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