How do I create an agile, high performance culture? How do I engage and align our people? How do I drive productivity? Land strategy? Create trust in our business?
There’s an old story about two hikers who are confronted by a large bear in the woods. One calmly sits down, removes his boots and puts on a pair of running shoes. “What are you doing!” his panicked friend asks, “you’ll never outrun a bear.” “I don’t have to” he replies” I only have to outrun you”.
Whilst CEOs may be right that their business isn’t moving fast enough, they only need to go faster than the other guy. It’s therefore worth asking who is wearing the running shoes in your industry. Which are the agile businesses you face, and what are they doing that you are not?
The answer tends to be the businesses that are smaller, newer, less encumbered with legacy; in other words, the entrepreneurial ones.
Entrepreneurial thinking; a mindset not a legal entity
Yet, entrepreneurial thinking actually has very little to do with scale or age. It’s a mindset. It’s therefore worth taking a really close look at what entrepreneurially-minded businesses, of whatever size, actually do. How is that they create that agility of culture, productivity of people and performance of management. And can this be replicated?
In our experience, a big part of what drives agile business is a compelling and engaging purpose which is authentically and consistently held in the organisation. This engenders the behaviours of alignment and engagement in people, clarity and velocity in management, and openness and creativity in cultures which are the hallmarks of the agile, entrepreneurial business.
And that is the point: the first rule of purpose is that, for it to have any impact, it must not only be credible and congruent to the activities of the business. It must also be absolutely authentic.
Most large organisations have come to accept the importance of holding a purpose beyond profit or the immediate interests of shareholders. This may be from a genuine sense of civic duty, an understanding that society is demanding more of business, or a consciousness of the direction of travel of regulators and investors.
But a general view is emerging that a socially responsible model of business isn’t just a moral good but can actually lead to a more sustainably successful business.
According to the FT’s Andrew Edgecliffe-Johnson, this shift is “starting to converge into something that looks like a new worldview, shared by leading executives and investors and shaped by an unlikely alliance of consumers, employees, campaigners, academics and regulators”. which could “break a consensus that has governed business for two generations and offer a new model for capitalism based on the watchwords of purpose, inclusion and sustainability”.
This is great news. But there’s a problem. Even where adopting a more socially purposeful approach is fervently held by senior leadership, it is still a top-down exercise that struggles to penetrate much beyond the ExCO bubble.
For many organisations, it’s a mystery why their carefully considered purpose isn’t making a jot of difference to the behaviours in the organisation. Why there is a big gap between the purpose at Board level and the experience of employees and customers.
Entrepreneurially-minded organisations achieve agility not by having a purpose but what they do with it.
Careful observation of the best agile, entrepreneurial businesses provides some of the answers. They just use purpose in an entirely different way. These agile, entrepreneurially-minded businesses have a clearly defined set of attributes within their cultures that are the secret to bridging the ‘purpose gap’.
And that secret lies in the first rule of effective purpose; that it must be credible, congruent and absolutely authentic.
The first and most fundamental attribute in any agile, purposeful culture is TRUST
Which is why the first and most fundamental attribute in any agile, purposeful culture is TRUST. Companies where purpose lives and breathes tend to be open, compassionate and creative rather than inward looking, fearful and controlling. In more traditional cultures based on control, people are instinctively fearful and therefore distrustful of the purpose. Hence it has no power to change things for the better.
What drives trust is a marked difference in the organisation’s approach to people.
What drives trust, allows purpose to thrive and transforms cultures is the organisation’s approach to people. An example of this is provided by a major European Bank. The Bank had made purpose a top priority and it was well received in internal surveys. Yet it made little difference how people felt or behaved. The leadership team couldn’t understand why purpose was not ‘working.’ Research showed the Bank’s purpose was quite well understood; it just wasn’t trusted. In fact less than 25% of employees really believed the authenticity of the purpose.
The solution was nothing to do with ‘purpose’ itself, but rather demonstrating its authenticity and rebuilding trust by a fundamental reappraisal of how people were treated and encouraged to treat each other.
The results were extraordinary. In teams taking part in the programme, positive beliefs and behaviours jumped by an average 33% after only 6 months of participation. In particular, the critical measures of trust, openness and compassion increased by 40%. Purpose was now working because it had been activated by trust. Most extraordinary of all, in a wholly surprising and unintentional consequence, revenues in the pilot teams had increased by an average of 15%.
To find out more about creating agility through building a trust culture read here.
With trust comes the second major attribute of entrepreneurially-minded, purposeful businesses; a company-wide feeling of, and desire for, OWNERSHIP.
Unless everyone in the organisation feels – and feels allowed to feel – a powerful sense of ownership of the business it will not flow through into agile employee behaviours.
Organisations in which everyone feels an emotional investment demonstrate employee behaviours of alignment, engagement and autonomy. And the simplest and most compelling route to creating a culture of ownership is to create a feeling of ownership of the purpose the organisation serves.
Organisations need to reframe the relationship between the company and the employees from one of control to one of self responsibility
This is about a critical shift in how management at every level of the organisation thinks and behaves and about shifting the relationship between the company and the employees from one of control to one of self responsibility.
Research in a large pharma/medical group suffering from a significant problem of engagement and motivation uncovered an intriguing truth. Although disillusionment in most managers was resulting in ineffective decision-making and a critical lack of strategic implementation, a small group thought and behaved in an entirely different way. This group felt emotional ownership of the organisation an extraordinary 45% more strongly than the median manager, which translated into some remarkable differences in their commitment, effectiveness and willingness to take responsibility for successful outcomes.
And what made these managers different from their peers came down to one thing: the degree to which they believed in the purpose the business served.
It was clear that individuals who felt their company to be authentically purposeful (as distinct from having a stated purpose) had a far higher sense of ownership and responsibility, and were consequently dramatically more effective as managers (as well as, incidentally, being far more joyful and far less likely to quit). To find out more about creating agility through developing ownership and responsibility read here.
The final driver of entrepreneurially-minded businesses is the ability to manage in CONTEXT. Whilst trust drives cultural agility, and ownership drives engagement and autonomy, the ability to manage in context defines how effectively and efficiently management behaves.
Contextual Management creates clarity, adaptability and, above all, velocity in management decision-making.
An increasingly volatile, uncertain, complex and ambiguous world requires a significant amount of adaptability; and that is something that entrepreneurial management is all too familiar with. Whether because of the speed of development, newness of the market or paucity of resources, entrepreneurial management has long been adept at navigating an ambiguous world. The key skill entrepreneurial management demonstrates is the ability to make decisions contextually to create clarity and direction rather than getting bogged down in the content. And this is a skill that can be taught.
Where management uses a clearly articulated purpose as the context for key decisions, within an environment of trust and where the whole team is willing to take responsibility, it creates enormous velocity. It also ensures the purpose links the business up from top to bottom. To find out more about creating agility through managing in context read here.
It’s easy to agree that purpose is a good thing for employees and for society at large. But with the life expectancy of a S&P 500 company down to 15 years, it’s also easy to identify that the behaviours of aligned, engaged staff, open, innovative cultures and agile, clear-headed management are the key to survival.
The problem is the gap between purpose and behaviour.
Without the entrepreneurial attributes of trust, ownership and context, muddle, distrust and cynicism will persevere in middle management and purpose will not take root. What drives the extraordinary agility of the best entrepreneurial businesses is not ‘having a purpose’ but that purposefulness is credibly, congruently, consistently and authentically lived in the organisation. It is that which unlocks the human capital in the business allowing both people, and the business itself, to achieve their full potential.
Without these entrepreneurial ways of thinking no business can hope to be agile. It will always be outrun. And in a volatile, uncertain, complex and ambiguous world the bear is very large and very real.
To find out more about how the Contexis Index can transform the impact of purpose in your business, and how you can help this important research please get in touch.
To find out more about the thinking behind the methodology you might enjoy this short EthWord film
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John Rosling is a writer and lecturer on entrepreneurship, CEO of Contexis and Head of Thought at the Contexis Index; ever curious as to how entrepreneurial thinking is the key to activating purpose, stimulating agility and velocity and fulfilling human and commercial potential in global organisations.