Deep Purpose: The Key To A Better World

When tenured, award-winning Harvard Business School professors begin writing impressive books about organizational purpose, people should pay attention.

“I never thought of purpose as another unlock into business that actually could help both shape your strategy and implementation, unlocking productivity in ways that otherwise are unimaginable.”

Those are the words of Dr. Ranjay Gulati, the Paul R. Lawrence MBA Class of 1942 Professor of Business Administration at Harvard Business School. For the past 25 years, he has studied and written about leadership in turbulent times. Gulati’s admission on the concept of purpose was both refreshing and needed.

Gulati’s latest book, Deep Purpose: The Heart and Soul of High-Performance Companies, shows how companies can embed purpose much more deeply than they currently do, delivering impressive performance benefits that reward customers, suppliers, employees, shareholders, and communities alike.

Gulati had been hovering around the concept of purpose for a while, be it with research he was conducting with start-ups or even with his own mother. However, things changed when he began discussing the concept of purpose with the CEO of Microsoft. “It was really a conversation with Satya Nadella [Microsoft CEO] that I saw how large companies at scale can leverage purpose in fundamental ways to drive performance,” he admitted.

Between the conversations with Nadella and additional research, Gulati titled the book Deep Purpose because he discovered that only when an organization goes deep with purpose will it realize the opportunity to unlock value.

“There’s just too much purpose confusion,” he said. “Leaders think of purpose as CSR (corporate social responsibility) and ESG (environmental, social and governance) only, so the idea in the book is to clarify it.”

Gulati introduces an excellent topology of purpose in the book centred on a 2x2 matrix. On the Y-axis is “commercial logic,” and on the X-axis is “social logic.” A “deep purpose” organization goes deep on both logic categories to wind up in the upper right-hand quadrant toward a “purpose with profit” scenario where win-win solutions equate to doing well and good in society.

“What happened over time is that we shifted to solely a commercial logic under the Milton Friedman doctrine of shareholder value,” suggested Gulati. When a company operates with high commercial logic and low social logic, it finds itself in a “profit first” operating mechanism, doing well but failing to do good.

“Businesses optimize on one dimension [commercial logic], and the other dimension was ignored. That business could have a positive by-product of whatever they were doing for their communities, the planet, customers, or even their employees was relegated.”

Gulati is spot on in his analysis. The fixation on shareholder primacy, where publicly traded companies do whatever they can to increase profitability to buy back shares in order to game the market and pad their pockets via stock offerings, is—as author Roger L. Martin has pointed out on many occasions—one of the greatest abominations of leadership over the past 50 years.

Deep Purpose articulates four key benefits of purpose-driven organizations outlined as directional, motivational, relational and reputational.

• Directional: purpose guides the company’s growth.
• Relational: long-term purpose builds trust with all stakeholders.
• Reputational: purpose boosts the overall reputation of the company.
• Motivational: companies that take meaningful action in line with purpose witness increases in employee engagement which fuels productivity, retention, etc.

“We know customers seem to care more about companies that stand for something,” he said, “and they trust them more and are more loyal to them. There’s a reputational brand advantage to having purpose.”

Employees are not to be forgotten either. Gulati points out that leaders ought to become master storytellers of purpose for employees to both understand the context and to get on board. He said, “You’re trying to build an emotional connection with them. They should experience work as an emotional connection, not just a rational, cognitive connection.”

Gulati believes leaders should operate like poets—not solely like management plumbers—to sell the story and benefits of deep purpose in the organization.

Gulati’s favorite definition of purpose comes from Stanford psychologist William Damon. He said purpose is a stable and generalized intention to accomplish something that is at the same time meaningful to the self and consequential for the world beyond the self. “Right now,” he stated, “it’s a wonderful idea for all individuals to think about something meaningful to themselves and also consequential to the world beyond them.”

It is abundantly clear. Deep Purpose is a book that helps cement the evidence. If senior leaders were to operate with deep purpose—leading as poets who motivate and inspire employees to act with meaning and selflessness—the organization and society would become positive beneficiaries.

Watch the interview with Dr. Ranjay Gulati in full below or listen to it in podcast format via the Leadership NOW series.

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Check out my award-winning 4th book, “Lead. Care. Win. How to Become a Leader Who Matters.” Thinkers50 #1 rated thinker, Amy. C. Edmondson of Harvard Business School, calls it “an invaluable roadmap.”