Purpose in action: the secret to building and sustaining high-performance organizations
In the past year alone, individuals wrote a whopping total of 669 articles about building purpose-driven organizations.
I like that number — it shows how much attention is being paid to this topic — but I have one critique: Nobody pays enough attention to the critical importance of aligning employees, working practices and leadership behaviors to a compelling purpose. I call doing so "purpose in action."
This matters for a couple of reasons. First, alignment around sustainability or social goals isn't just about living up to ideals — it's also good for business. Customers undeniably are interested in purchasing from companies that demonstrate some social or environmental benefit. For instance, 70 percent of millennials — the demographic with the most potential spending power — actively consider company values when they make purchases.
Second (and equally important), an aligned and highly engaged culture is a hallmark of high-performing companies. One Gallup report shows that organizations with greater engagement see a 10 percent boost in customer metrics and a 20 percent sales bump. The connection is clear: Employees who are proud of where they work demonstrate more discretionary effort and bring their most creative selves to work.
It’s not enough to have an enterprise with goals for environmental and social good; nor is it enough to have high-performing employees without an inspiring purpose. Purpose in action is that secret sauce that blends these ingredients together.
Not just doing it, but doing it well
In a recent letter, BlackRock founder and CEO Laurence D. Fink perfectly summarized the truth about profits and purpose: "Profits are in no way inconsistent with purpose — in fact, profits and purpose are inextricably linked."
Plenty of organizations have an inspiring purpose, but relatively few have leaders who consistently model the behaviors that support that purpose. Regardless of an organization’s size, a major (yet surmountable) roadblock that accompanies this growth is the need to refine working practices in a way that drives nimble decision-making, innovation and cross-enterprise alignment.
A leader’s role is to help the organization innovate and build inspired, productive teams. This is best accomplished by creating a high-trust work environment where employees feel empowered to cast aside the constraints that cumbersome work practices place on an organization’s strategy and purpose.
When I served as COO of the Bill & Melinda Gates Foundation, I dealt with a challenge that most organizations cannot imagine: too few constraints. Due to Bill and Melinda’s incredible generosity, baseline resources such as headcount, talent and money were rarely in short supply. We used these resources strategically and helped enable innovation on the world’s most pressing challenges.
At the same time, one of my priorities was introducing constraints to drive even more innovation. My team and I prioritized and streamlined our budget and, most important, we set aggressive goals to accelerate project timelines while improving quality. We delivered on this strategy, and I’m proud to report that employee engagement and management effectiveness scores improved every year of my tenure.
Aligning people with purpose will look different for every organization. But those who put in the effort will see better results, higher employee engagement and a broader impact.
Paving a path to purposeful action
Practicing purposeful action is not a matter of employees memorizing a mission statement. It requires an ongoing, companywide commitment. I've seen great results by implementing these strategies:
1. Hire for values instead of just technical capability. The entry criteria for the candidate pool must be talent. But if a candidate's values don't align with those of your organization, move on to the next person.
A company near and dear to my heart, Genentech, is a great example of an organization that prioritizes talent and values alignment. During my tenure there, we doubled in size to nearly 10,000 employees. To ensure our mission and culture remained vibrant, then-CEO Art Levinson held leaders accountable for hiring talent that shared the company's values. This was so important that the executive team made recruiting and onboarding "value-aligned" talent a priority goal.
2. Create purpose-first policies. Employees easily can spot a gap in purpose if your policies don't reflect it. For example, valuing employees means having high-quality health insurance and generous time-off policies. Leaders are responsible for building purpose-first culture through policies rooted in purpose. My team at the Gates Foundation introduced a groundbreaking parental leave policy, which includes six months paid leave and a $20,000 child care stipend.
3. Be truthful and candid, especially when times are tough. It’s intimidating to tell your team hard news. However, I’ve found that being straightforward helps morale and productivity.
At the Gates Foundation, I managed a difficult yet appropriate decision to remove a poor-performing executive. To help steady the ship during the transition, I assumed interim leadership of the executive’s organization. I regularly shared recruitment updates and hosted weekly "office hours" to ensure employees could ask difficult questions and give me helpful feedback.
Despite the uncertainty of not knowing who the next leader would be, employees were able to root themselves in these concrete milestones. In turn, that helped us all focus on the important work at hand.
4. Model and communicate purpose-driven behavior. Great organizations have an excitement and a verve that animates the culture. As a leader, actively communicating your organization’s vision for success and what that purpose means to you personally will help breathe life into that culture.
One reason Genentech consistently has received workplace-related awards for the past decade is that employees at all levels are deeply committed to its mission. That commitment fuels passion for innovation and spirited, open dialogue. This cultural hallmark sets the company apart and is a key reason it continues to develop life-saving medications.
Does your company demonstrate purpose in action? If it does, odds are your employees and customers can feel it in every action you take.
If your company has struggled to embrace this approach, give the above four steps a try. It assuredly will help your team flourish and strengthen your organization's impact on the world.