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.
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.
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)