“If you have no agreement on purpose, then command and control is all you have left.”
– Dee Hock – founder and former CEO of Visa
VALDOSTA – “Start With Why” is the title of a great book by Simon Sinek. Starting with why is also great advice when you sit down to plan for your organization and your life. But most people will not make the time to do it.
Your why is another way to talk about your purpose. It is your reason for doing everything else in life. In the business world, an organization’s purpose is its greater reason for existing. It is how the organization will make a positive dent in the universe. It is the reason for being beyond making more money. Don’t get me wrong. Making money is a requirement. What we are talking about is having a purpose for making that money.
What I find immensely cool is that purpose-driven companies tend to outperform those without purpose. In the study for his book, “Built to Last”, Jim Collins found that “visionary” companies outperformed the marketplace by 15x. To put that in context, $1 invested in a visionary company during the study period would be worth $9,300 after 64 years. The same dollar would be worth if $415 if invested in the general stock market.
Collins highlighted multiple differences between the visionary companies and their competitors. The clearest differentiator was an adherence to a core purpose and core values in the visionary companies.
There are also studies on the returns of “conscious companies” and companies that are “great places to work” that show returns from 3 to 8 times that of the general stock market. This stuff works.
How could adhering to a core purpose and core values lead to outperforming your competition? The answer is culture. An organization’s purpose and values drive the culture of the organization.
Peter Drucker was one of the foremost business thinkers of our time. Drucker famously stated that “culture eats strategy for breakfast.” He didn’t mean that strategy is unimportant. He meant that a bad culture will kill a great strategy every single time.
A culture is the set of beliefs and norms in an organization that directs behavior. It’s like character for an individual. Individually, we make decisions that we feel are right, but we are also influenced by our peers. This is why our parents always told us to not hang out with the wrong crowd. Our beliefs are influenced by those we spend time with.
A well-defined purpose, vision and values are the “true north” for an organization’s culture. The culture requires constant reinforcing, but everyone can always look back to the purpose, values and vision when making decisions. Deviations from cultural norms are discussed in the context of the purpose, vision and values. Rewards and discipline are based on the outcomes achieved and how those outcomes were achieved.
A dysfunctional culture kills trust and the ability to get things done. A strong, cohesive culture attracts the right people, builds trust and creates an environment where the right work gets done. That is why culture eats strategy for breakfast. You need a great strategy. You need a great culture to implement the strategy.
Because culture can feel so soft and squishy, we often skip over it when discussing strategy. That is why we made a free course available to help you get started. Consider it homework for your year-end planning. The course is called “Values Driven Leadership” and you can find it at https://valuesdrivenresults.com/resource-library/.
As always, you can reach me at 229.244.1559 if I can help in any way.
Curt Fowler is President of Fowler & Company and Director at Fowler, Holley, Rambo & Stalvey. He is dedicated to helping leaders create and achieve a compelling vision for their organizations.
Curt is a syndicated business writer, keynote speaker and business advisor. He has an MBA in Strategy and Entrepreneurship from the Kellogg School, is a CPA, and a pretty good guy as defined by his wife and four children.
