How thinking like an entrepreneur could make corporate organisations 26% more productive

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What drives agile, highly productive businesses?

It’s a question that leads directly from the current debate about culture and organisational ‘Purpose.’  It’s a question that has made us determined to understand and measure the impact purpose. And to show definitively whether purposeful companies are really better – both ethically and commercially.

But in doing that research, what we have found suggests that, done right, Purpose might offer even more than that.  It make a significant contribution to addressing the current productivity crisis.

Evidence has existed for years, of course, that ethical, purposeful businesses can outperform profit-led peers. The problem is that no-one has been able to consistently prove why or to empirically measure this effect. And that’s a problem in trying to design strategies for large organisations.

Purpose might offer a significant contribution to addressing the current productivity crisis

We have a 20-year interest in entrepreneurial thinking – as practitioners, lecturers and writers.  This led us to exhaustively examine the key positive attitudinal and behavioural differences of people working in an entrepreneurial business environment as compared to a corporate environment, and the impact these may have on business agility and productivity.  That lengthy research has resulted in a distillation into 9 key attitudinal behaviours which drive business productivity and performance in entrepreneurially-minded business.

The critical question, though, is what drives these high-performance behaviours?

For example, a key attitudinal behaviour of an entrepreneurially-minded culture is a self-identified belief in personal autonomy. And autonomy is known to drive business performance. In a study of 320 businesses by Cornell University, those that encouraged autonomy grew at four times the rate of more traditional control-oriented firms, and experienced one third the turnover of staff.

According to economist Francis Green “the lack of individual discretion at work is the main explanation for the declining productivity and job satisfaction in the UK”. But what fosters autonomy? Our analysis suggests the key source of autonomous behaviour is a feeling of emotional ownership.  And the strongest ownership response in most (particularly larger and more complex businesses) is for the purpose the business serves.

But autonomy is just one of the key attitudinal behaviours of an agile, entrepreneurial culture.

The curse of legacy-thinking

The problem is that these ‘entrepreneurial’ behaviours are, to some degree, suppressed in most corporate organisations.  Scale, complexity and legacy thinking dominate.

There is a ‘gap’ between purpose and people

In our work, we identified a disconnect between the purpose the organisation purported to serve and the beliefs and behaviours of employees. There was a ‘gap’ between purpose and people. And the source of this gap lay in a weakness in three key cultural markers; ownership (as above), trust and contextual clarity.

To further our research, we engaged with leading purpose researchers and academics at Cambridge Judge Business School, Cambridge Psychometrics and Plymouth University. Together we developed and modified the Model with the aim of empirically measuring each behaviour, its source and the relationship to purpose. The academics identified robust academic studies from around the world measuring the performance impact of each of the identified behaviours and drivers.

What did we create?

The outcome to all of this work is a robust, academically rigorous Model that measures the efficacy of purpose in organisations, tracks the degree to which it is driving agile behaviours that we identify as entrepreneurial, and the degree to which, and in which demographic, a gap exists.

Data for the Model is gathered through an on-line survey or smartphone app. The App can ‘pulse’ survey population groups to ‘dip stick’ changes in attitudes, for example following an intervention.  Results and analysis are presented to participating companies in a detailed Report and, shortly, via an interactive dashboard.

And what does it prove..?

The results of the initial companies to take the Index have been remarkable. Put simply, Purpose drives productivity and performance. Activating purpose in an employee group leads to an average increase over the median employee of 30% in engagement, 36% in openness to new ideas, 42% in feelings of ownership and self responsibility, 44% in trust, 29% in joy – and 26% in productivity. And the methodology is usefully demonstrating how these impacts are achieved.

As Rupert Lee-Browne CEO of FX group Caxton observes “Without Purpose, a company can only flipflop around without truly consolidated, effective effort. What Contexis has developed with its Index is a very clever way to measure the impact of Purpose on Performance, enabling companies to really motivate their teams. Contexis Index did it for Caxton!”.

And this is where you come in..

The results have been remarkable. Put simply, Purpose drives productivity and performance.

We are now ready to open the analysis to the next tranche of companies. We have the research funding to conduct a pro bono analysis of a limited number of organisations and we are looking for some specific types and scales of organisations. I’d love to hear from you if you would like to know more.

By undertaking this analysis, you will be joining companies around the world in supporting important research into how ethics drives commercial performance by contributing wholly anonymised date to the University of Cambridge. You will also develop remarkable insights into how purpose is working in your organisation and where it is not.

To find out more about how the Contexis Index can transform the impact of Purpose in your business and how you can help in this important research please get in touch.

To find out more about the thinking behind the methodology you might enjoy this short EthWord film

You  might also enjoy these articles:

‘90% of corporate strategies fail’. Not if you think like an entrepreneur

Purpose transforms performance. But if you can’t measure it how can you implement it?

How one company discovered the source of a 20% increase in people performance

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 can activating purpose, stimulating agility and velocity and fulfilling human and commercial potential in global organisations.

 

Photo by Sean Patrick Murphy on Unsplash


How to make your people 30% more engaged, 29% more joyful and 26% more productive. Easily.

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What powers the performance of the most successful companies on the planet? What do they know that is lost on so many slow-moving traditional organisations?

It’s a question that we have spent the last couple of years researching with leading institutions including the Universities of Cambridge and Plymouth.

It’s a question we think we may have answered.

The purpose gap

That answer, of course, is rooted in the cultures of these organisations. Culture is unique to a particular organisation and takes years to build. But what if the key elements of how agile entrepreneurially-minded organisations behave could be codified and therefore replicated? What if it could be understood ‘at source’?

 

there’s a missing link between Purpose at the top and how it is received in the real business

Yes, it’s about clarity of purpose and that’s nothing new – 90% of CEOs now claim to be actively engaged in implementing or exploring Purpose. But it’s more nuanced than that. In large organisations, beset by complexity and legacy-thinking, there’s a missing link between Purpose at the top and how it is received in the real business.  That gap doesn’t appear in the best entrepreneurial businesses.

By studying the very best entrepreneurial thinking, combined with cutting-edge academic research, we believe we’ve identified why that is. It’s not about having a social purpose – it’s what you do with it.

Our research identifies 9 key attitudinal behaviours which drive business productivity and performance. And, in entrepreneurial businesses, these behaviours appear to be the outcomes of an actively engaged purpose. The key question is what is the source of these productive behaviours – and what is the missing link in more hierarchical, corporate organisations?

 

It’s not about having a social purpose – it’s what you do with it.

It’s clear that these ‘entrepreneurial’ behaviours are, to some degree, suppressed in most corporate organisations.  And the source of this appears to lie in a weakness in three key cultural markers; ownership, trust and contextual clarity. Research suggests that Purpose in the absence of these is unable support the positive performance behaviours typical in an agile culture.

A lack of ownership, trust and clarity creates a gap between purpose and people in the business.

 

And that’s where the Contexis Index® comes in. By understanding the cultural relationship between purpose and performance and codifying this, our research creates a tool that any business can use to transform its human capital and organisational performance.

The Index is a measurement tool that provides robust metrics that reveal how Purpose is working and where its effect is blocked.  It employs rigorous scales to assess a broad range of organisational performance metrics and links these back to Purpose through a defined set of cultural characteristics. The Index provides these metrics, in detail, by demographic (age, sex, seniority, time in business etc.) and location.

Data for the Index is gathered via a simple on-line Survey. Results are provided in a detailed Report with data presented graphically together with detailed analysis and recommendations. This will enable you to design highly targeted interventions to bridge the gap with a great deal of confidence since they are based on reliable empirical data.

And can the gap be bridged?

So far, the results of the initial companies to take the Index, whether they are entrepreneurial businesses or complex corporates, have been remarkable.

Purpose does drive performance. But only where it is activated.

Activated purpose leads to an average increase (over the median employee) of 30% engagement, 36% in openness to new ideas, 29% in joy and 26% in performance. And the results are showing how this activation is achieved and how to bridge the gap between stating a purpose and bringing it alive in the business.

As Rupert Lee-Browne, CEO of FX group Caxton, observes “Without Purpose, a company can only flipflop around without truly consolidated, effective effort. What Contexis has developed with its Index is a very clever way to measure the impact of Purpose on Performance, enabling companies to really motivate their teams. Contexis Index did it for Caxton”.

And this is where you come in..

We are now ready to open the analysis to the next tranche of companies. We have the research funding to conduct a pro bono analysis of a limited number of organisations and we are looking for some specific types and scales of organisations. I’d love to hear from you if you would like to know more.

By undertaking this analysis, you will develop remarkable insights into how purpose is working in your organisation and to what extent the key markers of ownership, trust and contextual clarity are activating purpose across the business.

You will also be supporting important research by contributing wholly anonymised date to the University of Cambridge.

To find out more about how the Contexis Index can transform the impact of Purpose in your business and how you can help in this important research please contact me at jrosling@contexis.com.

To find out more about the thinking behind the methodology you might enjoy this short EthWord film 

 

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.

 

Photo by David Iskander on Unsplash


The awesome productive power of keeping the main thing the main thing

Reading Time: 4 minutes

In his 2015 book Thirteeners Daniel Prosser makes the claim that 87% of businesses fail to execute their strategy each year. The colossal waste in money, energy and simple human joy behind that statistic is shocking. And it reflects the much-quoted earlier work by Kaplan and Norton (The Execution Premium) that 90% of strategies fail to deliver all their goals.

If this is true, just what is going on? How can this be commercially sustainable? How can highly skilled and highly paid executive teams in leading global companies be getting their basic strategy wrong 9 times out of every 10?

The truth, of course, is that they don’t. Both Prosser and Kaplan/Norton are regularly misquoted.  In the shock of the statistical carnage it’s easy to overlook the important little words “execute” and “all of their goals”.

But we still have a problem. And, in an increasingly volatile and ambiguous business world, it’s a fatal handicap to future business performance. It’s not the formulation of strategy that’s at fault. It’s the inability to execute.

According to the Economist Intelligence Unit, 87% of CE Suite say executing strategic initiatives successfully will be essential for their organisations’ competitiveness over the next three years.  Yet 61% acknowledge that they struggle to bridge the gap between strategy formulation and its day-to-day implementation.

Having lost sight of our objectives, we redoubled our efforts Walt Kelly

In most organisations, a huge amount of energy and investment goes into strategy design and formulation. But that’s not where the problem lies. In almost all cases, it’s in an inability to execute that kills the strategy.

It’s a problem of clarity and prioritisation, with a multiplicity of competing objectives paralysing management’s ability to act decisively and strategically.

A problem of engagement, with management, overwhelmed and unclear of priorities, disengaged and unwilling to take responsibility for fear of sanction

And a problem of communication, with line management unable to articulate strategy and align staff behind it.

“Fewer than 10% of employees report that they understood their company’s strategy” Kaplan & Norton The Execution Premium

It’s not a problem you find in the best entrepreneurially-minded businesses.

Over 20 years of working on strategy with both the best entrepreneurial businesses and the biggest corporate businesses, we have observed a fundamental difference in the cultural approach to strategy between the two.  And I believe that difference is at the heart of the costly execution problem in corporate business.

That difference is as simple as this: fast-moving, entrepreneurially-minded businesses actively engage their people at every level so that they not only clearly understand strategy but take ownership of it.

Of course, that’s easily done in a small or flat structure. But this is not just a matter of structure and scale. It’s a matter of human beliefs and behaviours.  It can and does work in organisations of any size. But it requires a complete change of attitude.

Key to this approach is having management first identify and emotionally engage with the purpose that exists behind the strategy. This starts at the top but ultimately needs to happen at every level required to execute the strategy. It’s a radically different approach to the imposed top-down, ‘strategic launch’ approach of most large companies.

“High performance people do better work if they understand the context…the best managers figure out how to get great outcomes by setting the appropriate context, rather than by trying to control their people”. Reed Hastings, Netflix

By first understanding the context (the ‘why’), it’s far easier to take ownership and responsibility for the strategy (‘what’ needs to be done).  By then working through a structured process of prioritisation it’s possible to see with clarity how this can be achieved for that particular management team or business unit.

That resolves the first execution problem of a lack of clarity, with competing objectives paralysing management’s ability to act decisively and with velocity – and that can be critical. As Baum and Wally conclude in their work “Decision Speed and Financial Performance ‘there is a particularly clear association between strategic decision-making speed and subsequent commercial performance’.

And there’s a second feature of entrepreneurial management teams that has been lost in traditional corporate hierarchies; trust.   A lack of trust leaves middle management unwilling to take responsibility for fear of sanction and creates the familiar sclerotic cultures of endless meetings and analysis which are the hallmark of a culture fundamentally unable to take responsibility. After any time spent in a typical UK corporate it will become abundantly clear why high-trust cultures are 50% more productive (Paul Zak).

Clarity of context and a culture of trust also resolve the third problem of strategic execution; communication. If management are confused as to the purpose the strategy serves and unwilling to take responsibility for it, they can hardly be effective in communicating it to, and inspiring, their teams. It’s hardly surprising that, in most organisations, the vast majority of employees haven’t the first idea of what the strategy is – and that’s a major disincentive to effort and commitment.

Entrepreneurial management has long been adept at navigating the kind of volatile, uncertain and ambiguous business world corporate organisations are increasingly having to face. In this new world companies with a desire to survive need to learn the lessons of contextual clarity and trust that allow entrepreneurial businesses of any size to be strategically agile, adaptable and fast.

But for that to happen someone in the organisation needs to take some self-responsibility for changing how things are done. And that will never happen..

 

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 organisation

 

Photo by Josh Spires on Unsplash


Unstoppable Change

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Loving the Eth Word

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Just finished my filmed interviews with the Eth Word (www.theethword.co.uk) “unbusiness-like conversations about values, purpose and leadership”. Great interviewer. I think there were tears..


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Love it when someone makes things easier for us. Thanks @nmatthews for our The Buzz form!


WE BELIEVE

that when purpose drives strategy in an environment of trust, it creates passionately engaged people, innovative cultures and clear and high-velocity management. We call this entrepreneurial thinking. And it leads to unstoppable change.

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