Project Description

What It Takes to Truly Engage Your Employees

Over the 15 years I’ve been consulting in the corporate world, I’ve only met a handful of senior leaders who had as a primary goal for their companies making a positive difference in the world.

Surely, there are more such people, including a good number who are highly philanthropic outside their work. Still, as best as I can tell, higher purpose is not a common characteristic of the corporate world.

I don’t say this to bash business, nor to make a moral case for why leaders ought to focus more on serving the greater good. I fully understand that a primary obligation of any business is to earn a profit, and that without one, nothing else is possible. I also know that no amount of righteous haranguing is going to prompt leaders to fully embrace priorities beyond the bottom line.

But what if they believed that articulating and embracing a nobler purpose would help them to attract, inspire and retain better employees, and ultimately make their companies more profitable?

As John Mackey and Raj Sisodia put it in their book “Conscious Capitalism,” “Just as happiness is best experienced by not aiming for it directly, profits are best achieved by not making them the primary goal of the business. They are the outcome when companies do business with a higher sense of purpose.”

Professor Sisodia’s research, which I’ve cited before, suggests that “conscious companies”— characterized in part by an explicit commitment to a higher purpose – outperformed the Standard & Poor’s 500-stock index from 1996 to 2011 by an astonishing 10.5 to 1.

Much of this is common sense. All things being equal, would you rather work at a company focused solely on maximizing profits, or one with a deep commitment to adding real value to the world through its products, practices and services? Wouldn’t you find a greater sense of meaning by working for the latter, feel a greater sense of commitment and be less likely to leave?

Employee engagement in the United States (and throughout most of the world) remains depressingly low. According to the latest Gallup poll, 70 percent of Americans are either not engaged or are actively disengaged from their companies. According to Gallup, the cost to productivity just from the actively disengaged employees is $450 billion to $550 billion a year.

In the simplest terms, a purpose defines the difference an organization is trying to make in the world. In some cases, that’s a natural and straightforward outgrowth of what the organization actually does to earn a profit.

Whole Foods, for example, is explicitly committed to helping people to eat well, as a way to improve the quality of their lives and increase their lifespan.

Patagonia sets out to model sustainable environmental practices by taking complete responsibility for every product it makes – repairing, recycling and helping people sell those products when they no longer need them.

Eileen Fisher, the clothing company, has a five-part mission that includes producing “only what we love,” creating a “joyful atmosphere in the workplace” and “supporting women through social initiatives that address their well-being.” Or put even more simply: “Have our mission drive our business and our profitability foster our mission.”

There are many ways to create a nobler purpose in an organization, even if the products or services themselves intrinsically do not. Toms Shoes, for example, makes a very conventional product, but founder Blake Mycoskie has infused passion among employees partly by giving away, with each purchase of a pair of shoes, a second pair to someone needy. Now Toms is expanding that model to other products, including eyewear.

The company is also consistently profitable, not least because its noble purpose is differentiating, and appealing to consumers. We live in a highly commoditized world. Why couldn’t a big bank differentiate itself by using a matching model like Toms does and offer, say, financial planning to those who are needy?

It’s also possible to build a noble purpose around caring deeply about your customers. Think of, Zappos, Ritz Carlton and Southwest Airlines. Likewise, you can create a higher purpose around the commitment to truly great products and inspiring design, as Apple did under Steven P. Jobs.

Here are three questions I believe all chief executives ought to regularly ask themselves, not just to be good citizens, but as a powerful way to build competitive advantage:

1. What is our noblest purpose and are we fulfilling it?

2. How can we give our employees a greater sense of meaning in what they do, so they feel more enthusiastic about coming to work every morning?

3. In what practical ways can we add more value in the world (and do less harm)?

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Tony Schwartz

Founder & CEO

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