Why clarity of purpose is so important for both effective leadership and effective management

By Elisabeth Goodman, 9th October 2019

According to W. Bennis, “Managers are people who do things right and leaders are people who do the right thing.”

Clarity of purpose is one topic where these differences in remit can be vividly illustrated, as Thomas W. Malnight, Ivy Buche and Charles Dhanaraj remind us in “Put purpose at the core of your strategy” in the September-October 2019 issue of Harvard Business Review (pp. 70-79).

 

Clarity of purpose underpins organisational strategy and change

This is the main message in the HBR article.

Responsiveness to external drivers: A leadership team that is clear about the purpose of its organisation – the main reason why it exists – can respond to economic, competitive and other external drivers of change in a well thought out way. Or, as per the opening quote for this blog: they can “do the right thing”.

A planned approach to change:

With clarity of purpose, leaders can take a considered approach to how they want to work with the market, their customers, make changes to their products and services or their internal processes.

Without clarity of purpose any change is simply haphazard, unlikely to get the backing of stakeholders, and unlikely to succeed.

When leaders are clear about their purpose and can communicate this as the context for organisational change, they will be more effective at bringing the rest of the organisation on board with the change.

Evolving the purpose: Should it be appropriate, leaders can also evolve the purpose to respond to opportunities and challenges, as long as they make the basis for the evolution, and its outcome, clear to all stakeholders.

Successful high-growth companies:

According to Malnight et al, it is such a purpose-led approach that makes for successful high growth companies. One of their illustrative examples is Neste, a Finnish oil-refining firm, that made a switch in 2009 to developing sustainable sources of energy. This was a response to dropping oil prices, new EU legislation on carbon emissions, and a 50% reduction in their market value over the course of two years. They summarised their new purpose as: “Creating responsible choices every day”.

Neste’s CEO and his leadership team had to persuade employees, customers and investors; make major investments in infrastructure and innovations in technology; and create a fundamental change in the company’s culture. By 2015 the company was the world’s largest producer of renewable fuels from waste and residues.

Clarity of purpose provides the ‘why’ for motivating people to work for an organisation

Dan Pink and Simon Sinek are two exponents of using the purpose or the ‘why’ of an organisation as a strong motivator for people who work there (or indeed for those who buy from the organisation).

Malnight et al. remind us of this too: “The two best tactics for doing that [making purpose central to an organisation’s strategy] are to transform the leadership agenda and to disseminate purpose throughout the organisation.”

A manager who communicates the purpose of the organisation, provides people with the context for how they and what they do fit into the bigger picture. The manager is “doing things right” by giving people the information that will help them to focus and be at their best in support of the organisation’s purpose.

According to Malnight et al., the softer benefits of having a clear purpose include:

• Unifying the organisation – as employees understand why changes are happening and are more likely to support them
• Motivating stakeholders – the authors suggest that there is an increasing trend for employees, and maybe especially Millennials, to want to work for an organisation that is contributing to some ‘higher cause’
• Broadening impact – as explained by the authors, is about providing the context for how teams in the organisation fit in and the value that they can bring to the organisation and perhaps, ultimately, to society.

Conclusion

With clarity of purpose being so central to both leadership and management, organisations should ensure that this is a regular agenda item on leadership and management team meetings.

An organisation’s purpose should also be regularly cascaded in communications through the organisation, and especially at times of change, and when setting team and individual objectives for the year ahead.

Notes

Elisabeth Goodman is the Owner and Principal Consultant at RiverRhee Consulting., a consultancy that specialises in “creating exceptional managers and teams”, with a focus on the Life Sciences. (We support our clients through courses, workshops and personal one-to-one coaching.) Elisabeth founded RiverRhee Consulting in 2009, and prior to that had 25+ years’ experience in the Pharmaceutical Industry in line management and internal training and consultancy roles supporting Information Management and other business teams on a global basis. RiverRhee is a member-to-member training provider for One Nucleus.

Elisabeth is accredited in Change Management, in Lean Sigma, in Belbin Team Roles, MBTI (Myers Briggs Type Indicator) and is an NLP (NeuroLinguistic Programming) Practitioner. She is a member of CILIP (Chartered Institute for Library and Information Professionals) and of APM (Association for Project Management) in which she was a founding member of the Enabling Change SIG.