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Somik Raha

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The Purpose of Business Is a Business of Purpose

Posted: 06/08/2012 5:05 pm

A wall of numbers stands on the projection screen and your eyes are already glazing over. Words seem hollow and dullness descends into your strategy meeting. While the answer seems right, it lacks inspiration. You know that it's not going to happen. Sounds familiar? Business strategy that focuses exclusively on the head while ignoring the heart won't work, for it becomes dry and lacks the motivating power to inspire people to dream up amazing ideas and make them happen.

Part of the head logic is the notion that people think money matters the most. Psychological research shows otherwise. According to Dan Pink (author of best-selling book Drive: The Surprising Truth About What Motivates Us), study after study in psychology and behavioral economics shows that higher monetary rewards lead to worse performance in tasks that require even a rudimentary degree of cognitive ability and creativity. Since business strategy development requires a lot of creativity, simply focusing on profit maximization produces mediocre business strategies. According to Pink, "purpose" is one of the top three things that actually motivate people, along with "autonomy" and "mastery."

Having focused for some time now on helping people elicit their deepest values in my dissertation research, I am continually surprised at how inspired people are to discover what truly moves them. For example, one executive in the mobile networking space started a conversation with me saying, "I am sorry to say that I have no values." After going through a value elicitation process, he discovered that he did have many values, and the core value on which everything rested was: relieving users of excessively high mobile network prices. By improving network efficiency, he would help people save their money for other things in life. This realization gave him a deeper purpose beyond profits and he had a big smile on his face.

While finding purpose by eliciting values starts with a straightforward question, "What is the core value of your business?," people often give superficial answers. Some offer "profit" as the purpose, but upon reflection on how much time and energy they spend for their compensation, they change their mind. Others offer "shareholder value maximization" as the purpose but retract it when they realize the strangeness of saying their sole life purpose is to make their bankers happy. It is not sufficient to take the answers at face value -- one needs to keep drilling in by asking "why" until the answer becomes "just because" and people start resonating emotionally.

Once we get beyond the superficial answers, people get to deeper values such as "integrity" and "treating people well." These are about how we handle ourselves, and not about our purpose. A question that will help you hone in on the purpose is "What transformation in the world do we want to bring about with this business?"

To illustrate, the purpose that a packaging company came up with had to do with using their unique talents and capabilities to make food packaging that was natural. What most people don't realize is that good packaging allows fresher food to be distributed with fewer additives. Not only did this purpose deeply motivate the executive team, "natural" also served as the criteria for strategic fit; the company would only evaluate business opportunities that enabled natural packaging. This addition of heart thinking powered up the head thinking in the strategy and people rallied around it.

Henry Ford said, "Business must be run at a profit, else it will die. But when anyone tries to run a business solely for profit ... then the business must die as well, for it no longer has a reason for existence." In other words, the purpose of a business is to be a business of purpose. The next time you are in a dry, head strategy discussion, try adding a little heart to it.

 

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