This series is about purpose-driven organizations. In the first part, Paula Nordhauzen from Energized.org discusses the benefits of a clear and inspiring purpose with Tim Kelley from the True Purpose® Institute.
This second article is about how to accept the challenge of redesigning from money-driven to purpose-driven and last but not least an article about purpose in self-organizing companies.
Tim, in the previous article we discussed the huge benefits of having a higher purpose. Still, it’s hard to mention purpose without getting comments on profit.
I go around selling the idea of having a higher purpose as a company, which I thought would be easy because the statistics are so clear.
The problem is that if I’m the CEO of a company, it’s a psychological thing; I’m used to doing things a certain way. I think, ‘I got here, I got control of this organization by playing the game the way the game is currently played. And now you’re telling me to change the game. You’re asking a lot of me to change the paradigm, to change the whole game that got me here and play a different one that I may not know how to play as well.’
The emotional perceived risk of this is very high, and it’s not even necessarily conscious. So it’s a relatively small percentage of CEOs who are willing to go for self-organization, are willing to go for an organizational higher purpose, no matter how good the statistics look, and no matter how obvious it is that it would work better than the old way.
When money is all that matters
So there is this firm belief that the only healthy way to run a business is to be money-driven. And that belief overrules statistics that point out – even the economic – benefits of being purpose-driven as a company?
That’s how economists told them that they’re supposed to do it. It’s a misunderstanding of Adam Smith. Everyone focuses on this. There are one or two statements he made about the invisible hand of the market. It’s specifically Milton Friedman and the Chicago School of Economics that took that to its illogical extreme, which is that companies should only be concerned about money and only be concerned about creating value for shareholders. Nothing else matters.
When I’m talking to an audience of CEOs, I love to ask this question: ‘Have you ever had a person working for you who only cares about money and nothing else?’ And the answer is almost always, ‘yes.’ The next question I ask is,
‘Did you enjoy managing this person?’
And they say, ‘No, I did not enjoy managing this guy.’ (It’s usually a guy.)
‘He was a big pain in the ass. He was constantly asking for money.’
Then I ask, ‘What happened when you gave him money?’
‘He asked for more, this constant nagging, nagging, nagging about money.’
I was talking to the CEO of a company in Manhattan. He said, ‘Tim, I had this one guy who was a mediocre performer and we switched to pay for performance and then he became a top performer. And I’ve always used that as an example of why pay for performance works. But I am realizing at this moment that I always left out that we later had to fire him for embezzling from the company.’
Someone who only cares about money and nothing else has what is called ‘attachment disorders’. If it’s bad, then they’re a sociopath. Someone who only cares about money and nothing else is not psychologically healthy. And so the economists have modeled all workers as sociopaths and the companies themselves as sociopaths. We shouldn’t be surprised that they’re dumping toxins in the river or hiding the fact that their products are unsafe from their customers or stuff like that. It’s sociopathic behavior.
It’s not that corporations are bad. It’s that we’ve modeled and designed them as sociopaths. Regular, ordinary, psychologically healthy human beings need meaning from their work. If they don’t get it, they become unhappy and depressed and look for different work. That’s what happens to real people, not sociopaths: regular, psychologically healthy people. So if we want to model our companies after psychologically healthy, moral human beings, then we have to give them meaning.
Right now we have a bunch of sociopaths competing to see who can get the largest slice of the pie. Which is the way we’ve designed it, and which has all sorts of horrible toxic side effects.
Redesign: invite purpose to the table
At Energized.org we support organizations to become self-organizing. Also with adopting Holacracy. There’s a requirement as part of the transition to finding a purpose for the company. It’s just a check-the-box item along with a whole bunch of other stuff that needs to happen. And all they need to do is do a good job of that. Is that enough? How do you feel about these business purposes?
I think doing a good job doesn’t mean sitting down in the boardroom and saying: ‘Let’s come up with a purpose. How about this? Oh, yeah, that sounds good. Let’s put that in the purpose.’ That won’t get the job done, because it is not going to create the benefits that we’re talking about. You have to use a real process that was designed for finding a compelling higher purpose. People don’t do dental surgery on themselves. They understand that they’re not qualified. But they are willing to do purpose work on themselves. They’re not qualified to do that either.
What should the purpose of an organization look like to get the most motivation? You already mentioned that it needs to be a ‘higher purpose’. What does that mean?
It looks and sounds just like a non-profit mission. Paula, you’ve been through my purpose process. It’s complicated. We get several purposes out of it that are very, very powerful. But just to lower the bar a little bit: all you need is something that would fly at a non-profit.
Most business missions sound something like ‘deliver the highest quality divorce legal services to high net worth couples’ or something like that. Or ‘create excellent truck tires for the transportation industry.’ And there’s nothing wrong with those missions. Those missions are answering a different question. They answer the question ‘What do we do?’ and not ‘Why do we do it?’
If you look at a non-profit or NGO mission, it’s actually answering a different question: ‘How are we changing the world?’ ‘How are we making the world a better place? By saving the whales, by feeding the starving children, by preserving this threatened species or by combating climate change.’ It’s that kind of mission that creates motivation and inspiration. The company – and this is so hard for business leaders to do – have to change modes.
You can’t answer the questions from inside the scope of the company’s own activities. ‘Why do you make trucking tires?’ ‘Because trucks need tires.’ That’s not a valid answer in this context. It’s much, much, much bigger. You have to solve some social or environmental or some other kind of problem that people care about, something that would make the world a better place if you succeeded.
It’s surprisingly difficult to come up with an answer. I’ve had people come to me and show their business purpose to me. And I say, ‘You know, not to be rude, but your purpose sucks.’ And they know, but it took them nine months to come up with this terrible purpose.
The conscious, rational mind can’t answer purpose questions
What if a company wants to come up with this inspirational mission that goes beyond its products and services? Enter the meeting room with the whiteboard, the markers, and the sticky notes?
The companies in the previous examples always did the same thing, with great goodwill and intention. They went into the meeting room with the whiteboard and the markers. They started with ‘Okay, guys, let’s come up with a good purpose.’ And they brainstorm and they write words and they do it and they do it and it can go on indefinitely. Sometimes you get lucky, but almost never will that yield a really powerful, Olympic-class, motivating purpose, because the conscious, rational mind can’t answer purpose questions. That’s not how it’s designed. It’s like trying to get a recipe out of a calculator. That’s not what it’s for.
It’s not just that it’s not obvious which problem the company should go after. That’s not why they came together. They didn’t design the company to solve the social problem. They designed the company to offer this product or service to the marketplace. And then when you ask, ‘Okay, which social problem should we solve?’ There is no basis for answering that question in what the company has done. Occasionally there is, but usually not. And so it leaves well-meaning, intelligent people confused and stumped about how to answer the question. They have to go beyond their own scope first.
Good purposes come from the CEO falling and hitting their head in the shower or something like that. That’s actually more likely to produce a powerful purpose than a brainstorming session. Because it takes a lot of guts to say, ‘We’re going to solve this problem in the world.’
But you’re not suggesting to hit your head intentionally, right?
People expect that they ought to be able to answer the question. I’m saying you have the same odds of being able to do that as conducting dental surgery on yourself successfully. You just don’t have the training and the tools to do it properly. And it’s obvious with the dental surgery example and not obvious with purpose. You’re not going to hurt yourself during a brainstorming session with a whiteboard the way you would if you drilled holes in your teeth. If you put a really bad purpose out to the company, it might do mild harm. Generally speaking, it’s not going to make things substantially worse. You’re just going to be frustrated. But like flying a plane, like playing the violin, like most things in life that are difficult, there is a technique. So people usually don’t try to teach themselves to fly planes or do dental surgery or play the violin. They hire someone to do it for them using the techniques that have already been developed, or they go to school to learn how it should be done properly.
It’s the same with purpose: either hire someone who knows how to do it or go get educated about how it works. There are techniques for finding organizations’ purpose and individuals’ purpose. Trying to do it on your own is incredibly frustrating because you’re not taking advantage of the fact that other people have already figured out how to do it.
Deal with fear first, then take the leap
You’re talking about big, bold purposes. Isn’t it scary for an individual to take ownership of something that big? I remember feeling overwhelmed from my own purpose during the training with you.
A really good purpose should be scary. If it’s really good, it’ll be both exciting and frightening at the same time. Often, at the end of a purpose process, people say, ‘No, no, not that one. We can’t do that.’
That’s golden. When people say that, we have a winner.
For company owners, it’s probably also the fear that people will leave or not support it. People’s natural response to fear is to move away from the thing they’re afraid of. So that’s a huge obstacle in taking the first step to finding your purpose.
Definitely. But many of the things that are worth having in life are frightening. I remember I was the best man at a Navy buddy’s wedding once. And about an hour before the wedding, I realized what my real job was: to get this guy to the altar. His brain had dissolved. He wanted to get married to this woman, but the fear had just caused him to become less conscious. I had to lead him to the altar and make sure that he got there at the appointed time. Fear makes people unable to function and think.
In the purpose work that I do, we always start with dealing with fears, because we have to reduce the fear to a sufficiently low level to be able to seek and find information that’s outside of what people already know. That’s the tricky part. Right. If you’re afraid, you’re not receptive. In order to get something out of the box, you have to be relaxed and calm and open. people will tend either to be afraid if they’re actually trying to get something out-of-the-box and unable to think, or they’ll stay in the box and not be afraid, one or the other. But then the purpose they come out with just sounds like stuff that they’ve already known, that’s been recycled before and isn’t very inspiring.
In the purpose work that I do, we always start with dealing with fears, because we have to reduce the fear to a sufficiently low level to be able to seek and find information that’s outside of what people already know. That’s the tricky part.
How to craft the organizational purpose
Let’s get back to the organization. Where do you start when it comes to your organization? Do you go for the personal purpose of the CEO?
Often I go for the personal purpose of the CEO first, for two reasons.
One reason is the CEO wants to do a little test-drive to see what he or she is getting themselves into, so I can show them how this thing works. They need to see it for themselves before they’re willing to commit to spending money on finding their employees’ purpose or funding their organization’s purpose. Usually, with the CEO or someone very close to the top, there’s a little pilot. Could be a couple of people, could be one person, just so they get to have the experience and understand which methods work best for them. They experience what it’s like personally to have a purpose and, “Oh wow, this is cool. Yes, I do want this for others. This is great.” That’s usually the first step.
I and others who do this for a living tend to do it this way: do individual purpose first and then organizational purpose afterward.
There are some methods that aren’t very threatening. And it’s okay to mandate that everyone find their purpose, or all managers find their purpose, with the simpler, more conscious, less threatening methods. You can say, ‘Next week we’re finding everybody’s purpose.’
On the other hand, the deeper methods, the ones that poke around in the unconscious, it’s really not okay to force people to use them. For those, you have to ask for volunteers. If you’re going for the really high-grade, Olympic-quality purpose, these are the methods you use. You sell the idea to the company; you explain to them why it’s so cool and why it would be beneficial to them as individuals to have a higher purpose in their life. Show them some statistics, give them some examples, answer their questions.
So now a bunch of the employees finds their individual purpose. And then you say, ‘Now we’re going to find the company’s purpose’. You can do it with a very small number of people. But that’s actually not as good; you don’t get as much benefit from that. You get the most benefit by inviting the largest number of people to participate. Because people who are involved in finding the company’s purpose will be more motivated by that purpose than people who were not involved in finding it. If you’re in the room when they find it, and you contributed to it, you’re going to feel much greater ownership of that purpose. The result is that people love the purpose that they helped find, and therefore they love the company. I don’t know why a company leader wouldn’t want every employee, every customer, every supplier to love the company like that. Why would you not want as much of that as you could get? Usually, they’re worried that they’re going to dilute the purpose. With a good method, that’s not really a risk. You get all these people involved in finding the purpose, you explain and promote the purpose to those who didn’t participate in the process, and then you start thinking about how to use it externally.
Usually, it’s good to use it internally for a while first and start creating some initiatives and some projects that are purpose-driven.
As an employee if you’re in the room when they find it, and you contributed to it, you’re going to feel much greater ownership of that purpose.
Up next: high-performance purposes in self-organizing companies
Once your company is operating according to a higher purpose, you still have to move your organizational structure to support it. Usually, that evolves quite naturally towards self-organization. And if you’re already self-organizing but struggling to get to the high-performance level that we’re talking about, then check out the next article on purpose in self-organizing companies.
What do you need? Share it!
Let us know what comes to mind when thinking about purpose. Send an email to email@example.com