Organizational culture and purpose

Over on the Twitters, Marc Rettig points us to a little Forbes piece, ‘Culture of Purpose’ Is Key To Success According To New Research From Deloitte.

What’s the leader of the world’s largest audit, tax and consulting firm doing preaching about what seems like a squishy business attribute like “purpose”? As Punit tells me, “exceptional firms have always been good at aligning their mission or purpose with their execution, and as a result have enjoyed category leadership in sales and profits,” (think Whole Foods, Tom’s Shoes or even Apple). This seems particularly clear for companies where the founder is still very much involved in the business or where the founder’s ethos is culturally ingrained in the organization. Companies that are singularly focused on exceeding customer expectations tend to fall into this category. “So there is an empirical financial benefit to organizations that instill a purpose-driven culture,” says Punit.

The piece says some very good things, but it has such a stiff and awkward tone, it reads like a virgin talking about sex. Take this little passage.

Through interviews with the media and then in speaking engagements that he did at various campuses around the world during those times, the Deloitte Chairman was regularly challenged to justify business in general and even more specifically Deloitte’s reason for being beyond returning profits to its partners. “I found it disconcerting that business has been cast in a not so positive light,” said Punit.

Companies like Deloitte have earned disconcerting questions about what purpose they serve. So business has not “been cast in a not-so-positive light”, business has screwed up and we haven't held businesses nearly accountable enough.

It makes me wish this article didn't make these questions about purpose sound like the usual rah-rah corporate BS, because I believe in what it says. Devotion to purpose supports business success. It makes money.

Having been inside organizations with a strong purpose (and many more organizations without it), one can scent a true purpose focus in discussions of even the smallest projects. When one asks folks why they are doing something, they can — they will — tell you things like, “We are doing A in order to prepare the ground for B, which we are doing despite it being a compromise on C because it will help with the more important project of D and the essential project of E because D and E are both major initiatives in service of our organizational mission of F.” Not only can everyone walk up and down that chain from tactical moves to strategic projects to fundamental purpose and back again, they do it constantly. This makes the organization more effective because tactical actors keep the whole system aligned ... and they need less supervision to do it, freeing up executive attention for doing the work they need to do.

Breaks in this chain test the culture.

In truly purpose-driven organizations people will talk about a break constantly, with the expectation that fixing it matters more than the proximate work in front of them, since the fix must necessarily transform their tactical work.

In organizations without a true commitment to their purpose, people avoid talking about a break between purpose and tactics. Talking about these ruptures becomes politically dangerous, regarded as “distractions from the task at hand”.

That does not mean that every project in a purpose-driven organization must have some kind of perfect conception. People sometimes say, “Yes, we are neglecting the important principle X in service of the urgent need for Y.” But it is not only safe to say that in the organization, it is encouraged, because a purpose-driven organization makes its necessary compromises with its eyes open in order to ensure that those necessary compromises really are necessary.

This a deep organizational culture question. Having a purpose and talking about it isn't enough; you need a cultural commitment to talking about how it connects to everything you do.

And culture is hard to address.

When I was in consulting, I lost count of the number of companies I worked with who worried about keeping their culture as they grew. And I would always tell them, “That's not your problem. What will happen as you grow is you will discover what your culture really is, not what you have told yourself it is. As you get bigger, what will get harder is not keeping that culture, but changing it ....”