violated the conventional assumptions of economics. Economics suggests that wealth is created by a single minded focus on shareholder value or wealth maximization. There is no place for higher purpose in the logic of value creation. You must choose one or the other.
Our discussion eventually grew into a research project. We built a mathematical model of an organization. The model was comprised of principals and agents engaged in conventional relationships of transactional exchange.
We then altered the model. We introduced a collective purpose higher than profit. When we introduced higher purpose the organization was transformed. The employees began to act like owners. The assumptions of self-interested, transactional exchange fell away. The employees became intrinsically motivated people willing to go the extra mile at work.
The research made it clear that organizations are complex. On the one hand, value creation and the pursuit of higher purpose can be conflicting as is conventionally assumed. Yet contrary to conventional economic thought, they can also be complementary. Some leaders learn to transcend the normal assumptions of economics and more fully tap the potential of a given organization.
Impressed by the findings in our mathematical paper, Anjan and I wanted to understand more about how leaders imbue an organization with purpose. We assumed that the heads of organizations would understand this process, so we interviewed 25 leaders who were known for having organizations of higher purpose.
The interviews generated a surprising finding. Half of the CEOs did not believe in purpose when they first became CEOs. They were steeped in the conventional perspective and only discovered the power of purpose as part of some traumatic challenge.
Whenever I reflect on this finding, I think of the words of Peter Vaill: “Higher purpose must be discovered, articulated, acted upon, and continually clarified. It is an ongoing process, requiring continual attention…managers wish to absolve themselves from the responsibility to creatively revivify purposes.”
Most managers are trained and rewarded for solving problems. The notion of discovering, articulating and clarifying purpose seems like a wasteful distraction. The notion of attending to purpose as an on-going process is a particularly troublesome notion. Purpose is a responsibility that managers prefer to escape.
Given this tendency the reader has a golden opportunity. If most managers do not understand how to imbue a group or an organization with purpose, learning to do so is an important differentiator. Discovering, articulating, acting upon and continually clarifying purpose is a rare skill that defines positive leaders. The reader would be wise to consider this opportunity and make it a priority to learn how to imbue an organization with purpose.
Why is higher purpose an important tool?
Why do managers flee from the responsibility of imbuing their people with a higher purpose?
How can we use this passage to create a more positive organization?