In recent years, we’ve come to feel that learning how to establish firms that are purpose-driven, performance-focused, and principles-led is becoming increasingly critical for business leaders.
We think that developing companies with these three traits is no longer an option in a time when business transformation is faster than ever. Continuous disruption, fast technology innovation, and volatility demand today’s leaders to establish agile companies with resilient personnel to achieve great performance.
However, concentrating just on outcomes is insufficient. Demographic, cultural, and technical shifts have resulted in a workforce that expects a set of operating principles based on fundamental values like transparency, trust, inclusiveness, and real-time collaboration to drive company behavior and decision-making.
A Complex Challenge
We can see the threads that must be weaved together to produce firms that are both purpose-driven, performance-focused, and principles-led when we look at these two small instances. The desire to align purpose, performance, and ideals appears easy and uncomplicated on the surface. “Who doesn’t want to work for a purpose-driven enterprise?” one would wonder. “Who wouldn’t want to work for a firm that constantly outperforms the competition?” “Who wouldn’t want to work for an organization with strong core values and guiding principles?” But, to get a sense of how difficult the problem is, consider this: “Who now works for a firm that is consistently purpose-driven, performance-focused, and principles-led?” The first series of questions would almost certainly get unanimous good replies, however the question concerning one’s present employer’s position may elicit a far lower favorable response rate.
It’s easy for executives to declare they want to develop firms that are purpose-driven, performance-focused, and guided by principles. However, achieving that goal is extremely tough. The difficulties that leaders have in reconciling the conflicts between purpose and profitability have been highlighted by us and other scholars.
After reality, in interacting with thousands of managers throughout the world, not a single one has said that this is a simple endeavor. Why is it so difficult to achieve this goal?
The answer is in accepting the fact that, in business as in life, people experience events and actions through various glasses, with occasionally opposing aims. If you’re Dave McKay at RBC, for example, you spend a lot of time on cross-enterprise issues. You try to put the bank’s jigsaw pieces together. It is your responsibility. A mid-to-senior-level manager in the bank’s retail sector, on the other hand, has a narrower perspective and sense of context, and does not view thinking and acting with larger enterprise issues as part of his work. As a result, the retail manager hears the call for cross-business collaboration while also knowing that his bonus is contingent on meeting his unit’s performance goals. In this case, performance goals collide with cooperation, a fundamental value that the CEO emphasizes as critical to the bank’s success.
Finally, studies have demonstrated that corporate social responsibility and a compelling sense of purpose inspire millennials.
These pressures combine to argue that businesses that do not strive to match purpose, performance, and principles will struggle to recruit top personnel. Furthermore, CEOs need engaged, devoted staff who have opportunities to contribute their expertise to make the kinds of reforms that today’s fast-moving industry frequently needs of organizations. Employees can be more engaged if their purpose and ideals are clear.
