As the participants were sharing their insights, a man raised his hand. He said, “I am going to say something I never thought I would say. I came into this week genuinely pissed off at the senior leaders of this company. Now my anger is gone. I realize that they do not matter. Regardless of how they act, I can lead. I can clarify our highest purpose and create a positive organization, and that is what I am going to do.”
There was silence in the room. This executive had just become the voice of a subset of the group. He did not express the voice of helplessness. Some of the executives were now seeing beyond their own thought walls. They were envisioning the purpose-driven organization. Bob walked over and gave this man a high five.
Summary
The principal–agent model focuses on the role of explicit contracts, and organizations spend a great deal of time and money in designing incentive contracts to produce the desired behavior by their employees. This model makes it hard for leaders to believe that their employees can be motivated by higher purpose to do things that are not contractually rewarded. However, for leaders to take higher purpose seriously, they must imagine an unimaginable organization of excellence in which people are purpose-driven, sacrifice for the common good, and collaborate beyond expectations. The first counterintuitive step in creating a purpose-driven organization is thus to drop the assumption that employees cannot be inspired by higher purpose and to envision a purpose-driven organization.
Getting Started: Tools and Exercises
To envision a purpose-driven organization, try the exercise described in this chapter. Identify some key people from different parts of your organization, and ask them to engage with you in the following way:
First make a list of words or phrases that describe the organization at its best. Then examine the following checklist. Identify other words and phrases that capture aspects of your aspiration. When you are done, write a paragraph that describes what you believe is possible. Share and integrate your visions. In doing this, you help your people envision the purpose-driven organization.
Checklist: The Positive, Purpose-Driven Organization
MEANINGFUL INTENT
We have a higher purpose.
We have a shared vision.
We are driven by a strategic plan.
We are pursuing possibilities we believe in.
SPONTANEOUS CONTRIBUTION
We surrender our self-interest.
We sacrifice for the common good.
We spontaneously give of ourselves.
Our ego goals become contribution goals.
FULL ENGAGEMENT
We care about what we are doing.
We are engaged in our purpose.
We are giving all we have.
We are fully committed to our purpose.
FULL INCLUSION
We make the outliers feel invited in.
We see the obstinate people beginning to believe.
We all feel like we belong.
We lose no energy dealing with resisters.
POSITIVE PEER PRESSURE
We see more positive norms emerge.
Our expectations align with the purpose.
Negative peer pressure becomes positive.
Peers confront the underperformers.
COLLABORATIVE RELATIONSHIPS
We have a win-win mentality.
Our competition becomes collaboration.
Our teamwork is natural.
We become a dynamic whole.
CREATIVE EFFORT
We try new ideas.
We take intelligent risks.
We improvise.
We make discoveries as we move forward.
POSITIVE REGARD
We use affirming language.
We do not judge anyone.
We express positive appreciation.
We value one another.
SHARED VULNERABILITY
We share personal vulnerability.
We reveal our own mistakes.
We ask questions when we fail to understand.
We ask one another for help.
CONSTRUCTIVE CONFRONTATION
We see truth as more important than power.
We communicate in an authentic way.
We share what we really feel.
We respectfully challenge ideas.
SPONTANEOUS LEADERSHIP
Our leadership emerges spontaneously.
Our leadership moves from person to person.
Each of us leads as appropriate.
Each of us initiates as needed.
COLLECTIVE LEARNING
We co-create learning.
We piggyback on to one another’s contributions.
We create a shared mind-set.
We feel we can figure out anything.
TIME DISCIPLINE
We maintain a quick pace.
We keep to our planned schedules.
We deliver results on a timely basis.
We persist as needed to meet deadlines.
RECOGNIZABLE SUCCESS
We experience recognizable success.
We receive praise from those we serve.
We attract new business.
Outsiders want to work with us.
JOYFUL ACHIEVEMENT
We take joy in our outcomes.
We infect one another with positive energy.
Our growth creates enthusiasm.
We love the work.
ATTRACTION OF RESOURCES
Our success breeds success.
New people want to work for us.
New customers flow to us.
Our work is in high demand
CHAPTER NINE
STEP 3 Meet the Need for Authenticity
We were on the panel at an academic meeting on the topic of authenticity. We talked about how authentic people have integrity in that they live in accordance with an ideal or higher purpose. They become servants of the purpose or aspiration, which causes them to be internally directed, and they take ownership. Their behavior moves from an ego base to a moral base, and they become better versions of themselves. They pursue the purpose, and in doing so they step outside of normal role expectations and accomplish unusual things. They speak from both the heart and the head, and others discern their authenticity and vulnerability, leading to trust and the emergence of collaborative relationships.
Conventional Assumptions
We opened the discussion to the audience. Most of the professors in the audience were there because they were interested in authenticity research, but they didn’t seem to understand it in the way we had just discussed it. Their questions reflected assumptions of transaction and exchange, they could not seem to imagine authenticity.
Making the conventional assumptions about authenticity, they believed that it meant correspondence to the facts. It meant being honest and telling the factual truth. The notion of having a higher ideal and being internally directed and speaking simultaneously from the heart and head seemed outside their conventional perspective. These scholars had learned from cultural experiences, as we all do, to expect people to be externally driven, self-interested, political actors. They expected communication to be distorted by self-interest. They did not expect people to say what they felt and feel what they said.
Authenticity has two dimensions. One dimension is the conventional notion of factual honesty. The second dimension is emotional honesty. Authentic people have both, so they speak from both the head and the heart. Their feelings and their words are congruent. They are not trying to meet role expectations or adjust to a changing political context. They convey a message that reflects a deeply held internal perspective. They are authoring their own unique message.
Assumed Hypocrisy
The skeptical perspective that people are only self-interested political actors permeates managerial practice. For example, one CEO actually told his senior leadership team he did not want to do purpose work because he knew they would not live the purpose. He felt that articulating
a higher purpose would simply make the organization devolve into an even more political place where people would use purpose as an excuse to engage in more self-serving behavior. By recognizing that organizations are political systems and hypocrisy is inevitable, he was accepting conventional reality.53
A member of the team responded, “Why don’t we change that? Let’s identify a purpose and a set of values, and live them with integrity.”
That earnest comment punctured the existing skepticism. It raised the unusual possibility of pursuing an authentic higher purpose. The executive team considered the possibility and decided to take purpose work seriously. That one comment changed the organization.
A Jolt to the Mind-Set
To understand the power of authentic higher purpose, people need an inclusive mind-set that integrates the reality of constraint with the reality of possibility. They often acquire such a mind-set, as we have seen, through an external jolt that alters thinking.
We interviewed a CFO who had just lived through the fiscal transformation of a troubled organization. He told us he had worked hard to solve the financial problems his organization faced, yet he had made only a minimal impact.
Subsequently, his boss clarified and rearticulated the purpose of the organization and transformed the culture of the organization. In the new culture, people had more control, and trust increased. They became more positive. They had conversations that were more authentic. They collaborated more. People began to go the extra mile for the good of the organization. They agreed to return rather than expend allocated annual budgets. The organization changed, and soon the financial crisis became known as the “financial miracle.”
The CFO spoke of the “financial miracle” as a life-changing event. He told us that it had never previously crossed his mind that inspiration, authenticity, trust, and collaboration could solve a major financial problem. He had always assumed that a workforce consisted of self-interested “agents,” and the notion of leading an organization in which people willingly sacrificed for the collective good was not imaginable.
The CFO had experienced an epiphany. He now tells his peers in the same industry about the power of authentic purpose and positive culture. He told us, “They do not listen. They say, ‘It might have worked in your place, but we are different. It would never work with us. No one is going to willingly give back their unspent budget.’” The CFO gained a more complex level of understanding that leads him to believe and see possibilities his colleagues do not see.
We should note that his colleagues’ defensiveness is due to more than just their experience-based assumptions. CFOs are expected to be experts in finance and shareholder value creation. If this particular CFO’s message is true, it means the other CFOs have to acknowledge and explore paths to value creation that are outside of their formal training and the “best practices” of their discipline. This is hard to do. We all share this tendency. Our functional expertise can blind us to paths that lie outside of our discipline boundaries. And even if these paths are pointed out to us, our propensity is to resist them because they do not fit our worldview of what works.
Purpose and Authentic Communication
Conventional culture trains you to present a politically acceptable self. People see that, and it causes them to be indifferent to the messages you communicate because the political correctness diminishes the information value of the messages. As leaders turn to higher purpose, we have observed a trend. They begin communicating in a new and more influential way.
We attended the annual leadership meeting of DTE Energy. Over eight years the company had become increasingly purpose driven. At the meeting, we could see a new pattern that we often observe as a company turns to purpose. Many of the senior people begin to become more intimate, vulnerable, and authentic.
At DTE the annual meeting had always been scripted from start to finish. On the first day, after a presentation on purpose, the CEO, Gerry Anderson, stood up and went off the script. He told a personal story and then spoke about the importance of families. The openness was unexpected but deeply appreciated by the audience.
On the final day, he again spoke from his most intimate experience. He told of John, his uncle and a man of extraordinary worldly accomplishments and renown. John had suffered a heart attack and was dying. Gerry said he went to visit John and began by asking him what he had been thinking about lately. John replied that he had been thinking about all the people in his life. He told a story about his sons, who had recently visited. During the visit, the two sons hugged each other. John said, “It was beautiful.”
In the entire conversation, John talked about relationships and never mentioned any of his great achievements or the rewards they brought. Gerry was moved. He said, “For me, it was a message from the future. What really matters, what bring us our greatest meaning, is our relationships.”
Gerry began to speak about the difference between leading a successful life versus leading a significant life. Success tends to be about personal achievement. Significance tends to be about contributing to the good of others. He spoke of the cumulative effect of making many small contributions to the people around us. Then he said, “Investing in relationships does not come to me naturally, so I have decided to work at it.” It was clear that everyone was captivated by this revelation. The CEO was confessing a weakness, and people were impressed. People are hungry to hear authentic messages, and the expression of vulnerability is the door to trust.
Gerry told another personal story. He spoke of a lower-level employee who was retiring after 40 years. The person who brought him the news asked Gerry if he might be able to drop into the retirement party for a few minutes. When Gerry checked his calendar, he found that the party was the day of the board meeting. Since he would be having lunch with the board, he declined the invitation.
The experience nevertheless stayed in his mind. He kept thinking about how much his presence might mean to the employee. He began to think that leaving the board meeting for a few minutes would not be a big deal. So he decided to make the visit.
When he walked into the retirement celebration, the person who had made the invitation simply “lit up,” and the retiring employee was “dumbfounded” that the CEO was attending his retirement party. Everyone was delighted. The gesture also had an impact on the CEO. He said he also felt “lit up,” and he returned to the board meeting filled with positive energy.
The experience, though small, was so positive that Gerry began to ask himself: how could he more regularly make such small but positive investments? So he asked the people who surrounded him to look for and notify him of such opportunities. He closed his story by asking everyone to imagine a company where all 150 top leaders regularly made similar small but positive investments.
At the conclusion of the meeting, we chatted with one of the participants and asked her to assess her experience of the three-day event. She said, “This is so different. Of all of the annual meetings I have attended, this is the best by far. I am so looking forward to what happens to this company.”
Why is it that when a company begins to orient to higher purpose, senior people begin to become more intimate, vulnerable, and authentic? One reason is that as senior people try to explain personal and organizational purpose, they find it necessary to illustrate being driven by personal values and purpose. They explain their personal identities and destinies by sharing the experiences from which they stem. They speak of the link between their personal purpose and the organizational purpose by sharing meaningful personal experiences.
While conventional culture trains us to avoid appearing to be vulnerable—seeing it as a sign of weakness—the positive lens calls us to authenticity and vulnerability. In a purpose-driven, positive organization, people have high-quality relationships because it is safe to communicate who they really are.
Authenticity on Wall Street
When we introduce authentic purpose, critics often suggest that it is a naive approach. They tell us, “It would n
ever work on Wall Street.”
One CEO whom we interviewed was Jimmy Dunne of Sandler, O’Neil and Partners, a midsize investment bank in New York City. One day in 2001, Jimmy was playing golf. As he walked off the course, he was given an incomprehensible message. One third of his employees, including two of the three most senior leaders in the organization, had died. The date was September 11, 2001.
From that moment, Jimmy faced severe challenges. He simultaneously mourned the death of his workforce while also trying to save a firm with few remaining resources. In the midst of this intense pressure, Jimmy resolved that he or another senior person would attend every possible funeral of employees who had died on 9/11. This meant Jimmy attended many funerals. In the late hours of each night, he tried to work on the business, that is, to save his company. Today, Jimmy claims that in crisis you discover your deepest values and clarify your highest purpose. He says, “Crisis does not create character. It reveals it.”
As Jimmy attended the funerals, one of the first issues he faced was what to do about the salaries and benefits of those who had died. In most organizations, if an employee dies, wages and benefits expire too, perhaps not right away but in a matter of months. Jimmy said: “We had decided early on we were willing to go against the trend. We’re willing to do what we thought others were not willing to do.”
The Economics of Higher Purpose Page 12