In today's episode, Tristan discusses the purpose of a business with MIT graduate and Harvard Business School professor Ranjay Gulati. Deep Purpose, Ranjay's newest book, delves into how the human aspect of a company is what matters most when growing a team and a business. They discuss Ranjay's journey while writing this book, as well as the insights he gains from interviewing various business leaders about what they believe the role of businesses should be in the community, and whether businesses should have a purpose.
Companies and Purpose
When businesses talk about purpose and social impact, Ranjay begins cynically. A lot of businesses claim to have a purpose but don't follow through on it, using purpose as a guise to make themselves look good. Some use purpose as a hobby, while others only use purpose for profit.
When Ranjay speaks with some growing small business CEOs, he frequently hears them say, "Now that my company has gotten bigger, it has lost something. It has lost its sense of purpose."
What is “Purpose?”
“Purpose is not about the [purpose] statement, it’s an ideal,” Ranjay says. It has both ambition and a sense of duty.
Purpose is the question of “Why do we exist?” People often say “performance AND purpose,” implying that purpose is an additive to action. But businesses who want to achieve lasting growth should focus on “performance WITH purpose.”
How Purpose Ushers Company Growth
There are two things necessary to grow your business: strategy and implementation. One is a plan for the organization, and the other is laying out the steps on how to get the plan done. Companies need both to grow, and purpose acts as a guide to a company’s strategy and implementation.
Most companies have a written purpose statement that takes months of brainstorming to write, but what comes next after the statement is harder.
How do you turn a set of words into action? How will purpose drive your performance?
How are you leveraging your purpose to achieve greater financial success and social impact?
Defining Deep Purpose
“Purpose is a unifying idea of the commercial and social problems you want to profitably solve for your stakeholder.” -Ranjay Gulati
In his book, Ranjay defines purpose as a compass that orients the direction the business will go, and as the foundation, or the soul, that brings energy to the organization.
Ranjay also identifies who are the “stakeholders” in a company.
He also dissects purpose at the individual level, and how personal purpose interplays with the company’s purpose.
“It’s the organization’s job to help us align our 'personal' purpose with the organization’s purpose,” Ranjay says. “I want to work in a place where everybody gets meaning out of their work on an everyday basis. We spend far too much time at work for it not to have a deeper meaning in life.”
“There is magic when an organization can inspire their people to align their 'personal' passions, self-understanding, and desire for growth with a common organizational ambition.” - Ranjay Gulati
Purpose and Culture
Culture is a set of invisible rules we use to operate. It is the “dos and don’ts” of how we behave.
Purpose is a “Why do we exist?” question. Hopefully, it shapes and informs your culture.
Most companies have an organizational culture that can be quite oppressive. But organizations with deep purpose have a culture that is often loose and non-conforming.
There are two core principles common among cultures of deep purpose organizations:
A deep sense of responsibility to the team, the organization, and the company’s purpose.
Mutual trust between the organization and the individual.
“To unlock an individual’s personal purpose, you need to demonstrate that you care about them as not just a worker bee but as a human being.” - Ranjay Gulati
However, leaders need to remember that caring about the people who work with them doesn’t mean lowering your standards. A leader needs to learn how to be supportive and challenging at the same time.
Leadership and Purpose Clarity in the Changing Times
When business leaders of different organizations come together, different ideals can sometimes pull the purpose in different directions that don’t necessarily serve the stakeholders. That’s why, especially with the things happening in today’s world, when leaders are forced into a terrain of difficult decisions, having a deep purpose helps guide your organization in making the right decisions.
How do we get mission, vision, and strategic clarity in a world where there are many trade-offs and choices? Purpose can be messy. Having a deep purpose doesn’t mean getting a clear answer, but it gives a certain amount of directional clarity.
As times change, purpose can also change. It is important to challenge your deep purpose to see if it still stands the pressures of the current time. Sometimes, the way to invigorate a company’s purpose is by saying, “Maybe we should throw this away.”
DISCLAIMER: The people interviewed are well-trained experts and highly skilled in their areas of practice. They take many safety precautions prior to attempting the activities described. The activities or research discussed in these podcasts should not be attempted without qualified supervision and training with professionals.