The 'Business Case for Purpose' Completely Misses the Point
Chris Houstonon 19 July, 2016 at 05:07
Nowadays, it seems to happen in the blink of an eye. An idea, once ahead of its time, even prescient, becomes commonplace, distressingly hackneyed. I saw unmistakable signs of this a few weeks ago on a trip to New York. The ads on the inflight entertainment have huckstered financial investments under the “purpose” umbrella for a while, but when I caught sight of the promotions for the latest Justin Bieber “Purpose” tour in the back of my taxi, I knew the word was doomed. I was instantly glad to have some years ago selected the word “telos” (an old Greek word referencing “intended end”) as the backbone of my writing on this subject, for it will undoubtedly be helpful as I seek to sound a distinctive clarion call in all of this cacophony of purpose.
“Purpose, schmurpose,” muttered the seasoned PR executive as we reviewed an upcoming publication in the Telosity series. “Chris, I have no doubt that when you began, you were ahead of the pack, but now ‘purpose’ is everywhere. What are you saying that is different?” It was a penetrating question and he was right to ask it. As is so often the case I discovered a clear answer in the Harvard Business Review. This time, however, not because they are right, but because they have completely missed the point. In fact, most people have.
My friend and colleague Angela provides a helpful story of her own discovery of a much deeper truth than many commentators have looked for let alone found. She called me the other day to say that her whole way of thinking had been turned upside-down. Long a subscriber to the “shared value” model, promulgated by Harvard’s Michael Porter and itself fairly new, Angela believed that you could indeed, as she put it, “do well by doing good.” But as she sat and listened to a group of executives from a very well known global brand lay out their social mission without any reference to its business case, she began to see something different.
Undeterred, Angela sought through her persistent questions to uncover the expected economic rationalization for their decision to invest significantly in making a major social contribution. What she came to discover was that their decision had nothing to do with economic factors, they were just doing what they were convinced was right for the world.
That decision produced all manner of economic consequences rather than rationale, however, because by choosing good first, their decisions resonated with both customers and employees alike, especially the latter, such that the “business case” (which never was one) ended up as a slam-dunk. Angela’s metanoia had begun. As she listened, probed skeptically and eventually realized, these leaders were doing good simply for the sake of doing good, because it was the right thing to do and they felt personally compelled to act in this way. And that is a very different thing from doing good for the sake of doing well. It’s a radical idea given our notion of business, but when you think about it, rather less radical than the modus operandi we’ve used to guide business decisions for the last 200 years: profit trumps all.
Somewhere in the history of western society, the spirit of individualism and the rights guaranteed to people were subsumed by “the corporation” and we gave business a hall pass from the moral duties of citizens. In other words, businesses got all the rights, none of the responsibilities. As such, “it’s a business decision,” somehow became an acceptable rationale for wholesale exploitation of all sorts, clad in the impenetrable armor of being, “good business.” But there has always been a chink in that armor, and now hordes of “davids” have found it and have let loose. More seem to by the day, and steadily that license to, “do anything so long as it turns a profit,” is being entirely revoked on the barricades of employee engagement and customer satisfaction, armed to the teeth with social media.
But the thinking goes very deep in our assumptions and is wonderfully manifest in the HBR article of 2015 entitled, “The Business Case for Purpose”. The writers discovered that while 89% of business leaders whom they interviewed suggested that, “purpose matters,” only a minority said that their company runs in a purpose-driven way. Purpose in theory is solid.
Purpose in reality is sorely lacking. The HBR article hauls out the usual suspects to target for improvement: shareholder pressure, the inevitable “say-do” gap, poor communication, failing systems, misaligned incentives, and, of course, the ubiquitous and vague “leadership”. What I find so mystifying in the analysis is the tacit assumption that the problem is elusive. Of course the short-term expectations of shareholders are resistive to purpose, because on the face of it, purpose will hijack the corporate agenda and turn it away from shareholder value maximization and direct it toward something else entirely! Of course systems, actions, communication, incentives and leadership must be reconfigured when wealth creation is no longer the ultimate aim.
The fact of the matter is: this is not about a valid “business case for purpose” that can just be more effectively implemented. As long as we treat “purpose” as a management technique that can be harnessed to achieve an old set of ends, shareholder value maximization by any (even noble) means, we will miss the point completely. We must face the stark reality that the social and environmental conditions we now face as human beings actually present a “purpose case” for the very existence of business. We do not need a business case for purpose, we need a purpose case for business! [TWEET THAT!]
My friend Angela said it quite succinctly the other day after her “a ha” moment. “In shared value, we think you can do well by doing good, but I now realize that we have to do good, and we just might, if we are lucky, and smart, do well.”
The adoption of a powerful “telos” by a business is no clever management technique. It is the re-formulation of the very identity of the organization and its primary reason to exist. Leaders cannot simply adopt purpose as yet another management fad that they seek to bend to their will, rather, they will find it controls them and bends them to a larger will. They will find themselves less in control of an agenda and more compelled by a course, even a calling.
For instance, the recent Paris Agreement to limit climate change to 1.5 degrees Celsius is binding and was agreed to by 195 countries in attendance. The necessary targets set out will not, of course, be reached without businesses that decide to pursue related goals because it is simply the right thing to do. These movements will occur organizationally if and only because they first occur personally. Personal change must precede organizational change. Such is the very personal nature of metanoia that sparks all real and lasting organizational transformation.
And yet, my friend in PR is right. “Purpose, schmurpose” – it so often feels like just another fad, another concert tour, another purpose-branding tag line, another campaign, all evidence of a new agenda of purpose-washing. But we simply cannot afford to go on this way, using purpose superficially, only to later discard it, as it proves itself (and it will), too challenging or costly to the real agenda to, “do well.”
To use purpose as a marketing tool to boost short-term returns is a dangerous game anytime, but especially today, when authenticity is in such high public esteem. Disingenuous companies simply will not be tolerated, and when the purpose frauds are discovered – and there are plenty – they will end up much further down the road to ruin than if they had honestly declared their real intentions, no matter how selfish or short-sighted.
But what if it were not so? What if the small group of senior executives who so profoundly changed Angela’s heart and mind were a new normal? What if they actually believed what they said not because it worked, but because it mattered? What if the CEO who wants to reconfigure every business asset of the major brand he leads to deliver positive impact on the country actually succeeded? The leaders who begin thinking this way now, and figuring out how to cause their organizations to deliver on the,“purpose case for their business,” are the oracles who point to the coming era. More of them will continue to arrive on the scene, but only as more metanoia moments like my honest friend Angela’s occur. How much better off business and the world will be when they do!
Amidst the growing crescendo of noise about purpose, I hope you will recognize just one crucial and inescapable conclusion; purpose must be personal or else it is little more than manipulation masquerading as meaning. One day, one choice and one person at a time, we CAN transform business from a single-use tool delivering only economic profit into a multi-use device to help us solve difficult human problems and make the world a better place…
For other posts in the Telosity series, click here.