trust Archives

17% of your people would sabotage the business given a chance but it’s the 83% who don’t care enough to bother who should worry you

*Gallup

What does managing corporate risk mean to you? In most large organisations, particularly financial services ones, it’s mostly about processes and oversight structures designed algorithmically to detect fraud, prevent safety violations, or predict and circumvent human error before these end up as a crisis.

Culture, more than rule books, determine how a company behaves

Of course, it makes a sense to manage risk actively. Cock ups and criminality trash value and even destroy companies. But process is a small part of the picture. Everyone knows it’s people that cause the problem. We even have a name for it; ‘risk culture.’ But if that’s true, it’s also people that prevent bad stuff happening, or at least act swiftly to limit the damage when it does.

In other words, the beliefs and behaviours of employees either expose you to risk or save you from it. As Warren Buffett says “culture, more than rule books, determine how a company behaves.”

But the general view is that people are pretty weird and unpredictable. Certainly, most organisations seem peculiarly unable to get them all pointing in the same direction.

Yet, it turns out that something over 90% of people in your organisation are remarkably predictable. And the rest you can probably do without.

over 90% of human beings in a typical organisation are motivated not by self-interest but by a sense of joint and meaningful endeavour.

Chuck away your preconceptions about carrots and sticks and the theory of the rational actor and the evidence is pretty compelling. Once their basic needs for comfort and safety are met, just over 90% of human beings in a typical organisation are motivated not by self-interest but by a sense of joint and meaningful endeavour. Call it purpose, if you like. Of course, if you choose not to provide that sense of shared meaning, or you choose to undermine people’s sense of safety, people will default to self-interest. That’s fine if you want people to perform purely simple binary tasks. But it’s deeply ineffective if people have discretion and agency in what they are doing. It’s also a horrible way to avoid risk.

Which is why a clear and authentic purpose, at the heart of strategy and the lived experience of employees, resolves a lot of the problem of a poor risk culture.

Health check: operative words in the sentence above are ‘authentic’ and ‘lived’. This is not a quick fix. It’s not about ‘having’ a purpose and sticking it on all the mouse mats (do they still make those?). One thing that surprised us in our research across global companies was the extent to which organisations can achieve high purpose recognition amongst employees and still leave them entirely untouched in how they feel and behave. It’s abundantly clear that, in truly purposeful companies in which purpose is engaged in driving strategy and supporting human performance, purpose is truly alive in the experience of everyone in the business.

The key question therefore is ‘if that’s the key to effective risk management, how do you create a lived and experienced purpose?’ Our research shows that genuinely purposeful companies seem to have three key attributes embedded in their cultures that turn out to be critical in managing risk.

People care because they belong

Firstly, these companies exhibit a culture of ownership and responsibility that makes people, at every level, care because they belong. They own. Which means when something damaging happens or is likely, they care enough to do something about it because, emotionally, it is theirs. Emotional ownership appears to have a direct impact on both engagement (do I care?) and autonomy (enough to do something about it myself). And the easiest thing to feel ownership of is a purpose to be proud of.

They can articulate what the organisation believes in

Secondly, these organisations have in their purpose a clear articulation for what the organisation believes in, that this is inspiring to people whilst also being credible and congruent to what the business does for a living. And, critically, they have a commitment to authentically apply that purpose in how the business behaves and how decisions are made. That clarity of purpose cuts through confusion and guides how people behave and how decisions are made, right down the organisation, with laser-clarity and with real velocity. That means when damage occurs people are more likely to know how to respond and do so quickly.

They have built an enviroment of trust and compassion

Thirdly, and most critically, they have built an environment of trust and compassion. Which means people feel able to act for the good of the company and not to keep their heads down or protect their position because they fear ridicule or blame. In every company we have assessed, a big difference in trust is one of the key discriminators between a company where purpose is lived, against one where it is stated.

And critically, these cultural factors appear to work together.

I’m clear about why we do what we do, I’m proud of it and feel responsible for its success, and I’m not afraid to act on it to protect it and see us succeed.

Purpose is not a statement. It’s a living culture based on clarity, trust and ownership. If you don’t invest the time and energy in creating these cultural underpinnings to your purpose it will have minimal impact on your people. And that matters a great deal when it comes to managing risk. If I don’t really get ‘why’, if I don’t feel I belong or if I feel scared I’m spectacularly unlikely to bother to do much about it when I see a risk of harm to the company or respond quickly and in the right direction to reduce the damage.

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Image from rawpixel.com / Markus Spiske

Yellow not with happy face ticked in front of group of people

Purpose, not profit, inspires companies to outperform

How do you know if purpose is working effectively in your culture. And if it isn’t, why not?

The single-minded purpose of business for the last 50 years has been simple; as exemplified in Milton Friedman’s maxim, it has been to generate profits for its shareholders. And it has been a spectacular success.

82% of wealth goes to just 1% of the population

Spectacular that is if you are an asset owner or senior corporate executive. Wealth has undoubtedly been created. But its concentration has been extraordinary. According to Oxfam, 82% of all the wealth generated in 2017 went to just 1% of the global population. It’s equally extraordinary that the consequences of that inequality were not foreseen.

As Paul Polman asks, “why should the citizens of this world keep companies around whose sole purpose is the enrichment of a few people?”

The tumbril or the mob?

Polman may not be threatening the tumbril or the mob but something just as terminal, if not as abrupt. And that is the creeping disillusionment and disengagement from businesses and brands by the societies they serve and the people they employ. In terms of disillusionment, according to Edelman, just 52% of people globally now trust business to do what is right. And as for disengagement, only 13% of people feel their work is meaningful (Gallup).

Just 52% of people globally now trust business to do what is right

Far-sighted business leaders see the threats and are responding; seeking to build businesses that hold to a purpose beyond shareholder return. A purpose that seeks to also create value for employees, consumers, communities and planet. This is not CSR. Nor is it reputation management. It is bringing a social purpose to the heart of business strategy. Surprisingly, this is nothing new but simply a return to the principles of business as a servant of society and the common good first articulated by Adam Smith.

A new model for capitalism?

According to Andrew Edgecliffe-Johnson, writing in the Financial Times (Jan 2019), this shift to a more holistic view of the purpose of business 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”. In Edgecliffe-Johnson’s view, this 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”.

Society is demanding that companies, both public and private, serve a social purpose.

That is quite a claim. Certainly, it is the moral duty of business to serve society and not just the narrow interests of shareholders. Even Larry Fink, at the head of the bastion of capitalism that is Blackrock says “society is demanding that companies, both public and private, serve a social purpose.” But is this just a moral argument? Could doing the right thing actually be more than that? What if pursuing a pro-social purpose not only benefits society and planet, not only supports the wellbeing and fulfilment of employees, but actually enhances business performance and value creation?

Where’s the beef?

Larry Fink goes on to say “to prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” This idea – that purpose creates performance – is rapidly becoming mainstream. But hold on. Is there really any evidence that this is the case? And, more importantly, can it be shown precisely how this process works in real businesses?

There is scepticism that the full impact of something as nuanced as purpose can be measured. Metrics are “the soft underbelly of the ESG movement,” warns Martin Whittaker, chief executive of JUST Capital.

Yet, the need exists if this is genuinely to be ‘a new world view’, as envisaged by the FT. EY’s Chief Executive, Mark Weinberger, predicts that the metrics around social and people performance will someday be as important to the Big Four as financial audits are today. But “nobody has yet devised a way to measure purpose that is as simple as the bottom line of a profit and loss account”.

Metrics around social and people performance will someday be as important as financial audits are today.

Yes, it is possible to measure purpose

It was to address this deficit that a global group of entrepreneurial practitioners and leading academics, led by Cambridge and Plymouth universities, has been working over the last three years. Specifically, this team aimed to answer two key questions: Is it possible to measure purpose; to create robust metrics of purpose impact? And, if so, can an empirical model show exactly how purpose works to trigger human and organisational performance and reveal where that impact is blocked?

At Contexis, we’ve always been fascinated with what drives human motivation and productive culture in organisations. Specifically, in the differences between agile, entrepreneurial businesses and scaled, legacy corporate ones. All of our careful observation of the differences fundamentally come down to one word – ‘purpose’. But not in the way you may think. It’s not about having a purpose. But what you do with it.

Yes, the best agile, entrepreneurial businesses are obsessively clear about why they do what they do. But that’s not the whole story. They also exhibit a set of specific cultural attributes that activate purpose to drive startling levels of human motivation and performance. And exactly those same cultural attributes are often suppressed in most scaled businesses – stunted by time, complexity and legacy.

It is these insights that form the basis of a new Model devised by the Universities with robust metrics that seek to establish reliable correlation and causality to show exactly how purpose is driving organisational cultures.

This is not a subjective, external view of purpose, nor is it based on proxy measures. It seeks to provide a clear metric of purpose performance that can be benchmarked internally, over time and against peer comparators. In other words, an Index of purpose effectiveness. It also provides an uncompromisingly accurate view of how purpose is working and where it is blocked in the real business, in real time.

It’s not purpose but its activation that matters

So, what does the Index reveal? It seems clear that an activated purpose galvanises specific positive human beliefs and behaviours. And it is this that results in enhanced business performance. Purpose has the power to maximise both human and business potential. It’s no longer a choice.

Employees who consider their employer to be purposeful are between 25% and 100% more positive than the median employee across a broad range of performance attributes. Think about that for a second; those people who believe you stand for something more than short term profit are up to twice as effective as the average employee. These people are, of course, more engaged. But they are also more autonomous, more open to ideas, more compassionate and more joyful. They are far clearer on strategy and make decisions faster. They are also around 50% less likely to quit their job. These are the people you really want in your business.

What triggers purpose is principally trust.

The key question is what characteristics in the organisational culture activate purpose to allow for these performance gains – and what is missing when purpose is suppressed. The answer is a combination of powerful human motivators, most particularly trust and emotional ownership. In other words, what triggers purpose is principally trust.

The honest conversation that transformed the humanity of a global Bank; and grew revenue by 15%

An example of this is provided by a major European Bank. The Bank had made purpose a top priority for its 150,000 people, and its stated purpose was well received in internal surveys. Yet it made little difference to engagement scores.

What had long been thought of as an engagement problem that could be resolved through driving purpose was actually an issue of fundamental distrust.

The leadership team couldn’t understand why purpose was not ‘working’ and decided to use the Index to find out. They were shocked with what it revealed. What had long been thought of as an engagement problem that could be resolved through driving purpose was actually an issue of fundamental distrust. The Bank’s Purpose was quite well understood. It just wasn’t believed or trusted.

The Index showed that less than 25% of employees really believed the purpose the Bank served. And, whether in terms of engagement, innovation, strategic clarity or happiness, those with a strong sense of the Bank’s purpose dramatically outperformed their peers. On the other hand, a sizeable minority of employees felt negatively about the Bank’s purpose. These individuals, concentrated in middle management, underperformed dramatically, particularly in terms of whether they trusted the Bank and its culture, whether they felt a sense of responsibility for its success, or understood and believed in its strategy.

The analysis was clear. There was nothing wrong with the Bank’s purpose. It just needed to be activated through a fundamental focus specifically on rebuilding trust, particularly amongst middle managers. The Bank took up the challenge, embarking on a structured programme of open conversations led by each team leader or Director.

Positive beliefs and behaviours jumped by an average 33%

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; the negative purpose group had shrunk to less than 10%, whilst the high purpose group now represented over 50% of employees.

Most extraordinary of all, in a wholly surprising and unintentional consequence, revenues in the pilot teams had increased by an average of 15% in just six months. As the Director in charge of the pilot commented,

“we read these days that Purpose drives performance. In our case, this simply wasn’t true. What drove performance was actually trust in the purpose we serve. And that allowed our teams to take real responsibility for performance. In 30 years in the Bank, I cannot remember an initiative that has had anything like this impact. The commercial return has been extraordinary. But, more importantly, the well-being and sheer joyfulness of our people have been transformed.”

It’s not purpose but what you do with it that counts

What the Cambridge work and the Index results shows is pursuing a social purpose is more than a moral duty. Larry Fink is right to say purpose leads to performance. But pursuing ‘purpose’ without understanding the cultural attributes that activate it is at best a waste of time and at worst fundamentally damaging to the cultural fabric of the business.

The Contexis Index, for the first time, picks up the gauntlet thrown down by the FT to ‘measures purpose in as simple a way as the bottom line of a profit and loss account’. It shows that the key activator of purpose is not a set of words but the creation of a culture of trust and emotional ownership. And it allows organisations to identify accurately and with extraordinary granularity specific communities where the impact of purpose is blocked and to track the impact of interventions or communication on these individuals and to adapt these in real time to maximise the change and build cultures that are meaningful and productive.

As the director of a FTSE Pharma / Healthcare found

“this has fundamentally changed how we think about our people and their motivation. The clarity it’s brought has been extraordinary.”

By undertaking this analysis, companies also join others around the world in supporting important research into how purpose drives organisational performance 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 this important research please get in touch.

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

90% of CEOs don’t believe their business is moving fast enough to survive

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

‘Most big companies won’t have the velocity to see out the decade’. Survival tips from the ones wearing the running shoes.

90% of CEOs don’t believe their business is moving fast enough to adapt to the changing world. And that raises a mass of questions. 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?

The life expectancy of a S&P 500 company is down to 15 years!

Whilst CEOs may be right that their business is not moving fast enough, it may not be as bad as they fear. In most cases 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

Entrepreneurial thinking actually has very little to do with scale or age

A big part of what drives agile business is a compelling and engaging purpose which is authentically and consistently held in the organisation. For purpose 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 know this and have spent a great deal of time, trouble and money creating and communicating a clear purpose. They believe it’s the key to driving the agility in their people, their leadership and their cultures that they need to survive in the fast-paced and ambiguous world they face. They believe that a clear purpose will engender behaviours of alignment and engagement in their people, clarity and velocity in their management, and openness and creativity in their cultures. These are the hallmarks of the agile, entrepreneurial business they seek to create.

For purpose to have any impact, it must be credible and congruent to the activities of the business. It must also be absolutely authentic.

And most are finding it’s making not a jot of difference to the behaviours in the organisation; “we’re just not getting any traction from our purpose” as one C-Suite said to me recently. There is a big gap between the purpose at Board level and the experience of employees and customers. Just why is this?

Entrepreneurially-minded organisations achieve agility not by having a purpose but what they do with it.

Agile, entrepreneurial businesses just use purpose in an entirely different way. A way we find can be replicated in almost any organisation to bridge the gap and actually harness all the power of legacy (that currently burns itself up in internal nonsense) and point it outwards to create velocity for the company.

Our experience of these agile and entrepreneurially-minded businesses reveals a clearly defined set of drivers within their cultures that are the secret to bridging the Purpose Gap.

Inspiring leadership helps. Purpose should be inspiringly and credibly led. But what the business believes about itself and how it behaves are more important.

The first major difference in these organisations is a strong cultural assumption of TRUST. These cultures tend to be open, compassionate and creative rather than inward looking, fearful and controlling. In more traditional cultures based on control, people are instinctively distrustful of the purpose and 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. There is no mystery to this; as Jeff Weiner of LinkedIn says, it can be taught. There is also nothing soft or altruistic about it; creating trust is a major driver of exceptional productivity and efficiency. And, as LinkedIn has discovered, the rewards of creating Cultural Agility in terms of building cultures that are innovative, open and always learning can be extraordinary. To find out more about creating agility through building a trust culture read here.

There is nothing soft or altruistic about creating trust; is a major driver of productivity.

The second major driver of entrepreneurially-minded businesses is 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

Contextual Management creates clarity, adaptability and, above all, velocity in management decision-making.

Is there any proof to support these observations?

Actually, yes. So convinced are we that purpose drives performance we wanted to prove it. So, we’ve spent two years creating a measurement methodology with Cambridge University and others that provides the metrics to definitively prove that purpose drives performance. But that’s not enough. We also need to show how this effect works and measure the correlations and causalities between the cultural attributes described above. We need to show how these cultural factors activate and unlock purpose. So that any company can replicate the cultural systems of the best entrepreneurial businesses and start to develop a more dynamic and agile culture. You can find out more about that work, and how you can benefit from it today, here.

It’s easy to agree that purpose is a good thing. With the life expectancy of a S&P 500 company down to 15 years, it’s 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 drivers of trust, ownership and context muddle, distrust and cynicism will persevere in middle management and purpose will not take root. 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.

Kindness in business – there’s a thought.

A great watch even if you have less than two minutes to spare.

Have big companies forgotten that they are just a collection of human beings?

In order to iron out all inefficiencies and all risk, businesses have become driven by their processes and their people have become disconnected.

How can a company use Purpose – become more Human – to reconnect their people?

two woman jumping on the street during daytime

Turn pressure, stress and conflict in business into productivity, innovation and trust

“The ability to deal with people is as purchasable a commodity as coffee. And I will pay more for that ability than for any other under the sun.”

J D Rockerfeller

There’s a simple technique to turn pressure, stress and conflict in business into productivity, innovation and trust.

Here’s some good news. It is perfectly possible to make yourself and your people dramatically more productive. To turn conflict into creation, pressure into progress, breakdown into breakthrough. And make everyone a great deal more joyful in the process.

But first you have to accept a fact that is deeply shocking to most highly educated and skilled executives and professionals. A fact that it took me about 5 years to digest.

What you know has surprisingly little impact on how good you are

The fact is that very little of our commercial success has anything to do with technical knowledge, skills and expertise. It may suit us to believe that our value to our organisations and our clients lies is in our expertise. But it’s not wholly true. In fact our brilliance may be damaging to our effectiveness. And that could be costing us a lot of money.

Research by the Carnegie Institute of Technology shows that only 15% of financial success is due to technical knowledge. 85% is due personality and our ability to communicate, negotiate, and lead (what they call “human engineering”).

Our brilliance may be damaging to our effectiveness

Consider this, Nobel Prize winning Israeli-American psychologist, Daniel Kahneman, found almost everyone would rather do business with a person they like and trust rather than someone they don’t, even if the likeable person is offering a lower quality product or service at a higher price.

Could all that investment in skills training be a waste of time and money?

There are broadly three areas of skill in a business: technical, commercial and human. We invest incalculable amounts of time and money in training our people, at school and in business, in technical and commercial skills and almost no time at all in developing their abilities in human engineering. And yet that is what accounts for 85% of our success. Skills training is valuable. But we’re missing a trick if we focus on technical expertise to the exclusion of the human.

And there’s another problem. Even where we do spend time and money on helping our people understand themselves and other people, most of the tools we use actually get in the way of taking any practical action. We are told that the first step in understanding others is to understand yourself. The problem is that the personality tools we use are so complex that people spend even less time thinking about others because they have so much more complex ‘insight’ into themselves.

The difficulty in applying the tools that are supposed to help in this area result in little change in people’s behaviour. And this is particularly so in the way they are experienced – very often away from, and not directly related to, real business environments. Which means that, when the pressure comes on, any learnings are swiftly overwhelmed and made irrelevant.

We’re missing a trick if we focus on technical expertise to the exclusion of the human

After all, when did you last apply the learnings from that latest psychometric analysis when the proverbial hits the fan and you and your team are up against crisis, pressure and the clock?

Surely, the key to true dynamic skills is the ability to apply techniques in real time and under pressure.

People’s response to pressure is key to understanding how to improve human dynamic skills

That is, after all, what happens in elite sport. This is how the ‘process of coaching’ works. Firstly, you help a person learn a new technique, then you put them under pressure and see if they can still execute the technique. Then it is called a skill. In a game, if they can execute this skill for the benefit of another team member then they are called a player.

In business we give people lots of techniques but most of those techniques are lost when pressure is applied. No execution. No real players. 15% of the potential value.

The learning is that people’s response to pressure is key in understanding how to improve human dynamic skills, reduce friction and increase productivity. This may sounds like a whole new layer of complexity, on top of ‘personality types’ etc. But it isn’t. And nor is it new.

J D Rockerfeller said ‘the ability to deal with people is as purchasable a commodity as coffee. And I will pay more for that ability than for any other under the sun’. Perhaps he knew instinctively what the Carnegie Institute of Technology proved many years later.

Our response to pressure is predictable. And that unlocks the puzzle.

And we have an ally. Our own psychoanatomy. People’s response to pressure is entirely predictable. And that means there’s no requirement to learn complex psychometric types which are hard to remember and apply. Some simple tools can be applied in the moment, in real times of business stress, to understand and engage with others under pressure. And that really is understanding human engineering.

Modern neuroscience has shown how our brain has developed over time. Most interestingly, how the neocortex (thinking and language brain) has developed. But there’s one area of our brain that has seen no upgrade in millennia. And that’s the amygdala. The purpose and the functionality of this part of our brain has not changed. It is functionality we share with all our evolutionary antecedents. And that function is to protect. It kicks into action when there is a threat. When we are under pressure.

New research applies this neuroscience to find out what happens when a person is under stress or pressure in real business environments. Using this, the researchers can codify and predict how people will react. This is rather hard to do in the theoretical ‘observational’ approach of most organisational modelling from Jung onwards.

Of tigers and tight deadlines – the unthinking tyrant within

So, what does the amygdala do when we are under pressure? Firstly, our brain receives a shot of adrenaline to help us respond quickly. It also receives a shot of dopamine to reduce inhibitions that might prevent action. Then the neo-cortex receives a shot of serotonin, basically to help it calm down and thus stop you thinking too much which can be debilitatingly slow. It’s sometimes referred to as ‘the amygdala hijack’.

Our amygdala simply doesn’t distinguish between a real threat and a perceived threat

All of this is fantastic when you’re being chased by a sabre-toothed tiger. But not so good at work when we are dealing with complex pressures – and, most critically, other people. Because what the neural research suggests is that the amygdala simply doesn’t distinguish between a real threat and a perceived threat. Our response to stress, at a physiological level, is the same.

We may be the only species that does not suffer from daily threats to our existence. But instead we have invented the game of business. And in that game an amygdala response can be triggered by anything that is a threat to our reputation or our identity. This perceived threat results in exactly the same neurological drug-fest that occurred when the tiger was getting closer. And unlike in our evolution, when amygdala hijack was an infrequent occurrence, today, in the office, it is happening on a daily basis. And that creates unprecedented stress, friction and dramatically decreases productivity.

Conflict as a spark to leap forward not dig in and stop

So, if there is a neurological cause, is there a neurological answer? The answer is yes. There are four survival strategies triggered in response to an amygdala hijack. These are biological responses and hard coded into our DNA. They are therefore entirely predictable.

When under pressure, some people have a need for certainty and so take charge and tend to dictate. They can come across as arrogant and perhaps uncaring. They love ideas.

Some have a need for a sense of freedom. They need to feel they are not boxed in. They can often come across as impatient and restless. They love relationships.

Under pressure a third group have a need for stability, get their heads down, tolerate things and plough on. They love getting things done.

And finally, there’s the group that have a need for security and tend to hibernate in their office. They do not like to make decisions but do they love getting things right.

Since a person’s response to pressure is relatively consistent and therefore predictable, how to deal with that person is equally predictable. There are simple things can be done differently for each style.

“With only 15 minutes of planning, we got a whole new approach to a Group Board member that we had struggled with for two years.”

In every office environment there is conflict, and that conflict is made worse under pressure. Breakdown between individuals and within teams is common. It’s both incredibly damaging to productivity and not great for mental health. Either way it costs a lot of money.

Yet, now we understand the neuroscience behind the problem, there is a simple solution to breakdown. A clear set of strategies people can learn to apply to unblock relationships, build trust and unleash the power of collaboration. These strategies take less than a day to learn and can be applied to real situations immediately.

Find out more about how Agile Styles can be applied in your own business here.

“Of all the courses in our core curriculum, this has shown the highest correlation with accelerated revenue growth and improved performance. Individuals and teams in every service line have dramatically transformed their results with these tools.”

Katherine Steen, Colliers University Global Director

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

How can you get people aligned round your strategy? How can you speed up strategic implementation?

61% of C-Suite acknowledge that they fail between strategy formulation and its day-to-day implementation. We can learn a lot from entrepreneurial business. And it’s not hard to replicate their play-book.

In his 2015 book Thirteeners Daniel Prosser claims that 87% of businesses fail to execute or implement 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.

It’s not the formulation of strategy that’s at fault. It’s the inability to execute.

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. 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.

How can we bridge the gap between strategy and implementation?

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, I 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

First, understand the ‘Why?’

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.

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’.

Build a culture of trust

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. It 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).

Communicate to inspire

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….

If you enjoyed this article you may enjoy these too:

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

How one word helped an ambitious new CEO reinvent his strategy, transform his team and set his business on a path to a €1bn target

Photo by Steven Lelham on Unsplash

Purpose drives performance. End of…

If you are occasionally frustrated by the sometimes woolly debate about Purpose, you are not alone. It’s made us determined to definitively prove that Purpose-led businesses are better businesses – both ethically and commercially. And to do that we needed to measure exactly how Purpose is working to drive performance in real companies today.

We are determined to definitively prove that Purpose-led businesses are better businesses – both ethically and commercially.

After extensive work with Cambridge University, the University of Plymouth and others we think we’ve cracked it. We think we can now definitively measure the impact of Purpose and, in doing so, help companies to understand how it is working in their business – and where it is not.

We think that this could play a part in promoting a better way to do business. And if that sounds like a useful ambition you can help take this research to the next stage – and, as a bonus, find out how Purpose is really working in your own business.

We know Purpose inspires and engages employees. But, if Purpose is driving strategy it also creates clarity and velocity – critical in today’s ambiguous business world.

Employees who get your purpose perform, on average, 26% better than the median employee

The positive benefits of Purpose are clear in terms of employee engagement and wellbeing. But that tells only half the story. Circumstantial evidence has been around for years that Purpose-led businesses can commercially outperform their profit-led peers. But why? What has not previously been clear is why and how Purpose drives this commercial performance; and the specific pathways that directly link Purpose to the performance of the business.

Without this evidential clarity, it is hard for organisations to understand and fully implement and activate Purpose.

If you can’t measure it, what’s the incentive to change?

That’s why, working with leading researches and academics, we’ve developed an Index to provide robust metrics that reveal how Purpose is working and where its effect is blocked. The idea is to give companies the evidence that will enable them to run their business more compassionately for their people, more ethically for society and more sustainably for the planet. And to design highly targeted interventions and cultural change programmes with a great deal of confidence since they are based on reliable empirical data.

The new Index employs rigorous measurement scales to assess a broad range of organisational performance metrics and links these back to Purpose through a defined set of cultural characteristics. This provides, for the first time, a comprehensive analysis of the drivers of an activated Purpose on organisational performance. The Index provides these metrics, in detail, by demographic (age, sex, seniority, time in business etc.) and location.

Initial results have been remarkable; and remarkably consistent

In aggregating these metrics, the Index provides a single headline measure of business performance in three defined areas of activity; people, culture and management/leadership. Within each of these areas the Index provides a measure of the specific behavioural characteristics that are known to be primary influencers of performance. The Index then measures the critical moderating characteristics of ownership, trust and contextual clarity that are seen to act as pathways between Purpose and performance outputs.

Data for the Index is gathered via a simple on-line Survey or smartphone App taken by all or a sample of employees. The App also offers the ability to ‘pulse’ survey all or specific groups in real time to assess and test changes as the result of interventions or announcements in the business.

And what does it prove..?

It’s early days but initial results have been remarkable; and remarkably consistent whether a small private business or a complex corporate. Purpose drives performance. End of..

Put another way, employees who get your purpose are, on average 30% more engaged, 36% more open to new ideas, 42% stronger in feelings of ownership and self-responsibility and 44% in trust, 29% more joyful – and they perform fully 26% better than the median employee. And the methodology is starting to
show exactly how these impacts can be 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 now we need your help

You can help take this research to the next stage – and, as a bonus, find out how Purpose is really working in your own business

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 very specific types and scales of companies. 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 where it is not. You will also be supporting important research into how ethics drives commercial performance by contributing wholly anonymised data 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 get in touch.

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

Purpose: If you can’t measure it, what’s the incentive to change?

Our ambition is to measure the commercial impact of Purpose and show specifically how Purpose is acting to change human behaviours and drive business performance.

It’s widely accepted that Purpose-led companies are more attractive and empowering places to work. But can it be indisputably and empirically proved that ethical businesses also commercially outperform their profit-led peers? Is a robust measure of Purpose Efficacy possible?

Can it be indisputably and empirically proved that ethical businesses also commercially outperform their profit-led peers?

A clear set of purpose metrics

If it is, it could have a significant impact on promoting a better way to do business globally. It would enable organisations of all sizes to embed Purpose and ethics into their strategy, confident of the long-term benefits to commercial performance and value creation, based on a clear set of metrics and an understanding of exactly how Purpose can drive performance in their specific organisation. The Contexis Index® solves the measurement problem for the first time, providing credible metrics based on the latest academic thinking on the impact of Purpose on human performance in businesses today and showing how this is working so that you can activate Purpose right across the business to enhance staff and societal wellbeing whilst also supporting long-term value creation.

The Index is the result of research into high performing businesses by Contexis and researchers at the Universities of Cambridge and Plymouth.

The Index is the result of research into high performing businesses by Contexis and researchers at the Universities of Cambridge and Plymouth. It employs rigorous measurement scales to assess a broad range of organisational performance metrics and links these back to Purpose through a defined set of cultural characteristics. This provides, for the first time, a comprehensive analysis of where the gaps exist between Purpose and organisational performance. 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 an on-line Survey or smartphone App. Results are provided in a detailed Report with data presented graphically together with detailed analysis and recommendations.

Are you clear as to how purpose is really working in your organisation?

Running the Index through your business will give you a clear understanding of how Purpose is working in your own organisation and where its effect is blocked. It will also enable you to design highly targeted interventions with a great deal of confidence since they are based on reliable empirical data and ‘pulse’ survey all or specific groups in the business to assess their impact in real time.

And in gaining this insight you are also contributing to important global research.

Running the Index through your business will give you a clear understanding of how Purpose is working in your own organisation and where its effect is blocked

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

Photo by Smart on Unsplash

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

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.

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

Photo by David Iskander on Unsplash

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.