There is a purpose problem in business – the symptoms are there. But I’m a vocal curmudgeon about the much hyped “purpose” discussions which circle business today. The cure for today’s “purposelessness” disease isn’t to be found among the utopian “purpose” theories embraced by followers of P&G’s former global marketing officer Jim Stengel and others.
So let’s look deeper at the disease.
Sit back a bit from the whirlwind of purposeful discussion and think about people and the businesses they work in. What I see is a very strong dissatisfaction among even the highest level employees of corporations and businesses.
The frustration comes from many places. But I’ve also noted a specific thread:
- Employees are frustrated that they know the right thing to do, but if they do it too often they will get demoted, transferred, or fired.
- They are frustrated that doing the right thing for the business may lose them their bonus because someone set up KPIs that don’t have anything to do with “good business”.
- They are frustrated with the degree that their career future is dependent on politics and whether their bosses/coworkers like them because for most work there is no valid, meaningful, objective measure of their performance.
- They are frustrated that even when there are objective measures (like sales), their future is more dependent on corporate politics than doing exceptional work and building the company.
- And they are frustrated that while they have to commit to the company, the company doesn’t commit to them beyond near term salary and benefits.
Think about all these together and what I see is a vast disconnect between what employees know their purpose should be and what they are told to do (in so many ways). No wonder they’re frustrated.
Diagnosing the Problem
Hang around with founders of businesses – massive AND small – and you’ll hear very similar stories. The stories from Home Depot before 2002 tell of an entire company with a shared purpose – to build this new type of store. When I worked in supercomputers, we were all passionate about high performance computing and what it could do for customers. My Drill Doctor client was passionate about the technical challenge of sharpening drill bits.
In all these companies there is no vagary about purpose.
But hang around a business school and you don’t hear much about what a company does – you hear about individual tasks abstracted to a point that’s meaningless. In fact, the only common thread is money (apart from sometimes a vague sense of “you should do good”).
What Caused the Disease: Culture, Training, and Unfounded Assumptions
- Business school. In a biz school, each support service (HR, Finance, Marketing, etc) is studied separately and mostly disconnected from specific businesses. Case studies, when used, only dip a toe into the true “business” of the business. In fact, biz schools exist because of the idea that the specific business isn’t very important – the different practices are. I found this in my own MBA work as well as from teaching in business school.
- Except, in business the specific business is everything. The purpose of a Business is inherently wrapped up in the meaningful things it does in the category it serves. Without that purpose, a business drains the souls of those who work there.
- Shareholder Value. In the 1970’s, thinking began to come out of Harvard recommending that the focus of corporations should NOT BE building and running good businesses BUT rather single minded focus on building “shareholder value”.
- Think about this for a minute: That suggests a public company is purely a grab for money on behalf of investors (something only meaningful to the C-suite and a few other employees).
- No wonder employees feel a need for purpose – their leadership isn’t managed to give it.
- Business as science. Starting in the 1800s, we were told business could be a science. There IS tremendous value in using smart measurements to help understand business and to guide decisions. Yet too many apply “business as science” to micro-manage employees and remove any enjoyment of their work; it often turns purposeful work into drudgery. Computers and tablets have dramatically increased management’s ability to micro-manage which contributes to why the purpose problem arises seriously now.
- The tech “pivot”. Computers, software, and the surrounding businesses rely on an idea that the area in which the technology is used doesn’t matter. This is what the “pivot” is all about – taking effective technology from an area you care about and directing it in another area you probably don’t care about. Companies expect employees to pivot without concern but they don’t. So while pivots may be necessary at times, we must also know they destroy purpose.
- Bonus plans & the annual performance appraisal. W. Edwards Deming called for the elimination of annual performance appraisals because he saw how unfair they were – that they were most likely to rate employees on how good or bad their management is.
- Add to this that many CEOs run on the crass assumption that only money is motivating to employees. This is a false idea as shown by plenty of research. And have you considered the message it delivers? Not to put it delicately, management is saying they think employees are greedy little bastards who won’t do the right thing.
- To make all this worse, computers have enabled a KPI culture of micromanagement that is the scourge of companies everywhere (although popular in biz school). It gives managers the idea they can sit in ivory tower offices tweaking goals in a spreadsheet and cause the company to reinvent itself. Except, KPIs are a failure. Let me suggest reading Campbell’s Law and Goodhart’s Law to understand why.
- Societal Change: Money Begins to Indicate Morality. A series of trends (misunderstood libertarianism being one of them) has led to a societal tendency to believe “if it makes money it must be right”. The press certainly hasn’t hesitated to celebrate this idea with shows and the way they report the news. This belief kills company purpose and replaces it with a grab for money.
- Failure to honor employee commitment to the company. Dan Lyons (author of “Disrupted”) has a new book coming out this fall about how Silicon Valley employment practices have degraded the workplace. I’m excited to read it because there has been a huge degradation in the agreement between employee and company.
- In my father’s day, he could commit to a company (Ma Bell in his case) and, in return, they would give him stable employment (in his case, 32 years). Over those years, my father’s engineering, planning, and organizational skills contributed to expanding excellent telephone service across the mountain west.
- There are few places today any young professional can find a job that would offer that kind of longevity. It’s no wonder employee’s search for purpose.
Treatment: A COMPANY’S PURPOSE IS NO MYSTERY
Business is integrally connected with hopes and dreams, with the lifestyle people want to live, and with being able to be involved in those things which are fulfilling for the individual. Good business also involves something that interests us – coffee, hardware, design, clothing, technology, etc…
Companies need to return to this sense by focusing on a balance of goals. It’s easier said than done but let me suggest that the following summarizes most of those goals:
- Be a good business – commit to a category, develop innovations in it, and support expansion of that category. Have subsidiaries commit to their own specific categories. Categories provide a tremendous amount of purpose within companies.
- Make a good product/deliver a good service.
- Demand that your executives and managers ALSO be deeply involved with your category.
- Treat employees well; commit to them for the long term, help them develop, and assist them on their way it they need to/choose to go elsewhere. And get rid of the annual review (it’s okay, HR will find something else to keep themselves busy).
- Support and help your vendors.
- Participate in, and commit to, the communities where you do business and have employees.
- Pay your taxes.
- Make a good profit for your investors.
- When possible, quietly support things that help move the society and the world ahead.
We don’t need a lot of hype or expensive executive soul searching retreats to accomplish this. We just need companies to focus on doing business.
Now, let’s move forward and return businesses to their true purpose. Everybody will be a lot happier. And, surprisingly, my sense is everybody will be better off financially.
© 2018 – Doug Garnett – All Rights Reserved