This will inform your strategy development and ultimately allow you to build a legacy.
To solve the problem of soul-destroying traffic, roads must go 3D, which means either flying cars or tunnels are needed. It is December 2016, and a new company emerges that constructs safe, fast-to-dig and low-cost transportation, utility, and freight tunnels – The Boring Company created by Elon Musk. Love him, hate him, agree with him, or not, Elon Musk has accomplished some incredible things, including adding $165.5 billion in wealth in the past year, which means we should at least learn something from him. He clearly isn’t driven by the money. According to the man himself, the thing that drives him is his vision.
“I think it’s important to have a future that is inspiring and appealing. There has to be reasons you get up in the morning and want to live. Why do you want to live? What’s the point? What inspires you? What do you love about the future?” — Elon Musk
What is incredible to me, personally, is that when he cares about something, he goes out and finds a solution and does it. This is clearly evident on the climate front and Tesla being recognized as a purpose driven innovator breaking records in sustainable transportation, technology, and more. Musk clearly has missions with associated companies rather than companies with associated missions. He builds movements, elevates the brand, and democratizes the impact. His organizations break down barriers and demolishes silos with flat organizations, ensures everything they do is aligned with the mission, and focuses on continuous improvement.
This is incredibly important for anyone to understand. You need to have purpose driven leadership throughout the organization which informs your strategy development and ultimately allows you to build a legacy. It is hard to overstate the impact of following this advice and I’ll share some numbers with you on why that is the case. I will not sugarcoat it, though, this is a much more difficult task to authentically implement than it is to state here.
Purpose and profits are not fundamentally opposed to each other. This has been demonstrated empirically by research conducted through the Wharton School of Business, Harvard University, and The Great Places to Work Institute. They used more than 1.5 million employee-level observations across thousands of companies and quantified purpose as the aggregate sense of meaning and impact felt by employees of a corporation. If a company has a strong corporate purpose, its employees will feel greater meaning and impact in their jobs. In the data, companies with a high level of purpose outperform the market by 5 percent to 7 percent per year, on par with companies with best-in-class governance and innovation capabilities. They also grow faster and have a higher profitability. This, however, is only successful if senior level management can successfully infuse that purpose throughout the organization and especially the middle management. This outcome is also supported by the performance of the winners of Zweig Group’s Best Firms To Work For Award.
While a higher purpose does not guarantee economic benefits, the Gartenberg study – which included 500,000 people across 429 firms and involved 917 firm-year observations from 2006 to 2011 – suggests a positive impact on both operating financial performance (return on assets) and forward-looking measures of performance (Tobin’s Q and stock returns). Therefore, we are not simply discussing a lofty ideal, but one that has practical implications for your firm’s financial health and competitiveness. This can be transformational for your organization. Below, you will find an eight-step framework that can help you overcome the “transactional” view of employee motivation (i.e., compensation and pay).
- Envision an inspired and motivated workforce
- Uncover your purpose
- Make sure you are authentic
- Communicate the message constantly
- Stimulate individual learning
- Turn mid-level management into purpose-driven leaders
- Connect your people and behaviors to the purpose
- Unleash the positive power of the entire firm through typically unrecognized change agents
As always, we enjoy hearing from you. Tell us what you think and get in contact with us if you’d like our help in putting these ideas into practice.
Phil Keil is director of strategy services at Zweig Group. Contact him at firstname.lastname@example.org.Click here to read this week's issue of The Zweig Letter.