Principles of Talentism: Part 4 - Purpose before Profit

News flash to every econ major, business school graduate and socialist flack: Companies exist for a reason beyond producing profit. Companies produce profit because of purpose, not in spite of it.

Profit is like oxygen - you can't thrive without it, but few people go around saying "Hi, I'm Jeff and I'm a Breather." It’s not a reason for existence; it's just a necessary way to evaluate health (people who stop breathing tend to have health problems).

There is no one area of corporate life where the word "or" hurts us more. We are told you can have profit OR purpose, but not both. The conventional wisdom goes something like this: the real business people religiously watch the bottom line, while the closeted tree-huggers don flannel, drink Chai and talk about feel-good things like purpose. That's crap. Any company that doesn't have a clear idea about their purpose is certain to be burning money they don't need to. Lack of purpose is like lack of clarity - it's highly inefficient.

So what is "purpose"? Let's start with the easy part: The purpose of any business is to produce value for which people are willing to pay or invest. Assuming that the value is substantial enough, then the customers / clients and / or investors pay more than it costs you to produce that value. The difference between the cost (and we will explore the true nature of cost later in this series) and the price (profit) is a measure of the value that you are producing, so profit is a very good thing. But profit is not the value itself. Profit is a measurement of the value. You may measure the 4 "Cs" of your diamond, but you don't set the little paper that carries those figures in your broach and call it precious.

Businesses don't create value in a vacuum. They are measured in many ways around how efficiently and effectively they create and deliver that value. In the creative age, where processing power has to be distributed as widely as possible in the organization, a key measure of efficiency is how long it takes to make decisions, and whether the decisions help the organization achieve its stated objectives in the most efficient and effective manner possible. The "purpose" of the organization is the fundamental philosophy that aligns decisions and resource allocations inside the organization. A solid, well understood and accepted purpose provides a foundation from which people can make decisions that are in the best interest of the company and its investors.

The most important function that a purpose serves (and notice I am not saying a "purpose statement", which is rarely worth as much as the paper it is written upon) is guiding the assessment function in recruitment. Recruiters need to find tangible evidence in behavior and work product that the individual being considered for a job instinctively operationalizes the right purpose through their work. This doesn't mean that everyone who lives the purpose will have done the same work in the same way. It does mean that everyone who lives the purpose will display a similar passion and commitment for results that forward the purpose, and their work will demonstrate just such a commitment.

It's HR's job to make sure that every entrepreneur in your company is aligned with your purpose. The alignment of the individual's purpose with the company's purpose is the second most critical piece of Talentism, since it creates the environment within which the other principles can be actualized.

It is not possible to scale the size of a company without this principle. Alignment on purpose becomes the DNA that guides the replication of body parts and the adding of limbs. The consequence of not having an alignment of a corporation's and individual's purpose is a high degree of inefficiency, loss of shareholder value, high turnover and a lot of inefficient bureaucracy (antibodies to protect the corporate body from the virus of change).

A "purpose" is not a mission statement (a specific, quantifiable and recognizable objective that is both measurable and time bound), and it is not a vision statement (a present-tense recollection of a desired future state). A purpose is your organization's reason for existence. When the purpose is fulfilled, the entity should die, or see if it can change itself into having another purpose (which usually means death). Most companies have purposes which are perpetual but not limitless:

Google: "Organize the world's information and make it universally accessible and useful."

(the following list can be found here)

Reebok: "Our purpose is to ignite a passion for winning, to do the extraordinary, and to capture the customer’s heart and mind."

Walt Disney: "To make people happy."

Wal-Mart: "To give ordinary folk the chance to buy the same things as rich people."

The Body Shop: "Tirelessly work to narrow the gap between principle and practice whilst making fun, passion and care part of our daily lives."

Marks and Spencer: "Our mission is to make aspirational quality accessible to all."

Sony: "Our mission is to experience the joy of advancing and applying technology for the benefit of the public."

Coca Cola: "The basic proposition of our business is simple, solid and timeless. When we bring refreshment, value, joy and fun to our stakeholders, then we successfully nurture and protect our brands."

3M: "To solve unsolved problems innovatively."

Glaxo: "We are an integrated, research-based group of companies whose corporate purpose is to create, discover, develop, manufacture, and market safe effective medicines throughout the world."

I don't necessarily think these are great purpose statements, and they are all lousy mission statements, but they do each try to create a boundary for the company's explorations and activities (albeit a pretty loose and ambiguous one).

It is critical to understand that we each of us as individual's must have a purpose too. This may not be a sentiment shared by many today, but I don't think that a human's primary purpose is to consume resources and pass time before re-entering the long-term carbon cycle. In fact, I would go so far as to say that companies should invest in helping their people discover their purpose. Every manager, as part of their architectural duties, must be concerned about whether they have the right processors in place. Individual purpose is where that evaluation all begins.

This is why I spend a fair amount of my time working with people and businesses trying to help them figure out their purpose. Once they do that, establishing the next principles becomes easier, as does releasing their inner entrepreneur.

Next: "Part 5 - Information before Ignorance"

Comments

[balaji utla]

I would agree with you. And I like the bit about joining the carbon-cycle.

My crib about organizations is the 'purpose statement'. It is like the new year resolutions that most of us have. Especially mine ;-)

The challenge is - all that happens or does not happen - between the espoused purpose and the 'experienced and lived in' purpose.

That's where the authenticity of an organization or an individual is experienced. That is the fertile ground for cynicism. Organizational cynicism kills the DNA of the organization and creates a ground for mushrooms that represent 'contractual engagements', 'exploitative relationships' and the like.

In my view, whatever the purpose, if individuals connect to it or align with it, and experience it, in humanly appreciabe doses (my rough guess is around 60+ percent of time/events - in the world where respect is available to only quantifiable things, hence the number, nothing sacrosanct about it!)a community is built, however loose it may be, and communities survive longer, have longer memories and are most importantly have the ability to 'regenerate'.

Phew! I am always aware of the need for brevity. The problem of brevity is that it needs too many words :-)

cheers.

[Isidro]

You business people are really smart. This stuff you know makes the world go round. I'm amazed at how much sense it makes when I read about it. I go to work in a big corporation and I can't help wondering about and trying to understand why things are arranged like they are, and wonder whether it could be better. I really am a the bottom of the heap - lowest qualified, older worker, segregated from the decision making classes because I don't have the mandatory educational qualification to be eligible for training or any kind of grooming for success. My prospects are zero. I'll do this job until I'm laid off. I've survived two rounds, so it's not unlikely that I'll succumb in the future (luck runs out eventually). The sad thing is, I love this job (not the day to day, but the PURPOSE of it), and I feel like I could be so much more useful. I wish I was able to communicate how much the whole thing means to me. I'm desperate to understand it and make it better, but I cannot, because I am incapable of expressing myself in an acceptable way. I have lower status so I don't get access to information, and I'm not expected or encouraged to change stuff (apart from saving money on paper clips or something). I totally accept that I may simply just be crap at my job, lazy, and resentful of others who are encouraged when I'm not. I could be deluding myself that I could contribute so much more. Maybe I really can only do the stuff that humans do because the robot hasn't been invented yet. I'm probably looking for excuses as to why I'm crap, but truly, I have SO MUCH ENERGY and PASSION inside for my job. I can't avoid having tremendous loyalty, even though I know it's a negative quality nowadays. I can't help caring like crazy about the work environment, and my colleagues, and whether stuff is good for them, and what could be better. I know that when it's good, REAL stuff can get done and changed, not just the rote stuff that one is expected to do, is told to do, and which has always been done. I wish that I could unleash my passion at the workplace, but fear of damaging the extremely remote chance of being allowed to sit at the grown-ups table one day helps keep me silent. Also, fear of not being able to support my family keeps me from asking too many questions that might upset someone. I know it's my fault, and that I have to change, but I wish that my job could really make the best of ME, instead of binning me into a role that is assigned my school years, and limited because of them too. I love your world, organizational behaviour peeps. It seems you tell it like it is. I can't be the only pleb out there who marvels at the infrastructure of committees and decision makers (many, very important, high status), who get to talk about and use and manipulate and make decisions about the creative, investigative product of a very few peeps (disposable, interchangeable, low status) It drains me. I might start my own business knitting horse blankets or summat (laugh. I can't knit). Oh yeah, I'm also scared because it might all be nuts. I'm just a lower class idiot who knows nothing! Laters!

[Bootes]

For Isidro

I can't help but respond to Isidro's comments. I think his writing proves he's not "just a lower class idiot". His points are good and he express himself and his passion for his job quiet well in the note above.

Isidro, please don't sell yourself short. Don't think so negatively of yourself. As a line says, "You are what you think." and you have to think better of yourself, and not as a "lowest qualified, older worker, segregated from the decision making classes because I don't have the mandatory educational qualification to be eligible for training or any kind of grooming for success. My prospects are zero. I'll do this job until I'm laid off. I've survived two rounds, so it's not unlikely that I'll succumb in the future".

While we are alive, there is hope and there are things in our control which we can change. For instance, you can go to night schools and get more education. You can volunteer to participate in training programs or in some field where you can contribute and also enhance your skills. These programs may be offered by your company, or in your community or in a church.

Lastly, the Lord did not create crap, and since He has created you and given you some talents and passion for something, go and make the most out of it, asking His guidance and help to be the best of what you can be.

cheers!