Does Your Company Live Up to Why It Exists?

Today, “purpose” is discussed ad nauseam by people around the business world. The zeitgeist around purpose-oriented companies risks being counterproductive, as too many companies become satisfied with declaring and publicizing their purpose rather than the more important work of living up to it.

While discussing purpose is a positive step beyond just talking about profit at all costs, purpose is unfulfilled intention that doesn’t satisfy anyone for any length of time: not the employees, customers, leaders or investors that purpose initiatives typically aim to serve.

Declaring why your company exists is a good start, but many companies are struggling with the challenging and expansive work of living up to it.

Here are four considerations to realize potential:

The first consideration

Living up to why you exist is not a one-time event. Just as great athletes are forever honing their craft or those dedicated to a religious faith consider a lifetime’s journey, companies with an elevated purpose are unlikely to ever have a singular moment of being “done.”

And that’s a good thing: Larry Page has said that focusing on “really big goals” is critical to leadership, “because something you can work the rest of your life on and still be excited about … that attracts the best people, and retains them and keeps them focused.”

In navigating the journey, it’s useful to frame big questions that continue to reveal new paths and opportunities.

Ben Steele, chief customer officer of REI, who led the wildly successful #OptOutside initiative, has said it stemmed from internal questioning: “The question is not how do we maximize sales, the question is are we living up to our values … and how do we show people what we believe?”

Asking the big questions, frequently, is the best guidance system in evolving towards your potential.

The second consideration

Living up to why you exist is more about action than communication. In many companies, the purpose conversation has been driven by marketing teams aware of customer and cultural demands.

But as a result, too often purpose-oriented initiatives have been biased toward talking and not doing. Communication is critical  —  imagine a religion without the founding texts, or a sports team that doesn’t communicate the plays — but it’s the doing that counts.

In my company enso’s recent work with Uber, we worked together to define how the company’s core marketplace technologies could serve CEO Dara Khosrowshahi’s directive of, “from growth-at-all costs to responsible growth.”

The framework we developed connected the team’s aspirational purpose to everyday practices through the guidance of innovation principles. By baking these principles into the product development process, the lived experience of employees and customers can line up with the purpose.

The third consideration

It’s important to explore how the company can serve people more deeply in pursuit of its purpose.

Because 20th-century management disciplined focused on incremental efficiency and productivity, too many companies got stuck thinking mostly about how to serve people in very limited, functional ways  —  more stuff to more people. But customer needs are not just functional. We humans need more than stuff to thrive, and companies that serve greater needs can win special loyalty.

As Emanuele Madeddu, EVP of Global Brand Strategy at National Geographic has said, “Today, there is a different relationship between brands and people … it’s not a matter of just owning the brand physically, collecting things, we’ve moved to a place where we’re collecting experiences … now we’re moving a step further, where people want to use the brand for personal growth.”

One way to think about this is considering how the company can serve people toward the top of Maslow’s hierarchy of needs. While many companies begin by considering how to serve people functionally, huge new areas for value creation can open by serving people’s needs for trust, belonging, esteem and ultimately, as Madeddu says, personal growth, or as Maslow might say, self actualization.

If you look at great companies, you can see them serving people across all layers of the hierarchy of needs. Consider for instance National Geographic serving its fans in functional ways but also with belonging and self actualization through events, travel, education and communities. The We Company too is overtly pursuing this as a business strategy, with WeWork, WeLive, WeGrow.

Phil Knight, the founder of Nike, speaks of business as a deep form of service, writing in his autobiography:

When you make something, when you improve something, when you deliver something, when you add some new thing or service to the lives of strangers, making them happier, or healthier, or safer, or better, and when you do it all crisply and efficiently, smartly, the way everything should be done but so seldom is  —  you’re participating more fully in the whole grand human drama. More than simply alive, you’re helping others to live more fully, and if that’s business, all right, call me a businessman.

The fourth consideration

Living up to why your company exists is not the job of one team or one leader but every team.

Companies have got really good at building complex systems from component pieces, with teams and departments focused on one piece each. But these organization systems also lead to an atomization of decision making, where everyone can be focused on their own goal while the company misses its bigger potential.

As economist and management adviser Fred Kofman has said, “If the defensive players of a soccer team are punished for every goal they allow, they will never go on the offensive, even when their team is about to lose the game by a goal.”

Somewhat counter-intuitively, “to optimize the system, you must sub-optimize the sub-systems,” he adds.

Unfortunately, in many organizations, department leaders are focused on optimizing department goals rather than companies’ bigger potential. In many cases, this disconnect results in company purpose being a secondary consideration or completely redundant. Employees, customers and stakeholders get restless because the purpose says one thing, while the company does another.

To move beyond atomized decision making, broader teams need to ask themselves the big questions, routinely — only by creating space for this dialogue across the company, and with stakeholders, can goals be aligned and new opportunities emerge.

Service industries around companies exacerbate this problem by having myopic goals. It’s not native to consultancies with heritage in productivity optimization to ask bigger questions about how companies can live up to why they exist, just as it’s not native for advertising agencies, accountants or technology providers.

Companies that live up to why they exist can be massively positive forces in the world because in serving people more deeply  —  both those inside the company and outside — these companies can help individual people live up to why they exist.

Consider one of National Geographic’s core goals, “to ignite the explorer in all people.” By living up to that, the company doesn’t just sell subscriptions, it can inspire and facilitate its millions of fans toward their own potential.

And through its community programs, it creates natural feedback loops, building a virtuous circle of people in turn contributing to the company’s goals. In Phil Knights words, “helping customers live more fully” also helps companies live more fully.

This is not 20th-century, efficiency-optimized business as usual — this is the kind of capitalism we need today.

This article first appeared on Fast Company and was republished with permission.

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