Soren Eilertsen, President, Kollner Group, Inc.
Historically, business survival has been dependent on a sound model that generates bottom line results and the primary focus of the CEO has been to ensure the company makes money. As society has evolved and advances in technology have enhanced awareness of global issues, this basic concept comes into question. With information just a click away, local, national and international challenges, such as global warming, pollution, homelessness, cost of education and hunger, just to name a few, are increasingly in the forefront of people’s minds. In response, a growing number of people, particularly younger individuals, are asking themselves, “What can I do to make a difference?” Not surprisingly, with struggling governments, many turn to where they shop as customers and to their places of employment for solutions. Their expectations are high that businesses will take more responsibility in making the world a better place by aligning with worthy causes and providing opportunities for people to be part of the solution in order to find meaning in their lives.
The rules of conducting business are changing: creating value and profit are still essential goals, but equally important to a company’s success is connecting intentionally and authentically to a purpose that serves a societal cause. Accomplishing this requires a paradigm shift where leadership adopts the principle “purpose with profit” in order to create new meaning and results for employees, investors, customers and the public.
The importance of purpose
Research has shown that public opinion is high for companies that let it be known that they exist with a cause. This can lead to increased customer loyalty and greater company profits, especially with Millennials, or people who were born between 1980 and the year 2000. According to the 2013 Cone Communications Social Impact Study, which tracks American’s perceptions and behaviors around corporate support of social issues, Millennials respond with increased trust (91%) and loyalty (89%), as well as a stronger likelihood to buy a company’s products and services (89%) if they support social and environmental issues. For businesses, this information is significant, since Millennials are the employees of the future and considering the buying power of this segment of the population. In 2013, Time magazine reported that Millennials spend $600 billion annually and that this number was expected to hit $1.4 trillion by 2020 (Sept. 11, 2013).
A sense of connection with a company also goes a long way in creating business value. In their book, Firms of Endearment – How World Class Companies Profit from Passion and Purpose, by Raj Sisodia, David B. Wolfe and Jag Sheth, the authors note that companies people say they “love” have outperformed the S&P 500 more than double in over five years and 10 to 15 times over fifteen years.
Overcoming the business versus purpose dilemma
Leaders hold the purpose on behalf of business. Fred Kofman, author of Conscious Business, argues in his article Businesssattva: The Business Bodhisattva that “business doesn’t have a purpose; it proposes a goal for those who accept to play by its rules. Making money is the purpose of the businessperson.” A person can be a successful businessperson and make money without being driven by a noble societal purpose. Some leaders simply step into the role of the businessperson and take on the purpose of “making money” without articulating a deeper personal purpose. There is absolutely nothing wrong with this when it’s honestly communicated. However, when the question “why we are doing something” ultimately is answered with “to make money for our owners,” employees eventually disconnect. Whereas money is necessary for ongoing sustainability, it is purpose that supplies the motivation and passion necessary to drive people towards results.
Looking around, truly inspiring people have a calling in life and a deep sense of their own purpose. They want to make the world a better place, each in their own way. They have a profound reason for existence. These people are natural leaders and they attract people to follow them in their pursuits. While everyone has this innate sense of an underlying purpose, not all are in close touch with this and hence can’t fully articulate this. Day to day survival with its fears and doubts gets in the way and so does the internal ego in its pursuit of ongoing survival. Without developing a strong connection to one’s deeper purpose, the ego tends to pursue self-interests. Leadership requires a meaningful dive into the soul to clarify a purpose, which provides hope and inspiration to see beyond everyday struggles. Leaders who look into their souls typically find their true calling, which is to be of service to others and society.. The reality is people want to follow leaders who are committed to a larger purpose.
When asked, most leaders want to leave a legacy that surpasses a successful financial result. Business provides an ideal environment for carrying this out. The act of commerce is a place for mutual service. As Fred Kofman states, “The market is an alchemical process that transforms self-interest into service, pettiness into greatness, greed into the desire to satisfy others’ interests.”
A company’s purpose often mirrors the personal goals and/or beliefs of the founder or leader. Take for instance, the professional networking site LinkedIn, which expounds commitment to “create economic opportunity for people” along with its mission “to connect the world’s professionals, to make them more productive and successful.” At a Wisdom 2.0 conference, CEO Jeff Weiner expanded on how this tied deeply to his personal purpose of wanting to “expand the world’s collective wisdom and compassion”. At LinkedIn, Weiner’s determination to hold true to purpose has led to the creation of a highly engaged workforce. At the time of this article, he holds an amazing 100 percent approval rating on Glassdoor, a website where employees and former employees anonymously review companies and their management, further allowing LinkedIn to attract exceptional employees. At the same time, Weiner does not forget to drive for business and financial results as anyone following LinkedIn’s profit margin and valuation can testify.
Evolved purpose driven leadership
Is it possible for all businesses to focus both on a cause for making the world a better place and also on making money and profit? The answer is “yes,” but there is a catch. Success of this nature requires an evolved and deliberate leader. This is an individual who can transcend ego to hold an authentic noble purpose while creating value for all stakeholders, which includes making money for the business and its owners or investors. The ability to hold and integrate these multiple perspectives is the hallmark of such a leader. Jeff Weiner is a prime example, and there are more like him showing up in the world every day.
About the Author
Soren Eilertsen, Ph.D., works with business leaders to clarify vision, set strategic focus, and develop leadership muscle. Since founding Kollner Group in 1999, he has shaped the success and strategy of numerous for-profit and non-for-profit businesses in a variety of industries. He teaches business strategy as Adjunct Faculty at Pepperdine University’s Graziadio School of Business and Management. For additional information, visit www.kolnergroup.com or call 310- 230-3150.