Attracting the people that are prepared to take on the difficult challenges makes for a better and more sustainable business
Christoph Lueneburger is the New York-based head of the private equity practice at Egon Zehnder, an international executive search and leadership consultancy. He is the author of A Culture of Purpose, in which he argues that the most successful companies are those that are the most purpose-driven, and that the pursuit of sustainability is “the most reliable blueprint” for building a culture of purpose.
The challenge for corporate leaders, according to Lueneburger, is to find the right team, who will not see the pursuit of sustainability as a set of problems to be solved, but rather as the necessary foundation for long-term value creation.
Lueneburger spoke to Ethical Corporation about instilling purpose and about building sustainability-minded leadership teams.
Ethical Corporation: What in your view is a “culture of purpose”, and what are the benefits?
Christoph Lueneburger: Cultures of purpose power winning organisations with an audacious vision and matching values. Because they “sell” values first, rather than competing primarily on price, they create tonnes of value. They attract the smartest, most passionate people with those values. What is a culture of purpose? Let’s start with the culture itself: a set of beliefs and customs, the kinds of thinking and behaviour that define an organisation. Now add purpose. Because it captures an ideal, a purpose goes beyond profitable growth, shareholder value, or any other measure of whether you are doing things right. A purpose, instead, is a pledge to do the right things. Audacious and bold, a purpose inspires a meaningful number of people to take action.
EC: Are making profits and achieving shareholder returns not sufficient in themselves as a purpose for a corporation?
CL: Neither profit nor shareholder returns constitute a purpose. But both can be the results of one – recent work by John Mackey and Rajendra Sisodia has shown that mission-led companies vastly outperform the market. A purpose answers the question of why the organisation exists. Aspirational but actionable, purpose introduces a shared vision with impact beyond the organisation itself. And that action becomes the handprint of the organisation: the thing you do well – whether getting people to explore the outdoors or improving lives with medicine – and what you want to maximise to have impact. Minimising footprints, on the other hand, constitutes neither inspiration nor purpose.
EC: How can a culture of purpose be instilled in the leadership team, and more broadly throughout the organisation?
CL: Building a culture of purpose requires selecting the right people, both the ones you hire according to their traits and the ones you promote to leadership roles. But crucially, it also means fostering the right cultural attributes – namely energy, resilience and openness – throughout your organisation to attract these kinds of people in the first place. Sustainability is the most reliable blueprint to build such cultures, because a sustainable organisation is one that continuously asks what it will take to run its business indefinitely.
In a culture of purpose, everybody throughout the organisation feels ownership for this question. John Mackey, for example, likens the people at Whole Foods (the company he founded) to a basketball team: they share a strong sense of the objective (win the game) and the tactics (put the ball in the hoop), but when they run down the court, decisions about passing the ball or who will jump are made on the fly. The role of the coach (like that of the leader) is not to tell the team who should take the shot, but rather to equip his team to make that decision in the moment.
EC: What implications does the creation of a culture of purpose have for the working environment?
CL: What strikes me every time I get to spend time in a culture of purpose is the passion and intent of its people, the trust between them, and the conspicuous absence of cynicism. A culture of purpose constantly bets on the passion of its people, and refuses, wherever possible, to accept the tyranny of “B players” who lack that passion. Cultures of purpose have an unfair advantage because they attract the smartest, most passionate people to be had. I visited a CEO of a company in the building hardware industry that had undergone a remarkable turn-around by rediscovering their purpose. The parking lot was full on a Friday afternoon. People were animated. And when they explained to me what they were doing, they started with the reason they were there, rather than the function they were fulfilling.
EC: Which companies have a culture of purpose? What makes them stand out?
CL: There are many companies in pursuit of a true purpose, among them Patagonia, Toms and Honest Tea. Patagonia’s purpose, for instance, is to build the best product, cause no unnecessary harm and use business to inspire and implement solutions to the environmental crisis. But cultures of purpose can be found anywhere: from the Spartans to the 1995 Springboks rugby team – history is shaped on all sides by cultures of purpose. At first glance, what makes them stand out is that they are so bloody difficult to defeat. But that is merely the outcome of a group of people aligned behind a mission they view as important and inspiring.
EC: How can corporate leaders identify the right people to fit into purpose-oriented organisations?
CL: Finding the right people has two elements. For starters, there are individual traits. Unlike competencies (which can be learned), traits are more fundamentally embedded in our identity. It is difficult for people who lack determination, for instance, to will themselves to become more determined. One of these traits towers above the others in a culture of purpose: curiosity. This trait fuels a passion for difficult questions and the right answers to them, rather than just “being right”. The second element, naturally, is having access to people with these traits. Does your culture attract curious people? How would they be received if they questioned the roots of your business model? Some organisations, and indeed some academic institutions, have begun to test for these fundamental traits, recognising that they represent the scaffolding for the competencies that individuals can most likely develop in the right environment.
EC: And what traits do corporate leaders need, to instil a sustainability-based culture of purpose?
CL: While curiosity is the king of traits, leaders rely on a complement of other traits to expand the sphere of their impact. Among these – insight, determination, engagement – it is the latter that most directly scales their reach. Engagement is about connecting with and motivating others in a shared pursuit of a larger objective. It is built on both the empathy required to “get” others, and the enthusiasm to win their hearts and minds. In a culture of purpose, that engagement is more specifically linked to bringing together others who become “infected” with the same viral purpose. Sergio Marchionne impressively showcased this ability when he took control at Chrysler and quickly promoted a group of new leaders who bought into and multiplied his vision to revive a legacy brand.
A Culture of Purpose: how to choose the right people and make the right people choose you, by Christoph Lueneburger was published in May 2014 by Jossey-Bass.
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