This month’s print edition of HBR makes mention of a new study supporting ‘the purpose-profit’ connection (p32). The study looks at the relationship between strong purpose and public company financial performance. I believe the insights apply to all organizations – That is, any organization with a strong purpose will see increased performance.
The study finds there is a strong link between PURPOSE and PERFORMANCE (or, in my adjusted language, IMPACT). Researchers make a distinction in two types of high purpose organizations. The first is what it calls ‘high camaraderie’ where everyone simply has a sense that they are doing something great, TOGETHER. The second type of purpose is ‘high clarity’ from management. This is noted as the type where managers excel at translating purpose into action.
The statistically significant performance bump was only found with organizations that have ‘purpose clarity.’
As a leader, think not just about PURPOSE, but ‘PURPOSE CLARITY.’ To help you with this, I would bridge some of the findings of the research with some of the For Impact teaching. Think about PURPOSE as an anchor for your STORY. And, by story, I don’t mean a narrative with a beginning-middle-end. I mean how you FRAME the organization.
A GREAT STORY…
- Is anchored in hope-filled purpose (Start with WHY!)
- Simplifies WHAT you do.
- Serves as a litmus for action.
Some of the writing in the research study further supports thinking about placing PURPOSE inside of STORY. “The company’s primary purpose – the real one, which isn’t necessarily the one written in the official documents or etched in the wall plaques – [that] guides its actions and decisions.”
Gartenberg, Claudine Madras and Prat, Andrea and Serafeim, George, Corporate Purpose and Financial Performance (June 30, 2016). Columbia Business School Research Paper No. 16-69. Available at SSRN: https://ssrn.com/abstract=2840005
Sir Alex Ferguson managed Manchester United for over 25 years, leading the club to 13 English Premier League Titles.
In his book, Leading: Learning from Life and My Years at Manchester United, Sir Alex tells a story about his own tipping point as a leader.
Prior to his post at Manchester United, he managed Aberdeen, a Scottish Football Club. He learned about the importance of ZOOMING OUT to lead. My emphasis in bold…
Watching is (an) underrated (leadership) activity…it costs nothing. For me there are two forms of observation: the first is on the detail and the second is on the big picture. Until I was managing Aberdeen and hired Archie Knox as my assistant manager, I had not appreciated the difference between watching for the tiny particulars while also trying to understand the broader landscape. Shortly after he arrived at Aberdeen, Archie sat me down and asked me why I had hired him. The question perplexed me, until he explained that he had nothing to do since I insisted on doing everything. He was very insistent… Archie told me that I shouldn’t be conducting the training sessions but, instead, should be on the sidelines watching and supervising. I wasn’t sure that I should follow this advice because I thought it would hamper my control of the sessions. But when I told Archie I wanted to mull over his advice, he was insistent. So, somewhat reluctantly, I bowed to his wishes and, though it took me a bit of time to understand you can see a lot more when you are not in the thick of things, it was the most important decision I ever made about the way I managed and led. When you are a step removed from the fray, you see things that come as surprises– and it is important to allow yourself to be surprised. If you are in the middle of a training session with a whistle in your mouth, your entire focus is on the ball. When I stepped back and watched from the sidelines, my field of view was widened and I could absorb the whole session, as well as pick up on players’ moods, energy and habits. This was one of the most valuable lessons of my career and I’m glad that I received it more than 30 years ago. Archie’s observation was the making of me.
As a player I had tried to do both– paying attention to the ball at my feet whilst being aware of what was happening elsewhere on the field. But until Archie gave me a finger wagging, I had not really understood that, as a manager, I was in danger of losing myself to the details. It only took me a handful of days to understand the merit of Archie’s point, and from that moment I was always in a position to be able to zoom in to see the detail and zoom out to see the whole picture.
Stepping back to watch from the sidelines is not natural (at least not to me!) This story has powerful leadership insights and implications for all of us.
Ferguson, Alex; Moritz, Michael (2015-10-06). Leading: Learning from Life and My Years at Manchester United (p. 18). Hachette Books. Kindle Edition.
In designing, managing and leading hundreds of ‘building campaigns’, these are questions we ask – at altitude:
- Are we in the Re-Construction Biz or the Impact Biz?
- What is the Purpose(s) of the ‘Space(s)’?
- How does it relate to our Vision?
- Have we dealt with the ‘Footprint’ & ‘Bubbles’ before Wall Coverings & FFE?
- Do our Financial Goals match our Constituent’s Capacity?
- Is this about ‘Ownership’ or ‘Control’?
- How do we Share this Story (of Impact) vs. ‘Sell Recognition/Naming Rights?’
- Have we explored Partnerships? Multi-Use Facilities? 24/7?
- Have we engaged all stakeholder groups to validate that we have the best solutions/plan?
- Are there other cheaper and/or more creative real estate solutions to achieve our goal? If so, can we address why we’re not pursuing?
- Have we looked at all Creative Financing Opportunities?
- Are we telling the architects and planners what we want and need, what we can afford, how it fits… or are they telling us?
- Cost per sq. ft. needs to fit our situation
- Entire Project/Cost must enable our Case for Support
- Can this be divided into phases? (Both Building & Funding)
- Can we take 3 to 5 Year Commitments? Do we need Bridge Financing or a Construction Loan?
- Have we made Everything A Project? (within the Big Initiative)
- Are there Projects (In-Kind Opportunities) to Maximize Gifts?
In sharing this, I also want to encourage leaders and readers to engage with us EARLY in the formative stages of a building project or strategy. By asking the right questions up front you can save time and money – but it’s not just about that – It’s about identifying the right solution and needs to help you with your impact!
From the archives, but still relevant today – Read on for how to avoid Vocabulary Wars.
Last week we were with an organization that helps homeless people find and secure permanent housing. The Executive Director of this organization had spent the last 10 years – off and on – trying to get three specific area Foundations ‘on board.’ In that time, some $10K grants had been awarded but for the most part the Foundations said, “We don’t fund projects like yours.”
The mission statements for the foundations were almost identical to that of this homelessness organization. And, each Foundation had funded similar agencies working in the homeless arena.
After some discussion, I realized that the challenge has been vocabulary, not fit. For example:
- This organization receives about $1M annually from the government — to be used for ‘capital’. It turned out that ‘capital’ in this definition meant anything that had to do with the actual home or residence (including programs to get into the residence.) In the case of this organization, the ‘home’ was the OBJECTIVE of the program. Kind of hard to end homelessness without a home somewhere in the equation… no?
- The Foundations avoided ‘capital’ projects. It turned out the ‘capital’ meant ‘capital campaign’ to the them – bricks and mortar, campaign committees, fancy office chairs, etc.
- The organization had structured all of its internal vocabulary based on conversations with the government. These vocabulary words were deal killers with the private foundations who heard “capital campaign” when they wanted to focus on more “programs for the homeless.” (I’m not making this up.)
So, here’s what we did:
- We coached the organization’s senior leadership to go back to one of the Foundations. This time the organizations was to ask questions, listen and use the Foundation’s vocabulary to advance a discussion.
- The key questions to ask were, “What is the biggest challenge you’re seeing with respect to ending homeless in this area? How are you working to address that challenge?”
- The Foundation said it felt a lack of ‘housing opportunities’ were available to the working poor and that it was trying to identify agencies that worked as a catalyst to create more opportunities. Note: The most critical point of this entire story is probably right here. The organization had to LISTEN to the foundation to pull off the right ask.
- The organization’s leadership was then able to position its work as a ‘catalyst to create more housing opportunities’.
- Both the foundation and the organization leadership described the ensuing conversation as ‘electric’ and ‘exciting.‘ They will be meeting again next month to talk about a multi-year financial partnership.
For 10 years, would-be partners had failed to align for what amounted to a vocabulary war. At times the relationship was even contentious – there were debates and arguments between foundation heads and leaders in this organization about right/wrong and ‘justice’ in funding.
It’s important to realize in this story that at 30,000’ they were in COMPLETE alignment: all parties were trying to end homelessness. The fact that the homeless organization was getting a token $10K here and there was an indicator that there was alignment on the CAUSE (WHY), but not the CASE (WHAT). The relationship was advanced – light speed – by really, really listening and aligning the solution in terms the funder understood.
The only way to avoid a vocabulary war is to listen.
Note: In the actual coaching I said to the ED, “I want you just to listen.. to really understand the foundation’s challenges. When you hear a word you don’t understand, ask them to define it. Keep listening until you can say, ‘wait a minute, we can help solve that!’”.
As a leader the vision makes the most sense to you because it lives in your head. You probably have the most complete view of the operation, you spend the most time thinking about the vision, and feel like you’re constantly communicating that vision.
And yet, that vision is likely under communicated! Here is a great excerpt from Adam Grant’s Originals about how change agents under communicate their vision:
“When Harvard professor John Kotter studied change agents years ago, he found that they typically under communicated their visions by a factor of ten. On average, they spoke about the direction of the change ten times less often than their stakeholders needed to hear it. In one three-month period, employees might be exposed to 2.3 million words and numbers. On average during that period, the vision for change was expressed in only 13,400 words and numbers: a 30-minute speech, an hour-long meeting, a briefing, and a memo. Since more than 99 percent of the communication that employees encounter during those three months does not concern the vision, how can they be expected to understand it, let alone internalize it? The change agents don’t realize this, because they’re up to their ears in information about their vision.”
The vision for you is a full-length motion picture in which you’re the writer, producer, director — surely worth millions of words. But likely, for the rest of your team, the vision is a word-cloud they heard on Tuesday.
In a nutshell: The vision can’t be over-communicated!