The following is an excerpt from What Are Your Blind Spots? by Jim Haudan and Rich Berens
One of the foremost thinkers on purpose in recent history is Simon Sinek, who has published several books and gives an excellent TED Talk titled “How Great Leaders Inspire Action.” According to Sinek, purpose is not about what you do, but it is about why you do what you do.
It’s the big-picture answer to the question, “What is your reason for being as an organization?” Most companies have spent time working on “the what” and “the how” but have not really gained deep clarity on “the why.”
And absent that, you are more strategically vulnerable to not adjust to today’s environment of rapid change. You are also vulnerable to the chance that your people will not have an authentic and meaningful connection to your company, leaving them feeling more like a cog in a wheel.
If you are not sure how to authentically make purpose the driver of your company, try this. Look at any successful person or company in history that you admire and really listen to the conversations about that success. Watch people tell their company story or observe how people passionately discuss what they do. In almost every case, the idea that they are a part of something bigger than themselves will surface.
When Tim Cook, the CEO of Apple, was asked to only commit to those activities that were profitable, he responded by saying, “When we work on making our devices accessible by the blind, I don’t consider the bloody ROI.” That goes for many areas Apple pursues. According to him, the company does “a lot of things for reasons besides profit motive. We want to leave the world better than we found it.”
Apple is one of the most profitable companies on the planet and has been for some time. Cook’s point is not that Apple doesn’t care about profits. But profits are merely the outcome of being a company that is focused on creating unique value for its customers and doing things the right way. Cook knows that is important to him, to the people working at Apple, and to most people buying Apple products. It’s not only the right thing to do; it is actually the smart thing to do.
While a meaningful purpose is important, it’s also crucial to understand that this can raise difficult questions that teams need to be ready to wrestle with. CVS is the perfect example of such a situation. In September 2014, CVS stopped selling tobacco products because such products went against its purpose of helping people on their path to better health. The company understood it would take a significant short-term revenue hit, but the purpose of the company was the main driver.
After a few months of not selling cigarettes, CVS conducted a study of the impact this change had in states where its pharmacy share was prominent. The results were astounding. The company found that tobacco sales in those states across all retailers decreased by 1 percent in an eight-month period. That is a reduction of five packs per smoker and an overall reduction of 95 million packs of cigarettes in those states! That is living your purpose.
While CVS lost significant tobacco sales, the company also gained a lot of respect from many customers and employees because it showed it was serious about what CVS stands for. The jury is out, but we would venture to guess that over a 10-year time frame, this will prove to be a very profitable strategic decision embraced both by CVS employees who feel that there is an authentic commitment to purpose and by customers who show a greater degree of loyalty and trust toward the company.
Purpose ultimately requires great conviction and courage from leaders. Their focus must be on something larger than themselves and creating or fostering that in their organizations.
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About today’s guest contributors
Jim Haudan is Co-Founder and Chairman of Root Inc. Root Inc., the organizational change expert on helping companies create leadership alignment, execute strategies and change successful, build employee engagement, and transform businesses.
Rich Berens is CEO and Chief Client Fanatic of Root Inc. and has helped align leaders at Global 2000 organizations to drive strategic and cultural change at scale.
