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DAN PONTEFRACT


THE PURPOSE EFFECT


BUILDING MEANING IN YOURSELF, YOUR ROLE, AND YOUR ORGANIZATION

Figure 1 Publishing, 2018

15 min read
10 take-aways
Audio & text


WHAT'S INSIDE?

Purpose-driven firms put principles ahead of profits; still, being
purpose-driven is good for business


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EDITORIAL RATING

8

THE RATING – WHAT DOES IT MEAN?

At getAbstract, we summarize books* that help people understand the world and
make it better. Whatever we select for our library has to excel in one or the
other of these two core criteria:

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what you do.

We rate each piece of content on a scale of 1–10 with regard to these two core
criteria. Our rating helps you sort the titles on your reading list from solid
(5) to brilliant (10). Books we rate below 5 won’t be summarized. Here's what
the ratings mean:

10 – Brilliant. A helpful and/or enlightening book that, in addition to meeting
the highest standards in all pertinent aspects, stands out even among the best.
Often an instant classic and must-read for everyone.
9 – Superb. A helpful and/or enlightening book that is extremely well rounded,
has many strengths and no shortcomings worth mentioning.
8 – Very good. A helpful and/or enlightening book that has a substantial number
of outstanding qualities without excelling across the board, e.g. presents the
latest findings in a topical field and is written by a renowned expert but lacks
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While the rating tells you how good a book is according to our two core
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products or trends.
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her or his topic inside-out.
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its major aspects.
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Visionary – You’ll get a glimpse of the future and what it might mean for you.
Well structured – You’ll find this to be particularly well organized to support
its reception or application.

--------------------------------------------------------------------------------


RECOMMENDATION

Dan Pontefract, author of Flat Army, explains how companies can establish
meaningful goals, provide energized workplaces, and contribute to their
communities and society. Such “purpose-driven” firms put principles ahead of
profits, but they find in the long run that being purpose-driven is good for
business. Pontefract shows firms how to reach a meaningful “sweet spot” where
three important roles come together: each employee’s “personal sense
of purpose,” the company’s purpose and the role-based purpose employees
feel when their jobs align with their priorities and beliefs. Those who seek a
sense of direction for their organizations and business students will benefit
from this detailed, practical, inspirational book.


TAKE-AWAYS

 * “Purpose-driven” firms put principles above profits. They focus on their
   customers, employees, team members, community and society, as well as
   profits.
 * The “Purpose Effect” has three components:
 * “Personal purpose” centers on each employee’s identity and commitment.
 * “Organizational purpose” concerns a firm’s “principles, ethics, leadership
   and culture.”
 * “Role purpose” focuses on turning each worker’s job into a “calling.”
 * The alignment of these elements creates an energizing “sweet spot.”
 * The Purpose Effect inspires employees by making their jobs meaningful.
 * Purposeful organizations follow the “Good DEEDS” acronym: “Delight, Engage,
   (Be) Ethical, Deliver” and “Serve.”
 * To use it, make customers feel great, engage with your employees, operate
   ethically, always be fair and serve all stakeholders.
 * Purpose-driven companies set out to earn profits and improve society.


SUMMARY


BEHIND THE SCENES MAKING SAUSAGE

Johnsonville Sausage LLC, headquartered in Sheboygan Falls, Wisconsin, produces
meatballs, sausages and bratwurst. It employs 1,500 people it refers to as “team
members.” It sells more than $1 billion in meat products annually.

In 2015, a fire destroyed Johnsonville’s plant in nearby Watertown. One hundred
Johnsonville members had no place to go to work and nothing to do.
Johnsonville’s management decided to keep paying them their full salaries. In
return, it asked its members to volunteer for community work for 20 hours each
week and to spend another 20 hours each week on self-education. These activities
occupied its Watertown workers for nearly a year until a new plant opened.

> “When the culture of an organization is harmonious – when team members feel as
> though their opinion and contributions matter – a causal relationship between
> increased team member commitment and bottom-line improvements becomes a likely
> outcome.”

Johnsonville Sausage has been a special place to work ever since Ralph C. Stayer
founded the company in 1945. Its “culture statement” says that Johnsonville’s
goal is to “become the best company in the world,” something it characterizes as
a “moral responsibility.” The firm serves “the best interest” of its
stakeholders and the “personal growth” of its members. Johnsonville’s intranet
publishes the “personal development commitments” of each member.

> “When an individual performs in a role so that meaning and fulfillment [are]
> demonstrated, good things can happen for all stakeholders.”

A drive to implement the “Highest Impact on Customer Service” (HICS) is the
foundation of Johnsonville’s business strategy. Team members work continually to
implement it. Johnsonville’s purpose transcends profits. Its culture statement
represents the firm’s deeply held ethos, by which the company lives daily – even
in the toughest times.

> “While purpose in the workplace is imperative, leaders are potentially
> overlooking its significance to the overarching health of our civilization.”

Johnsonville executive Cory Bouck explains, “It would be morally wrong to hold
people to incredibly high standards without also giving them every opportunity
and resource to stretch and grow themselves in order to be able to deliver
against those high standards.”


“PURPOSE-DRIVEN” FIRMS

Many notable organizations across a broad range of industries have set an
example of how purpose-driven companies act. Consider these examples:

 * In-N-Out Burgers, a fast-food chain, pays new employees an above-the-minimum
   wage.
 * Gravity Payments, a credit-card processing company, pays every employee at
   least $70,000, based on a Princeton study finding that $75,000 represents the
   ceiling for emotional well-being. Gravity’s CEO lowered his salary by
   $90,000.
 * Fairphone, which makes mobile phones, uses “conflict-free minerals” to
   manufacture “ethical” cellphones.
 * Ikea manufactures a wide range of furniture, following a core business plan
   that calls for “prices so low that as many people as possible will be able to
   afford them.”
 * In 1982, Johnson & Johnson quickly ordered stores to remove 31 million
   bottles of Extra Strength Tylenol from their shelves when a criminal poisoned
   a few bottles with arsenic, killing seven people. The company reportedly lost
   more than $100 million, but cemented its long-term reputation for caring
   about its consumers.


THE “PURPOSE EFFECT”

Purpose-driven firms base their activities on the Purpose Effect, which concerns
the organization’s purpose beyond making money, the roles that its team members
play within the organization and their individual motivation. The organization,
individual team members and society all benefit when each element is in place.

> “When an organization and its team members are indeed on the same page – when
> the sweet spot is being demonstrated by all parties – a collective sense of
> community can be felt.”

The Purpose Effect engages and fulfills team members and engages them. In this
atmosphere, people do better work. If an organization’s purpose conflicts with
employees’ purposes, they will be unhappy at work. But the Purpose Effect
ensures that all workers feel that their jobs represent more than just
paychecks. They want their work to be meaningful and to give them a genuine
sense of purpose. As management expert Peter Drucker explained, “To make a
living is no longer enough. Work also has to make a life.”


THE COMPONENTS OF THE PURPOSE EFFECT

The Purpose Effect emerges at the intersection of three essential factors:


1. “A PERSONAL SENSE OF PURPOSE”

Each team member should have a special, motivating purpose that addresses “what,
who and how.” Personal purpose calls for knowing who you are in terms of three
aspects: First, develop yourself. Be determined to improve and grow. Ask, “What
am I doing to evolve myself?” Second, define what your life should be, and
redefine it regularly. Ask, “Who am I in life and at work?” Third, decide every
day to act in a moral, ethical and responsible way in keeping with the person
you choose to be. Ask, “How will I operate and be perceived by others?”


2. “ORGANIZATIONAL PURPOSE”

This is why your company exists. Organizational purpose defines who and what the
company is to itself, team members, customers, its local community and society
as a whole. Organizational purpose concerns “principles, ethics, leadership and
culture.” Organizational purpose requires the implementation and deliverance of
solid “fair practices” to all team members. This involves compensation (pay your
people fairly); performance management (substitute “coaching and mentoring” for
“in-depth scrutinizing”); and “recognition” (58% of all team members want more
workplace appreciation).


3. “ROLE-BASED PURPOSE”

Every organization assigns people to certain roles to meet its goals, and every
team member’s role should be meaningful. Most people define themselves according
to their work; that’s why their roles at work are so important. Employees’ role
purpose should completely align with their “personal and organizational
purpose.” For role purpose to emerge, companies must treat their employees well.

> “The sweet spot is less a gentle overlap between three categories of purpose,
> and more the result of dynamic tension between three often contradictory
> demands.” (Box of Crayons consultancy founder Michael Bungay Stanier)

Team members who have a sense of the purpose about their roles don’t think of
their jobs as meal tickets. Instead, each person views his or her job as a
“calling.” This is how you want your employees to feel about their work.
University of Ottawa research indicates that 76% of people who see their jobs as
callings are “always engaged” at work.


THE “SWEET SPOT”

The sweet spot of purpose is where the three areas come together in a
“reciprocal relationship.” A balanced sweet spot emerges only when these main
components work together. This aligned structure supports members of the staff,
“teams, the organization, customers, owners and, perhaps most importantly,
society as a whole.” The sweet spot isn’t a final destination. Instead, it’s “an
outcome of the alignment between personal, organizational and role purpose.” To
reach the sweet spot, organizations first need a declaration of purpose.

> “An organization without purpose [could] miss out on keeping or hiring
> high-performing individuals.”

The declaration of purpose of Deere & Company (previously known as John Deere,
still its trade name) states, “We are committed to serving those linked to the
land, thereby helping to improve living standards for people everywhere.” Whole
Foods’ purpose is, “Helping support the health, well-being and healing of both
people – customers, team members and business organizations in general – and the
planet.” Patagonia’s purpose is to “Build the best product, cause no unnecessary
harm, use business to inspire and implement solutions to the environmental
crisis.”


“WIN-WIN-WIN”

Many companies have a shortsighted focus on profit alone. Such organizations
should broaden their perspectives. Mana Ionescu, the founder of Lightspan
Digital, a purpose-driven Chicago firm that offers professional content
marketing and social media services, says that companies need win-win-win
strategies.

> “In a world where anything or anyone can be owned, manipulated and exploited
> for profit, everything and everyone will eventually be.” (University of
> British Columbia law professor Joel Bakan, “The Corporation”)

These tactics create profits as well as giving customers solid value, making
significant contributions to society, and providing meaningful, rewarding and
satisfying work for their employees. However, win-win-win will work only if all
team members, no matter what their individual roles and authority, perform as
both “leaders and followers.”

> “An individual who seeks a personal sense of purpose in life…is constantly
> developing, defining and deciding his values, priorities, attributes and
> general ways of conducting themselves.”

The culture of a win-win-win organization is “open, connected, collaborative,
participative”; it’s based on “general reciprocity.” This means that all team
members work together for the common good and understand the organization’s
goals of achieving a high level of service as well as a profit. Everyone in a
win-win-win organization should have a “purpose mind-set.” That is, all team
members should feel passionate about their work and their performance. Everyone
should commit to developing a “meaningful and engaging” workplace.


THE “JOB MIND-SET”

The purpose mind-set stands in marked contrast to the job mind-set, which shapes
the actions of employees who do their jobs simply to earn paychecks, and the
“career mind-set,” under which employees focus primarily on advancing their
careers so they can earn more money and accumulate more power and prestige.

> “Companies in which more employees perceive their workplaces as ethical report
> higher retention rates, more positive work and supervisory relationships,
> better dispute resolution, and enhanced productivity.” (Keyes)

Both of these money and power-oriented mind-sets undermine the purpose mind-set.
When you educate your employees about their personal, organizational and role
purposes, address these negative mind-sets directly. Explain why they aren’t in
alignment with how people think in a purpose-driven organization.


“PERSONAL DECLARATION OF PURPOSE”

Each team member should create his or her personal declaration of purpose that
answers the all-important question, “Who am I in life and at work?” This brief
written document provides each person with an “ongoing definition” that changes
depending on evolving circumstances. You can’t achieve balance – the sweet spot
– among your personal, organizational and role purposes unless you know the
personal purpose that brings meaning to your life.


“GOOD DEEDS”

Organizations that are formally or informally dedicated to their purpose
subscribe to the goals outlined by the Good DEEDS acronym:

 * “Delight your customers” – Remember, customers are the top priority; strive
   to make them happy.
 * “Engage your team members” – Helping your team members flourish will create a
   sense of communitas, denoting a “feeling and spirit of togetherness.”
 * “(Be) ethical within society” – Make a positive contribution, and have no
   negative effect on people or the environment.
 * “Deliver fair practices” – Offer top value for a reasonable price.
 * “Serve all stakeholders” – An organization’s stakeholders include its
   “customers, team members, the community and owners.”


PURPOSE IS GOOD BUSINESS

McKinsey & Company advises companies to “integrate environmental, social and
governance issues into their business model – and act on them.” Purpose-driven
companies achieve “positive productivity gains,” and they enjoy “short- and
long-term growth” and “financial benefits.” Deloitte reports that 73% of team
members in purpose-driven organizations feel “fully engaged” in their work.

> “By working faithfully eight hours a day you may eventually get to be boss and
> work 12 hours a day.” (journalist Robert Quillen)

Companies that operate with purpose are on the path to becoming productive,
successful enterprises with engaged team members. Their focus is to improve
society as well as to increase profits. This isn’t just smart business; it’s
also the moral, ethical thing to do. Futurist Buckminster Fuller probably said
it best: “Make the world work, for 100% of humanity, in the shortest possible
time, through spontaneous cooperation, without ecological offense or the
disadvantage of anyone.”


ABOUT THE AUTHOR

Dan Pontefract is “chief envisioner” of TELUS Transformation Office, a
consulting firm that helps organizations enhance their corporate culture and
collaboration practices. He also wrote the bestseller Flat Army: Creating a
Connected and Engaged Organization.

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