Four Conditions for Purposeful Behavior

Introduction

Purposeful Behavior is an action performed by an organization consistent or aligned with a Common Purpose that is meaningful and important to that organization’s key stakeholder groups.

The concept of Purposeful Behavior is based on the following premise:

This premise has two corollaries:

1. An organization that is committed to a single purpose will be more successful in achieving that purpose than if it were committed to multiple purposes.

2. The chance for an organization’s success will be lessened when any stakeholder group is not aligned with its purpose (that is, when stakeholders do not find it meaningful and important to them).

To exhibit Purposeful Behavior, four conditions must be present:

1. The organization must have A Clearly Stated Singular Purpose and Related Mission

2. The organization’s Key Stakeholder Groups Must Be Aligned with That Purpose

3. The organization must have A Credible and Transparent Plan to Accomplish Its Purpose

4. The organization must Keep Key Stakeholder Groups Informed of Progress in Accomplishing Its Purpose

Condition One- A Clearly Stated Singular Purpose and Related Mission

The Difference between Purpose and Mission

We define purpose as a declaration of an end result that is meaningful and important to the declarer such that the declarer is inspired and impassioned by it. By declaration we mean an intentional or determined act witnessed by others. The end result could be an object (one of the Pyramids), a destination (the new World) or a condition (ending world hunger). The power of purpose comes from its ability to inspire and impassion the declarer to action. For that to occur the purpose must be meaningful and important to the declarer.

It is one thing for an individual to have a purpose that is inspiring and motivating. It is quite another for an organization to have a purpose that is inspiring and motivating to all its members. Having a common purpose requires communication and agreement taking into account the cultural, economic and demographic diversity that exists in most organizations. For this reason, clarity and simplicity are important attributes to assure communication and alignment across today’s organizations.

A clear purpose defines an end point, but it doesn’t generally indicate how that end point will be reached by the organization. A clear mission statement addresses that issue. A Mission can be defined as “the work the organization does to achieve its purpose”. For example, Google’s Mission as stated on its website is “to organize the world's information and make it universally accessible and useful”. From this mission statement, one might assume that Google’s Purpose is to “make the world’s information universally accessible and useful”. Given this purpose, their mission as we define it might be “to organize the world’s information using the latest technology for universal access over the Internet.” Google, like many organizations, incorporates its Purpose in their Mission Statement.

The Gap’s Purpose, as another example, is “to make it easy for you to express your personal style throughout your life”. Their mission is to “…create emotional connections with customers around the world through inspiring product design, unique store experiences and compelling marketing.”

Why a Common Purpose?

Multiple purposes would mean sharing of resources and requiring the organization to move in different directions. Very often, an organization’s goals get confused with its Purpose. For example, one of an organization’s goals might be to increase profits, but that is generally not considered the organization’s purpose.

In order to find alignment among stakeholder groups, organizations must find a common purpose versus multiple purposes. Organizations that attempt to use multiple purposes to satisfy different stakeholder groups will be forced to use resources to benefit one stakeholder group at the expense of another. Such win/lose strategies are costly and will hamper the success of an organization in satisfying its stakeholder groups. The answer is finding a “larger” singular purpose that is meaningful and important to all key stakeholder groups.

A vision is a picture of a future. For an organization, that future could be the condition of the organization itself or the result of the organization’s purpose being fulfilled. For example Avery Dennison’s Vision is “To be the world leader in products, services and solutions that enable and transform the way consumers and businesses gather, manage, distribute and communicate information.” In this case, the vision statement describes Avery’s future condition or state as “the world leader”. If this vision statement described the result of its purpose being fulfilled, it might have read as “a world in which all businesses gather, manage, distribute and communicate information efficiently”.

A vision may grow out of a Purpose or be the source for that Purpose. For example, an entrepreneur in the biomedical field may have first been committed to the Purpose of curing lung cancer and then envisioned what the world might look like without the presence of lung cancer. On the other hand, the entrepreneur may have first been inspired by envisioning a world that was disease free. Then, given an expertise in lung cancer, the organization committed to the purpose of curing lung cancer.

As you can see a vision is not a purpose but can be useful in coming to agreement on a common purpose as well as clarifying how that purpose will be achieved. A vision of the future can create a context for an organization’s Purpose. A Purpose in turn provides the context for an organization’s Mission. All purposeful organizations operate from a vision of the future, a purpose and a mission. They may be well thought out and clearly defined in Vision or Mission Statements or they may be imbedded or hidden in the subconscious of the organization’s culture. The more clarity there is for the organization’s Vision, Purpose and Mission the more likely stakeholders and stakeholder groups will find alignment with its Purpose and Mission.

Condition Two - Key Stakeholder Groups Must Be Aligned with That Purpose

The second condition requires that an organization’s Purpose and Mission be aligned with its key stakeholder groups. To understand this condition, we must first understand the role stakeholders play in sustaining an organization.

In nature we observe that for any life form to survive, it must live in balance with its environment. If we think of a business organization as a “higher life form”, it too must live in balance with its environment. What this means in a more practical sense is that an organization must interact constructively with those individuals who come in contact with or who are impacted by that organization. If we classify these individuals into groups based on the nature of their interaction, we could say that each group has a particular stake in the operation and/or success of that organization based on its relationship to that organization. The different types of relationships might be one of the following:

1. Customer: a targeted group for which the organization provides some value consistent with its intended purpose or mission
2. Supplier: another organization that provides some added value to its products or services or its operation
3. Channel: another organization that provides access to customers or suppliers
4. Worker: an individual who is employed by that organization to assist in the fulfillment of the organization’s intended purpose and mission
5. Investor: individual or organization that provides capital to that organization in exchange for ownership (if a for-profit organization) or good will (if a not-for-profit organization)
6. Local community: a group of individuals who is directly or indirectly impacted by the organization’s local presence
7. Larger community: a group of individuals who is directly or indirectly impacted by the organization’s presence in the world

These stakeholder groups are in relationship with and support the organization as long as they receive some value from that relationship. For its customers, it might be competitive products or services; for its suppliers, it might be fair prices for goods and services; for its channels, it may be access to new products or services or new markets; for its workers, it might be fair wages; and so on. When all stakeholder groups support the organization, we can say that the organization is in balance with its environment and is sustainable. When there are stakeholder groups who do not support the organization, we can say that an imbalance occurs and the organization must use resources to bring it back into balance. These added costs take away resources needed for an organization to fulfill its Purpose and Mission.

Here are some common circumstances requiring added costs:

§ Qualified employees who must work in an unpleasant environment will demand higher wages than if they were to work in a more comfortable environment

§ Businesses that have bad reputations, such as sex shops, message parlors, liquor stores may be forced to pay additional taxes or fees to operate in a community or hire advocates to counteract community action

§ Manufacturers who sell products that are considered by the community to be unhealthy (cigarettes, liquor, sodas, asbestos related products) may be limited to where they can be sold, have their products taxed or may incur high litigation costs.

§ Businesses that abuse their suppliers may have to pay a premium to attract new suppliers.

The opposite is also true. Organizations that are supported by their stakeholder groups tend to gain from that relationship. For example:

§ There are many organizations that are able to pay less than market wages to their employees because their employees want to be associated with that organization.

§ Many communities will offer incentives to organizations that have a reputation for creating benefits beyond employment opportunities to its citizens, such as a reputation to attract other businesses, local sponsorship, community involvement, etc.

§ Communities and business developers will go out of their way to attract retailers that enhance the reputation of their shopping districts

To understand how an organization can minimize the cost of maintaining support from its stakeholders, we must understand why people do things in the first place.

As workers in an organization, we do our jobs for many reasons: we like the work, we like the work environment, it’s close to home, the pay is good and so on. The reason why we do something impacts the way it is done. Since work generally consists of a complex set of tasks and outcomes, it is very difficult to motivate our performance for optimal results unless our reason for doing the job is similar to or aligned with the Purpose of the organization; that is, we see the organization’s Purpose as meaningful and important to us and we are committed to it.

As human beings we are driven to make a difference for others. We see it everyday in our charity work and in our individual support to our families, friends and community. We see it in public service (police, firemen, military), we see it in many occupations (healthcare, education) but we tend not to notice it in most business environments. As a consequence, many people look outside of their business experience to address this need.

If organizations can tap into this need to make a difference and have that need be aligned with the organization’s Purpose, the organization can maximize performance from its employees as well as other stakeholders.

Do all stakeholders need to be aligned?

Does an organization need all of its stakeholder groups fully aligned with its Purpose and what does alignment really mean? Measuring alignment is not an exact science and at best is an estimate. There are certain stakeholder groups that are more central to the success of an organization than others. One can tell by the size of the penalties for being out of balance with that stakeholder group. For example, a community-based organization such as a restaurant or retail chain is going to be impacted heavily by its local communities since they comprise most of its customers. On the other hand, an organization serving a national market, such as a manufacturer or distributor, might not be impacted as much by its local community but more so by its channels. Publicly traded organizations have more issues concerning investors than privately owned organizations, especially those where the owners are the managers.

It is important for the organization to recognize the level of importance each stakeholder group plays in its environment or market space. Based on their level of importance, some groups can be taken for granted while others will require significant resources to establish alignment. For many organizations, the workforce is the most critical stakeholder group and establishing their alignment of Purpose may require active participation by that stakeholder group in formulating the organization’s Purpose.

It is also important to understand the diversity of interests among members of stakeholder groups especially the key segments of stakeholders within a group. Within the workforce, for example, there are management, professionals and hourly workers. Customers or channels might also have different interests among segments such as professional buyers of large companies versus owners of smaller companies. Communities may also differ by segments such as politicians, activists, and voters. End users might differ by targeted market. It is important to realize that stakeholder groups are not homogenous entities and require a deeper understanding of the “leading” segments and influencers in each group in seeking alignment with Purpose

Seeking a Common Purpose

To achieve alignment among diverse groups of stakeholders, organizations must seek Purposes that are large enough to have a common interest. Let’s examine how a purpose becomes larger in order to encompass all stakeholder groups. As an example, consider a fictitious privately owned 50-store supermarket chain in California called “Food Fresh”. The primary stakeholder groups in the order of priority are: 5 owners and their families, 100 managers and their families, 2,500 workers and their families, 55 local communities the chain presently serves and intends to expand into over the next five years and 20 of its key vendors. The five owners are all related and they see the Purpose of “Food Fresh” is “To create a secure source of income for the entire family for many generations”. This purpose was very important to the five owners, who were committed to making a difference for their respective immediate families but it did not inspire the management team. They needed to come up with a larger purpose that impacted not only their families but all of the people working for the Company. Their larger purpose was “To create an environment where all workers could grow and prosper”. They soon realized that such a Purpose was inspiring for all of its workers but had little interest for the local communities and customers it serves, so they needed to begin thinking larger, beyond their own desires but include the desires of others. What did everyone want that would drive customers to the stores and have people wanting to be associated with this organization. They came up with an even larger purpose: “To create a healthy source of nourishment for our souls and bodies.”

If we examine the three Purposes below, we can see that each subsequent purpose is “larger” than the previous one in that it has the potential of aligning with a larger group of stakeholders.

Three Purposes:

1. To create a secure source of income for our entire family for many generations

2. To create an environment where all workers grow and prosper

3. To create a healthy source of nourishment for our souls and bodies

The power of a Common Purpose can tap into the passion and enthusiasm of all people who are committed to and seek to make a difference or contribution in life. When stakeholders see how the organization’s Purpose can align with that contribution, their relationship to the organization dramatically changes.

Condition Three - A Credible and Transparent Plan to Accomplish Its Purpose

The third condition of Purposeful Behavior is to have credible and transparent plan to accomplish that purpose. Purposes that appear to stakeholders as unachievable by the organization lose their power and usefulness as a source of inspiration and passion. To be credible, the organization’s work must be aligned with accomplishing its purpose. In lieu of work being aligned, as in the case of an organization in the process of changing its purpose, the organization must communicate the changes that are underway to bring the organization’s work into alignment; such as statements of mission and future plans.

Although common purposes enable greater alignment among stakeholder groups, they are by their very nature more difficult to achieve. Common purposes that are not supported by credible actions are not viewed seriously by stakeholders and could have the reverse affect in that the integrity of the organization is called into question. Purposeful companies must show its stakeholders how it intends to accomplish its purpose in a credible and transparent way.

Common purposes often times lead to certain expectations of behavior on the part of its stakeholders. When these expectations are not met, it calls into question the organization’s intention or its ability to achieve its purpose. For example, let’s consider what actions might be considered consistent and inconsistent with the fictitious grocery chain’s larger purpose of “To be the healthy source of nourishment for our souls and bodies”

If this grocery chain continued to pursue actions in the Inconsistent Actions column, it would soon become clear to its employees and customers that its purpose was only a public relations slogan and not representative of a purposeful organization. Since purpose creates the context for all future actions of that organization, one could ask the question “is that action consistent with the organization’s Purpose. In the case of our grocery chain, “are these actions consistent with being the healthy source of nourishment for our souls and bodies?”

The best way to assure and communicate alignment with Purpose is to have:

Clarity of Mission

As stated earlier, a Mission states what the organization does to achieve its Purpose.

The Mission statement must describe its work such that its stakeholders can see a direct connection with its Purpose. For our grocery chain, a clearly stated mission could be “to provide the health conscious consumer with the finest assortment of wholesome foods and supplements” or possible “to provide our active customers with the healthiest choices of foods and related products” The key words, “health conscious, wholesome, and healthiest choices”, are consistent with the “source of nourishment for our bodies and souls”

Similarly, an organization’s business strategy must also clearly support achieving its purpose. By business strategy, we mean the competencies in which the organization intends to invest and develop to achieve its Purpose and Mission. Organizations make these investments either by default or by design. In general, organizations that invest its resources based on a clearly laid out plan are more likely to achieve its goals than organizations that invest resources based on opportunistic or legacy demands. Stakeholders will have more confidence in a business strategy by design as long as that business strategy is truly aligned with achieving its Purpose.

In lieu of a clearly communicated business strategy, one could look at where the organization is investing its resources and speculate on whether these investments do or do not support purposeful behavior. In our example if the grocery chain were to invest in a long-term alliance with a fast-food chain with branches inside its stores, one might surmise that its business strategy were not aligned with its purpose. On the other hand if we saw highly trained sales staff in each department one could safely assume that its investment in training was aligned.

Having stakeholders guessing on whether the organization is aligned with its Purpose is risky business. It is much easier to just tell them. A transparent organization will clearly communicate its business strategy to keep its stakeholders from second-guessing the actions of the organization and loosing their passion for the organization’s work.

Clarity of Values

Purpose and Mission create the context for a set of values for the organization. These values help shape its culture and support achieving its purpose.

In many cases, certain values will be self-evident. Others will be based on existing culture. A new purpose will inevitably require a modification of values, further supporting the need for clarity in this area.

The more clearly stated, the more effective these rules will be in shaping behavior in and around the organization.

Win/Win Investing

One of the great benefits of Purposeful organizations is their ability to invest resources in Win/Win situations. What do we mean by Win/Win situations?

One reason organizations form is to amass resources and then deploy those resources for the benefit of its stakeholders. As we have seen earlier there are many different stakeholder groups and variations of stakeholders within each group. How does an organization deploy its resources such that all stakeholders benefit or gain value? If resources are deployed for the benefit of some stakeholders at the expense of others, we have created a win/lose situation. In those instances overall benefit to the stakeholders is reduced. If resources were deployed such that all stakeholders gain value, we would have created a win/win situation, and overall benefits to stakeholders would be enhanced.

If all stakeholders are committed to the Purpose of the organization, then resources deployed to achieve that purpose would provide benefit to all stakeholders. Investing in a mission and business strategy that clearly supports the achievement of the organization’s Purpose is a win/win investment and will provide greater value for all stakeholders.

Condition Four – Keep Key Stakeholder Groups Informed of Progress in Accomplishing Its Purpose

Measuring Success

To keep the Purpose alive and real for people so that it continues to inspire, motivate and be a source of value for all stakeholders, stakeholders need to be kept informed of the organization’s success in accomplishing its Purpose. If the Purpose is to build a cathedral or pyramid, it is very easy to notice how well the organization is doing- you see it every day. If your Purpose is to eliminate world hunger, it’s not so easy to track your progress. To address this issue we have identified two ways of measuring performance:

Operationalizing the Mission and Business Strategy

By operationalizing the Mission and Business Strategy, we mean putting it into action. This involves the setting and managing of goals, objectives, and tactics. As long as stakeholders can see a clear relationship and alignment between these targets and the Purpose, the organization will have an opportunity to benefit from its Purposeful Behavior. Observing that relationship is enhanced if quantifiable metrics are used. This is a necessary condition for purposeful behavior but it is not enough. Oftentimes stakeholders measure success indirectly in terms of sales and profitability, both of which are important goals; but they may not necessarily measure an organizations success in achieving its Purpose. The organization must also measure in a direct way its success in achieving its Purpose.

Metrics for Purpose Achievement

A more difficult task is to find ways of measuring success towards achieving an organization’s Purpose. For the Egyptian Pharaoh, it was very easy to measure success. One only had to look at the Pyramid as it was being built. But for our fictitious market “Food Fresh” it is more difficult to develop a metric that would show this organization achieving its Purpose of creating a healthy source of nourishment for our souls and bodies. One could imagine developing a measurement that would show whether their customers were getting healthier, such as less sick days, a longer life span, fewer drugs taken, etc.

Organizations that fail to measure achievement of their purpose and fail to communicate that measurement to its stakeholders run the risk of losing the value of having a purposeful organization in the first place.