Love in business. Are you completely crazy?

Love in business? What an absurd, even uncomfortable idea.

But what, after all, is ‘love’? Passion, regard, affection, enjoyment, zest, understanding and compassion? Are these not exactly the attributes we complain are lacking from our businesses?

And the antonyms of ‘love? Resentment, scorn, malice, antagonism, lack of alignment, fear. You don’t need to look far to see these in almost any large organisation in the world.

Perhaps love in business is not such an embarrassment. Far less an irrelevance. But, if so, what does this really mean and how to achieve it?
We thought we’d find out by bringing together leaders from some of the largest companies on the planet with entrepreneurs, advisors, academics and philosophers for an honest debate.

Read the results below.

#PurposeLed

 


Leadership? It’s followship we should be worried about

At a recent HR Conference, attended by HRDs from some of the largest organisations on the planet, there appeared to be only two topics of conversation over the canapes and warm pinot grigio. Leadership and Engagement.

It’s instructive for non HR types to attend these things. HR holds up a mirror to how we, as business leaders, are thinking about our people. And we clearly have some re-thinking to do.

Everyone recognises that employee engagement is the absolute key to higher productivity, efficiency, agility and financial performance. And this is seen as a “Leadership Challenge”. In other words, it’s a top-down issue. The thinking goes, ‘if only we had leaders who could engage, who had better EQ or better communication skills the issue would be solved’.

But what if this isn’t a top-down problem at all? What if it isn’t really an absence of leadership but an absence of followship?

Whilst EQ, compassion and communication are really important skills for the leader, of equal importance are the beliefs, feelings and behaviours of the followers.

And whilst leadership is complex and nuanced, there are only really three key elements to making followship easier.

the best managers figure out how to get great outcome by setting the appropriate context, rather than by trying to control their people” Reed Hastings

Firstly, there needs to be absolute clarity of purpose – shared in such a way that it is relevant and motivating to everyone.  Put simply, why is this thing, whatever it is, needed, and why does this matter to me?  This sounds screamingly obvious but, in most large organisations, clarity of ‘why’ is a rare commodity. Senior management often describe any initiative in ambiguous and often unaligned terms. They rarely communicate purpose. They rarely define context. Yet, to quote Reed Hastings of Netflix “the best managers figure out how to get great outcome by setting the appropriate context, rather than by trying to control their people”.

Clarity and congruence of purpose creates engagement. If messages are muddled or mundane it’s hard to engage as a follower. It’s a big reason that initiatives don’t gain the traction.

Ownership is the source of engagement. It’s actually how most good entrepreneurial businesses do it.

Secondly, ownership must not exclusively rest with the senior team.  Most companies develop initiatives in the senior echelons of the business then launch them on an unsuspecting workforce. There is then a natural pushback. The human reaction is to resist change of any kind. Employees therefore concentrate on why the initiative won’t work. This is a huge waste of time and energy dissipated in negativity and water-cooler dissent.

In order to facilitate a sense of ownership, leaders must instead structure, and allow time for, a process of early involvement from people right down the business before a “launch” is contemplated. Creating a process that is iterative rather than directive creates a sense of ownership. And ownership is the source of engagement. It’s actually how most good entrepreneurial businesses do it.

The value and knowledge in the business sits at the grass roots. And yet we expect all the solutions to come from the top.

So, how many people need to be involved? To achieve absolute buy-in and unstoppable change 15% of people need to feel some degree of ownership through involvement in the creative process. It’s a big change in approach for most large organisations. But the benefits don’t end with the achievement of passionate engagement and adoption of your initiative. You’ll also get a far better solution as pitfalls are ironed out as the initiative develops. As one CEO remarked recently ‘I am always aware that in every meeting I attend I am always the least informed person in the room. And it is the same with all my department heads in their meetings. The value and knowledge in the business sits at the grass roots. And yet we expect all the solutions to come from the top.”

Thirdly, trust is absolutely key to followship. It’s a simple truth that people will not follow where they do not trust or, crucially, feel trusted.

According to neuroeconomist Paul Zak “building a culture of trust is what makes a meaningful difference. Employees in high-trust organizations are more productive, have more energy at work, collaborate better with their colleagues, and stay with their employers longer than people working at low-trust companies. They also suffer less chronic stress and are happier with their lives, and these factors fuel stronger performance”. And he provides plenty of evidence that “people at high-trust companies report: 74% less stress, 106% more energy at work, 50% higher productivity, 13% fewer sick days, 76% more engagement, 29% more satisfaction with their lives, 40% less burnout”.

According to PwC, 55% of CEOs think that a lack of trust is a threat to their organization’s growth.

So, how to build trust in a large and complex organisation? The answer is that eventually everyone in the organisation needs to be involved in developing a new way of behaving. Jeff Weiner at LinkedIn talks about the necessity of a whole organisation learning the skills of compassionate management.

Trust is actually the most contagious of viruses

In a large organisation this sounds terrifyingly onerous. But trust is actually the most contagious of viruses.   Most businesses, like LinkedIn, have found that you start with a discrete and manageable group and through a process of engagement, education and coaching transform their beliefs and behaviours.  With consistency and support, the trust bug spreads and once 15% of people in the organisation are working with compassion the change is unstoppable,

In his book ‘Trust Factor: The Science of Creating High-Performance Companies’. Paul Zak identifies eight factors that build a high trust environment which can be summarised as: offering frequent praise and recognition; setting clear expectations and holding everyone to account on these; allowing maximum autonomy and encouraging self-management; being open with information; demonstrating care and investing in personal and professional growth; and encouraging complete authenticity.

For followship to take root, organisations need to fundamentally rethink their whole top-down, command and control methodology and instead build an organisational culture based on ownership and trust and with a clear and agreed purpose providing clarity ad context.

The simplest and most entertaining representation of how followship works in any human community, and the dramatic and unstoppable impact of getting this right, is best understood by googling ‘shirtless dancing guy’ (do it now if you are not one of the 4,500,000 to have already done so).

The skills of leadership are critical in today’s complex and ambiguous business world. But it is not enough. To create real engagement, agility and velocity right across the organisation it’s time we thought much more about the skills of followship.

If you want to know more about followship and a new approach to business agility you might enjoy this film from TheEthWord. Or do get in touch jrosling@contexis.com @jrosling.


Entrepreneurial businesses do not trust their bank. True? Threat or Opportunity?

It is said that most business owners don’t believe that their bank understands their business or, worse, even cares about them. Is this even true? And if it is, is this a crisis – or an opportunity for the banks that get this right?

We brought together top entrepreneurs, leaders from the main lending banks as well as from insurgent ‘challenger banks’, academics, journalists and thinkers in a no-holds-barred debate to get to the truth, find out what entrepreneurs really want and what the smartest banks are already doing to deliver it. You can read here the startling revelations and brilliant ideas that emerged from this lively and searingly honest debate.

 


Purpose in business is not just doing the right thing

At a recent event on the concepts of corporate purpose and social responsibility, senior leaders of several large businesses were asked whether their organisations had a clear and inspiring purpose. All responded in the affirmative. And then several talked at length about their support for their local hospice or other charitable endeavours.

Laudable though philanthropy is, it really shouldn’t be confused with purpose. Whilst corporate social responsibility (CSR) might be a good thing and might make the business feel good about itself – and there’s nothing wrong with that – purpose is a far more strategic and commercially powerful idea.

Sustainable Value

[pullquote]Responsible business should be integrated into the fabric of how a business operates, and how its people behave, at all levels[/pullquote]It’s is not about doing the right thing. It’s about building sustainable business value. Done properly, purpose drives sustained commercial performance.

To quote Stephen Howard, Chief Executive of the UK’s Business in the Community: “There is a fundamental difference between … good deeds acting as costly window dressing to spruce up the appearance of a business – and responsible business which is integrated into the fabric of how a business operates, and how its people behave, at all levels.”

Purpose is not therefore about doing good things in the world. It is about a fundamental understanding of why one’s business exists and what it seeks to create in the world. It acts as a ‘North Star’ guiding all commercial strategy and behaviours. And that can have significant commercial impact on the business.

Strategy with Heart

Whilst CSR is about how a company spends its money (responsibly), corporate purpose is about how the business makes its money. It is not about donating to good causes, it is about the fundamental beliefs and behaviours that drive the business. It is not peripheral to but at the very heart of strategy.

[pullquote]Purpose acts as a ‘North Star’ guiding all commercial strategy and behaviours.[/pullquote] Too often in the debate about purpose there is still a focus entirely on staff or customer engagement. That rather misses the point. It makes purpose look like a rehash of an old social responsibility idea. Lord Browne said “CSR is dead” for a reason. And it hasn’t risen again rebranded as corporate purpose.

Yes, like CSR but better, purpose does engage staff and drive talent attraction and retention. 62% of millennials want to work for an organisation that benefits society, and 50% would sacrifice salary for meaningful work, according to Global Tolerance. Staff in purpose-led companies are 40% more engaged, 70% more satisfied and 300% more likely to stay, according to The Energy Project. And, of course, that is a fundamental benefit to the business.

Yes, like CSR but better, purpose influences customer – or at least some customer – behaviour. According to Paul Polman, purpose-driven brands (at Unilever) accounted for half the company’s growth in 2014 and grew at twice the rate of the rest of the business. And customer loyalty too is a fundamental benefit to the business

Far More than CSR

But there is something about purpose that is far more profound and transformational than CSR could ever be.

The real power of corporate purpose is not just that it engages staff or customers, but that it is a single idea that drives everything in the business; and that creates an exceptional degree of strategic clarity and management agility. Purpose has the power to channel and direct all the energy in the business in a single direction, creating the innovation and velocity needed to thrive in an ambiguous and volatile world.

Yet, this is not such a new idea. Research in 2006 by Erik Berggren and Jac Fitz-enz showed that top performing businesses are 20 times more likely to have every manager’s goals aligned to the company strategy. Purpose, when integrated to strategy, simply serves as a powerful and motivating way of creating this alignment.

That may be why purpose-led businesses have a markedly higher asset value than their traditional profit-led peers. In research by Havas, purpose-led companies outperformed a stock-market benchmark by 120%. Burson-Marstellar and IMD came to almost the exact same conclusion in their lengthy study of return on investment over a five year period, concluding that “a strong and well communicated corporate purpose can impact financial performance by up to 17%”.

Yet it is what this research goes on to say that is truly interesting: “the 17% financial benefit can only be reaped if the company integrated purpose with the broader corporate strategy”.

The implications of this are quite profound. Whilst ‘doing the right thing’ as an organisation can have marginal benefits, pursuing purpose as a core driver of strategy can transform a business’s performance and even its shareholder value.

For a short video on this click here


What we can learn from Mark Zuckerberg about communicating a purpose with authenticity

Recently, Mark Zuckerberg published a strong defence of both globalisation and Facebook’s business model. In a nearly 6,000-word letter, he argued persuasively that Facebook thrives under a globalised socioeconomic system, where barriers to information, labor, capital, and products are minimal.

Not everyone agrees with him on that, but it is difficult to argue with his attempt to articulate a purpose for his creation.  There are many examples of research suggesting that purposeful organisations outperform their competitors; but research also suggests that people have a large degree of cynicism toward business leaders who speak about purpose. Senior management tends to have a greater sense of purpose than middle management, who in turn have a greater sense of purpose than lower-level employees. Senior management may try to cultivate a sense of purpose, but employees are generally not buying what they are selling and often regard the stated purpose of their organisation as nothing more than buzzwords and consultant-speak.

In a recent article in HRB, George Serafeim argues that Zuckerberg’s letter offers a lesson in how the purpose of an organisation can be communicated in an authentic way and provides a great checklist.  You can read the full article here and a summary of the checklist is below.

A good statement of corporate purpose should:

Be organization-specific. It needs to bring some clarity or differentiation, compared to other organisations, and to reflect the reality of the organisation.  Vague phrases such as teamwork, leadership and innovation just don’t cut it.

Articulate the how. It needs to provide some clarity on how to achieve that purpose.

Point to a void in the market. Dose it identify the market void that an organisation hopes to fill. What do people desperately want that the organisation aims to provide?

Explain your competitive positioning. Why is your company is uniquely positioned to achieve their purpose?

Provide a way to measure success. How will you know whether your activities are focused in the most productive direction?

Think of purpose as a continuous process. Are you embarked upon a search for mastery?

Admit the challenges.  Admit the challenges head-on, and at the same time describes actions to mitigate them.