To be successful, companies must build trust with their employees and consumers. But how can companies do so in these turbulent times when they are being pulled in many directions all at once?
First, businesses must realize that trust is fragile and must be continuously nurtured. And that means leaders must clearly articulate what it is they stand for and then take decisive actions around those beliefs. Not just when it’s easy or convenient, but even when it’s difficult.
In my new book, Deep Purpose: The Heart and Soul of High-Performance Companies, I explore how some leaders embrace “deep purpose” as a way to build trust and in so doing achieve both impressive economic results and positive social impact. The book demonstrates how purpose-driven business leaders find success by clearly articulating a purpose for the business. But they go way beyond words and try to embed those principles into every aspect of the organization. This purpose serves as a compass to guide all decisions, but also as an operating system that shapes all facets of the business, including its strategy, culture, and its public relations.
It enables the organization to reconfigure its organizational design so that empowerment and collaboration are not just aspirations but achieved reality. Purpose goes from being a slogan to a set of lived principles.
In the video below, Starbucks CEO Kevin Johnson explains the enormous challenge he faced in 2018 when a manager called the police on two black men who were waiting for a business meeting and were wrongly accused of loitering at a Starbucks store. “We work to create a warm, welcoming environment in our stores for every customer that visits Starbucks, and on that day in Philadelphia, we failed,” Johnson says.
Johnson considered himself accountable—and he also took action, closing all Starbucks stores to provide training to employees on racial bias and inclusion. Looking back, Johnson says that moment in Philadelphia gave him the opportunity to reaffirm the company’s sense of purpose.
“Values are tested at times of adversity,” he says. “If you make the decision, do the right thing, even if it’s hard, it’s true to those values, it builds trust. It builds belief. And it reinforces the mission that we stand for, our purpose, and it reinforces the values, our culture.”
Book Excerpt
Deep Purpose: The Heart and Soul of High-Performance Companies
Ranjay Gulati
Chapter 7: The Purpose-Autonomy-Trust Nexus
On one level, the connection between trust and autonomy seems fairly obvious, but analyzing it I found some interesting connections not only between trust and autonomy, but between these concepts and purpose. The links between these three were so nuanced and multi- directional that I came to conceive of a veritable nexus of purpose, autonomy, and trust.
To glimpse this nexus at work, consider the fast-growing American eyewear retailer Warby Parker. Founded in 2010, Warby Parker seeks to make eyewear affordable for everyone and to advance the cause of “socially conscious business.” To make good on this existential intent, Warby Parker adopted a signature policy of giving away a pair of glasses for each one sold—what it calls “buy a pair, give a pair.” As of this writing, Warby Parker has given away some eight million pairs of glasses and sends every three-year veteran of the company to a developing country to see its glasses donation programs in action. The company also broadened its social contributions, running programs that seek to expand access to eyecare in general among those who lack it. At one time a B Corp, Warby Parker is carbon neutral and advocates publicly on behalf of social issues, including immigrants’ rights, LGBTQ+ protection, and net neutrality.
Like Mahindra, Warby Parker addressed the Too Many Bosses prob lem in the course of pursuing deep purpose. During the company’s early days, Warby Parker’s four founders “had no hierarchy between themselves, committed to consensus-based decision-making and agreed that clear communication should be a core value of their start-up, going as far as to conduct regular 360-degree reviews of one another.” As the company grew rapidly during the 2010s, leaders emphasized autonomy as an operating norm, to the point where employees who had worked in more conventional organizations found the transition jarring. Leaders integrated crowdsourcing into decision-making, most notably in the firm’s product development group. Warby Parker created a system called Warbles that allowed employees to propose new projects to work on in accordance with the firm’s strategy. Employees, managers, and lead ers voted to determine which projects the company would prioritize. Afterward, employees could decide which projects to work on. If they wished, they could choose projects that didn’t make it to the top of the priorities list.
As cofounder and co-CEO Neil Blumenthal told me, such autonomy presumed the existence of trusting relationships. “If you have trust in one another,” he said, “particularly if leadership has trust in the team, they can grant autonomy to team members.” He and other leaders explicitly communicated confidence in their employees, enshrining trust as one of the company’s core values. But for autonomy to blossom, employees also had to trust leaders. They had to have faith that leaders would support them if they made decisions that later turned out to be misguided. Warby Parker went out of its way to win this trust by explicitly welcoming employees to take risks, show creativity, and express themselves (another of the company’s stated core values, for instance, was to “pursue new and creative ideas”). Leaders felt that their willingness to trust employees in turn induced employees to trust the company more. “To earn trust you have to give trust,” cofounder and co-CEO Dave Gilboa says. “Trust is a two-way street.”
Purpose greatly intensified this connection between trust and autonomy. Scholars have argued that purpose benefits companies in part by prompting employees to trust the company more. Some theorize that purpose fosters trust inside companies because it clarifies the company’s decision-making and enhances its credibility. Such trust in turn comes to pervade the organization, underpinning, I argue, the granting of autonomy. Purpose transforms the entire basis for cooperation inside the workplace, turning the enterprise from a nexus of contracts between self-interested individuals into a nexus of commitments. As my research confirmed, the trust that deep purpose companies inspire in employees not only forms such bonds; it’s visceral and experiential—a stark contrast with the absence of trust that exists in most organizations.
At Warby Parker, Director of Social Innovation Jesse Sneath told me of a memorable story shared by one of its veteran employees. To help employees connect with the purpose, Warby Parker sends them into the field to help distribute glasses to children in need. The departing team member went to a school in a tough neighborhood in the Bronx to present a new pair of eyeglasses to an eighth grader with severely impaired vision. “Have you ever gotten glasses before?” this employee asked the child. “No,” she replied, “this is my first pair. Sometimes my mom lets me borrow her glasses.”
This brief exchange made a strong impression on that employee. The thought of a child who desperately needed glasses having to go without them and to borrow their mother’s glasses on occasion was heartbreaking. And to understand firsthand what it meant for a child’s life prospects to finally have glasses—well, that was amazing. This experience stood out years later as one of the most powerful moments of this employee’s career. It shaped his view of the company, inspiring him to embrace its mission. “A lot of team members have really similar experiences,” Sneath said. “They feel connected, engaged, and proud of what we’re building.” They come to trust the company, its leadership, and the moral community of which they are a part, for they can see that the company delivers on its lofty aspirations.
If a reason for being allows deep purpose leaders to nourish employees’ trust in the company, these leaders cement that trust by granting employees more autonomy in actualizing the purpose. When employees encounter autonomy on the job, they understand that deep purpose leaders possess an entirely different conception of the enterprise than most leaders do. This validates the purpose in their eyes—they perceive it as real and worthy of their own commitment. We might further observe that purpose presumes the existence of considerable autonomy. Pur pose offers an alternative to rigid control—it creates an environment in which individuals regulate themselves in ways helpful to the organization and to themselves. But empowering individuals to self-regulate requires that the company trust them and grant them a measure of autonomy— otherwise self-regulation would mean little.
Warby Parker and other deep purpose companies create a virtuous circle of trust: by establishing a purpose and trusting employees to bring it to life, they prompt employees to trust the company even more and to engage even more energetically on the purpose’s behalf. A nexus of mutual trust, autonomy, and purpose emerges, with each of the elements undergirding and enhancing the other. The result is a very different kind of organization, one that has freed itself to some extent from the iron cage and become more dynamic, nimble, and innovative.
There is one wrinkle: the autonomy that purpose helps to fuel isn’t absolute. It usually comes with guardrails that instill a degree of control and render greater autonomy possible. Some might think of control and autonomy as opposites, antagonists in a zero-sum game. My research has shown that we can deploy constraints to pave the way for the healthy exercise of autonomy. Total freedom seems desirable, but it frequently proves a burden, leading to confusion, chaos, and overwhelming choice for employees as well as diminished performance. By providing a frame-work that helpfully bounds action, leaders and companies can liberate them to make choices autonomously and perform at their best.
DEEP PURPOSE. Copyright © 2022 by Ranjay Gulati Reprinted here with permission from Harper Business, an imprint of HarperCollins Publishers.
Feedback or ideas to share? Email the Working Knowledge team at workingknowledge@hbs.edu.
[iStockphoto/Mauricio Graiki]