Comments on: Providing Meaning and Purpose http://www.thecareguys.com/2010/03/01/providing-meaning-and-purpose/ Sharing Experiences on Caring Leadership Tue, 24 Mar 2026 20:47:31 +0100 http://wordpress.org/?v=2.8 hourly 1 By: Heinz Landau http://www.thecareguys.com/2010/03/01/providing-meaning-and-purpose/comment-page-1/#comment-62 Heinz Landau Sat, 06 Mar 2010 16:02:42 +0000 http://www.thecareguys.com/?p=635#comment-62 Dear Mr. Roder, If you do some search, you will surely come across academic evidence for the impact of providing meaning and purpose on a company's performance. Apart from getting access to the research behind the papers that I had mentioned in my blog, as one example, please find below an excerpt from the homepage of the Purpose Institute (www.thepurposeinstitute.com) referring to some relevant examples: "Jim Collins demonstrated in Built to Last that organizations driven by purpose and values outperformed the general market 15:1 and outperformed comparison companies 6:1. Harvard Business School faculty members Kotter and Heskett studied blue-chip firms across 20 different industries and found that firms with strong adaptive cultures based on shared values significantly outperformed firms with weak, values-neutral cultures. Over the four-year period that they observed these companies, revenue grew more than four times faster, rate of job creation was seven times higher, stock price grew 12 times faster and profit performance was significantly higher than comparison companies in similar industries.(1) In a book entitled Firms of Endearment, the authors identify 30 companies (three of whom include our past or current clients: BMW, Southwest Airlines and Whole Foods Market) driven by a sense of purpose and humanistic principles. These companies put the needs of their stakeholders ahead of the needs of shareholders and are bringing about a profound change in the existing capitalist paradigm. The authors found that companies that choose to put their employees and their customers first are outperforming conventional competitors (who have an eye almost exclusively on profit and shareholders), on the order of 8-to-1 in stock market performance. Not only is overall stock performance significantly better, employee turnover is lower, productivity is higher and pricing strategy is not subject to the same low pricing pressure experienced by pure profit-driven, shareholder-focused competitors.(2) Far from being some touchy-feely concept, the best business gurus of our time have identified purpose as a key ingredient of high-performing organizations. (1) Corporate Culture and Performance, John Kotter and James Heskett (2) Firms of Endearment, Rajendra Sisodia, David Wolfe, Jagdish Sheth" You mentioned in your comment that balancing the interest of all stakeholders as well as focusing on a purpose beyond cash (probably you meant profit) are simply the basics of good managing for you. At the same time, I believe you are aware that a considerable number of companies are not led and managed this way. You also mentioned that the CEO who is focusing on traditional old values might do so for a reason. In your opinion, if the company is under financial pressure that is exactly what you epect him to do. Does that mean that in times of crisis, the company should throw over board its meaning, purpose and value - system? Actually, that is a common mistake that is made all too often. You need to follow your values and your meaning and purpose also in terms of crisis. A good (or rather a bad) example is the (non)-commitment of companies to CSR that they show in terms of crisis. In such times, you can see whether CSR is purely a fashionable marketing gimmick or whether the company has an authentic belief in CSR. I know from some directors in my NGO - network that last year and still ongoing, a lot of companies have given up their support to NGOs either completely or have reduced it drastically. I fully understand that in such situations a reasonable cut of CSR - support makes sense (in line with other budget cuts), but I seriously doubt the genuineness towards CSR of such companies in the first place. Kind regards, Heinz Landau Dear Mr. Roder,

If you do some search, you will surely come across academic evidence for the impact of providing meaning and purpose on a company’s performance.

Apart from getting access to the research behind the papers that I had mentioned in my blog,
as one example, please find below an excerpt from the homepage of the Purpose Institute (www.thepurposeinstitute.com) referring to some relevant examples:

“Jim Collins demonstrated in Built to Last that organizations driven by purpose and values outperformed the general market 15:1 and outperformed comparison companies 6:1.

Harvard Business School faculty members Kotter and Heskett studied blue-chip firms across 20 different industries and found that firms with strong adaptive cultures based on shared values significantly outperformed firms with weak, values-neutral cultures. Over the four-year period that they observed these companies, revenue grew more than four times faster, rate of job creation was seven times higher, stock price grew 12 times faster and profit performance was significantly higher than comparison companies in similar industries.(1)

In a book entitled Firms of Endearment, the authors identify 30 companies (three of whom include our past or current clients: BMW, Southwest Airlines and Whole Foods Market) driven by a sense of purpose and humanistic principles. These companies put the needs of their stakeholders ahead of the needs of shareholders and are bringing about a profound change in the existing capitalist paradigm. The authors found that companies that choose to put their employees and their customers first are outperforming conventional competitors (who have an eye almost exclusively on profit and shareholders), on the order of 8-to-1 in stock market performance.

Not only is overall stock performance significantly better, employee turnover is lower, productivity is higher and pricing strategy is not subject to the same low pricing pressure experienced by pure profit-driven, shareholder-focused competitors.(2)

Far from being some touchy-feely concept, the best business gurus of our time have identified purpose as a key ingredient of high-performing organizations.

(1) Corporate Culture and Performance, John Kotter and James Heskett
(2) Firms of Endearment, Rajendra Sisodia, David Wolfe, Jagdish Sheth”

You mentioned in your comment that balancing the interest of all stakeholders as well as focusing on a purpose beyond cash (probably you meant profit) are simply the basics of good managing for you. At the same time, I believe you are aware that a considerable number of companies are not led and managed this way.

You also mentioned that the CEO who is focusing on traditional old values might do so for a reason. In your opinion, if the company is under financial pressure that is exactly what you epect him to do. Does that mean that in times of crisis, the company should throw over board its meaning, purpose and value – system? Actually, that is a common mistake that is made all too often. You need to follow your values and your meaning and purpose also in terms of crisis. A good (or rather a bad) example is the (non)-commitment of companies to CSR that they show in terms of crisis. In such times, you can see whether CSR is purely a fashionable marketing gimmick or whether the company has an authentic belief in CSR. I know from some directors in my NGO – network that last year and still ongoing, a lot of companies have given up their support to NGOs either completely or have reduced it drastically. I fully understand that in such situations a reasonable cut of CSR – support makes sense (in line with other budget cuts), but I seriously doubt the genuineness towards CSR of such companies in the first place.

Kind regards,
Heinz Landau

]]> By: Stephan http://www.thecareguys.com/2010/03/01/providing-meaning-and-purpose/comment-page-1/#comment-61 Stephan Thu, 04 Mar 2010 06:03:57 +0000 http://www.thecareguys.com/?p=635#comment-61 Hi, Tobias, Please, check the websites of Gallup and Towers Perrin. There you find hard evidence, research and a chance to be better informed. Cheers, Stephan Hi, Tobias,
Please, check the websites of Gallup and Towers Perrin. There you find hard evidence, research and a chance to be better informed.
Cheers, Stephan

]]> By: Tobias http://www.thecareguys.com/2010/03/01/providing-meaning-and-purpose/comment-page-1/#comment-60 Tobias Wed, 03 Mar 2010 07:35:51 +0000 http://www.thecareguys.com/?p=635#comment-60 Kotter himself revealed that only 30 percent of change programs succeed. So perhaps his approach is not yet the holy grail. I would almost presume that the problem may not always lie in "what we do" but in "who we are". What you describe from your experience is just that and I believe it makes a lot of sense to many people. It makes even sense to me, but at the same time it only reflects how you and me arrive at meaning in our current stage of mind. Therefore I'd be careful to replicate this as dogma. As for Harvard lecturers and experts, or so-called "thought leaders", I would be surprised to hear from any expert in any field of management that his domain does not have a significant impact on great performance. As for sharing experiences, I find the "Care Guys" an interesting place. Maybe there is already some research ongoing somewhere, which will soon also provide hard evidence for the impact of providing meaning and purpose on a company's performance (or vice versa). Kind regards, Tobias Kotter himself revealed that only 30 percent of change programs succeed. So perhaps his approach is not yet the holy grail. I would almost presume that the problem may not always lie in “what we do” but in “who we are”.

What you describe from your experience is just that and I believe it makes a lot of sense to many people. It makes even sense to me, but at the same time it only reflects how you and me arrive at meaning in our current stage of mind. Therefore I’d be careful to replicate this as dogma.

As for Harvard lecturers and experts, or so-called “thought leaders”, I would be surprised to hear from any expert in any field of management that his domain does not have a significant impact on great performance.

As for sharing experiences, I find the “Care Guys” an interesting place. Maybe there is already some research ongoing somewhere, which will soon also provide hard evidence for the impact of providing meaning and purpose on a company’s performance (or vice versa).

Kind regards,
Tobias

]]> By: Stephan http://www.thecareguys.com/2010/03/01/providing-meaning-and-purpose/comment-page-1/#comment-59 Stephan Tue, 02 Mar 2010 21:28:42 +0000 http://www.thecareguys.com/?p=635#comment-59 Hi, Tobias, referring to your last sentence, it reads like giving the answer, who was there first: chicken or egg. And this is, indeed, an accademic topic to do a good deal in researching the origin of a cause. For my experience, meaning, and thus motivation, is created by two things: good working experiences in the present, and a perspective - a purpose - for the future. Accademically proven, by the way, by Tal Ben-Shahar, Havard lecturer and expert in Positive Leadership, I recommend his book "Happier". And this is especially true during financial crisis: when both, good experience in the present and former perspective for the future are fading away - especially here, on the basis of a sound management you need to reestablish meaning an purpose first - otherwise you lose those, who have to manage the crisis, as you - as leader - are in charge of leading... J.P.Kotter, another Harvard scholar, differenciates quite well both perspectives, management and leadership, I recommend his book "Leading Change", accademically proven by experience. Cheers, Stephan Hi, Tobias,
referring to your last sentence, it reads like giving the answer, who was there first: chicken or egg. And this is, indeed, an accademic topic to do a good deal in researching the origin of a cause.
For my experience, meaning, and thus motivation, is created by two things: good working experiences in the present, and a perspective – a purpose – for the future. Accademically proven, by the way, by Tal Ben-Shahar, Havard lecturer and expert in Positive Leadership, I recommend his book “Happier”.
And this is especially true during financial crisis: when both, good experience in the present and former perspective for the future are fading away – especially here, on the basis of a sound management you need to reestablish meaning an purpose first – otherwise you lose those, who have to manage the crisis, as you – as leader – are in charge of leading…
J.P.Kotter, another Harvard scholar, differenciates quite well both perspectives, management and leadership, I recommend his book “Leading Change”, accademically proven by experience.
Cheers, Stephan

]]> By: Tobias http://www.thecareguys.com/2010/03/01/providing-meaning-and-purpose/comment-page-1/#comment-58 Tobias Tue, 02 Mar 2010 06:31:03 +0000 http://www.thecareguys.com/?p=635#comment-58 Dear Mr. Landau, I enjoy following your posts, but need to remark from a bit more academic view that an observed correlation is often mistakenly interpreted as causation. Just because “the creation of meaning is positively related to performance” does not mean it is the cause. It could also be that employees feel good about working in a company that performs well, a positive feeling that in turn might have them say that they find much meaning in working at that company. Ask the same employees in the same company, but in a year with financial struggle and pressure on the profit, and you might as well get as an answer that the work at that company seems quite meaningless. The same counts for the observation that “balancing the interest of stakeholders” leads to outstanding results. It sounds plausible and it may be so indeed, but it is at least as plausible that it was outstanding results in the first place which enabled the company to consider and apply a 4-stakeholder approach. And the CEO who “focuses on traditional economic values” might do so for a reason. If the company is under financial pressure then this is exactly what one should expect from the CEO. Employees resent this leadership style? Yes, that sounds plausible. It is also plausible that they resent being in a company that is not doing so well, especially if they have to start worrying about their job. Ask any employee in such a situation about how they perceive their boss … Altogether I am not saying that your observations are wrong. They could as well be true but from an academic standpoint it is necessary to differentiate correlation and causation. My own observation is that academic research makes this quite clear before business press snaps at mere correlations and celebrates the missing key to enduring greatness. For me, balancing the interests of all stakeholders as well as focusing on a purpose beyond cash are simply the basics of good managing. If these things also cause higher performance and to which degree … we don’t know for sure. Kind regards, Tobias Dear Mr. Landau,
I enjoy following your posts, but need to remark from a bit more academic view that an observed correlation is often mistakenly interpreted as causation.
Just because “the creation of meaning is positively related to performance” does not mean it is the cause. It could also be that employees feel good about working in a company that performs well, a positive feeling that in turn might have them say that they find much meaning in working at that company. Ask the same employees in the same company, but in a year with financial struggle and pressure on the profit, and you might as well get as an answer that the work at that company seems quite meaningless.
The same counts for the observation that “balancing the interest of stakeholders” leads to outstanding results. It sounds plausible and it may be so indeed, but it is at least as plausible that it was outstanding results in the first place which enabled the company to consider and apply a 4-stakeholder approach.
And the CEO who “focuses on traditional economic values” might do so for a reason. If the company is under financial pressure then this is exactly what one should expect from the CEO. Employees resent this leadership style? Yes, that sounds plausible. It is also plausible that they resent being in a company that is not doing so well, especially if they have to start worrying about their job. Ask any employee in such a situation about how they perceive their boss …
Altogether I am not saying that your observations are wrong. They could as well be true but from an academic standpoint it is necessary to differentiate correlation and causation. My own observation is that academic research makes this quite clear before business press snaps at mere correlations and celebrates the missing key to enduring greatness. For me, balancing the interests of all stakeholders as well as focusing on a purpose beyond cash are simply the basics of good managing. If these things also cause higher performance and to which degree … we don’t know for sure.
Kind regards,
Tobias

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