02 Feb 2007  What Do YOU Think?

Is There Too Little “Know Why” In Business?

There's know-how in business and then there's "know why." Purpose is a powerful motivator on many levels, says Jim Heskett. Can we aspire to a strong sense of "know why" even if our organization is not out to change the world? What do you think? Online forum now open.

 

Summing Up

The central debate among respondents to this month's column was joined early when the first respondent, Aaron Tice, commented, "Without the execution of business objectives in the pursuit of that purpose, the purpose will never be reached." Elvira Hernando agreed, saying, "Purpose is just one part of the whole process …. We definitely have to concretize the steps we intend to do, break down the core purpose to objectives, and then to relevant action plans …." Shrikant Sortur reminded us of Emerson's quote, "The man who knows How will always have a job, the man who also knows Why will always be his boss," before concluding that it's a "balance of 'Know Why' and 'Know How' that will generate results."

Wisdom Chitedze, however, put purpose in a somewhat different perspective: "The problem is we get so caught up in the nitty gritty of implementation that we forget why we are here in the first place …. 'Why' is just as important as the 'How'; they are not mutually exclusive." As Nari Kannan put it, "To survive and thrive, I think companies need to alternate between these two modes …. There have been … 'cool engineering havens'… that could not transition from a passion-driven enterprise to an execution-oriented enterprise."

Paul Kohn pondered whether a sense of purpose wanes as an organization reaches a certain size. He commented: "It would be an interesting case study to understand deeper the two cited examples, BP and Body Shop. At what point in time was purpose not enough? … Too often, I see … controls (structure) put in place that effectively raise barriers to both the understanding of, and more importantly a connection to, the company purpose."

Does purpose or profit typically come first? Akhil Aggarwal asked, "How many businesses truly were established with the vision of making the world a better place?" Jassi Brar said, "One must be able to 'afford' the good." Steve Holton had a different take on this issue: "Profitability changes Purpose …. The company's activities become centered around maximizing profits rather than maximizing on the Purpose."

Neil Olonoff argued that the concept of purpose put forth by Nikos Mourkogiannis in his book is too impersonal. He pointed out that "Michael Maccoby, in his excellent book Why Work, speaks of this issue in more personal, employee-centric terms …. There are no purposeful organizations—only purposeful people." Bern Lefson commented, "The 'why' is important but how that is defined varies by employee …."

As usual, many more questions were raised than answered by these exchanges. For example, is purpose itself evolutionary? Does it change as organizations grow? Does it change from one generation of management to the next? How can it be made as tangible to employees as profit? Can we aspire to a strong sense of "know why" even if our organization is not out to change the world?" What do you think?

To read more:

Michael Maccoby, Why Work: Motivating and Leading the New Generation. New York: Simon and Schuster, 1988.

Original Article

Two recent books offer views of the roles of managers and leaders. The first, Know-How, by Ram Charan, sets forth eight behaviors exhibited by managers who get things done. The second, Purpose, by Nikos Mourkogiannis, could really have been titled "Know Why." It describes four kinds of purpose, "starting points" that govern what great companies do and how they do it. Each of these purposes represents a kind of "holy grail" as opposed to goals (often merely financial), missions or visions, or even a set of values. As Mourkogiannis puts it, "Let others play with 'strategy' and 'tactics' and 'management.' Purpose is the game of champions."

According to this theory, truly transformational purpose can be found in: (1) discovery, the challenge of adventure and innovation characterized by dot-com entrepreneurs willing to work 24/7 in search of the new or unknown, (2) excellence, in which high standards are not compromised for short-term performance (as with Berkshire Hathaway and Warren Buffett), (3) altruism, where the primary purpose is to serve (customers, employees, etc.) first and assume that profit will follow (as at Nordstrom), and (4) heroism, typically involving grand plans to change entire industries or even the way we live (Bill Gates and Microsoft).

The argument is that only one of these purposes, if pursued rigorously and successfully, is required for greatness. Putting mere goals, such as primarily making money, before purpose gets us an Enron or a Worldcom. The pity, according to Mourkogiannis, is that true purpose could have enabled these organizations to make even greater "real" profits than those they reported.

One curious aspect of the book is that relatively few examples are cited to illustrate purpose in the for-profit world. Several are used repeatedly, perhaps in part to suggest the complexities of establishing purpose in an organization. Among these, the choices included examples such as BP and The Body Shop, suggesting that purpose, a requirement for greatness, is no guarantee of long-term respect and performance.

Purpose is powerful when it comes to attracting and inspiring employees, centering a company's activities, or guiding strategic change. Executives talk about and seek these things for their companies all the time. But how much purpose do we find even at the top of a typical organization? Can we aspire to a strong sense of "know why" even if our organization is not out to change the world? In terms described here, how strong is purpose in your organization? Is there too little "know why" in business? If so, why? What do you think?

To read more:

Ram Charan, Know-How: The 8 Skills That Separate People Who Perform from Those Who Don't (New York: Crown Business, 2007)

Nikos Mourkogiannis, Purpose: The Starting Point of Great Companies (New York: Palgrave Macmillan, 2006)

Comments

    • Aaron Tice
    • Manager, Rapid Refill Ink

    The problem with purpose is that it isn't enough. It is a great foundation for the walls to stand on, but can't be the building itself. Without the execution of business objectives in the pursuit of that purpose, the purpose will never be reached. While discovery, altruism, excellence, and heroism can be the fire that drives a company, they mean nothing without a mechanism to see their fruition. No matter how much thermodynamic energy a gallon of gasoline contains, it is far less valuable without a combustion engine to transfer that energy into work. Without execution, we have a great purpose that will never be realized.

     
     
     
    • Mary Wynne-Wynter
    • Owner, RedShift

    For decades we've struggled to separate and define vision, purpose, mission, goals, but it doesn't seem to get us anywhere. Creativity is the starting point.

    When we add goal or vision that is all part of a structural intention and we start to just know our purpose and can work towards it. There is high energy and enthusiasm.

    A danger is when goals start to be driven by ego and become disconnected from helping or serving people, and create stress through wanting, manipulation and "I win, you lose." This happened very quickly in the dot-com world. It took a lot longer to happen with the Body Shop. But once it happens, blocks and disillusion quickly set in.

    New effective leaders will work to keep the structural intention aligned with creativity and purpose. Clearly, it's a leadership model that contradicts traditional command and control, and even most shareholder value models. Perhaps that is why we see more corporations being taken private.

     
     
     
    • Mark Howell
    • Consultant, Lifetogether

    Is there too little "know why" in business? Almost certainly. In "The Leadership Challenge," Kouzes and Posner ask the question: "Are you on this planet to do something, or are you here just for something to do?" I believe most businesses begin as a result of finding "something to do" (in order to make a living) rather than "to do something" (which is what Mourkogiannis would call purpose).

     
     
     
    • Ashok B.
    • CEO, KGISL

    I couldn't agree more with Aaron's comments. Actually, vision is 1 percent, alignment (and execution) is 99 percent.

    Jim Collins and Jerry Poras' HBR article on "Building Your Company's Vision" is a valuable read if you are planning on defining the purpose of a company in the context of building a vision.

    It can be a difficult experience to try and nail down a core purpose that is both inspiring and guiding. The idea of four distinct purposes presented in this article is very useful in evolving or choosing between the various possible statements that might describe the purpose of an organisation.

     
     
     
    • Jay Smith
    • Associate Professor, Kagoshima University, Inamori Academy of Management & Technology

    Purpose fits directly into the realm of leadership, vision and the creation of meaning. (See Bennis and Nanus, etc.) Unlike the inanimate components of a car engine, a company is an organization composed of people with needs beyond the material. A clear sense of real and worthwhile purpose can do much to address individual hopes, fears, emotions, and existential angst as well as inspire teams of people to work together for a common goal. Better performers frequently have a larger choice of employment options to find those companies that fill both financial and non-financial needs--or worse, as John Kotter has pointed out--without clarity of purpose, and a compelling one at that, well-educated employees can sink easily into a Dilbert-like malaise that is highly dysfunctional. It is the people who directly--through their actions and through the systems they create and inhabit--determine whether we are driving a Ferrari or a lawn mower.

     
     
     
    • Anonymous

    One aspect of purpose in good successful sales organizations can be described as an obligation to the engineers and employees designing and building the products, the customers using them, and everyone else involved in the endeavor (#3). If they are all supported and well served by the sales professionals representing them, and provide value to the companies on both sides of the transaction, everyone's work becomes more and more valuable, effective, long term, and rewarding for all (including their families). This can be found in more than a few companies' sales organizations, and in the end, should translate into reward for shareholders. Of course, the product needs to have a market.

     
     
     
    • Leena
    • MT-E, Easytrans and software PVT. Ltd.

    Organizations, like everything else, are evolving. They always had a know-why but that is called management, tactics, or strategy by Nikos Mourkogiannis. Just like Maslow's need theory, these purposes can be placed at the bottom of the pyramid and altruism, heroism, discovery, and excellence at its top. It takes time to reach the top. Also different organizations evolve at different rates. Some might have reached the top, some might be in the process, and some might not even find a need to progress. They are happy with their old, traditional purposes, but just like survival of the fittest they may be seen nowhere in the changing times. So the crux of the definition of know-why might have changed, but organizations always had it.

     
     
     
    • Elvira Hernando
    • Accounting & Allotment Manager, DCL Group of Companies

    Purpose is just one part of the whole process. A good analogy would be the scientific method followed in conducting scientific experiments where we normally, first, define the purpose of the activity, then list the resources and available tools and materials, and make a hyphothesis (like creation of different scenarios) prior to other things we do like observe, control, analyze and evaluate results up to the conclusion. We definitely have to concretize the steps we intend to do, break down the core purpose to objectives and then to relevant action plans in order to be clearly focused on the attainment of our purpose. In everything there is a major point, but there has to be a clear order on how things are going to be carried out.

     
     
     
    • Wisdom Chitedze
    • Internal Audit Manager, Teveta

    As Aaron Tice has put it, purpose and meaning provide the beginnings of organizations, but because organizations are made up of people interacting within and with external parties and processes which are dynamic and often unknown, there arises a need for some disciplines to be set to ensure that the purpose is fulfilled.

    The problem is we get so caught up in the nitty gritty of implementation that we forget why we are here in the first place. In most organizations, most employees do not know how their work contributes to and links with the achievement of the purpose. "Why" is just as important as the "How"; they are not mutually exclusive.

     
     
     
    • Nari Kannan
    • CEO, Ajira Technologies, Inc.

    I think Nikos Mourkogiannis's ideas may be a valuable addition to Ram Charan's book in that one without the other may not work, whether it is a for-profit or not-for-profit organization. To survive and thrive, I think companies to need to alternate between these two modes.

    Google is a great example to watch now. There have been other "cool engineering havens" like NetScape before that could not transition from a passion-driven enterprise to an execution-oriented enterprise. I worked for Digital Equipment Corporation; it made the same mistake of being only a passion-driven enterprise and never transitioned to an execution-oriented one. HP is currently transforming itself into an execution-oriented one and we see all the turmoil with the old guard there being laid off or at best feeling uneasy.

    Unfortunately, every decade or so the organization has to switch back into the other mode to spur energy and new ideas. It's like getting a blood transfusion periodically!

     
     
     
    • Neil Olonoff
    • KM Consultant, GSA PBS

    It's interesting that the initial post mentions Worldcom, which merged with and nearly destroyed MCI--a company which despite its failings did have a collective sense of purpose. Their people were said to "bleed orange," a sign of their loyalty. Of the four types of purpose, I would say MCI mostly aligned with the first--the spirit of discovery.

    Michael Maccoby, in his excellent book "Why Work?," speaks of this issue in more personal, employee-centric terms. Not having read Mourkogiannis's book, I can't be sure about the focus, but it seems to me that purpose, as a practical matter, must be forged in every individual in the firm. Certainly culture is top-down, and a purpose-oriented culture will empower individuals to be purposeful, yet the individual must be the focus and nexus of this topic. I would say there are no purposeful organizations--only purposeful people.

     
     
     
    • Paul E. Kohn
    • Consultant, CEK Associates Inc.

    It would be an interesting case study to understand deeper the two cited examples, BP and Body Shop. At what point in time was purpose not enough?

    In the much-mentioned dot-com companies, there often is great passion on the parts of both the founders and the early employees. However, as company size and complexity increases, it can be increasingly difficult for employees within those organizations to see how their little piece contributes to that shared purpose. Witness the changes in the ever growing Wal-Mart empire. In my experience, the passion and pride that drove the success of the early stores is quickly being lost as the organization grows and employees feel more and more distanced from being able to "make a difference."

    Too often, I see, particularly in this post-Enron era, controls (structure) put in place that effectively raise barriers to both the understanding of, and more importantly a connection to, the company purpose. In Jim Collins' work "Good to Great," the author suggests that this passion is key, provided that you have the right people who can then create the appropriate structures to enable the organization to achieve the business goals (purpose).

     
     
     
    • Maureen Swift
    • Executive Director, AT&T

    I would agree that if the individuals in the corporation are not purposeful, or if they don't interpret the purpose the same as the organization's leadership, then it doesn't really matter. If the purpose is "excellence" and yet people continue to assume that must require a change for everyone else but me, then excellence will not be achieved.

     
     
     
    • Ashraf Iqbal
    • Director, MindSpring, Malaysia

    The lack of "know why" is a direct reponse to the command and control structures of the industrial organization where people are employed "to do" and not "to think."

    Although we talk about valuing thinking, in the pursuit of short term / immediate results, thinking can and does get in the way, especially if the organization does not [utilize] the social skills that flow from the "understanding others / managing others" quadrants of the EI framework.

    The higher n-Ach is at the leadership level, the more likely thinking will get canned in the organization.

     
     
     
    • Karen Armon
    • CEO and Creator, MarketOne Executive

    "Why?" is a powerful question that does not translate into numbers, dollars or metrics. However, the answer to the question most certainly will.

    In my experience working with many leaders in numerous industries, the "hang-over effect" of Scientific Management (a construct that isn't easily exported into a consumer-driven, digitally-connected, individualized global economy) is alive and well.

    This point of view, deeply embedded in leaders who began their careers at the height of its application (1970s to the early 1990s), causes many to miss what creative and innovative cultures require--a willingness for failure with failure recovery leadership--within an entrepreneurially focused organization.

    New models of engagement for leaders who can assume, rightly, that people today are educated, inquisitive, brilliant and focused must address this all-important, yet often ignored, link between what one does and why one does it.

     
     
     
    • Deb Dib
    • Executive Coach / Personal Brand Strategist, Executive Power Coach

    Corporate leaders who are pragmatic AND purpose-driven, who can vision AND execute, who are leaders AND learners, are rare (and wonderful).

    They sometimes lead Fortune companies; they often lead less visible organizations. They always create impact and they often inspire. And they make a difference while delivering robust profits. They dream of what can be and make money doing it.

    Coupling purpose, pragmatism, and passion can build great companies and it can change the world, in small ways and large. It's the best of American capitalism.

     
     
     
    • Isaac
    • Internal Controller, M (M) L

    Just ponder on those great ideas: putting people first; start with the end in mind; government as the facilitator but ignoring its role as the regulator.

    I think the nobleness of management has been hijacked in the greed of profits and the finance sauce. You know people talk about corporate governance and social responsibility.

    It's now time to cut the Gordian knot. The old fashioned school had both a heart and a spirit. We all know that we don't beat new ideas with old ideas that have failed in the past. But, we equally don't beat older successful ideas with recent ideas that have already failed and failed again.

     
     
     
    • Bern Lefson
    • Consultant, Lefson Consulting

    Leadership in business can be successful if the leader(s) lay out a meaningful purpose for the employee. This purpose many times is simply to find and meet customer needs. In other words, to stay in business, not to discover revolutionary means. Success is attributed to such leaders by those who follow with their efforts, brains, and loyalty. It is such an environment that permits many firms to remain in business and to compete successfully.

    As many studies have demonstrated, the legion of employees seeks to be with others who are viewed as smarter or more talented and who are given meaningful work to perform. In many instances, that work they perform may not be up to standard but if they perceive they are continuing to learn and grow their skills, satisfaction follows. It is the creation of such a perception that drives many businesses. The "why" is important but how that is defined varies by employee and that which motivates him/her.

     
     
     
    • CJ Cullinane

    The purpose of a for-profit company is to make a profit; the purpose of a non-profit company is "purpose" or a non-financial goal. In the book "Know-How," Ram Charan discusses and emphasizes leadership and setting the right goals, but how long will a CEO/leader last if they do not make a profit?

    Purpose is tricky. If a CEO/leader decides they will solve a non-profit problem (GE and the ecology), will the stockholders go along with it or even agree with it? I believe Microsoft (Bill Gates) saw an opportunity to fill a void and set a course for an industry, but was money the motivator or purpose? Only Mr. Gates knows.

    Purpose is difficult to articulate, profit is not.

     
     
     
    • Anonymous

    I'm driven by "why", and if you get the "why" you are already the CEO or GM of the team. The team concentrates on important things too, but they are "how," "what," "where," and "when." These questions are only the "data," whereas "why" is the wisdom (or as you say, the purpose) behind it all. And that's the most important driving force. It is the reason people believe and work, and if you know that, you've figured out the buttons that make people work (or don't).

    This article is close to another one I read recently, one that sort of offers proof to this thought. In SpinBrush's story of success, Dr. John listed 17 mistakes entreprenuers make. One of them goes (see: http://cpd.ogi.edu/mst/capstone/17Mistakes.htm):

    Mistake 13: Seeking confirmation of your actions rather than seeking the truth. "This often happens: You want to do something, so you talk about it with people who work for you. You talk to [your] family and friends. But you're only looking for confirmation; you're not looking for the truth. You're looking for somebody to tell you you're right. But the truth always comes out. So we [test] our products, and we listen to what [the testers] say. We give much more value to the truth than to people saying what we're doing is great."

    I agree that what I see around us is "get the work done, but don't think about it." However, those who can't stop thinking about it get better results out of the same tasks. Depth of purpose and the curiosity to ask "why" is a huge factor in the results.

     
     
     
    • Pete DeLisi
    • President, Organizational Synergies

    We continue to introduce new terms into the business vernacular. We now have "purpose," for me in the author's definition hard to distinguish from values. I also thought that "purpose for being" is the official definition of a "mission." Each new term becomes in turn the new sine qua non of industrial success. What it really does is sell lots of books and confuse the dickens out of everyone.

    Many of the respondents have it right. It's no one single thing, but it is clarity, consistency and alignment around who you are, what you stand for and what you are trying to achieve and why. And each person in the organization knows the answers to these questions and understands how they can make a personal and vital contribution.

     
     
     
    • Muhammad Abbas Hameed

    The idea of "purpose" seems easier said than done. The concept of discovery, excellence, altruism and heroism sound bookish. However, it would be naive to underestimate these values in today's business atmosphere. These values are important but not sufficient.

    Discovery appears to be the most plausible ideal, bearing in mind the cut-throat competition attitude in today's times. However, for every Bill Gates and Microsoft there are hundreds of new innovations that never materialize. There is discovery but not enough action to execute this discovery.

    Excellence is the most "tangible" value amongst them all. Excellence is a question about strategy. It is subjective and depends on the goals of a company. There is a high likelihood of success if a company does not compromise on excellence for short-term gains.

    Altruism is a difficult ideal to implement. Firstly, it is risky to assume that by serving customers and employees, profits will automatically follow. The idea behind this assumption seems that if people are being well served they will be motivated to work hard. However, this benevolence may lead to laziness and act as a deterence to work hard.

    Finally, heroism is passionate but not well supported. It is difficult to make big plans and execute them without tangible success (profits, high revenue or an increase in stock value). Heroism for companies at an early stage is usually optimistic as well as improbable. However, once a company experiences success, heroism is a natural follow-up. Heroism is more of a feeling than a plan to be implemented. This feeling can only be achieved when there is the confidence of succeeding.

     
     
     
    • Akhil Aggarwal
    • IBM Corp.

    Perhaps driving the execution of the business strategies on the basis of the purpose of the business - with reference to the ease to the customer, which will attract business - will be good for the business.

    How many businesses truly were established with the vision of making the world a better place? But concentrating on the purpose of your creation from the perspective of the customer can be beneficial.

    Example:

    If I have an idea for launching a website where potential buyers and sellers can get in touch, I derive revenue by charging the sellers to advertise. Now, while designing the website, if I keep in mind the purpose of the site - from the view of the visitor (who is also a potential client) and make her site-viewing experience as simple as possible, by making the site efficiently interactive, that would win me more and more business. Hence, my website will be more profitable.

    Recognising the purpose from the customer's perspective makes sense even in a competitive market because it makes your business make more money.

     
     
     
    • Steve Holton
    • VP, Sales

    The "Strength of Purpose" within an organization is influenced by profitablity. Numerous start-ups today have such a powerful and inspiring "Discovery" or "Heroism" Purpose that they create an environment that draws numerous thoughtful, intelligent and well educated individuals to stand in line in order to be a part of something so exciting. And the right people combined with the most effective mechanisms to execute on the Purpose will likely lead to success.

    What is success? Success in business terms is commonly defined by profitability. And profitability changes Purpose. At least it can. Senior Execs may identify and act on opportunities that maximize profits. If this strategic change moves away from the ultimate Purpose, the company is forever changed. The company's activities become centered around maximizing profits rather than maximizing on the Purpose.

    The decision to remain focused and steadfast on the ultimate Purpose is ultimately in the hands of those who control the company's levers. If the original and "inspiring" Purpose is lost, many of those highly motivated, highly intelligent people who "got you there" may become disenfranchised and move on to their next exciting venture. My hat goes off to those companies who stay true to their Purpose ... it's not an easy task.

     
     
     
    • Julie Mairs
    • The Boss

    Know what, know how and know why track the growth and development of the employee and the organization. If one is missing, execution suffers. Drucker said that the purpose of business is innovation. If he is correct, then which of the the three is expendable? Call me old-fashioned but I want the organization to know what, how and why so we can avoid errors, exceed expectations and enact a socially sanctioned reason for being that leaves our reputation and what we started with better than when we started. Organizational plans, levers, scorecards, values, strategy are all tools. Tools and their associated processes change as work changes and knowledge expands. Purpose is the continuous thread that binds the skills profile, time, financial, space, machine, management and leadership resources into action groups.

     
     
     
    • Adam
    • Consultant

    After 30 years in corporate America, as an executive and a consultant--even for BCG--the only "purpose" I found among colleagues was to (1) protect an existing position or (2) make more money. Despite the fact that both of these inevitably led to failure, it still drove the behavior of almost everyone I worked with. I don't recall ever meeting a business leader who viewed profit as the RESULT of their actions instead of as a goal (or purpose) unto itself.

    After 30 years I was so disgusted with chronic self-serving actions and justifications I wished I'd never attended HBS, and never entered the business community. I'm now looking to find purpose in my life, after wasting far too much of it trying to help people who had no worthy ends in sight. Hopefully someone will take to heart the intent of this research and re-instill purpose to the work of business people.

     
     
     
    • Maree Conway
    • General Manager, Quality, Information and Planning, Victoria University

    You can't separate know how from know why, and you can't have one without the other. And know why needs to come before know how--there is no point deciding, acting and executing without knowing why you are doing it. Purpose gives you the constant or guiding star--it's always there to remind you why you do what you do every day.

    But, I find it interesting that altruism doesn't include serving the interests and needs of future generations as well as current stakeholders. If purpose is only focused on current generations, it is very shallow purpose indeed. Once you include the future in consideration of know why, you will not only deepen your purpose so that it actually means something and does build those values that underpin action, but also that action will actually make sense in the long term. If we don't care about how our know how is going to affect the future, then we don't care about our organisational future--simple as that.

    And, if we'd cared about the impact of climate change on our future 15 years ago when the first reports started to come out--instead of dismissing them because they didn't affect me today--then we might not be in the position we are in today. So, I say, let's expand altruism to include future generations so that we have strong and deep purpose to guide our decisions and actions today.

     
     
     
    • Shrikant Sortur
    • Lason, Inc

    "Without ambition one starts nothing, without work one finishes nothing." -- Emerson

    "The man who knows How will always have a job, the man who also knows Why will always be his boss." -- Emerson

    Both quotes from Emerson still hold good today. It is the adequate balance of "Know Why" and "Know How" that will generate results. Often one without the other would probably derail an organisation. Having said that, there would be no single universal formula I guess; the mix would vary from organisation to organisation.

    So to answer Jim Heskett's question, my personal opinion is that most often "Know Why" is lacking in most of the organisations at various levels.

     
     
     
    • Jassi Brar
    • Engineer, "Truely" MNC

    This reading too fits into the "Nothing is either 0 or 1" theory. Big companies like Microsoft, Google, Yahoo, Wal-Mart, etc. have two things in common. One, today they do strive to contribute back to society (in some form of Altruism, Heroism, Discovery or Challenge). Two, there have been some dark marks on their record in the past. Human rights violation in China, labor issues, etc.

    What do we deduct? One must be able to "afford" the good. One can't sit back while others divide the exploits among themselves.

    Harvard Roark cannot run a Microsoft.

     
     
     
    • Burak Guler
    • CEO, Lifethinks.org

    Great thought has been put on purpose, mission, vision, tactics, strategy, etc. so far.

    When I draw a time dependent graph for 1 month, 1 year, 10 years, and 40 years from now, [the] only parameter that I find is sustainability (not only environmentally).

    How we achieve is that we have to continuously improve and sustain ourselves, organizations, and communities. Yes, purpose is sustainability, whether organizationally or individually. Also, if we want sustainability, we need to do and execute whatever we can to achieve it.

    Regards,

     
     
     
    • Nancy Branton
    • Leadership & Talent Management Program Director, Leadership Coach Academy

    Successful leaders have a clear vision that reaches beyond the bottom line of their organization. That vision propels leaders toward success and enables them to keep a healthy perspective about the bottom line.

    Employees at all levels need to be involved in building the company's vision, in order for them to have input into the vision as well as understand what piece of that vision they can claim as their own.

     
     
     
    • AT
    • Jataayu

    Purpose is perhaps what you come back to when each successive vision or mission or goal is reached (or not). There may be many people and companies who have one overarching vision and work on that diligently over very long periods, but I suspect there are many more whose visions, goals and missions are relatively short term (a few years or so). Purpose is what I think will be the thread stringing together these evolving ideas of the destination.

    And isn't purpose itself evolutionary? Can't heroism morph into altruism--at least for people that seems like a fairly common thing.

     
     
     
    • Akhil Mehta

    Purpose in its simplest form is the ultimate goal that an orgnization strives for and in this form it cannot be achieved, until and unless it's broken down into smaller goals with which the lay shop floor worker can also identify and, more importantly, to which she can contribute.

    A major fallacy that we see today is that of a majority of organizations getting driven by short term, probably at the goading of analysts always expecting better and still better results, quarter after quarter, every quarter, leading orgnizations to the rat race, which obviously comes without a purpose. And it is this fallacy that we need to address to help organizations add greater social value.

     
     
     
    • Ulysses U. Pardey, MBA
    • Managing Director, Am-Tech, S.A., Panama, Rep.of Panama

    Can we aspire to a strong sense of "know why" even if our organization is not out to change the world? Is there too little "know why" in business?

    I must admit that very often as a manager, leader and even as a consumer, mentioning the reason why something had to be done made it happen.

    The reason why might give people the foundation to trust that what you say makes sense to them and that therefore they can be of assistance to you. They become somewhat committed to your cause. I believe that in the world of business this understanding and commitment to a common purpose could be one of the ingredients which makes teams great teams. And this is what a company or a government is all about: a group of people working reasonably together and committed to a common purpose they understand. The reason why could give you the influence the other person needs to move forward.

    I see that people can work without knowing the reason why. It is also true that hiding the reason why has become a key success factor for career advancement. All this is part of the reality of the labor market. This is why the promotion of the reason why to all employees should be part of the company's job.

    It is realistic to accept that we all work for a salary; however, I believe that the company should not limit itself to pay a salary for a job. I am convinced that the company must provide the employees with the reason why in order to upgrade people's enthusiasm for a job well done and therefore to be more competitive in a better work ambience.

     
     
     
    • Prof. K. Prabhakar
    • Director, KSR College of Technology

    While examining various ideas given, I would like to submit that one of the most important traits that is visible and working is a "volitional trait." It is a combination of "passion" and "voluenteerism" which can be approximated to purpose. Let us consider the example of Wikipedia. Do you have a profit model? What we have is purpose. However, we do have models that have both profit and purpose. Profit is one of the outcomes of purpose and profit itself cannot be the purpose. If we take the books In Search of Excellence and Build to Last, both researchers have taken organization as units of analysis and value creation as the base. However, if we consider other dimensions, we will have a totally different set of conclusions, in my opinion.

    If we consider Indian examples such as Amul, it is not driven by profit, but by purpose. A set of farmers with the leadership of a scientist created a totally different model. If we examine most businesses, they are driven by superordinate goals that are not visible. The definition of purpose will help us to understand the process better.

    Similarly, we need not restrict the purpose for business organizations alone. If we consider public-private partnerships, the concept of social entrepreneurship that is the Know-How in them, it is know-why and based on a strong volitional trait. Professor Leif Edvinsson has published data on the working of the volitional trait in business.

     
     
     
    • Luigi Giavina Bianchi
    • Partner, SREULA Consultoria Empresarial

    Purpose is the compass to guide us whenever we have doubt about the daily decisions.

     
     
     
    • Edward Hare
    • Retired Director of Strategic Planning, Fortune 300 Manufacturer

    Writing about "Know How" and "Purpose" certainly is useful in stimulating lively debate and a host of views based on individual experiences. But I wonder ... do we REALLY need another twist in semantics? I worked a 40-year career across two large manufacturing organizations. Boy, have times changed. And, not for the better. More recently, I suffered through the endless exercises and training about vision, mission, leadership, diversity and such. I watched generation after generation of executives fail their organizations more miserably than their predecessors while their pay for such accomplishments skyrocketed.

    I believe that most employees internalize their own purpose when there is nothing else for them to "enlist" in. And too often that's a simple trading of time and skill sets for money so that they can support themselves and their families. I'd argue that most employees live in that world. A few lucky ones find that rare leader who can ignite them. Or, if bold enough, start their own business if they have an idea or simply don't want to work to enrich others.

    People are driven by feelings of purpose sometimes, or by need, fear, a sense of affiliation and so on. Let's face it, we spend most of our time interpolating between what those above and around us tell us and do. Often, that gap is enormous and wastes our time, energy, and imagination we could spend elsewhere. We try desperately to divine "the truth of things" because honesty and forthrightness are in such short supply. My last boss, one of the 3 top executives in an $8 billion firm, privately described his position to me as "just a game." He wasn't lying. He believed it and played his role that way. To him it was a game, one called win-as-much-as-he-could. To me, it was a signal that it was time for me to go. His purpose was clear ... and I'd agree with Adam (post 26) ... that that's what's wrong with many of our institutions. Our "leaders" believe, and are guided by the thinking, that it's all become a game.

    The saddest thing to me is that so many organizations are simply unable to identify integrity, character, and sound values in those that they promote to their very highest levels. Strong business models with their attendant levels of profitability frequently disguise the real underlying problem. I'd advise everyone to devote their energy to identifying their personal "purpose" and what makes them feel right and whole. For the most part, they won't find it among the dysfunctional games within Corporate America or any other highly politicized organization. And that's a shame.

     
     
     
    • Anonymous

    Businesses start with a purpose or there is no need for them to start. And the purpose is something that addresses a need or creates a need.

    The purpose may have a very small component of self-interest.

     
     
     
    • Gerald Nanninga
    • VP, Retail Ventures, Inc.

    When I read the commentaries, the common thread to me is the distinction between words and actions. Leaders can spout all sorts of visionary, purposeful talk, but if the employees watch the actions of the leaders--taking exorbitant salaries, the back-dating of stock options, use of corporate assets for personal purposes, etc., they will come to the conclusion that the boss lives by a different purpose from the one they talk about.

    Purpose must be a way of life, rather than a set of words. And if you want the purpose to lead to profits, then the purpose needs to include making someone happier than yourself--namely your customers.

     
     
     
    • Ruediger Vaelske
    • Client Service Director, CPM Germany

    I have not read the book of Mourkogiannis, but on the basis of the summary given here, I see parallels to the ideas of the Viennese psychiatrist, neurologist and philosopher Viktor E. Frankl. According to him, people are in search of meaning/purpose (he talks of "Sinn"--a metaphysical German word, which is hard to translate). Meaning/purpose is the primary human motivation; it is a pacesetter of human existence. In economical theory, we talk of motivation, confidence culture, relations intelligence, responsibility, service readiness and cooperation. These concepts can be justified with the help of Frankl's theses and can be filled with vitality.

    The strong striving for meaning/purpose represents in my opinion an extremely powerful motivation concept. Self-motivation by searching for meaning/purpose increases the employees' sense of self-esteem and their commitment and reduces sick days. A meaning/purpose orientation in companies has a motivational and satisfying character.

    In my opinion, companies must, in order to perform successfully in the market, offer a meaning/purpose to all market partners, employees, suppliers and customers. Companies must be determined to contribute a little bit to make the world a better place. A company that offers a vision and meaning/purpose is not in conflict with a shareholder value orientation. Quite the opposite!

    Companies which live meaningful visions with all fibers and capillaries do attract people who are passionately inspired by these visions and who want to be a part of them. Therefore these companies become better and better. But as a "flavour of the month" action, such a process is doomed to failure. For long-term execution you need people who live the company values and who employ people who passionately share these meanings/purposes. For a successful long-term and medium-term achievement of such goals, instruments like the Balanced Scorecard are needed to translate the vision operationally day by day.

     
     
     
    • Shaiful
    • Executive, BSO Technologies

    I agree with every point which supports there is too little "know why" value in our business society in particular. Generally we are confused in terms of distinguishing purpose with monetary value. We tend to mix them up together when we decide which direction a company should go. Actually we don't get anywhere if we don't have a very strong sense of purpose in our life. This rule is also applicable to business organizations in action. Without a strong sense of purpose value, business society is inclined to get selfish and unfriendly to society as a whole.

    Business is supposed to be the complementary to human life in respect to fulfilling human needs in particular. Having a strong sense of purpose in business would promote creativity in business in the long run and thus would attract more monetary value incidentally and, more importantly, would attract more good people into the organization, prolonging its business cycle in the industry. The organization leads others to a healthy environment in the market and promotes healthy competition in the industry, to say the least.

     
     
     
    • Mark Earls
    • Writer and consultant, HERD consulting

    I have been working with and writing about "purpose" for some time now and find a lot of what is said here very sound. Particularly the last few posts.

    Of course, it is about balance, between thinking and doing, and so on. There is no magic bullet (if there was we wouldn't be debating such thoughts), but purpose is really much more important than we might think.

    The important issue that purpose raises was highlighted by Henry Mintzberg and co. some years ago in the Sloan Management Review: the relationship between business and society and the responsibilities of the manager. To paraphrase: We've thought that business had no connection with the world in which it lives--it's much easier for managers to seek to optimise shareholder interests than it it is to balance shareholder, employee, community and customer interests. That's why so few folk are able to build good, strong, healthy businesses over a long period of time: There are tough calls to make again and again.

    At the same time, it seems to me that we have also forgotten that business (as all organisations) is about people: employees, associates, distributors, customers, supplier employees and their interactions. This is why purpose is so important--and yes, I suspect that Viktor Frankl is one really good place to look to understand why (but needs finessing).

    We are a social species. A species that seeks Social Meaning (as Guy Kawasaki repeatedly points out; not just Individual Meaning as Frankl suggests) and Social Utility (rather than just individual utility). We create and co-create and recreate this Social Meaning with things that have social utility in all our interactions whether we like it or not.

    Now seems a good time to reunite this aspect of ourselves with management theory, particularly in the Anglo-Saxon world which has for so long slaved under the tyranny of "I" and made itself a willing slave to shareholder value.

     
     
     
    • William P. Bailey

    A tangential strategy that may complement the need for managerial purpose is a "how/why" that re-defines two essential enablers, productivity and growth. This is achieved by executing the current commitment, expanding that commitment and expanding the horizon. I see this through an operating rhythm with differing stress and durations based on customer pull and economic cycles. The only true measure of productivity is doing the right thing at the right time and doing it well enough to cause growth as an expectation and not a desire.

     
     
     
    • Bob Gouzinis
    • Software engineer, UGS

    I'm glad to see that most of the comments are rather skeptical towards Mourkogiannis' Purpose. I too have profound reservations towards the importance of this new concept. This reluctance is probably spelled out clearly enough in post 37 by Edward Hare, "do we REALLY need another twist in semantics?"

    I particularly feel uncomfortable with Mourkogiannis' statement: "Let others play with 'strategy' and 'tactics' and 'management.' Purpose is the game of champions." From this, one could argue that the book--and the whole Purpose story--targets people who want to be champions. I do think this is the sort of people that would pay lots of money for Mourkogiannis' consultancy services. Already a successful consultant, Mourkogiannis creates his Purpose theory and adds a deeper sense of reliability to what he sells.

    I would agree if the statement was something along the lines of "If you?ve got strategy, tactics and management in place, and still haven't made it to the top, the Purpose is what you need," or even "Sometimes you should rely on strategy and management, sometimes on Purpose, and sometimes on a combination of both." But these would not sell books and would certainly not create enough excitement among Mourkogiannis' potential future clients.

    Taking this a bit further, management, strategy, tactics, vision, value, are all tools one good use--ie, know-how of business--while knowing how to combine these tools to get to or remain at the top is a higher level of know-why. If you elaborate on this reasoning a bit, you end up in a circular argument, which suggests that Purpose is not really a completely independent quantity here.

    The four classifications of purpose in this theory are also of a concern. One could see why by looking at the associated examples. I am a software engineer--yes, the employee, the managed quantity, the small fish--and it strikes me as simply not correct to put Microsoft and Bill Gates under "heroism, typically involving grand plans to change entire industries or even the way we live."

    It appears that applying this classification in real world examples is a vague process and not straightforward to quantify. This gives Mourkogiannis lots of room to maneuver and twist semantics according to his needs as he tries to sell his theory.

     
     
     
    • Herbert Meyers
    • Westport Arts Center

    I find that "Outcome Based Evaluation" is the key for nonprofit organizations. The driving concept here is that something must change as a result of your activities. Once you define what must change you are required to build the instrument for change into your program. While defining change, often in qualitative ways, is difficult, it provides a different framework from conventional business approaches.

     
     
     
    • Joe Schmid
    • Managing Principal, Oak Leaf Consulting, LLC

    I haven't read the book. That said I'll go on the premise that this theory is about transformational purpose as introduced. The implication is that there is something--a company or organization--to transform into a higher competitive state.

    Purpose is powerful. It translates into ownership. Without ownership in something bigger than oneself or the immediate line-of-sight organization you are in contact with, you really can't expect greatness. Considering the myriad of unaided decisions that are made daily in an organization and their cumulative consequences, purpose is the compass for making the right decisions that define who and what a company really is.

    Discovery? I agree. Without it you are riding a hobby horse spending the time and treasure of a company, but going no where. Excellence? I agree. Without constant stewardship for improvement you are building markets and opening doors for competition to come on in and eat your lunch. Altruism is the ageless management paradox, but then again that's why management exists--to solve it. That considered, if a company does not exist to serve customers, employees, and community, they won't be profitable or sustainable. Heroism? I agree. If you are not taking the inventions of Discovery on to innovation in how the competitive game is played you will forever be an also-ran.

     
     
     
    • Anand Sri Ganesh

    An all-permeating sense of purpose within an organisation is a difficult tenet to achieve. I have come across (and been part of) many organisations that have been successful in a competitive context and in a financial sense, but would not be able to pass muster for having an encompassing sense of purpose directing the organisation's vision and actions. That would not necessarily reflect poorly on these organisations; it is just that the relentless pursuit of financial gain can hold an organisation in good stead for a considerable distance.

    It would also be true that in most organisations, strategy and ownership for critical resources are entrusted in the hands of "a few good men." It is possibly more critical that these business leaders be seized with the organisation's sense of purpose and have the ability to interpret and translate this in a manner that line managers can follow and execute.

    In the same breath, when the leadership team does not share a common sense of purpose (or worse, has different pursuits to follow), it is unlikely that the corporation will have much of a chance under the sun.

     
     
     
    • Ellis Baxter
    • CEO, High Fidelity SSS

    I have written volumes of prose on the subject, all with noble intent, but as time pases I find that the Know Why is but a link in the chain of Know What, Know Who, Know When, etc. In my final research I now find that it is all about what is required to keep the player at the table, table stakes so to speak. A simple form of this is "IT is the money." What you change is yourself, but only in the mirror.

     
     
     
    • Phil Clark
    • Clark & Associates

    Why? It is the center of all action. Our modern societies still do not like to really reveal the why. Why are millions dying in Africa? Why did Enron fail? Why is our climate changing? Why are we at war? Often the reasons or excuses are not the real answer. Therein lies the problem. We often do not like to say or know the real reason. Do you really want to tell an employee the reason you are firing them is because someone on "Wall Street" wants to make a few more cents on the dollar? We often complain, but seldom change. Why? We can provide many excuses but often do not want to face the real reason. We might have to do something hard or change. Why will always stare us in the face - facing the real reason often is the challenge.

     
     
     
    • Charles Carroll
    • consultant, independent

    "Why" and "purpose" can also relate to the "underlying doctrine" being supported. Technology is a reproducible time-boxed approach to achieving a desired state using people, processes and artifacts. Exponential smoothing was introduced because second-genration computers heated up and make mistakes when too many cards were processed, so even if you had all of the historical data, you didn't want to use it in calculations every time. It was therefore no longer an advantage when this shortcoming was removed. If you think in terms of achieving and maintaining desired states (or removing undesired states), then the ultimate purpose or state must be known along with the environmental and psychological factors that influence it.

     
     
     
    • Ollie Lind
    • Director, HOWCANI

    It seems to me there is a good deal of confusion between goals and purposes. If I may, I submit that goals are the destinations and purposes are the reasons why in any organisation, regardless of for or sans profit.

    One of the biggest problems facing industry worldwide is disengagement of employees. Could it be that this is connected to the lack of "why" in management communication to the troops?

    It's all very well for senior management to have grand and noble purposes if they are not communicated effectively to the ordinary people in an organisation.

    The main reason people make "mistakes" or perform below par is because they do not identify with a function if they see no real point to it. They don't understand the why and so it becomes unimportant to them. There is no perceived personal benefit or satisfaction to the individual and therefore no ownership.

    For any organisation to move forward cohesively it is vital that the why is clearly enunciated and continually reinforced, with adequate acknowledgement of efforts that reinforce the why.

     
     
     
    • Anupama DG
    • Chief Executive, Infoloungeworld.com

    Responding to the answers that all the whys raise may lead us away from our short term objectives ... and that is scary, isn't it? I myself feel torn between decisions of this sort--between what is right to create an impact NOW vs what is the right thing to do for longer term interests of others. Everyone wants to see quick results.

    "How" can almost always be learnt ... but facing the "why" often leads to a paradigm shift--hence the significance of "why." Dramatic changes often take place under dramatic influences. Does that mean that paradigm shifts can only happen in times of crisis? My experience has been that once the seed is sown (and it is often sown at the top), change can be driven to happen. However, engaging with an organisation is very different from sharing an idea or a dream with a few people at the helm of affairs.

     
     
     
    • Veena Bharti
    • Administrative Officer, National Insurance Company

    A sense of purpose is what elicits charged and motivated behavior. Everybody is working with a purpose, be it money or power, but many a time the individual motive comes into conflict with the organisational purpose. This can especially be seen in the context of government bureaucratic organisations, which should have public interest as the core. The bureaucracy itself becomes a powerful, self-perpetuating body with vested interests. In such a scenario, there is no sense of mission which would permeate the whole organisation and drive the public servants to serve society with zeal, frankness and courage.

     
     
     
    • Susan
    • PhD student, Swinburne University of Technology, Australia

    As a PhD student researching the reasons that founders of young companies decided to identify and articulate their "core ideology", I've followed this discussion with great interest. Drawing threads from many of the posts above, here are my thoughts:

    It doesn't have to be an "either/or" between purpose and execution focus (post 10). A sense of purpose can lead to a strong culture that assists execution (former HBS fellow Jennifer Chatman has written about this). Maybe companies need to focus more on purpose or more on execution at time to time, but they can, and indeed should, co-exist.

    There are good business reasons why the culture of self-interest or "it's all a game" (posts 26, 37 etc) should not prevail. Back in 1992, Kotter and Heskett observed that in poorly performing companies the executives were more interested in themselves than in customers, employees or shareholders. Enron demonstrates where this sort of culture can lead.

    Semantics can be important. While purpose might be seen by some as another term for mission or vision, I personally find it more meaningful. A purpose MUST answer the question "why", whereas a vision doesn't have to. A mission tends to have a measurable goal at the end of it, whereas a purpose is eternal, something that can keep a company going indefinitely. But hey, you choose the term that is meaningful for you!

    Finally, I don't like the idea of typologies. They are nearly always overly simplistic and restrictive. I find entrepreneurs identify their own specific role models which are much more meaningful to them than deciding whether their purpose is "discovery" or "heroism" or whatever. Typologies help sell books. Period.

    Is this discussion important? Oh yeah! Is it timely? You bet! Keep it going!!

     
     
     
    • Dick Meza
    • Adjunct Faculty, Chapman University College

    "Are You Answering Your Listener's Number One Question?" How will what you are proposing be beneficial or advantageous to me, my unit, and my organization's goals? If the beneficial end-result is stated upfront first in the form of a question this should minimize fear and stimulate a desire to hear more of "know-how" and "how-to." There has always been too little "know-why" or rationale in business. Stating the features of an idea, or intervention instead of the end-result benefits, has been an opportunity for improvement in basic business communication for some time. It's a kind of relic left over from sales training's "feature/benefit" theory. It requires doing your homework if you want to make the sale.

     
     
     
    • Ray Glab
    • Six Sigma Black Belt, United Health Care

    Reading some of the comments has forced me to ask, and perhaps attempt to answer, the question "Why?" Sometimes we just get too caught up in analyzing things. If getting an answer to "Why" isn't important, ask youself that question next time a child raises that question!

    Asking Why is also quite helpful in drilling down to root causes of organizational and process issues. That's "Why" the "5 Whys" is actually a Six Sigma tool--must be something to this Know Why thing.

    And, if true leadership is about direction, not speed, I'd sure like to know Why we are pursuing a specific direction or course of action.

    And yes, there is too little "Know Why" in business.

     
     
     
    • David Stanton
    • IT Manager

    Knowing why and the purpose of why will differ per person and per job responsibility. For functional management, knowing why the organization has a strategy, a vision, and a mission in place is an essential part of the success of the organization. For members of middle management, this is not such an essential part of the daily workload but does influence the decisions made. For task oriented positions, the knowledge of why has little to do with the task being completed and what they may consider being successful. What is important is knowing why different people are motivated and delivering what will help increase performance.

    I agree that purpose is powerful when it comes to attracting and inspiring employees. However, the purpose is the motivator and it more than likely will not be the same per person. The challenge is to understand the purpose per person and communicate what and why they might be interested in knowing.

     
     
     
    • S. Gnanaharan
    • Development Consultant, Yagna

    The postings in the Open Forum and a manifesto of the author (http://changethis.com/29.04.Purpose) were a great read. They are quite thought provoking.

    To the question "Is There Too Little 'Know Why' In Business?" my answer is both Yes and No. "No" because most organizations do have a purpose in the form of mission statements and "No" in the sense not all of their purposes can be fit into any one of the four types discussed by the author.

    Two distinct issues need to be addressed here. One relates to the type of purpose an organization had discovered for itself and two, its role in determining its success. It is interesting to look at the purpose of an organization using Maslow's Framework (post 7). As organizations evolve over a period of time, their purpose also gets strengthened/intensified. But rarely do they shift from one type to another--say from Discovery to Altruism. But it is quite likely that a number of organizations driven by low-level needs like profits could shift gears along the way and prefer the experience of driving a Ferrari rather than a lawn mower (post 5). The need to incorporate an altruistic agenda in the purpose of an organization is getting louder by the day and is reflected in widespread adoption of CSR measures.

    As far as the role of purpose in determining an organization's success, the title of the book itself is quite instructive. The starting point of great companies, the author claims, can be found in their purposes. However, without Know How they will remain at the place where they started. Aaron Tice (post 1) graphically illustrates this through an analogy. Know Why is like the thermodynamic energy in gasoline and Know How is the combustion engine needed for transforming the energy into work.

    That is not to downgrade the importance of Know Why. After all, starting well ensures 50 percent of success. In this regard, an anonymous posting (20) reminds me of Rudyard Kipling's celebrated six sources of wisdom. Of them all, "Why not" only provides the starting point but also gives life and relevance to the remainder. Lastly, all other types of wisdom are of "acquired" ones; whereas "Why" can only be discovered. And hence the age-old advice, "Know Thyself."

     
     
     
    • Yesha
    • MBA-HR, B K School of Business Management, Gujarat

    In my opinion, "know why" that is discussed among all, is for others. We ourselves always know the purpose. Sometimes that's explicit, sometimes not. But it's always there, known to oneself.

    By focusing more on the business front, from the organization's angle, every move is based on one or another "know why." It might be anything--a short-term mission or a long-term vision. Even it can be a willingness to move ahead or a need to maintain the same pace in a market.

    Moreover, when the focus of the purpose involves more variables it becomes known to others as well. For example, altruism. As theory says, it's about serving people in order to get profit. People might get confused about what is the actual purpose, serving people or getting higher profits!

     
     
     
    • Saurabh Gautam
    • Reliance Retail

    The purpose of business is creating wealth. It is the only "Know Why" for any business.

    Affluence is the fifth dimension which entails all discovery, altruism, excellence and heroism. Any firm which restricts itself to any one of the components is not realizing its full potential.

    "Know Why" is the primary driver to arrive at "Know How," but often that is missed as we get too much involved in the complexities of running a business. Organizations tend to stray from their objective in the absence of clear definition. And that definition is nothing beyond "Affluence" that is "Creating Wealth."

    Adding abstract dimensions and definitions to "Know Why" may work at an individual level but for an organization we need a realistic definition that's easy to understand and follow.

    Many may term it as a mean motive of an organization's existence minus all morals. On the contrary, if an organization has to be affluent and sustain creating wealth it cannot do away with morality. As already cited by Jim Heskett in his article, do we see Enron anymore?

    In conclusion, "Know Why" is "Affluence" and for "Know How" I leave this choice to the organization.

     
     
     
    • Deepa Prabhu
    • Mumbai, India

    The purpose of life is a life of purpose. This is true in our own personal lives or in the life of an organization. And the answer is within the question if purpose is about semantics or about philosophy.

    We find a lot of purpose at the top of an organization, only it may not necessarily be the four as elucidated by Nikos Mourkogiannis that is required for true transformation; it may be sometimes closer to what Adam has noted in his response!

    Every organization, by its very nature, whether it sets to do so or not, changes the world--for its employees, its customers, the community. Definitely, purpose is to be aspired for--if, sadly--it does not exist.

    That there is too little "Know Why" in business may be due to several and not one or two reasons. One may be simply because there is little or no awareness, acknowledgement as well as compulsion to "Know Why." The other reason is that organisations are not seen, perceived or understood as organic entities that need something more than goals, targets, mission, etc. Yet another reason may also be that the guarantee of long term respect and performance is not mapped, evident, or conveniently ignored. This is strange when there is evidence to contrary and I quote Jim Collins, author of the books Built to last and Good to Great, who has stated how stock returns and the performance of "visionary" companies from 1926 to 1990 had stock market average nearly eight times higher than valuation of comparison companies. The definition of such visionary companies is those who are not motivated by short term profit, but have a long term vision and incorporate the role of the company in the social and environmental fabric. These companies are guided by a core ideology and a sense of purpose that go beyond just making money. Though profit is a necessary condition and means to an end, it is not an end in itself.

    It seems to me to be very similar to the four transformational purposes mentioned. "Core ideology and sense of purpose"--keywords.

     
     
     
    • Gaurav Goel
    • PGPX - II, IIM Ahmedabad

    Goals can be defined in absolute terms; hence goals are easier to measure and manage. In general, purpose is relative and it is difficult to plan milestones to measure success of purposeful efforts. I think that purpose is a good motivator and can be used to fuel passion and dedication at work place. But we do need "know how" and goals to measure and manage the day-to-day activities of any organization.

    I'll relate purpose with extraordinary results and goals with predictable results. I would think that a right combination of "know why" and "know how" is the key to astonishing results.

    It is important for the top management to have a vision and purpose. The management needs to ensure that organization policies are aligned with the vision and the policies do not result in actions that conflict with the purpose of organization. At the same time, the business processes need to implement "know how" to ensure proper tracking of progress towards the purpose.

     
     
     
    • Anonymous

    Though purpose should always be a goal, in today's profit-centered globalized world the only subliminal message many are fed is the goal of generating profits at the expense of everything else. Until mankind's purpose is translated more quantifiably to cost and profit in income statements and balance sheets, purpose will remain just a bump in the road to profits.

     
     
     
    • Anonymous

    In some organizations in which I have worked, some leaders have been threatened by employees who ask the question "Why?"

    Some see it as insubordination; others see it as disrespectful; and still others see the justifications for one policy or another as so obvious a message that any intelligent person would have already understood it.

    If people work in an environment where "Why?" cannot be articulated in a way that creates buy-in for the employee, then the organization will suffer. Tolerance for hearing the question "Why?" asked and the willingness to answer it well is critical to success.

     
     
     
    • Mike Moreau
    • Consultant

    We live in a business culture that rewards output, which means we move quickly. Many of those put into positions of management are paid to ensure output, which means they have to hit the ground running. As such they only have time to learn the tricks of the trade rather than the trade itself. Leadership becomes positional rather than behavioral. When this happens, organizations tend to hire from the outside, rather than take the time to grow from within. This behavior is demotivation to those within the organization and tends to force them out as they seek advancement opportunities elsewhere.

     
     
     
    • Stan Heard
    • Business Consultant, Dale Carnegie

    My first lesson in leadership was to "act with purpose." It was given in the first moment that I was told that I had been accepted to Officer Candidate School. I never forgot it. I did not, however, think that it was the only lesson to be learned.

    I can only offer a perspective of 40 years experience. I submit that to be in control of my life, I must have a purpose. Purpose serves to integrate and focus all the concerns of my life. Without a purpose I would also be without values and direction. I would not have values because I would have no reference point to help me judge what is or is not important. My decisions would be valueless and would not move me toward the things that constitute my self-esteem.

    Purpose is not the only thing one must know but it is a fundamental part of what makes your life meaningful. It is also fundamental to being able to "manage" a business.

    It seems to me that we dissect the functions of management into seemingly discreet components. They aren't. Each function is tied to the other functions. Planning, Organizing, Leading and Controlling are functions that are united in a concept we call "management."

    Leadership is the work a manager does to inspire people to pursue a common goal or value ... and people need a why to persist when things don't go well. The leadership function of management requires the communication of purpose, vision, values, principles and mission so that they meld into a sensible course of direction and action. It also requires coaching in how, when, where and who to achieve the efficacy of action required for productiveness.

    A professional manager incorporates all these functions into a seamless work that answers the why, how, when, where and who questions of the organization.

     
     
     
    • Bill Mansfield
    • Director, Graybar

    Purpose is the game. Goals are the scorecard. If you can't define success (fulfilling the purpose) with measurable outcomes, the purpose loses its ability to motivate.

     
     
     
    • Dennis Maginnis
    • Manager, Teradyne, Inc.

    When leadership defines a company's "purpose" it must also find a way to drive each individual employee to make decisions based on that purpose. Excellence can only come when the individual conributors are aligned with that goal. Companies like Enron and Worldcom could never be great with one goal for the public and another goal behind closed doors.

     
     
     
    • Andrew Rudin
    • Managing Principal, Outside Technologies, Inc.

    Many thought leaders gain recognition by providing sound advice on how to achieve successful outcomes consistently. Their discovery often involves reducing successful outcomes into component parts ("The 8 Skills that Separate . . ." , "The 7 Habits of . . . "). While this decomposition approach is helpful for many (including me), the risk is that people often lose sight of how the entire organism, enterprise, or entity is supposed to work, and instead concentrate on achieving competency or skill in executing the component parts.

    Nutrition scientists are just beginning to recognize the dysfunctional behaviors that ensue when people concentrate their dietary decisions around statistics about how much fat, fiber, protein, and carbohydrates one should consume on a per-meal basis, rather than understanding how many qualitative variables must interact to predict a healthy existence.

    The strategic decisions managers make for a corporation or other organization are analagous: if the component parts of a strategy are implemented without looking at their overall fit, the result will be outcomes that are warped and unlikely unsustainable. Many pejoratively refer to this behavior as "Managing by Magazine." Enron's singular pursuit of financial return is one of many documented examples.

    The solution is not to ignore the component parts of successful outcomes, but to constantly connect the strategic initiatives to the singular goal or initiative the enterprise has chosen as the reason it exists.

     
     
     
    • Anonymous

    There is plenty of "Know How" in business, but very little understanding of "Know why" or "cause and effect." Having received an engineering degree before my business degree, I often heard the words "stop thinking like an engineer." The business program that I received my MBA from didn't offer many courses in economics, which I think teaches the "why" in business.

    Take a moment to look at 2 primary drivers of the U.S. economy: travel and the auto industry.

    How well are these industries doing? The tragic events of 9/11 will have an impact to our travel economy greater than any of us might ever be able to imagine. The why in this equation is pretty simple. The economics behind traveling equates to spending money. Business or personal travel both result in spending.

    Now let's look at the auto industry. Like examples in the book "The Innovator's Dilemma" by Clayton M. Christensen, the U.S. auto industry chose to ignore making money on automobiles. They instead chose to focus on trucks and SUVs. The "how" to make money was easy to see. The Japanese auto industry moved right in to fill the gap left by the U.S. auto industry. "Why" didn't leadership understand the long-term effects? Or why would good leadership not focus on the long term?

    This is again a simple equation: U.S. business leaders today only care about "How" to make a profit and take the easy road. And have no interest in investing in the "why" unknown R&D areas, like solar power and/or alternative fuels. Our leaders will tout the importance of inovation, and in the very next breath outsource product development to China and India.

    IMO, true leadership in R&D doesn't exist. Years ago companies like Texas Instruments and 3M empowered employees to innovate, and this created new industries. Jack Kilby's Digital Signal processor sparked the development of: Computers, Calculators, Cell phones, Modems, Software, The Internet, and eBay. Paul Bredlove's (another Texas Instruments engineer) idea was to create a talking calculator, after being laughed at, this laughed-at idea became "Speak and Spell" which I think became the company LeapFrog Learning which was purchased by Ross Perot?

    In sum, the "why" is taught in engineering, not in business schools. Engineering schools should focus on creating engineers who have a better understanding on how to create commercial value. Business schools need to teach the "why" of economics. And our U.S. engineers of tomorrow need to be compensated to keep the innovative advantage here in the U.S. It is a global economy, and we need to innovate new procducts or "Become Extinct" Survival Isn't enough, by Seth Godin. The U.S. economy will fail if today's leaders do not start thinking about the long term.

     
     
     
    • Arthur Bertinus
    • Senior Business Consultant

    Companies (and small business) start very idealistic, driven by the spirit of entrepreneurship, to serve the customer, design and create new products and services. Within this growing process there will come a time that men will ask what's the purpose of this all. Where is this leading me or us in the industry or society? These questions are personal, but somehow when someone enters the corporate life and starts climbing the career ladder, they somehow manage to suppress philological questions about what the purpose is and what this all means.

    The corporate will never write the rules on the wallpaper saying, "do not ask what thy purpose is in this organization." The top management will explain the purpose of the organization to create the context for the organization's strategy. Contrary to this is that the purpose of the employee is to deliver service to the company and get paid for this. On the other hand the company delivers goods and service and get paid. Then the purpose of any organization is to design a context where both parties can accomplish their purpose.

    This is easier said than done. Most organizations are still designed or have industrial-age methods and philosophy of running the business. If we look at Enron, somehow along the way the company has lost her purpose. Enron's purpose was not making money, because they were not making money. Enron failed to create the context to facilitate the purpose of both parties, the company and the employees.

    Managers are driven to run businesses on past success and old management concepts, are too busy running the day to day business, don't have time for the future, and lack the knowledge of how to create a vision and context for the company, employee and their clients. Without this pattern there will always be too little "know why."

     
     
     
    • Petrina Buckley
    • Director, Magneto Communications

    Fascinating topic!

    A wishbone on its own (a powerful "why") is not enough. Business also needs a strong but flexible backbone (what/how) to consistently execute on the "why."

    People need purpose (a "why") to thrive as much as we need oxygen. Lack of purpose leads to unhappiness or lack of directed productivity. Both erode any business fast. If people don't get a clear purpose through their work environment they'll create it at home. Examples are the mechanic who underachieves by day and yet stays up all night innovating in his back shed.

    A business must have a powerful "why" in order to attract the right people that are ready and able to deliver on the purpose. The why is there only to work as a magnet to attract the right people and to act as "guide rails" for the daily choices each individual and the business as a whole make from that point on. Just like a human being, purpose evolves over time and needs to be revisited. It's a healthy part of growing.

     
     
     
    • Jacoline
    • Loewen, Loewen & Partners

    The roles of managers and leaders vary according to the size of organization and position on the growth curve. Of course, leaders want to inspire their people to get things done and the summary of the four kinds of purpose explored in the book "Purpose" nudged a memory from a meeting with a top fund manager. I asked how he recognized the type of leader or CEO who would get a company to spin out revenues, as he obviously knew the secret.

    He said, "I don't know how to tell you how to recognize a great business leader. What I do know is that if a leader is pushing outside of the industry norm, I want to put my money in his business."

    This pushing against the system can be encouraged in employees of big companies by giving permission to "break china" for customers.

     
     
     
    • Mark Powers
    • Consultant

    This has been an illuminating and rich discussion. Thanks to HBS for providing this forum.

    It seems that one important theme of the comments is that purpose is a part of the whole, albeit a neglected part. I'm sure that Mr. Mourkogiannis is fully aware that there are complementary tools one uses to win "the game." In other words, purpose is a necessary, but not sufficient, building block of effective organizations.

    An organization can also benefit from having a vivid and compelling picture of the future it hopes to create, building a culture that supports its purpose and direction, and implementing processes that will effectively deliver its purpose and move it in the chosen direction. Having these as part of a dynamic, interconnected system which includes purpose (Know Why) at its core would seem to provide an effective organizational guide.

    Perhaps the most important challenge was pointed out by Mr. Chitedze in Comment 9: "The problem is we get so caught up in the nitty gritty of implementation that we forget why we are here in the first place." This insight begs the following question: who has the role of ensuring that the organization we are building stays in sync with our purpose?

     
     
     
    • George Chiesa
    • Founder and CTO, dotNSF Inc

    "Why" is the kind of "ultimate question" as in Isaac Asimov's famous short story: Asimov explained, in quite dramatic terms, the costs for humanity of insisting in trying to verbalize (in this thread terms that would be consult-ize) what common sense can explain as intuitively a good thing.

     
     
     
    • Mike Splaine
    • Director, Advocacy Programs, Alzheimer's Association

    In motivating change or activities that may not seem natural (e.g. political participation) the "Why" has always made the "what" conceivable and approachable. Glad it is getting some serious attention.

     
     
     
    • Sylvia Lee
    • Managing Partner, Performance Partners Inc.

    I haven't read either of the books listed for this discussion, so may well be talking out of turn, but it seems to me that one of the problems we have with the concept of purpose is an assumption that there is only one of it. In reality, the employees in an organization may well all buy into a common vision, but each person finds different purpose in achieving that vision. What constitutes "why" for me may not be, and probably isn't, what constitutes "why" for you. And why should it be the same? I bring a whole different set of unique experiences to my work than you do, so why would anyone expect us to find the same meaning in the work that we do?

    Vision, to me, is what drives the company, whereas purpose is what drives me.

    Along the same lines, even if we accept the idea of a common purpose, why would that exclude the idea of multiple individual purposes within the larger, collective purpose? Again, there can be multiple purposes existing in perfect (and synergistic) harmony. It's when they're in conflict that we experience trouble.

     
     
     
    • Eric Wendel
    • Founder, CTO, PiQue Systems

    The question "do we know why?" intuitively seems to me to be THE question. Sure we have lots of know-how, but as Clayton Christensen points out in the Innovator's Dilemma/Solution, having the best "know-how managers" in the world is not only insufficient, it can actually BE the cause of failure.

     
     
     
    • James Johnson
    • Principal, EnterCap Partners, LLC

    As a consultant in organization effectiveness and leadership development for many years I know where I would put my money--with Charan. Purpose is wonderful and no easy feat for many challenged leaders but as Al Haig said, "Vision without action is a daydream." Of course organizations need not face an either-or choice. Effective leadership selection and development can increase the odds of finding a well-rounded executive. It is just that many companies don't do this well. Why? I think much of it is hubris, a macho-like cocksureness that "I can see a good leader a mile away." So they end up with gifted individual contributors in the management pool, often the ones with a great social presence, narcissistic and oblivious to the needs of others. They may make great PowerPoint slides and talk a good game but at the end of the year they matched the GDP. This style can all to easily appear to others as visionary.

     
     
     
    • Ahmad Faraz
    • Noahs Trading

    The buck stops at the "purpose."
    Both at individual and corporate (collective) levels. Corporations can't survive without defining these seven letters. Purpose, well-executed, creates the ultimate difference between a mediocre and a frontline blue chip.The path of achieving a purpose varies with the vision, corporate culture, managerial systems, and leadership skills.

     
     
     
    • Arsalan Haneef
    • Consultant, Access to Justice Program, Asian Development Bank

    One key problem facing public and private sector organizations is diluting, if not eliminating, sub-unit orientation. This dysfunctional tendency comes in the way of an organization achieving its goals, which I consider a combination of "discovery, excellence, altruism, and herorism."

    While each element appears to be a necessary ingredient for organizational effectiveness, I don't think each element in itself is sufficient to drive an organization toward a sustainable success. For instance, the chances that you will "discover" something creating value for an oranization depends not only on excellence, altruism, and heroism. I think the connection between success and what drives it is much more complex. However, sticking to the know-why principle certainly helps people see why they are doing what they are doing and that ensures that the value generated by peoples' interaction within an organization is worth more than the sum of values individually created by these people. The author captures this vital connection in his work.

     
     
     
    • Hujaj Ali Nawaz Khan
    • Senior Reservation Planning Officer, PIA

    Know How? is the phenomenon derived from an outside environment based upon experiences from the past and others as well, and Know why? is a phenomenon derived from an inside environment for how you want to do it. It's the willingness from where you organise your activities and try to derive results by involving patience and determination for what the results/profits will be after doing it; while in Know How you set a target and follow it wherever it takes you. The crux of the matter is that you decide whether you are results driven or people driven. In the future it will be "Why know how?" The strategy will be "ideology driven" for "results driven people."

     
     
     
    • Narendar Singh Raj Purohit
    • Asst. Manager - ISD&C, MetLife India Insurance Co. Pvt. Ltd

    Purpose is the most cardinal thing in any organization, whether the organization is running its business for creating wealth for the shareholders or acting as a non-profit organization to serve the poor and needy. Purpose is mostly seen in the form of Mission and Vision in any organization; it is about where you want your organization to be after 5, 10 or 15 years; that is what drives the personnel and their efforts. While every organization has to focus on short term goals, the long term goals are what purpose is about. It's about telling people what we want to achieve, by which time we have to achieve them and how we will achieve the set targets. Mind you, no organization is created with a view to close the business after 1 or 2 years.

    Top management defines purpose, as the top management is the one who is constantly in touch with the investors and shareholders and knows what they (investors, shareholders) expect out of the invested finances in business, in simple terms Return-on-Investment. For example: IBM, Oracle or Microsoft will not establish its business in India or China just to have fun. Similarly, Infosys from India will not open its office at Canary Wharf just to enjoy the cool climate of London. There is a purpose behind all these organizations of catering to a new business environment. To this extent the top management drives the purpose .... Once the purpose is defined, it's all about ways and means of attaining it.

    To conclude, what drives millions of working people and their organization is the word "Purpose."