11th October 2017 - Unilever and Blueprint discussion
Notes from our Purpose conversations -
On the 11th October Patrick Hull of Unilever and Charles Wookey joined the L&D community to discuss the increasingly popular business issue of ‘Purpose’. The conversation began with Charles’ challenge that the pervasive disconnect between business and society is the product of dominant ways of thinking about business purpose, and what motivates people. The result is unrealised potential within people, within businesses and within society. When that happens both business and society lose out.
Here is a recap on Blueprint's thinking about purpose and people:
Organisations are a product of peoples thinking. These can limit or enable what any organisation is able to achieve.
Taken together how any organisation thinks about its purpose and about people shapes what it does.
Over the last 40 years the dominant view has been that the purpose of business is to maximize shareholder value (MSV). But, this view is a social construct. Contrary to popular opinion, this view is NOT mandated by the law – Section 172 says that the duty of directors is to promote the success of the company. That duty is to the company as a whole and not directly to shareholders. Explicitly, the law does not say that the duty of the directors is to maximize shareholder value. There is an alternative – and this is not a new idea. In fact, prior to the 1970’s and Milton Friedman, a different view prevailed. This was that a business should have a clear purpose – a why… a reason for existing - where Profit was seen as the condition and outcome of a good business living out its purpose well.
Economist John Kay describes it thus:
“Profit is to business as breathing to life - without it you die but it’s not why you get up in the morning” (though it may keep you up at night ..!)
Alongside the MSV view of purpose has been the idea that people at work are best assumed to be self interested motivated by money status and power. This assumption about people and motivation is also very powerful. These ways of thinking taken together seek to align individuals self interest to the maximization of profit. But we know from a range of disciplines (philosophy, faith, neuroscience, behavioural economics) that people are “hard wired” to care for others, and to want autonomy, mastery and meaning. So organisations that appeal only to self-interest lose out on intrinsic motivation, and the loyalty that comes when people feel the business genuinely cares about them.
Blueprint’s view is that there is an alternative, which reconnects business and society. It’s is having a purpose - a reason for being - that moves people to commit to a shared worthwhile endeavour, creating a set of relationships that contributes to high performance. Profit is the result not the purpose.
Crucially though it’s not just a question of purpose. How the organisation thinks about people and the quality of relationships it has - the mindset about people - will determine the extent to which a good purpose can actually come to life in a business.
Unilever and the Purpose journey
Patrick (Paddy) shared that Unilever believes that having a clear Organisational Purpose is a powerful enabler of superior performance. As per the latest Korn Ferry report People on a Mission – December 2016:
“Purpose-driven companies with humanistic values outperformed the S&P 500 by 14 times over 15 years. People with a positive, energizing purpose tend to be focused, optimistic, and successful. Great purposes inspire both people and Organisations to do great things.”
We have further evidence from our own organisation: our Purpose-driven Sustainable Living Brands grew over 50% faster than the rest of our business in 2016. They delivered over 60% of our growth.
However, a clear company purpose is not enough on its own. Whilst this provides a powerful focus for the organisation and attracts the millennial generation in particular (82% of graduates who’ve joined Unilever say that they did so because of the values and sense of purpose they found here), we know this also has to feed through into everyday behaviours that drive the business forward – and this takes time and focus. We know this ourselves: 7 years after the launch of our Unilever Sustainable Living Plan and our purpose to Make Sustainable Living Commonplace, we are still working to embed this into the way we do business. And we know this from looking externally: many organisations say they have a meaningful purpose – and yet, their employees appear to make decisions that are not in line with that purpose. Why is this?
If we wish to unlock the full power of a purpose-driven organisation then we need to help our people unlock the power of purpose in their own lives. When people understand how purpose is the key to helping them accelerate their growth and deepen their impact (in both their professional and personal lives), then they can understand the importance of preserving and driving the organisation’s purpose.
Therefore, by helping our people discover their purpose – their authentic leadership – in their work we ensure that they treat their part of the business as owners, as well as giving them greater fulfilment.
The live work inside Unilever has focused on cascading the ‘Discover your Purpose’ programme throughout the organisation. It started with taking our EVP and SVP level staff through an intense 3.5 day workshop on Purpose. This ensured that our senior leadership bought into the idea of purpose as a way to galvanise individual and Organisational alignment and engagement. With this in place we decided to cascade a programme on individual purpose throughout the organisation. Our target by the end of 2018 is to reach a third of the organisation so that we create the critical mass for purpose to become the language of the organisation.
Patrick explained the Unilever journey – “I don’t feel that we at Unilever have all of the answers; we are a work in progress. But, we have huge ambition in this and we want to talk to others to ensure that we achieve them”
How do incentives work for or against us?
Are we ‘what we repeatedly do’? Behavioural science shows a compelling body of evidence that actions create actions, which then create character. This being the case, then the incentives we deploy change action in the moment and are material in creating the person who is at work. Therefore, the burden of designing these incentives properly is great. The Organisation is responsible for the increase or depletion of altruistic capital. We try to use regulation to monitor bad instincts, but, that can kill other things such as creativity and innovation. Is there a better way?
Worth a watch – Dan Pink’s RSA short video on The Surprising Truth About Human Motivation: https://www.youtube.com/watch?v=rrkrvAUbU9Y
Key messages coming through on ‘Purpose’
Purpose has to exist in the past, present and future
The assumption we are implicitly making about human nature drive the way in which we design incentives etc. and that drives what we create in our Organisations
Don’t ‘do CSR’! This funneling of ‘responsible business’ through a department that is extrinsic to the core, too conveniently puts things that take place inside your business, on the outside of your business
Our role as L&D/HR / People Officers is about creating the context, the safe space for people to bring their whole selves to work and to live a life fully lived
Asking employees to uncover their personal purpose is not difficult – this is natural and connects to the human heart
We do not need to force a link between personal purpose and Organisational purpose – this personal purpose work helps unlock an appreciation for the org purpose, it’s power and it’s importance.
If it feels fake, you have a problem – the intent has to be sincere
Evidence – there is a good deal of evidence about the importance of coherence and how our working memory goes to processing dissonance
Local leaders need to give local context if individual purpose is to be effective
If you open up the personal and Organisational purpose you need to be ready to take the consequences and work hard to ensure resonance over dissonance
If you need a new purpose for the next generation, think hard, consult widely, go deep and take your time.
You have a purpose whether you like it and whether it serves you or not – as with values – even if they don’t serve you – they are there
Leaders are the lighting rods that galvanise people
You can start with Why at any point – and there is always a why.
Key Questions to get us started inside our own organisations:
What would change if we, as an organisation, took Purpose seriously?
Should we, like Unilever, radically simplify our HR systems and ‘other stuff’? If Purpose should live in our people strategy then do we need a set of new HR tools to re-engage the whole human being and let that live in their relationship with the company?
Is a programmatic approach the right approach?
Is there a timeline? What is the horizon of a Purpose?
Do extrinsic incentives crowd out intrinsic motivation?
Does Purpose have to be altruistic? How best to enable the potential of the people, latent intrinsic motivation?
Research shows that ‘Altruistic Capital’ accumulates - creating a major return on the investment: What depletes this and how can we as designers of our organisations consciously design/determine this?
How does wider environmental ‘responsibility’ fit into this ‘Purpose’ conversation? Some business models are in conflict with environmental concern.
In what way do the Feedback loops and timelines of these focus or detract, from our actions.