Episode #2: Purpose at Work (Part 1)
Updated: Sep 14, 2020
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What exactly is Purpose, within the context of Conscious Capitalism? How do we know a business is purpose driven? Join us for this episode where we begin delving into the idea of Purpose.
Chapman, B., Sisodia, R. (2015). Everybody Matters. Penguin.
Frankl, V. E. (1984). Man's search for meaning: An introduction to logotherapy (6th Edition). New York: Simon & Schuster.
Sisodia, R., Sheth, R., Wolfe, D.B. (2003). Firms of Endearment. Pearson FT Press.
Freeman, E. (2012). Business Should be Driven by Purpose. Forbes India.
Mayer, C. (2019). Prosperity: Better Business Makes the Greater Good. Oxford Answers.
Timothy: Hey Raj, and welcome back to our second The Conscious Capitalists podcast. Good to see you.
Raj: Good to see you too, Timothy.
Timothy: I love where you are sitting. I hear you are in Colorado somewhere. You have either got antlers or horns growing out of the side of your head.
Raj: That’s right. That’s right. I think it is wood.
Timothy: Oh, really? It’s driftwood!
Raj: No animals were harmed in the creation of this broadcast.
Timothy: Oh, brilliant. Well, that’s really important because what we are going to talk about today is purpose. And what does that mean within the context of conscious capitalism and what does it mean within the context of this mess? So…
Raj: You know, that is a really, really important topic. It is kind of the starting point for all of this, right? I mean, why are we doing what we do?
Timothy: Yeah, I love it. Well, why don’t you start? I mean, what does purpose mean to you?
Raj: Well, you know it is sort of a transcendent value for human beings and it is something, you know, if you define what is a human being, you know. We are defined by a self-interest, of course, self-preservation and so forth. And that kind of was the basis for the wealth of nations, Adam Smith’s book that defined how markets work, right, and that individuals who are free to pursue their own perceived best self-interest will end up meeting each others’ needs. So, certainly self-interest is one of the fundamental human drives. We also have a need to care, which is wired into us, you know. It is not from any selfish reasons, but we just have the need to care. That is just how we are as mammals. And I think if you want, the third drive is the drive to purpose because we are given this extraordinary gift of a human life. All of the extraordinary capacities – nearly divine capacities that we have. And what do we use that for? It is not just for our survival, right? And it is not just about getting through this life, but what is the consequence of this? And then, I think we had some great philosophers and thinkers who helped us understand the power and the importance of purpose. And to me, I always refer back to Viktor Frankl and “Man’s Search for Meaning”, and his fundamental observation. Of course, human beings want to be happy in their lives, but as he said, happiness cannot be pursued. Happiness ensues and is the outcome, true happiness. I mean, you can have pleasure, short-term pleasure, hedonic sort of happiness. But true, deep happiness comes from living a life of meaning and purpose.
Timothy: Yes, I love that word meaning, you know. The idea that maybe we as human beings, we are meaning makers.
Timothy: We are meaning makers with each other and we are meaning makers inside, you know. We want to have a life of meaning.
Raj: Profits cannot be pursued. Profits ensue and they are the outcome of a business that is operating with meaning and purpose. Which means it is doing something meaningful in the world, that it is operating with love and from a place of love, and it grows from adversity. So, I think that some of the same ideas are very applicable.
Timothy: So, tell me a little bit more. I mean, I know we both have personal purposes and they impact our work. You know, my purpose I say is to create and catalyze leaders and organizations that are as human as the people who work in them.
Timothy: And to me, that kind of goes back to the meaning of, you know, of human beings. And organizations exist to support human beings, not the other way around. How about yourself?
Raj: Well, mine, the way I articulate it now is my purpose is to bring heart, healing and soul to business and leadership so that we can build a better world for all. And it has kind of evolved, you know. My purpose, you know, I really was not even aware that one should have a purpose. I don’t think we… probably you did not grow up with that either, right? This is a relatively new idea in the mainstream.
Raj: So, but I had… You know, I was a business professor and I really didn’t have a sense of purpose. But I knew that what I was doing did not resonate with me at a human level. It was a job, and to some degree it was a career, but it certainly wasn’t a calling. I think today that is what we aspire to. You know, your work should be a job of course, pay the bills, but a career it allows you to grow, and also it is a calling. It is what you were meant to do in this lifetime. So, I did not have that. And kind of accidentally, my purpose in a way found me when I was writing Firms of Endearment and sitting in the Poconos with David Wolfe, my co-author, and suddenly having this sort of revelation moment when I was moved to tears just writing about some of the things that these companies were doing for their employees and the families and communities and so forth. So, in a way, my purpose kind of found me in the sense that it made me come alive.
I think it was around June 12th of 2005, I think it was really when that happened.
Timothy: Around June 12th, yeah.
Raj: I think about 2:00.
Timothy: Eastern time.
Timothy: But let’s talk about that in terms of, you know, what does it mean. You know, we talked about purpose. Now we put the word business in front of it and we say business purpose. How does that word business and purpose, how do those fit together in your mind?
Raj: Well, it changes the whole game, you know? We have always thought about business, so for the most part, we have thought about it as just a way to make money, right? Business exists… Like, every other profession exists for some noble ends, right? Lawyers should care about justice, right? Doctors want to heal you. Teachers want to bring wisdom and knowledge into the world. Engineers want to build magnificent structures and so forth. And yet, somehow, we have created this category, at least in the past, where business, all of the inspired people go over there and then the mercenary minded people go over here and start a business, right?
Raj: So, somehow, we removed the soul from there. I mean, it is a human experience just like anything else that you do. And it can be done with a transcendent purpose. And in fact, I would argue that this is the way that we can have the greatest positive impact in the world. The biggest idealists should go into business because that is how they can realize their vision of idealism.
Raj: Steve Jobs said, “I want to make a dent in the universe.” As Bill Gates said, “I want to put a computer on every desk and empower people that way.” – that is a higher octane fuel. Or John Mackey at Whole Foods said we just want to change people’s relationship to food and educate them that what they put into their body makes a difference to their health and the health of the food system and the health of the planet. And all of that just becomes, you know, a tremendous source of power to impact things in a much more dramatic way.
Timothy: I know we have talked about it sometimes in the past in terms of, I think it was from Ed Freedman, you know, the red blood cell analogy. You know, we breathe oxygen and our red blood cells carry oxygen through our blood. It happens. That is like profit. But it is not why we are alive, you know?
Timothy: The money, the profit is important, you know. You need to have it, you know? No money, no mission. And at the same time, it is really important that you have this higher meaning that comes with it, which is what gives that extra juice, as we have said, to a business. Well, how does a business know it has a purpose? You know? I know we have sometimes said that, you know, what is the reason why this business exists that goes beyond just making money?
Raj: Right. Why does it need to exist and why would it be missed if it disappeared tomorrow? What is that unique thing that we do? And a lot of companies are aware of it, but many are not.
Raj: You know? And just like in our lives, there are some people who are kind of born with a sense of destiny and purpose at an early age and there are others who have to wait until a mid-life crisis hits them around the age of 40. And then they said, “Oh my god, my existence feels pretty hollow and empty and meaningless and there must be something more to it than this.” And so, I think I have seen that at companies as well. You know, Whole Foods started with a clear sense of purpose, right? Southwest Airlines in a way started with a clear sense of purpose. But other companies discover that later on and it takes them… You know, Unilever under Paul Poleman, you know, which created a new sense of purpose and completely transformed the experience of what it felt like to work there, to be a customer of that company, to be a supplier to them, to be a partner to them, and to be an investor. It was a dramatic example of purpose at work.
Timothy: Yeah. I also think that sometimes people come and they say, “Well, that’s great. Those are all sort of consumer driven businesses.” And you know, some can often argue that part of what attracts somebody as a brand. And you know, a brand that has a purpose and it is integrated then that is a good thing. It brings it… But I am wondering, you know, the best examples that you’ve seen of business to business companies. You know, I don’t know. Maybe like Barry-Wehmiller for example, speak of the devil, and maybe talk a little bit about their purpose, and…
Raj: Yeah. So, Barry-Wehmiller is a company based in St. Louis which started originally as a supplier to the beer industry. Anheuser Busch is also based in St. Louis. So, they would provide equipment and other things that were used in breweries. That was in the 1880s. But they evolved over the decades into a company that makes machines that make other products. So, today a lot of it is focused on packaging and things like that. So, they make machines that make cardboard boxes and packaging for potato chips, and but even things like toilet paper. So, they make the machines that make the toilet paper. And then a whole range of businesses like that. And now, in their case it is interesting. And this is something I learned when I worked on that book with Bob Chapman called “Everybody Matters.” When I went and visited and saw their business and saw what kind of drove them, and over time they acquired over 100 businesses that are all small manufacturing companies that are somewhat connected to this basic idea.
The common thread there is that they defined their purpose in terms of their people. They said we measure success by the way we touch the lives of people, right. And as Bob said, you know, the machines that we make are necessary and we need all of those products that those machines enable, but that is not what gets us out of bed in the morning. You know, we are here because we want to create a better future for the people whose lives we touch, and their families, and their communities. Those little towns in Wisconsin and Ohio and Pennsylvania and all over Europe now as well who depend on that one company. That is kind of the engine of their economy there. So, their purpose is people, right?
And so, it got me thinking that every business really needs to think about a product-centered purpose and a people-centered purpose, right? And it is like an airplane with two engines. And, you know, ideally you have both engines working. But if you had to pick one – and planes can fly on one engine – you would pick the people engine, right? You don’t want… and there are examples of companies I think that you know that have a noble purpose in the world but are toxic places to work. And that, to me, is not acceptable. You have to start with the stakeholder closest to you, you know. The employees and their families, they are the most vested and invested in the business. And then, of course, ideally, you also have something that you are doing in the world that is very meaningful, too. So, that would evolve over time. But if you have to pick one, it is the people-centered.
So, what that does is it universalizes the idea of conscious capitalism. Because it says you don’t have to… You could be making anything at all, right? You could be producing salt. I mean, you could be producing whatever, but you still can be a conscious, purposeful business because you focus on the people whose lives you touch, right? On all the people – customers, communities, you know, employees.
Timothy: Well, I think it is always interesting. I mean, the question that I often get is, well, you know, like where does my purpose come from? Is it innate in the business? So, you know, why did we start the business? As we started this discussion. There are others that say, well, you know, maybe it has evolved, and we need to discover it or rediscover it and we need to go back and find it.
Raj: That’s right.
Timothy: And then, there is another category that I have seen where they say, well, what would be a good purpose for our company? You know, almost as if they are starting with a blank slate. Now, those people tend to be going to the brand agencies and saying, “Help us identify a purpose that is meaningful.” And that third group, I am often sort of saying, well, I am not sure you are on the right track because it is something that comes from inside.
Raj: Right. Right.
Timothy: It is not something you go outside and petition the world and say, well, what do you think should be our purpose versus it is something that is core to the business itself. It is why we have existed, why we were started, how we operate.
Raj: Right. Yeah. That is the trickier one, as you point out. But there are many businesses, especially given how we educate people in business school and just the whole culture about what business is about, right? I mean, it is a mercenary thing. So, there are many businesses that were started purely from a money-making angle, purely as sort of an opportunistic, you know, thing that people saw. They saw a gap in the market, and they tried to generate profit out of that. So, there are many, many businesses that did start with that. But then, if you look at why did those businesses endure, why did they grow and what made them thrive over time, you often can find that there is some thread there. There is something that they didn’t even realize at a subconscious level that was making that business unique, you know. So, maybe there is something that we can excavate from the history of the business. And then you also find that if you look at where they are and what they are doing in the world today and what the world’s needs have evolved, etcetera, and that it might be then possible to discover a purpose in the reality of what exists today that connects in some way with where they have been in the past, right. But it may be sort of a new source of energy that we have connected to today. You know, something latent within us.
Timothy: Well, you know, that sort of relates a little bit to – I know we have talked about this – Colin Mayer at Oxford Business School. You know, he has a definition that he has of purpose, which he says it is to produce profitable solutions to the problems of the people and planet and not to profit from producing problems for people or planet.
Timothy: So, he qualifies that around profitable solutions to problems, which in a sense is how are you creating value in the world.
Timothy: And he puts a caveat on it, which is, “And do no harm.” And do no evil while you do it. I think that is a good, broad definition of it.
Raj: Yeah. Yeah, definitely. So, it says we need to be profitable so we can achieve our purpose. As opposed to saying, we need to have a purpose so we can make more profits.
Timothy: Yeah, I think that…
Raj: Purpose is not a means to an end. It is kind of the end.
Raj: And profits become a means to that end.
Raj: Whole Foods started as a tiny little store in Austin in 1978 and people loved it and so forth, and… But if they were not profitable, I mean, they were originally kind of a co-op type business, you know, before it became a company. If they were not profitable, then they would not have the capital to invest and grow and become what is now an $18 billion company with 20 million customers and 110,000 employees, right? So, profit is what enabled them to achieve their purpose now at scale. They have transformed our relationship to food in many ways and the way we think about food. And, they have transformed the food system to a degree and changed the way we produce food. So, purpose definitely is what drives them. But profit is what fuels their growth. And so, the two go hand in hand, you know. They are necessary. And that what differentiates, of course, a non-profit and a business.
Timothy: Well, I think what is important in there is that one, we have established the, you know, the value of purpose and why purpose is important. I think the next piece becomes how do we know when a business is purpose-driven? You know, like to me, there are like three or four things you want to be thinking about. The first is, first of all, do you have a purpose statement? So, do you have an intent? Do you have an intent to be purpose-driven? Can you describe what your purpose is? And then, I think the second one for me is that integrated into your business model so that when I look at how you are trying to make profit, I can understand very clearly the connection between purpose, value creation, and how that leads to profitable outcomes? So, in essence, having a purpose alone isn’t enough. But having a good business model is incredibly important. And being able to connect those two, to me, is that next step of relevance. And then there is sort of a third. It is, do we use purpose to govern the business? Like, is there a discussion that goes on when we make a decision? When the Board meets and asks “are we going to invest in this or invest in that”, is the purpose word even in the boardroom? Is the C-suite sort of explaining some big decisions by the fact that it is in line with our purpose? And then finally, to me, is can we start to measure the purpose? And this is where I think some companies are getting a little more precise around, not only do we have a purpose, but we have an ambition for that purpose. And I always find it really interesting. That is your purpose. What is the ambition for your purpose? Do you have a little ambition for that purpose or a big ambition? And as you get into that discussion of the impact, that is where that aligns with the ambition. So, if I have a big ambition, then I probably want to have a big impact. And if I want to have a big impact, how am I going to know? What are the metrics that I ought to be looking at out in the world to see? Qualitative or quantitative, but I ought to be thinking about that in terms of, I have got this ambition for my purpose, for this kind of impact. And then, how do we start to think about measuring elements of that?
Raj: Yes. I think the only thing I would add to that is how we select and develop leaders. That we want people who are innately purpose-driven as leaders. And they are specifically driven by our purpose. So, if I am Patagonia and I am eyeing a new CEO, I want to make sure they care about the outdoors, right, and they care about nature, and they care about our connection to it, being stewards of nature. And if I am Whole Food, I mean, even if I am hiring a Chief Technology Officer, I want to make sure they are a foodie who cares about health, right. And so, they are motivated by the overall enterprise, not just their piece of it, right. But everybody is kind of seeing the whole, right, of what we are trying to do and drawing inspiration and motivation from that.
Timothy: I love that because both of those examples, particularly the Patagonia one, remember we were out there a few years ago and they gave us a day long Conscious Capitalism leadership tour. And one of the things I remember them saying is like, we have on average about 100 applications for each job opening here. So, even if they were exaggerating that by 50% and they only have 50 applications, you know, that is a lot of applications. And that is this virtuous cycle that you start to get into of you have got an inspiring purpose. And then people who then look and they self-select, and they go, “Wow, that is a place where I can really live my purpose.” And we really connect. And now, that is a really powerful combination. And I think there is this virtuous cycle that you want to start – the flywheel of purpose so to speak.
Raj: Right. And so, I think you point out what I was saying. Leaders, but really all hires, right, everybody who comes to work for us should resonate with what we are about.
Raj: As I said earlier, their work becomes not just a job or a career, but a calling. And that the ultimate litmus test of that is if you win the lottery on Friday evening, do you show up on Monday morning, right? Because the work has meaning beyond the paycheck.
Raj: This nourishes you beyond the financial, right? And I think if we all can get to that place, I think the work would be incredibly impactful in society. If everybody has work that is that meaningful to them.
Timothy: I love it. So, that is our introduction to purpose. And I think in our next episode, we will go a little deeper into the whole idea of purpose.