Purpose is a Thing | Is Purpose Working Podcast Episode 1

Posted on Tuesday, October 27th, 2020 at 3:50 PM    


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Back in August 2019, the Business Roundtable—an association of chief executive officers of America’s leading companies—said that the Purpose of American business was no longer to maximize shareholder value but to instead promote an economy that ‘serves all Americans.’ “CEOs work to generate profits and return value to shareholders, but the best-run companies do more,” stated one Roundtable member, Tricia Griffith, President and CEO of Progressive Corporation. “They put the customer first and invest in their employees and communities. In the end, it’s the most promising way to build long-term value.”

A lot has happened since then. Multiple events over the first few months of Lockdown seems to bear out the idea that Purpose really has become front of mind for many corporations right now. To that end, we did what we do: we began to research.

This podcast introduces the Purpose-Driven organization research and hints at the guests and conversations to come this series.  Topics addressed in this podcast include:

  • Why ‘Why we do what we do’ seems to be the best definition of Purpose we’ve found
  • Why ‘cause’ isn’t the same as Purpose
  • Why HR needs to get more involved when it comes to Purpose
  • Some hints on some of the amazing writers, thinkers, venture capitalists and stakeholders coming on the Season
  • Why are people coming together to work?
  • The need to look at all the axes Purpose affects—leadership, people and systems
  • A new concept: the stake-giver
  • A quick progress report on RedThread’s ongoing Purpose research exercise
  • What Purpose in a Pandemic looks like



This season will culminate in a live online gated experience (a webcast) where we'll review and debate what we've learned. Seats are limited. Secure your place today, over at


We're also thrilled to be partnering with Chris Pirie, CEO of Learning Futures Group and voice of the Learning Is the New Working podcast. Check them both out.

Season Sponsor

Global enterprises rely on its collaborative online learning platform to build high-value capabilities that result in real impact, with its customers working to deliver powerful, engaging learning that activates deep skill development, from leadership to design thinking and digital transformation, as well as driving measurable business outcomes.


Chris Pirie:
You're listening to 'Learning Is the New Working' a podcast by the learning futures group about the future of workplace learning and the people helping define it. Welcome to this first episode in a brand new series called is purpose working. This 10 episode project is a collaboration with red thread research. And if you're not familiar with their work red thread research works to connect people, ideas, data, and stories to provide leaders with high quality unbiased insights on people related practices.

Chris Pirie:
We're very grateful for the team at NovoEd for their sponsorship of this season. Global enterprises rely on NovoEd's collaborative, online learning platform to build high value capabilities that result in real impact with NovoEd, you can build powerful, engaging, learning that activates deep skill development and drive measurable business outcomes. NovoEd will host a live webinar later in the season where Danny, Stasia and I will reflect on what we've learned, the implications for you as learning and talent teams and take your questions and comments live to reserve your seat, to get your questions in, and find other bonus materials. Please register now at

Stacia Garr:
I'm Stacia Garr. I am co-founder and principal analyst with red thread research.

Dani Johnson:
And I'm Dani Johnson. And I'm co-founder and principal analyst with red thread research.

Chris Pirie:
And I'm Chris Pirie. The host of learning is the new working in this season the three of us will meet and interview top talent leaders from some truly iconic companies, as well as startups and advisors from a range of business sectors. And we'll also learn from authors and subject matter experts who are documenting the rise of the purpose economy. Our goal is to understand the origins and the impact of this growing trend, especially for talent management and for learning leaders and professionals. We'll also share insights from the research report recently published by the red thread team and explore how purpose aligned organizations have managed people operations through the turbulence and disruption of 2020.

Recording of J&J CEO Alex Gorsky:
We looked hard at this issue about the purpose of the corporation.

Chris Pirie:
That's CEO of Johnson and Johnson, Alex Gorsky, who at the time was head of the business round table. The Business Round Table is a nonprofit association in the United States whose members are CEOs of major companies, including leaders like Jeff Bezos from Amazon, Tim cook of Apple and Mary Barra of General Motors. The BRT, as it's known promotes public policy, that's favorable to interests. And it also promotes broader public policy initiatives such as the no child left behind program in 2019, the BRT famously redefined the purpose of a corporation, putting the interests of employees, customers, suppliers, and the communities on par, if not ahead of shareholders.

Recording of J&J CEO Alex Gorsky:
And I think it's fair to say that we'd been criticized externally about the statement that actually had dated back to 1997, that really was predicated upon the primacy of the shareholder and that being your primary responsibility, ultimately the shareholders as a corporation in our country. And at that time, we, as a board discussed that and said, you know, let's let's test that. Should we change? And, um, and I think prior to that, we were always actually a bit defensive, I think saying, well, it was implicit in that statement that in fact to do that effectively, you needed to look out for other stakeholders. But I think as we went through the process, we realize words do matter.

Chris Pirie:
Words do matter. I love that. This interview followed the statement published, rather publicly, by the BRC last year, it was signed by 200 CEOs. It stated that the group seek to move away from the notion of shareholder primacy, a concept that had existed in its principles since 1997 and to move towards a commitment to all stakeholders, specifically the statement, articulates commitment to the following. One value to customers, to investing in employees, three, dealing fairly and ethically with suppliers, for supporting the communities in which they work and operate and five generating long term value for shareholders. Now, this is hardly a radical collection of change-makers, but as such, I think it's very illustrative of a profound shift in how we all hold corporations accountable for how they execute their business and the impacts that they have on society on the planet and on their workforce. This last one is the trend that we explore in this series, the surge of interest on the topic of personal purpose and purpose driven organizations, as we'll learn in this series is a shift at both a personal and corporate level. It's a fundamental shift about how people perceive our relationship to work and the organizations that employers.

Stacia Garr:
I'm Stacia Garr co-founder of RedThread Research. And I was the author on the original report, but as our listeners will find out throughout this whole podcast, we're all learning so much. So I feel like now that we're a little bit farther, it that is less relevant than ever.

Dani Johnson:
And I'm Dani Johnson the other cofounder of red thread research. My role as Stacia writing that report was to argue with her a lot, to be sure that everybody's point of view and to make sure that she knew her place!

Chris Pirie:
We're all about a critical discussion to get to the truth. That's a, that's a good part of the process. And while we're talking about process, I'd love to know, you know, we've recorded a few of these interviews now you're sort of into the podcasting mode. How does podcasting relate to your research methods? How is it different and does it compliment it in some way?

Dani Johnson:
Yeah, it really does. We find ourselves doing lots and lots of interviews. We do the quantitative research for sure, but the qualitative research really adds the stories and the color to the, to the research that we do. And so as a natural part of the research process, we talk to lots of people. This is the first time we've actually recorded some of those conversations. So that is a little bit different, but we, we definitely talked to a lot of people.

Stacia Garr:
Yeah. And I would say that we do record the other calls, but it's usually we put a voiceover of this is for note taking purposes. It will not be shared with anyone. And whereas clearly the intention of the podcast is, is quite different. So I think that creates a somewhat different dynamic. You know, there's been plenty of times where, but in some ways I think because people know it'll be public, it can force them to be a little bit more prepared and a little bit more thoughtful in the conversation is something I've observed. So I think there's benefits to both the kind of private interview, if you will, as well as the podcast in helping us kind of get to better truth and answers and stories as Danny mentioned.

Chris Pirie:
And we've had, as I said before, we've already recorded a few, a few conversations and I have learned so much. I really shifted my thinking on the whole topic, Dani, Stacia. Can you share with us some of the people that we're going to be talking to through this nine, 10 episode series?

Stacia Garr:
So we're going to be talking to, or we've actually already talked to Aaron Hurst who I think that was just a fascinating conversation because he wrote about this topic numerous years ago, six years, six or seven years ago. So that one was, has been really interesting. We're also speaking to leaders at Johnson and Johnson, Sanofi, S&P Global, Medtronic. We have an investor from GSV in here as well as another author, which I'm really looking forward to Dan Pontefract.

Chris Pirie:
Yeah. I think we've really strive to get a combination of people who are sort of thinkers on the topic and writers on the broad topic and then practitioners, we've got a mix of chief learning officers as well as talent leaders and other HR practitioners. And then, yeah, we also talk to venture capitalists in this space. So can I ask a question about red thread? Does red thread have a purpose statement?

Dani Johnson:
I don't, I don't know that we have a very clearly stated succinct mission statement.

Stacia Garr:
I'm not sure that we have yet. I mean, I think we're about to launch this new website and we've spent some time talking about what we believe in because that's going to actually be front and center on the site. And when I tried to succinctly describe what we do, I talk about the importance of bringing together a community of data, driven people to make decisions in organizations that can help better people's lives. I think that's the closest articulation, but we haven't written that down. And, you know, we had an interview interviewee this morning who talked about a constitution of sorts that the purpose statement was like a constitution. So I don't think we have a constitution yet, but I think we do have pretty good idea of what we think our purpose is.

Chris Pirie:
One thing that we're going to do differently in the season differently from, from the learning is the new working perspective is we're going to have a live podcast towards the end of the season. Once we've shared some of these conversations with people where the three of us will kind of share our learning so far and we'll invite listeners to join us and ask questions in real time and give their feedback as well. And I'm very excited for that because we've never done that before. That's, that's breaking new ground.

Stacia Garr:
That is, it's kind of like a podcast. I think we're, we're billing it as a webinar and I think folks should know that if they sign up early, they can submit questions that are much more likely to get answered than if they sign up late. So it would be great if I can sign up.

Chris Pirie:
Is a really good point. That's a really good point, Stacy, thank you for keeping me detail oriented and on, on the details. Great right into my conversation with station now. And we're going to go into the backstory of why you decided to pick up on this topic and do the original piece of research. I'm really looking forward to this set of conversations with you. It's going to be fun to collaborate.

Stacia Garr:
Most definitely. And thank you for the opportunity for the collaboration, Chris.

Chris Pirie:
Great. I thought it might make sense in this first episode to ground people in the work of red thread and specifically in this piece of research, you're doing around purpose driven organizations. So I'm going to spend the time having the conversation with you cause you're leading this piece of research. And then afterwards we'll do the we'll bring Danny in and we'll, we'll talk about, I guess, what our aspirations are for the whole series. So is that going to work and great. Awesome. Well, let's go, you launched a piece of research in March, I think on how to create a purpose driven organization. What prompted you to do that?

Stacia Garr:
Yeah, I think it was a number of things. You know, we at red thread have taken this perspective and in really you can even hear it in our name that there are kind of different elements that, that need together in terms of how organizations are working today. And we see these different elements coming together around this topic of purpose. And I should say before we launched it, it was just at the very beginning of COVID. So we didn't even know that was going to play into this, but some of the, kind of the enduring trends that we were seeing is, you know, we're, we're seeing a greater focus on automation, AI, et cetera, and, people asking, you know, what is it that an organization provides and enables similarly, we know that some of the contributions that people make and are different from, from machines and, some of the changes that are happening through that automation, some of those contributions are really tied to what is it that we, as humans are trying to do and trying to achieve. And then similarly, we've seen a decline in some of the social structures that exist that have traditionally allowed people to express their purpose outside of work. So we're seeing less participation and quite frankly, less trust in institutions like churches and some of the community structures and people are looking to fulfill that through work.

Stacia Garr:
So I think all of these, threads kind of came together to help us ask the question, which is why are people coming together to work as an organization, not, necessarily as contractors or individuals, why do people banding together? And ultimately it's not just about a paycheck, because you can get a paycheck in many instances, as a contractor, it's really bad, the organization coming together and individuals coming together to fulfill their purpose. And so that all of those things coming together as it was a big part of why we wanted to do this work.

Chris Pirie:
Well. I mean, it turns out to be very prescient because the world has changed a lot on a, on a number of those on a number of those parameters quite radically since then with, with the lockdown and the repercussions of the global pandemic. The was a statement in 2019 in August of 2019 by the business round table organization here in the U S that got a lot of coverage and it was about the purpose of the organization. And I think, the fact that they made that announcement, seems to be a reflection of a lot of social pressure on companies and organizations to essentially, you know, actively serve a broader stakeholder community than this organization's earliest stance was an emphasis on shareholder, but this idea isn't really a new one. Is it, this idea of the purpose driven organization has been around a while.

Stacia Garr:
Yeah. It's been around a long while. You know, when we began this research actually picked up a book called I've got it right here. Sorry, the, the the enlightened capitalist and that's by Jim O'Tool down at USC. And what he does is a really nice job of kind of mapping this history of social driven enterprises through really since the beginning. And he starts with Robert Owen and, James Cash Penney. So JC penny in the 1840s and kind of brings it forward to today. Actually his, his third one is as an organization. We'll probably talk about it, which is a William lever, which ultimately ended up being Unilever. But it's a concept that's been around for a long time. And, and I think the thing that stuck struck out to me when I was doing this reading was that in these organizations that have focused on this historically, a lot of the, purpose driven approach was a result of the leaders or the individual leader at the top.

Stacia Garr:
And once that leader left the building, as it were, or kind of step back as in the case of James Cash Penny, the organization kind of fell apart. And so the other, the corollary to that was that organizations that these leaders built tended to have these self-reinforcing systems. And so it took a little while for those organizations to fall apart because once the leader stepped back one small piece would get then get tucked away or get chipped away, and then another piece, and then another piece, but within, you know, five years or so, this incredible, in many instances, social institutions, social focused institution, that was also in many instances, also far more profitable than their peers. They kind of all fell apart. So that's part of what made me really interested here is this it's a system. If you're going to have something that's sustainable, it can't just be individual leaders. So of course they're very important.

Chris Pirie:
That's interesting. In the UK where I'm from, there is a rich tradition of these kinds of companies as well. One example is companies that were run by Quaker people like, Cadbury's probably a brand that even people in the US have heard of and Rowntrees. They're both took a very altruistic approach, especially to their employees, but also to the society at large. So we are going to dig into all of this in the season. It's really interesting stuff, but I heard, you know, there are leadership implications and lessons we can take from that. As well as systems people, systems, implications that we can take as well. What hypotheses did you develop for the research and how does it relate to the, the broader work that you do at red thread that might be a good thing to touch on?

Stacia Garr:
Yeah, so some of the hypothesis, and probably the leading one was that there is an important role for HR here. When we began the research, we started by looking at what others were saying about purpose driven organizations. And what was interesting was that a lot of the published content was published by those who were in CSR parts organization, maybe in marketing, maybe in a related foundation, et cetera, but you didn't see necessarily a lot of focus from HR, which is interesting. Because a lot of the work that we do at RedThread is writing about HR, and we know that a lot of HR leaders are not shy about sharing what they do in general. So to kind of see that gap with regard to purpose, you know, made us say, huh, like our hypothesis is HR is really important here, but we're not seeing it show up necessarily in the literature.

Stacia Garr:
Now, remember I said that we started this research before COVID and I think, you know, is the economist rightly pointed out COVID is HRS pandemic. Whereas the last one was finances or finances, recession prices. Thank you. And so we've, we started to see a lot more of HR related practices resulting from her posts or excuse me, being connected to purpose, but that's very different. So anyway, so that was one big hypothesis. I think a second one was that there are different areas of talent management that really all the different areas of talent management are critical and creating that self-reinforcing system that enables people to fulfill their purpose at work. Those, what I assume would be the primary two, and then I guess the third one, which we have yet to see if it holds out. But I feel pretty confident is that organizations have these changes is focused on being purpose driven is here to stay. And that is not just the latest fad. That's come along and, you know, we're seeing that test, that hypothesis tested every day. Right now we have with COVID and the Pandemic.

Chris Pirie:
This is a fascinating lens to look at this whole thing through, how were these so-called purpose driven organizations performing through these very, very difficult times on a number of different ways? I think the other thing that I got from your, from your research from the kickoff of the research was, this aspiration for essentially finding codified repeatable approaches and practices around this, is that something that you want to emerge from the study?

Stacia Garr:
Absolutely. You know, I don't, you know, you've asked a question which I didn't answer directly about what RedThread does, but one of the things that we do is find leading edge practices that we think can be adopted and incorporated into organizations approaches. And so finding those repeatable practices is absolutely an essential part of, of this research, as well as the best of our research.

Chris Pirie:
I thought it might be a good idea now to just talk about some terms here. I know when I came to this topic and read your research and did some reading around the topic, there was a lot of things mixed up and conflated in my mind about what a, what a purpose driven organization is. And you know exactly what's at work here. There's a number of terms. So just tell me what purpose means to you.

Stacia Garr:
Yeah. So as we think about purpose and a purpose statement, it's we define it as a clear and concise statement that inspires people to deliver value to multiple stakeholders. So employees, customer, supplier, shareholders, and communities. But I think probably the more concise answer to question is it's why I, or if you're talking about the organization broadly, why we do this. So what is our reason for existing? And I think actually I believe it was John Mackey may in many others have made the point is that it can't just be to make money. Cause there's lots of ways to make money, but those don't tend to be fulfilling. And so this point about purpose, is it something that is fulfilling to us as humans? Not just some pie in the sky language or for purpose of just making money.

Chris Pirie:
One of the things you talk about in the, in the first publication around this study was mission, vision values and purpose statements. I think a lot of people get confused about those things. I'm sure there are different interpretations of what they all mean, but why is it important to sort of tease out purpose from mission, vision and values?

Stacia Garr:
Yeah, I think, so we look at purpose as a unifying concept amongst them all. And so a vision is something like where we want to go. Our mission is what we do now. And in the future, we talk about values as being what behaviors we want to uphold and principles is what beliefs guide our behavior. So the, all of those are pulled together by purpose. And what is it? Why do we do this? And I think it's important because it's easy to say, this is how we do something. Now that might be part of your mission for this is what we want. One do a general direction, but the why the real, why to think that is critical to understand, to really influencing all of those other things. It's really the starting point of it all.

Chris Pirie:
I also read a book by Aaron Hurst, who is the founder of the Taproot Foundation. He's done a lot of thinking about purpose, both in the context of organizations and personal purpose as well. He takes time to differentiate purpose from cause, and, and just goodness in general. And I think coming into this myself, this is where I got hung up a lot. And I think there's a lot of brand advertising and organizational statements around that are causal. For example, we support the eradication of breast cancer if you're Delta airlines, but purpose is not quite a good cause is it? It's a little bit more than that.

Stacia Garr:
Yeah, it is. I think it's, it's more, it's deeper than that. Back to this whole idea of purpose being underlying, if it can be causes that connect to it and make sense to, to connect to it. But it's not a single issue item if you will.

Chris Pirie:
I like it. I like it. It's like, it's why we do what we do. And that might be, that might have an impact on certain causes that we care about, but that's a subtly different thing. I think for me I was definitely getting tripped up around that a little bit and it was helpful to sort of.

Stacia Garr:
Yeah. And I think the other component of that is that we, this is hard, right? Like if you, if you even take what you were just saying, Chris, and bring it to your own life, why do I do what I do? Or why do you do what you do? That's, that's a hard thing to answer. And so then to ask an organization to answer it, I think it can be easy to instead insert a cause or an action or, or something else that is a little bit less core and central. And so I think that's part of the reason why there can be the confusion, but also it's why having that clear sense of purpose is so important because it gives a, a why to everything else, why do we support breast cancer? Why do we do these other things? And I think that can create greater clarity, even though when you get started, it can be a hard thing to do.

Chris Pirie:
If sometimes the cause can be kind of totemic, you know, like sort of basically exemplify the good that we want to do in the world. And if it's aligned in some way with our own mission or challenges, we, you know, our employees face, then, you know, maybe it's part of telling that purpose story. But I think it's important to know that not the same thing. Also what Aaron talks about is, he talks a lot about personal purpose, like finding your own purpose. We're obviously talking here about organizations and the purpose of organizations. How do those two dimensions relate?

Stacia Garr:
Well in the organizations that we see that are the best at purpose, they are also good at helping their employees understand how that organizational purpose connects to their own individual purpose. And so there's two components of that. One is the organization knowing, and being very clear about whether their purposes and then them helping employees understand their own purpose and the connection between the two. So in some of the organizations that we see, they will even you know, they'll offer workshops or resources to help people understand their own purpose and to get a deeper understanding of what the organization's purpose. But if we, if we go back to what I said at the beginning, which is, why did we do this research? How big part of this is really, why do we gather together in an organization to work? And if we all understand that it's a purpose and a purpose that is greater than just ourselves and just making money that is a compelling reason to come together. But with purpose driven organizations and organizations in general, it's critical. I think to make that connection between that larger purpose and the individual's purpose to create that greater alignment.

Chris Pirie:
While we're talking about organizations and organizational structures, can I throw a few organizational types at you that again, coming into this, I found a little bit confusing. So what is the difference between an NGO and a social enterprise? Are they purpose aligned organizations? What's an impact business, what's a B Corp? How do they differ from traditional, traditional commercial enterprises? Is there anything useful you can share with me on how to think about those different types of organization that all seemed to be in some way aligned to a purpose or maybe even a cause?

Stacia Garr:
Yeah. I mean, they're all kind of a do gooder organization types. Right. But I think that the key is, is that it's a spectrum right. In the spectrum in terms of what is it that they are primarily designed to do versus what do they use as part of their guiding framework for how they do their work? So if you think about where you started, which is a charity that's on one end of the spectrum and, and, they're traditionally a nonprofit as are many of those examples that you mentioned, but their primary purpose is to do that work first and foremost, with, with less of a focus on kind of the economics of returning value to shareholders specifically as you move to the right. And so I would think, you know, about, like you said, we've got charities and we've got NGO's and nonprofits, and we've got social enterprises, et cetera.

Stacia Garr:
We're, starting to change some of the 'how' of that work, they can still be all purpose-driven, but they may approach it in a bit of a different way. And generally, there's maybe a difference in focus on the different stakeholders who are within those groups. So you go to the right of the spectrum, moving into things like the B Corps and then eventually 'For Profit' organizations, here's increased focus on making money but, but then increasingly a focus on profitability. So what I'm trying to say here is that in particularly with a B Corp, you're looking at how well they meet certain standards with regard to how they impact those stakeholders that I mentioned at the beginning. And, and yet those B Corps are still making money. They are focused on making money just as others are. And on the far right, I would say is, is those who are maybe the most focused on shareholders versus kind of the broader stakeholder model. But I think point is, is it's not either or, it's all just kind of different levels and different blending of the focus on shareholders versus broader stakeholders.

Chris Pirie:
Yeah. So I think the way I see it is that you've got, you've got this balance between being focused on a purpose, a why you do business that's, that's something other than just returning shareholder value. And then a number of different sort of frameworks, I guess, they are ultimately legal, and business frameworks that people people fall into. The B Corp, I think is a relatively new construct. And I guess it's all in a way heading towards probably one of the hardest things around this, this topic, and that is how do we, how do we measure it, right? How do we, you know, we're really clear on how to measure the return on shareholder investment. And there is a GAP accounting standards, and there is legal framework in the U S , it's a Delaware corporation standard that are, maybe a hundred years old, but as you start to shift your focus to be more purposeful around a range of stakeholders and communities, we're left wanting a little bit in terms of the measurement models, aren't we?

Stacia Garr:
Yeah, we are, we are wanting, you know, there's a lot of different ones out there, when's the focused on the UN sustainability, here's the well known Triple Bottom Line of profit ,people, and planet. Umo lots of different measurement approaches, but I think the, there hasn't been that same definitive sense of this is exactly how we measure purpose and the impact on all those different stakeholders.

Chris Pirie:
It'd be interesting to see how various stakeholders and even in the context of people and talent, how those measurements are evolving.

Stacia Garr:
I think that, I mean the Triple Bottom Line was going around generally as a concept in a way I think in the late eighties, early nineties. So, you know, that, that has been been there in challenge that we have is how do you actually measure for instance, your impact on the environment or, or your impact on the people? And I think on the people's side, you know, if you think about kind of the rise of, of measuring things like employee engagement and now increasingly employee experience, we're getting a bit better at it. When, when you're talking about just the people within organization, employees who are both, we call them both stake givers and stakeholders, because they're both enabling the organization as well as receiving some of the benefits. But I think it gets a little bit more murky when you start to think about, we both know many organizations have a lot of contractors working for them, Google, at least I live in Silicon Valley and Google is famous for kind of keeping on for a certain amount of time. And then, you know, and so, and, and there's been, there's been all sorts of discussions about people who are, or maybe janitors or cleaners or others new, right? Like, so how is an organization impacting those people who are not necessarily employees? I think that that's an area that has yet to really be looked at effectively. Same thing with your suppliers. You mentioned that at the beginning. So I think that on employees, we may be getting a better handle on some of these things, but I think there's still a lot of other people to use the triple bottom line framework, who we could get better at measuring the organization's impact on.

Chris Pirie:
And I think what's really exciting about it. We're going to talk a little bit about, you know, unique lens that we have to look at this through the covert pandemic, but all of this stuff is really in play and really in the press at the moment I'm thinking about Uber just came out with a proposal around a, kind of a new model for employment that was between full time employee and gig worker aimed at obviously the criticism that people who are doing gig work and not getting the benefits that they need. The other dimension. I think there's a lot of discussion and progress on is carbon footprints and how companies can really be accountable for the carbon that not just they, but their products and customers might produce in using their product. So I think there's, these debates are really starting to happen in public. And I think that's part of this whole momentum around the notion of the purpose driven organization.

Stacia Garr:
Yeah, yeah, absolutely.

Chris Pirie:
Let's Drill into the research project itself a little bit. You published a lit review in April. What, what is a lit review and how does that fit into your research?

Stacia Garr:
When we did research at RedThread, we have a standardized process where we start with a premise, which is really what is it that we're looking to research in and why? And we actually try to engage folks who are in our network to understand what they care about the most. So that's step one. And after that, we go, and we do a comprehensive literature review. So for those of you who are masters students, or were master's students or PhDs, it's similar to what you do. So we go out and read and read 50, or has it ended up being in this report. We ended up reading close over a hundred different articles for this research to really understand what the concept is, what people are thinking and what our contribution could be with the research. And so the literature review that you read, Chris was us stepping back and saying, okay, if all these articles that we've read, what are the top 10 that we think people really ought to go and read to understand this topic?

Stacia Garr:
And we've provided a brief summary of them and links and all that good stuff. The next step in the process, actually to do the research. So in this instance, we then went out and, and connected with folks. You know, I mentioned at the beginning that we did this research in the context of the pandemic and that this has been we've seen HR and purpose show up a lot more. The, the downside for us was that as a result of that, we got fewer interviews and we were hoping for, but the flip side, this is people were very generous in sharing their time broadly. So a lot of the work in, in stories that we included in the article are based on podcasts or specific interviews that we were able to access. And so then we pulled it all together and said, okay, well, what are, what did we learn? What did we learn about the systems and processes that are in place? What did we learn about how important systems even are and what are some general example, but then also some you would call real world threads. So real world examples of organizations, particularly in the context of coven. Cause we pulled all that together to the research that we will be publishing.

Chris Pirie:
Great. What kind of organizations were you able to study and engage with? Can you name names.

Stacia Garr:
In the study we've got I think, I think we've got 40 or 50 different organizations actually named within the report. So there's the ones that many are probably familiar with. So, so a Patagonia, which has been very forward thinking and out there with their approach Unilever, as I mentioned earlier in certainly, Ben and Jerry's, which is a subsidiary of theirs that they acquired. But that still remains kind of on the frontline of purpose and in that conversation. But there's a lot of organizations in there that you may not think of as being traditionally purpose focused. But yet they are. So you mentioned Accenture, we mentioned shod with the insurance company, Dannon the yogurt company Johnson and Johnson, with it's focus on health, certainly is purpose driven Slack. We talk about talk about USAA which has a purpose to serve the armed forces here in the US, PayPal, Salesforce, and in a whole number of others. I mean, it's really, I would say a lot of fortune 1000 organizations that in brands that people know which, which goes to where we started earlier, which is around this, this business round table announcement, you know, I think part of the reason that that was, you deemed to be acceptable is that a lot of organizations where he's doing a lot of the things that were in the business round table statement. So it didn't seem like a significant deviation, but certainly what we find when we look for organizations that have strong practices.

Chris Pirie:
Can we just talk a little bit about this pandemic? I mean, everything is strange and unusual right now. What did you sort of hypothesize that the pandemic might do to your research?

Stacia Garr:
Yeah, so, well, we have, what we've talked about in the research is that, you know, this is an opportunity for companies to, you know, come, they either walk the walk or to be revealed as a cause you said purpose washing. And we have seen a lot of that. You know, one of things that we didn't necessarily expect to see, but the pandemic brought up for us was this opportunity to see organization food kind of blending the lines between them, between themselves. Really. So if you think about, if you recall back at the beginning of the pandemic, Chris, when we had this terrible shortage of ventilators, we thought organizations, you know, GM and Ford and others that were basically opening up parts of their organization because they had the mechanical knowhow and the ability to spin up processes quickly, but they didn't actually know how to build ventilators.

Stacia Garr:
So they're partnering with other organizations to do that. And then there were just endless examples like that, where we saw organizations kind of taking a desire to help others and kind of putting their money where their mouth was. So I think in many instance, in a way that I think is remarkable we saw organizations really kind of walking the walk particularly at the beginning. What I think is interesting and what I'd love to talk about more as we do this series, Chris, is, are they continuing to do it? We're four months in, we're all certainly tired of COVID and the pandemic. And so are they continuing to have that openness and collaboration that we saw? So many articles about it, beginning of the handout.

Chris Pirie:
It's gonna be a great test. And I think you know, a lot of people came out and said, a lot of CEO's came out and said, you know, we're not going to fire people. We're even going to pay for a gig workers. There's a number of bold statements that were made. And then I think there's been some, obviously a lot of difficult statements as well that have been made. So we will, I'm looking forward to drilling into that. And I think it's an important theme for the series for us is, is this, is this a marketing thing or is this, is this really a different way of running companies, just an opportunity station to talk about what you hope to learn from the study and how it will be valuable for the red thread, subscribers and members. And I think thread heads is the term that I like this to people who follow your work well, what do you, what do you hope to be able to give them?

Stacia Garr:
Yeah. So in this, in this study, we talk a lot about kind of the different aspects of talent management that you as an HR leader can either control or influence. And that's one of the things we actually even have in the report, which things are in your circle of control, which are in your circle of influence. And so our hope is that in the short term, to give HR leaders a way to see where they can plug in and make a difference. So not all of these practices are gonna work for everybody, obviously. And particularly, you know, in the midst of all the change that we know organizations are going through right now it may not be something that they can, you know, make a massive change to, but it gives you a trail of place to start. And then our hope is, is to kind of continue to build on this with more quantitative data in the future.

Stacia Garr:
More stories that help tell this, this concept of purpose, because at red thread, you know, we believe that there is a incredible community of HR practitioners out there who want to use data to make their organizations and then make their people's lives better. And so this really feeds into that idea of what can we do that benefits both, both people and the organization. So that's, that's really, you know, where this research starts. Now, if you kind of zoom farther back out, we've done some other research on things like creating a responsive organization. So an organization that can handle disruption and change. And it's kind of amazing that so many of the practices that we found on this completely different study, this purpose driven organization study how much overlap there is in the practices with that responsible work study in this study. And I think it just speaks to, we're kind of, we're moving in this direction of distributing authority, building respect, creating greater transparency, encouraging growth, and ultimately building cultures of trust that enable people to do to align and fulfill their purpose and do their best work. So I think I kind of see all of these converging for folks. And hopefully in particular, between these two studies, we're able to help build up what this new model is going to be of successful organizations in the 21st century.

Chris Pirie:
I think that's really important. Because I think when I think of purpose, I think of a, it's kind of a whole system thing, right? I mean, we're going to drill in on the people side because that's what we do and that's what we're interested in, but it purposes really good example of something that sort of has to be deep in the DNA and in all parts of facets of how an organization works.

Stacia Garr:
Yeah, definitely.

Chris Pirie:
While we're on this, I always ask people on the podcast. Stacia why they do what they do. I always I didn't know it at the time, but I was always interested in people's sense of purpose. And now I know why I ask it. Why do you do the work that you do?

Stacia Garr:
That there's an opportunity to help people understand through data, how they can make better decisions. And HR is an incredible leverage point within organizations. So bringing that data, those insights, making it approachable, not, not academic, you know, I've done enough research studies to have a PhD, but I don't. But, but making it approachable and something people can grasp onto and say, yes, I can do that. I can use this insight to make my organization and the people who work here as a lives better. And if I can be a part of that lever that enables people, then I will fulfill my purpose. Is this else I should have asked you.

Stacia Garr:
One thing that we asked ourselves a lot in the research was, do you have to have leaders who are fully on board with all aspects of this or can this be kind of a bottoms up thing? And, you know, I think obviously as I mentioned the beginning with the historical context, having leaders at the top who we can help provide the direction and reinforcement is critical, but is I think hopefully through the report, people will see, there are small things that you can do. They're thinking about your learning program programs, excuse me, and how they're structured and how they connect to people. Thinking about the self assessments that you might be able to build into leadership opportunities or career development opportunities. All of that I think can enable these small steps along this purpose driven journey. And so I just like to encourage people who may say, Hey, I don't know if our senior leaders are really going to buy into this to say, okay, start, start small, but just start.

Chris Pirie:
A lot of the conversations around this and the writing around this is about leaders. And one of the things that I've learned in talking to smart people on the podcast is that culture, yes, leaders are important in setting culture, but there's, they're not all of it. They're not all of it by a long way. Culture comes from the grassroots. It comes from, you know, manages. It comes from even the customers and the, and the physical environment where places operate. And so I think that's a really interesting, interesting point. And it gets back to you know, Aaron Hurst's thing about there's your individual purpose and then there's organizational purpose. And when those things align in some way, then all kinds of goodness happens.

Stacia Garr:
I can tell you kind of a funny story, Chris. Just with the last moment we have, and that is when I first moved to the Bay area who was in the middle of the last recession and, and I actually was a taproot consultant. So I didn't know who Aaron Hurst was, didn't know any of that. But when I came, I had a set of skills and I knew I wanted to, to try and make an impact. So I, you know, the taproot foundation basically allows skilled individuals to volunteer their time for nonprofits. So I went in and I helped redesign a performance management system for a very large museum here in the area. And I did another, that of work on recruiting or directors, how to recruit for four directors for a different nonprofit. And even as I went to start my, my last job and, and work full time, even as I started MBA part time MBA, I still did that work because to your point, just now that alignment of purpose and skills and that sense of I can provide something unique. Yes, I'm getting something out of it, but I can provide something unique that will make a change is so powerful. Great story.

Chris Pirie:
Hey, we're going to close the curtains on this interview segment, and then you're going to miraculously appear again, And we're going to deconstruct our conversation. Do you think Danny will have, do you think Daniel will have interesting things to say about what we talked about?

Chris Pirie:
You can listen to a debrief of this episode, including information on purpose technology vendors, a discussion on purpose washing and a special request for Michelle Obama, from Danny by heading over to where you can also pick up a transcript of this episode and all the rest of the episodes in the season. As we published them, we're very grateful to the team at NovoEd for their sponsorship of the season. Global enterprises rely on NovoEd's collaborative, online learning platform to build high value capabilities that result in real impact with NovoEd, you deliver a powerful, engaging learning that activates deep skill development and drives measurable business outcomes. You can access the research that we discuss here, and a ton of other great research and insights at And you can subscribe to the podcast. Of course, at

The Purpose-Driven Organization

Posted on Tuesday, September 22nd, 2020 at 6:28 AM    

The flurry of significant events in 2020 have built a sense of urgency to act for the greater good of humankind. As a result, we’ve seen innumerable organizations rise to the occasion — acting with a greater and broader purpose, serving many stakeholders, not just shareholders. We wanted to understand better what is happening now, what we can learn from purpose-driven organizations’ approaches in the past, and what HR’s role is in making organizations purpose-driven.

Click on the image below to get the full infographic. As always, we would love your feedback. If you have thoughts, please share in the comments section below!


The Purpose-Driven Organization: HR’s Opportunity During Crisis & Beyond

Posted on Tuesday, September 15th, 2020 at 12:18 PM    

The flurry of significant events in 2020 have built a sense of urgency to act for the greater good of humankind. As a result, we’ve seen innumerable organizations rise to the occasion — acting with a greater and broader purpose, serving many stakeholders, not just shareholders.

We wanted to understand better what is happening now, what we can learn from purpose-driven organizations’ approaches in the past, and what HR’s role is in making organizations purpose-driven. To that end, this report answers 4 questions:

  • What is purpose, and how does it differ from other related terms (e.g., mission, vision)?
  • What is HR’s role in creating a purpose-driven organization? What can it control and influence?
  • What does the employee experience look like at a purpose-driven organization?
  • What are some of the purpose-driven practices we’ve seen in response to significant current events?

This research is the culmination of more than 6 months of research, with updates and insights specifically targeted at organizations managing through COVID-19 and the social justice movements of 2020.



The Purpose-Driven Org: What the Literature Says

Posted on Thursday, April 16th, 2020 at 2:17 PM    


We’ve been living in a COVID-19 world for quite some time now, and many people are feeling the effects. Companies cut more than 700,000 jobs in March and the total of unemployed workers now exceeds 16 million.1,2 Suppliers are scaling back on production,3 and the consumer confidence index declined in March to 120.0 as compared with 132.6 in February.4 In many ways, there's a sense that we just need to survive this time before we can get “back to normal.”

But in so many other ways, this crisis is providing an opportunity for individuals and organizations to contribute more to others than they ever have before. Many leaders right now assume that companies have an obligation to their workers and communities – even to humankind – to figure out what they can uniquely contribute to help others get through this crisis. And what’s more – to get it to them for free or at cost. (Click here for an epic list of companies contributing to humankind.)

This crisis has brought purpose-driven organizations – those organizations with a responsibility to deliver value to its stakeholders, not just shareholders – into the spotlight.

Given this dynamic, it's even more important to understand how organizations inspire people and make purpose-driven decisions. Our hope is that we can capitalize on this unique moment to better understand how leaders and HR professionals can leverage purpose to navigate the current crisis and continue to add value well beyond it.

To that end, we have begun a study on this topic for which we're asking:

What is the role of purpose-driven organizations today, and how can they help stakeholders navigate and survive this new reality?

It’s important to start by understanding what others have said – and there’s a lot of that! To better understand purpose in organizations, we looked at more than 50 published scholarly articles, periodicals, research reports, and blogs from the past 5 years. Given the current COVID-19 pandemic, we also extensively scoured what's been written more recently to identify trends or shifts in purpose-driven organizations.

5 themes from our lit review

Five themes emerged from our review. In this article, we summarize the most interesting insights we learned:

  1. Good purpose statements inspire action
  2. Relationships anchored in purpose can increase resilience
  3. Purpose enriches the employee experience
  4. Leaders face barriers to purpose-driven decisions
  5. Purpose-driven metrics are a big problem

Good purpose statements inspire action

Many organizations spend a significant amount of time, effort, and even money developing a purpose statement. Some even outsource it to PR or advertising firms to come up with a catchy slogan. But our review found a different story for organizations that are able to develop a good purpose statement and activate it throughout the organization.

Good purpose statements are clearly defined and distinct from other different, though related, terms like mission, vision, values, and principles:5,6

  • Mission. Establishes the organization’s specific business – what it is and what it isn’t
  • Vision. Defines what the organization aspires to become in the future
  • Values. Defines what the organization prioritizes and values most
  • Principles. Outlines a set of behavioral guidelines or rules

Purpose, on the other hand, has its unique flavor:7

Purpose: Expresses the organization’s impact on multiple stakeholders (employees, customers, shareholders, suppliers, communities) and connects to people’s intrinsic motivation. At times, it’s even called an organization’s philosophical beat because it serves to inspire employees.

Good purpose statements motivate people to take action through a shared sense of direction. It's shared because there's a collective sense among colleagues of working toward an unquestionable common goal.8

Relationships anchored in purpose can increase resilience

For purpose-driven leaders, challenging situations represent an opportunity for the organization to live up to its purpose of serving a greater cause. This couldn’t be more true in today’s coronavirus situation. Many organizations are shifting priorities to address market needs, such as distilleries and perfume makers that are now manufacturing hand sanitizers9 or automakers now producing ventilators.10 These actions can go a long way. Research shows that 88% of people feel it’s particularly crucial that organizations not only have a clear purpose statement, but they also demonstrate behaviors which are congruent with it.11

In our readings, we found that the benefits of purpose go both ways because people are more willing to help and defend a purpose-driven organization, if necessary. In a recent U.S. study, for example12

  • 73% of people said they would be more likely to defend a purpose-driven company if someone spoke badly of it
  • 67% of people said they would be more forgiving of companies that lead with purpose compare to those that do not

In companies that had an average annual growth rate of 30% or more in the previous 5 years, purpose enabled them to overcome the challenges of slowing growth and declining profitability.13 In general, purpose isn’t only beneficial to stakeholders, but it's also favorable to purpose-driven organizations. It allows them to build trust and loyalty both internally and externally, which in the end, can make them more resilient to challenging situations.

Purpose enriches the employee experience

During the current COVID-19 pandemic, it may be easy for employee experience – employees’ collective perceptions of their ongoing interactions with the organization14 – to take a back seat as organizations grapple with business disruptions. But, while it may be tempting to neglect employee experience, truly purpose-driven organizations tend to be better equipped to protect it.

For example, in purpose-driven organizations, HR plays a crucial role in helping people understand their purpose, how it connects to the organization’s purpose, and how their daily work contributes to it. This extra attention and effort in helping individuals connect their individual work to the organization’s purpose, especially during a crisis, go a long way in enhancing people’s connection to their work and the organization. Employees who perceive their work as meaningful and purposeful are 3 times more likely to stay with their organization.15

Organizational culture is a particularly important element in purpose-driven organizations. For example, we noticed a parallel between our study on employee experience and the purpose-driven organizations in our readings. Organizations with a positive employee experience display 5 behaviors that are woven into their cultural fabric (see Figure 1).16

Figure1 The Purpose-Driven Organization Literature Review Summary

Figure 1: 5 Essential Behaviors in Supportive Cultures | Source: RedThread Research, 2019.

Similarly, purpose-driven organizations, and especially leaders, tend to demonstrate behaviors that support a positive employee experience:

  • Collaboration. In purpose-driven cultures, shared purpose – a collective sense of working with colleagues toward a common goal – is the most important source of meaning for employees.
    • And meaning matters because employees who rate their work as very meaningful report 14% more job satisfaction than average employees, and 51% more satisfaction than employees with the least meaningful jobs.17
    • The power of shared purpose is more important now than ever. Consider healthcare workers on the frontlines who continue to put themselves at risk to treat infected patients driven by their shared purpose of saving lives.
    • Examples of HR activities that foster collaboration and shared purpose:
      • Career pathing to help existing employees discover their individual purpose and align it to career paths, projects, and new experiences that fuel their sense of meaning and purpose.
      • Learning and development opportunities – training, mentoring, coaching, education, resources – to help employees build skills that further their sense of meaning along with the organization’s purpose.
  • Alignment. Purpose-driven leaders use storytelling to help employees personally identify with the impact of their daily work on the organization’s stakeholders,18 which creates alignment and a stronger sense of shared purpose.
    • The current pandemic is inspiring a sense of shared purpose and alignment among many leaders. Messages like Together We Will Persevere from SAP’s co-CEOs and Coming Together to Combat COVID-19 from Microsoft’s CEO are more common now than in recent years.
    • Example of HR practices that create alignment:
      • Recruitment (hiring for purpose) by having a compelling employer brand that attracts the right individual to apply for jobs at the organization.
  • Transparency. Purpose-driven organizations have leaders who translate (reduce the complexity of purpose) and truthfully communicate the social impact of every decision.19
    • Consider for example, Patagonia’s decision to close all stores amid the COVID-19 outbreak to protect both employees and customers, and their commitment to continuing to pay employees throughout their closure.
    • Example of HR practices that cultivate transparency:
      • Communication to clearly and constantly convey purpose-driven beliefs, values, assumptions, behaviors, and decisions.
  • Psychological safety. Purpose-driven leaders dedicate time to talk personally with employees and intentionally integrate rituals or events that manifest their shared sense of purpose and enhance their mutual trust and psychological safety.
    • Crises like the current pandemic are testing many leaders’ ability to calm down fears and instill a sense of safety throughout the organization. The Coronavirus Generosity Challenge is an example of leaders who are finding ways to make a positive contribution internally and externally amid the current situation.
    • Example of HR practices that build greater psychological safety:
      • Manager support to learn to lead a remote team with empathy (e.g., encourage them to check-in more frequently with their direct reports via video conferencing or phone calls and have meaningful conversations).
  • Feedback-sharing. Purpose-driven organizations actively solicit employees’ ideas to activate their individual sense of meaning and their collective sense of purpose.20
    • Purpose-driven organizations tend to measure purpose through real-time feedback mechanisms (e.g., pulse surveys) that influence the employee experience.
    • Example of HR practices that support feedback-sharing:
      • Pulse surveys to collect real-time and frequent employee feedback, especially during these challenging times.

Leaders face barriers to purpose

Historically, many leaders have believed that a purpose-driven focus conflicts with a profit-driven approach. This may be of no surprise as most of the world has focused on only maximizing profit for shareholders. But even though purpose is often cast as the opposite of business profit, this isn’t necessarily the case.

Organizations can define their impact on stakeholders as a spectrum of possibilities based on what aligns with the firm’s objectives and values. This spectrum can range from deliberate social impact to maximizing both impact and profit objectives, and to meeting the traditional market expectations of pure business profit (see Figure 2).21

Figure 2 The Purpose-Driven Organization Literature Review Summary

Figure 2: The Force for Good Spectrum | Source: INSEAD Responsibility – BLOG, 2020.

Beyond the purpose-vs-profit debate, leaders face other barriers that prevent them from adopting purpose-driven strategies:22,23

  • Market volatility tied to shareholder expectations, which hinders leaders’ ability to focus on long-term value creation
  • C-level executives sometimes lack the ability to envision synergies between sustainable development goals and their business
  • Organizational systems and infrastructure that are not aligned with long-term purpose and value
  • Hiring people whose individual purpose does not align with the organization’s purpose
  • The lack of development opportunities for leaders who do not behave in purpose-driven ways
  • Employee performance targets and incentives that are not aligned with the organization’s purpose

This is further worsened by limited purpose-driven targets or incentives tied to leaders’ scorecards; 68% of leaders see the need to make better progress in this area.24

Yet, it seems like the current COVID-19 pandemic is affording leaders a bit of flexibility to make more purpose-driven decisions than in years’ past. We’re seeing this play out in leaders’ responses to policies and practices that protect employees or in their rapid pooling of resources to address community needs for more ventilators or masks. We see 2020 as providing an opportunity to cement a purpose-driven approach as a strategic and imperative way of doing business.

Purpose-driven metrics are a big problem

Nowadays, purpose is touted as a cost-of-entry for any business. This has been partly driven by pressure from well-known investors,25 by increased scrutiny over the impact of organizations on stakeholders,26 and, to a certain extent, by the promise of greater consumer trust and loyalty along with increased talent retention.27

This focus on purpose-driven organizations is bringing the need to measure impact to the forefront – which is easier said than done. In theory, purpose-driven organizations can substantiate their triple bottom line (TBL) impact on 3 areas: people, planet, and profit.28 There are numerous measurement approaches that follow TBL principles. Here are some of the common ones:

  • Environmental, social, and governance (ESG) criteria29
  • Includes measures of environmental impact (e.g., green building, pollution prevention, energy efficiency), social metrics (e.g., human capital engagement, labor standards), and governance (e.g., business ethics).
  • Social return on investment (SROI)30
  • Tracks relevant social, environmental, and economic outcomes to forecast or evaluate impact. It calculates a ratio after assigning a monetary value to inputs and outcomes.
  • B Corporation Certification31
  • Assesses all aspects of a company (environmental and social impact, corporate governance, community involvement) based on accountability and transparency standards.
  • SAM Corporate Sustainability Assessment32
  • Serves a wide range of stakeholders and includes several indices:
    • The Dow Jones Sustainability Indices (DJSI)
    • S&P ESG Index
  • ISO 26000 Social Responsibility33
  • Provides guidelines to effectively assess and address social responsibilities to multiple stakeholders: customers, employees, environment, suppliers, and shareholders.

But in reality, organizations find it challenging to actually measure their TBL; only 35% of companies align their business practices to a multistakeholder model today.34 This is partly driven by unclear and unsystematic reporting mechanisms.

Entities such as The International Organization for Standardization (ISO) and The Global Reporting Initiative (GRI) aim to fill this gap by outlining specific reporting guidelines that facilitate organization- and industrywide comparisons.35 Organizations can use the recommended guidelines to report their impact across clearly defined economic, environmental, and social categories.

Must-read articles

These articles caught our attention because they're interesting or insightful in helping us understand purpose-driven organizations.

Gartner HR survey reveals 88% of organizations have encouraged or required employees to work from home due to coronavirus

Brian Kropp

“As the COVID-19 crisis disrupts organizations across the globe, HR leaders must respond quickly and comprehensively, considering both immediate and long-term talent consequences.”

This article summarizes findings from a recent HR survey on how organizations are addressing coronavirus challenges and needs.

  • States that 88% of organizations have encouraged or required employees to work from home.
  • Shows how organizations are responding to coronavirus-related absences.
  • Lists recommendations for HR leaders on managing remote talent.

COVID-19 and corporate purpose—Four ways businesses can respond now

Greg Hills

“When faced with this unremitting uncertainty, how can a company maintain clarity on its societal purpose? What is the role and responsibility of your business in a time of chaos and crisis?”

This article suggests four levers to guide purpose-driven organizations during the current COVID-19 crisis.

  • Recommends that organizations leverage their core business assets to meet the current needs of stakeholders.
  • Emphasizes the importance of focusing on generosity and compassion (vs. profit) during this time of need by adding value to stakeholders, especially employees and local communities.
  • Advises leaders to keep a long-term view of their company’s role in navigating the pandemic and helping stakeholders return to normalcy once the current crisis passes.

We are nowhere near stakeholder capitalism

Vijay Govindarajan & Anup Srivastava

“While we admit that considerable progress has been made in developing theory, models, and disclosure norms for ESG objectives, we believe that we are nowhere close to achieving ‘integrated reporting,’ as some people might claim.”

This article states that many organizations aren’t creating value for all stakeholders.

  • Suggests that real change will come once organizations transform their financial and non-financial measures.
  • Mentions that maximizing shareholder returns remains the main objective – while keeping ESG goals as a secondary objective – for many organizations.
  • Asserts that organizations aren’t close to developing an “integrated reporting” framework that includes both tangible and intangible capital resources.

Put purpose at the core of your strategy

Thomas W. Malnight, Ivy Buche, Charles Dhanaraj

“When customers, suppliers, and other stakeholders see that a company has a strong higher purpose, they are more likely to trust it and more motivated to interact with it.”

This article highlights results from a global study of companies that use purpose to generate sustainable growth, stay relevant, and deepen ties with stakeholders.

  • Describes a purpose-driven strategy to help companies overcome challenges.
  • Provides specific suggestions to help organizations define their purpose and implement it as a core business strategy.
  • Highlights the tangible and intangible benefits of purpose to organizations.

Putting purpose to work: A study of purpose in the workplace

Shannon Schuyler & Abigail Brennan

“Purpose is about empathy – it defines the human needs and desires that a company’s products and services fulfill.”

This report discusses results from a study of over 1,500 U.S. employees across 39 industries on purpose in the workplace.

  • Considers leaders’ role in purpose-driven organizations, especially in their communication and decision-making.
  • Identifies team leaders and coaches as holding the greatest potential to help employees identify and translate their individual meaning and purpose into the organization’s purpose.
  • Discusses the role of younger generations in shaping the purpose conversation.

9 out of 10 people are willing to earn less money to do more-meaningful work

Shawn Achor, Andrew Reece, Gabriella Rosen Kellerman, Alexi Robichaux

“The old labor contract between employer and employee – the simple exchange of money for labor – has expired.”

This article discusses results from the Meaning and Purpose at Work Report, and asserts that people highly value meaningful work.

  • Identifies that more than 9 out of 10 employees are willing to trade a percentage of the earnings for greater meaning at work.
  • States that many companies fail to leverage the power of meaning at work despite its many benefits to both employees and organizations.
  • Recommends a series of actions companies and leaders can take to support and foster a sense of meaning and purpose throughout the organization.

Additional articles for your reading pleasure

  1. A Time to Lead with Purpose and Humanity,” Joly, H., Harvard Business Review, 2020.
  2. From Being Purpose-Led to Foster A Toxic Culture: Why Companies Like Away Fail to Live Up to Their Promises,” Bulgarella, C., Forbes, 2019.
  3. Balancing Profit and Social Welfare: Ten Ways to Do It,” Craig Smith, N. & Lankoski, L., INSEAD, 2018.
  4. Creating a Purpose-Driven Organization,” Quinn, R.E. & Thakor, A.V., Harvard Business Review, 2018.
  5. The Purposeful Company,” Chapman, C., Edmans, A., Gosling, T., Hutton, W., & Mayer, C., Big Innovation Centre, 2017.
  6. Purpose-Led Organization: ’Saint Antony’ Reflects on the Idea of Organizational Purpose, in Principle and Practice,” White, A., Yakis-Douglas, B., Helanummi-Cole, H., & Ventresca, M., Journal of Management Inquiry, 2016.
  7. “The Business Case for Purpose,” Keller, V., EY Beacon Institute & Harvard Business Review, 2015.

Creating Purpose-Driven Organizations

Posted on Wednesday, March 25th, 2020 at 6:09 PM    

Why we care

In 1776, Adam Smith wrote in The Wealth of Nations:1

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-interest.”

In essence, Smith was saying that businesses exist to make money for themselves, not necessarily so they can feel better about feeding their community, providing high-quality jobs, or producing their goods using environmentally-sensitive methods. This line of thinking – that businesses exist to increase the wealth of their owners (shareholders) – has been a foundational principle for many business leaders.

But not for all business leaders. Since the 1800s, leaders such as Robert Owen, James Cash Penney, and William Lever (among many others) have focused on more than the bottom line, by caring about employees, the environment, and their stakeholders.2 These leaders represent a sense that businesses have a large obligation to their employees and communities.

The tension between these two perspectives has tipped one way and then the other for years. Last fall, though, the balance tipped firmly to the side of businesses having a broader responsibility. In August, the Business Roundtable, a group of CEOs from large and significant companies, stated that, in addition to generating long-term value for shareholders and delivering value to their customers, they commit to:

  • “Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.
  • Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.
  • Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.”3

Assuming you take the group at their word, this represents a significant shift from a laser-focus on shareholders to a broader one on stakeholders.


Our hypotheses for this study include the following:

  1. The underlying factors contributing to CEOs, senior leaders, and boards of directors embracing stakeholders, in addition to shareholders, are meaningful and different from previous times business leaders have attempted this shift.
  2. Organizations with a purpose that focus on a broader set of stakeholders organize, manage, enable, grow, and amplify their people differently than those primarily focused on just generating shareholder value.
  3. These practices can be codified and scaled such that they are not limited just to a single organization.
  4. These organizations are developing novel – yet potentially standardized – approaches to measuring the impact of their purpose.
  5. These practices can positively impact an organization’s ability to generate shareholder value.

As alluded to above, this isn't the first time business leaders have focused on broader social good. However, we believe there may be some systemic changes, such as global climate change, that are different from previous iterations of this attempt. In this research, we plan to identify those factors and better understand if it really is different this time.

There are numerous examples of organizations who are already attempting to be more purpose-driven. We believe that there are similarities in these organizations’ people management practices.

We plan to better understand:

  • What does “purpose” mean in these organizations and how is it measured?
  • What does “purpose-driven” mean in terms of how organizations attract, engage, develop, and retain their people?
  • How, overall, is the employee experience different at purpose-driven organizations?
  • What do leaders do differently at purpose-driven organizations?
  • What are the implications for HR?
  • How do purpose-driven organizations track their quantifiable impact on stakeholders (e.g., revenue, profitability, engagement)?

This Project

We examine the following concepts in this research project:
Create Purpose Driven Organizations Premise

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