Read, digest and critique our pick of the best 5 articles for purpose-led leaders in 2017.
Shortly before the end of the second World War, Fortune published a statement by a forward-looking group of American CEOs called “A Framework for a Postwar Economy”. The third sentence began, “The Economic system is a tool for achieving the common good..” Profitability without advancing the common good was failure.
Today’s social and economic context is, once again, forcing business leaders to rethink what they were taught about the purpose of business. And CEOs need to talk about their company’s purpose, not just as a philosophy, but as a strategic tool that helps guide business choices.
Building a culture of trust makes a meaningful, measurable difference to companies. And according to PwC’s 2016 global CEO survey, 55% of CEOs think that a lack of trust is a threat to their organisation’s growth. But where do you start and how do you avoid ‘karaoke Friday’ and psychological fads?
Paul J Zak has been researching the relationship between trust and economic performance since 2001, both mathematically and behaviourally, and his article for HBR summarises the last ten years of neurological research as well as identifying eight management behaviours that build trust.
The pay-for-performance practices that dominate the corporate world are built on a foundation of standard economic theory. People act in their own interests, so they’ll work harder if there’s money on the table.
Yeah, right. Just as behavioural economics has shown standard theory to be terrible at predicting human behaviour, there’s little connection between pay for performance and the volumes of academic research on motivation and goal setting…”it’s like we studied human behaviour and flipped the findings on their head.”
“The human story as it’s unfolding now is a bit of a cliff-hanger,” says Valerie Keller, EY Beacon Institute Global Leader. “Automotion, digitalization and ongoing economic and political volatility are inspiring a great searching of the corporate soul. A new idea – and ideal – of successful business in the 21st century is emerging” purposeful business.”
It is relatively easy for a company to adopt the rhetoric of a feel-good purpose that articulates an aspirational reason for being. But actually living, breathing and effectively demonstrating a commitment to that purpose is an infinitely larger task. Yet it is an effort that can pay off substantially in our disrupted world.
Ah, trust. That old chestnut. Today, trust in government and other institutions, including business, is at an all-time low. But Paul Polman argues that with the UN Sustainable Development Goals, we have a roadmap for shared purpose, and above all a partnership for the common good. It will take strong leadership and moral courage in order to bring purpose-driven, socially accountable business models from the margins to the mainstream. If we can, then what better way to restore trust than with purpose?