Some already say that 2019 will be recorded as the year when climate change and sustainability came to a break-through in public debate. Clearly, we can see it as a year when purpose emerged from a personal and organizational to national and possibly global level. This is reflected in public debates as well as social and traditional media conversation: While in larger societies such as Germany key media start to make the point that the country needs a purpose, smaller countries such as Liechtenstein already involved their inhabitants to develop a national purpose during their recent 300 years anniversary celebrations. In Switzerland, Collaboratio Helvetica was founded to create spaces for open dialogue, experimentation and collaboration. The initiative is fostering a social innovation lab approach to bring together unlikely allies around a common evolutionary purpose: to create a Switzerland that is worth living in.
While social, economic and ecological transformation has reached entire nations, it is interesting to see that businesses still struggle to accept it even as a relevant concept: “Profit and growth over purpose,” this is still the standard paradigm and mindset in corporate boardrooms, particularly of stock-listed companies. Some executives may even say purpose is just one more buzzword that is overused, another element of ‘management fashion’. In my opinion – a shared view within PAUL – Organizational Development initiative – we need to go beyond the question, IF purpose is a business- and financially-relevant concept at all. The question we need to ask is: Which business operating in a complex environment can survive the next five years, if it doesn’t have a clear purpose-orientation in place NOW?
The purpose of a purpose
So, what’s the role of purpose in this? First of all, we need to acknowledge that purpose starts on a personal level. It is, to start with, our individual purpose that makes us get up each morning, as everyone has a purpose in the sense of a reason for being.
How does this individual purpose relate to the purpose of organizations? In business language, many organizations already have mission and vision statements that often sound empty and exchangeable – and if you ask employees or customers, a lot of them wouldn’t even know these statements at all. Similar to brand values that are used to somehow differentiate companies from competitors within their marketplace. So, is purpose indeed just another one of these marketing bubbles? An organizational purpose needs to express something that is really needed by the world – i.e. really relevant – and works as an inspiration for the individual. As lined out by Frederic Laloux, organizations are living organisms and their purpose emerges and develops in its own direction. On the one hand, individuals – on a team and also company level – participate in listening to what is needed and adapting the purpose accordingly. On the other hand, the so-called evolutionary purpose develops a pulling force for the individuals to fulfill their specific roles and create a positive impact on others. Viewed this way, an evolutionary purpose is extremely useful in guiding the work of individuals that will autonomously decide what to do (and likewise also what not to do). In summary, an evolutionary purpose works in two ways:
- It keeps the organization relevant for its stakeholders – employees and managers as well as customers, investors and activists alike. It is the basis for intrinsic motivation, providing an answer on the question: “How much of my life (i.e. time, energy, imagination, identity…) do I actually want to invest in this organization?”
- It also provides orientation for the entire organization, as executing suddenly gets very easy, collaboration starts to spread across teams and departments, and the limits when it is time to say ‘no’ also get clearer. This way, friction and waste are limited, as strategy and brand do not need to be ‘rolled out’ any more.
Then, WHY do not all organizations already have an evolutionary purpose? And HOW can we actually actually bring more organizations into the state of thriving and blossoming in this new version of flow? My best guess is that evolutionary purpose grows and unfolds best when we create an environment of open collaboration, based on plain transparency and spaces that allow for an open mind and heart of the participants in their organizations to emerge.
Collaborating to allow sensemaking
How many people complain about the fact that the future is simply not clear? It may have to do with just a lack of common sense that is, admittedly, not easy to achieve in complex environments. According to Karl Weick and his pioneering work ‘Sensemaking in organizations’ (1995), sensemaking is about understanding how different meanings are assigned to the same event. With events happening all the time, also sensemaking is a never-ending human process and, actually, triggered by volatility, uncertainty, complexity and ambiguity that occur in any situation of change and disruption. So, it is clear that in times of digital transformation, with ever shorter iterations, we need to expand our sensemaking skills. The polarization of public debates around the world shows how difficult that is. It is often a sign for the lack of a common understanding, which gets lost when uncertainty dominates. This also holds for organizations: Common understanding often gets lost, when decisions are taken because of fear – as we can see in situations of cost cutting programs that are launched to counteract market pressures: Management sends a press release – and employees that are impacted by job losses demonstrate in front of the factory gate. Why, instead, not listening to the evolutionary purpose of that organization, and then collaborate among all stakeholders to find out on what is the right next step? This kind of collaboration requires openness and structure – yet, a sustainable answers are easier to be found through sensemaking than shutting down communication.
Courage to take action
In addition to openness, purpose-oriented collaboration also requires courage: The courage to not only say but also do what feels right and necessary. Interestingly, we currently seem to have an ecosystem that is getting more and more supportive of courageous action that happens within the boundaries that are set by evolutionary purpose. Even more, stakeholders start to proactively request purpose-orientation from organizations. A certain attention on purpose in the sense of ESG – Environmental, Social and Governance – criteria, for example, is not new. It has for quite a while remained a PR exercise, though. We all know Sustainability Reports of large corporations that have been published for many years – but that hasn’t triggered a lot of action. Now, however, stakeholders start to move beyond that level of conversation and require action. Just two examples:
- Larry Fink, CEO of Blackrock, in his annual letter to CEOs requests purposeful action in a way that companies not only need to look into their roles within the community, but that purpose nowadays can be a more important component of value than profit used to be in the past.
- In response, the US Business Roundtable released a document signed by CEOs of stock-listed companies released a statement on the purpose of a corporation that respects the needs of all stakeholder, far beyond just the investment community.
This actually gives hope that such purpose-driven collaboration will also trigger action in boardrooms, as the required paradigm shift towards sustainable action requires not only rethinking, but also courage to act in the sense of evolutionary purpose.
Collaborating to increase resilience
To briefly return to the aspect of fear: To follow evolutionary purpose does not bear a huge risk – even if we are giving most of the apparent control that we like to have in our business life. The plain reason: Purpose-driven organizations that openly collaborate with their stakeholders tend to be more resilient when it comes to major transformations. For them, it is quite normal to constantly adapt to a changing ecosystem. They collaborate closely with stakeholders for mutual benefit rather than focusing on competition and market growth. Just to name a few examples:
- Cooperative banks: Cooperatives are an organizational form that is highly compatible with principles such as autonomy of members, collaboration in support of a common cause, self-management. During the financial crisis in 2008, and also now in times of digital disruption in the banking sector, cooperative banks prove to be profitable and successful.
- The German Mittelstand: Family-owned businesses have shown resilience by long-term orientation, backed by the purpose of their founders. In difficult times and to master challenges of complexity, company owners and employees stick together, to jointly find working solution, such as in the town of Eisenbach in the Blackforest, home of several medium-sized machine tool manufacturers.
- Also the companies described by Frederic Laloux and other ‘teal’ companies turn out to be resilient, even in established and even traditional industries. The management teams of companies such as FAVI, Freitag Taschen or Gutmann Aluminiumdraht all, at one point in time of company history, made a decision to step back from formal power and to transform towards more collaboration and autonomy of their employees – to the long-term benefit of their company’s sustainable development.
Purpose-oriented collaboration allows to create spaces where trust can evolve. In such an environment, managers can ‘afford to’ give up a predict and control attitude and, in turn, confidently rely on the fact that employees know what they need to do. As mentioned above, it somehow becomes ‘common sense’ to do that, emerging form a process of sensemaking.
Conclusion: Purpose makes the difference – and collaboration is the way to get there
For organizations that are evolving in a complex ecosystem, NOW is the time to act. We MUST collaborate to maximize our capability to find better and better solutions. But how? Due to the complexity of the world we need the capability to put at work the minds of as many stakeholders as possible. An evolutionary purpose that is strong enough to pull organizational members in its direction and an infrastructure supporting effective collaboration based on trust allows to work in the ‘sense & respond’ mode that is needed to be effective in complex markets.
Moving towards evolutionary purpose, requires collaborating and identifying partners that follow a similar path. Collaborate with your customers to find out what drives them and what they really need. Think about starting this journey by approaching your own employees. Involve your investors in the conversation.
Keep telling an invitation to follow and let your ecosystem thrive to make 2020 the Year of Purposeful Collaboration!
This is an invitation to discuss: How important do you see purposeful collaboration in 2020? For yourself? For your organization? For society overall? Let’s learn from each other!
This is also an invitation to connect: Interested in collaborating with us around evolutionary purpose? Interested in joining our PAUL ecosystem? Let’s join forces!