Tuesday, March 20, 2012

the success of purpose-driven organizations: a basic conceptual model (first draft)

“If Daddy didn’t go to work, many families wouldn’t be able to fly around the country and be with their loved ones. Without Daddy doing his job, little kids all across the country wouldn’t get to see their grandparents, their aunts and uncles, or any of their cousins. Daddy has to go to work to make sure everyone can be with their families.”
-Southwest Airlines ramp agent, explaining to his children why he works on Thanksgiving(1)

Over the last decade, there’s been a lot of interest and activity developing around the concept of “purpose-driven business”(2). With good reason: organizations built around purpose-driven concepts (e.g., Southwest Airlines, Apple Computer, Disney) have consistently outperformed their segments (by an average by 6:1) and the market as a whole (by an average of 15:1)(3). What has been lacking from the movement are useful descriptive models (which is also the basis for much of the lack of enthusiasm seen until recently in academic and consulting circles(4)). Much of the literature on purpose-driven business has been quiet on the question of “why it works”, focusing instead on the “why you should adopt”.

What follows is my personal strawman on the mechanism behind purpose-driven success, an idea that has been knocking around my head for the last several months. I’m sure this is not the first attempt to describe how purpose-driven enterprises work, and the concepts certainly require additional input and refinement. Hopefully you’ll find the model useful; even more importantly, I would welcome your ideas for improvement.

Purpose-Driven Organizations: a Basic Conceptual Model
Please note: as an initial hypothesis, this model is not yet fully researched. You will likely see the model and attributions evolve as it is tested and new ideas are integrated.

Corporate Purpose: the essential definition for corporate purpose comes from Jim Collins and Jerry Portas in their book Built to Last: “Core purpose is the organization’s fundamental reason for being. An effective purpose reflects the importance people attach to the company’s work—it taps their idealistic motivations—and gets at the deeper reasons for an organization's existence beyond just making money.”(5)

Personal Meaning: this is perhaps the most difficult of the model concepts to describe. Everyone has a unique perspective; for that reason a common definition is challenging. From academic literature, personal meaning has been defined as “having a purpose in life, having a sense of direction, a sense of order and a reason for existence”(6). While there are any number of externalities that drive personal meaning (e.g., religiosity, self-identity, enjoyment of job and personal activities, human relationships), individuals derive a significant amount of meaning from the organizations with which they are affiliated, especially their employers. It stands to reason that people seeking employment are more likely to choose organizations whose purpose sustains their “sense of direction and [a] reason for existence”; and, that employees that work for such organizations are more likely to have their personal meaning sustained and enriched.

(Note: for a deeper perspective on the subject of personal meaning in the workplace, see the recent McKinsey quarterly article "How Leaders Kill Meaning at Work".(7))

Individual Intention: “A determination to act in a certain way”(8). While the science in this area is rapidly evolving(9), there is general agreement that the higher-order behavior of individuals is driven by intention. Research is impacting our understanding of the nature of intention—how much is conscious vs. how much is ingrained and habitual. However, the formation of specific, productive intentions is certainly enabled by a positive, energetic personal meaning.

Collective Action: organizations are well understood as social constructs established for the purpose of fulfilling some need. Holding equal such concepts as composition, role definition and resource allocation, the organizations that function most effectively are those where the intentions of individuals throughout the enterprise are inherently aligned to motivate collective action in pursuit of corporate purpose. Organizations lacking inherent alignment of intentions to motivate collective action spend significant time and effort building and maintaining systems and policies to limit individual intent (consider the example of Kodak, whose engineers were developing significant innovations in digital photography as early as the 1970s, but whose efforts were suppressed by leadership(9)). In lieu of individual intent enabled by personal meaning, extrinsic rewards become the primary mechanism for driving collective action. Such systems can achieve performance results (measured by financial performance) over the short-term, but often result in incentive distortions and misalignment between desired and actual behaviors.

Shared Results: regardless of the outcomes, organizations structured around purpose share in the results produced by collective action. Purpose-driven organizations are, by their nature, learning organizations. Individuals and groups are enabled to develop their ideas and explore new approaches. Successes are celebrated, and failures are embraced as opportunities for growth. It is this collective accountability that makes it possible for the corporate purpose to be questioned, tested, and ultimately reinforced as the foundation for organizational success.


Though I’ve been focusing primarily on the process to date, some implications are beginning to take shape. Most significant is the potential to move beyond post hoc identification of purpose-driven organizations. The usefulness of a descriptive model is in its ability to enable more consistent comparisons of heterogeneous organizations, as well as to provide a basis for temporal comparisons. As more is understood regarding each of the model components, it will become possible to define appropriate methods to measure performance (e.g., interview and survey techniques to measure personal meaning, observation and survey techniques to measure individual intent, correlation analysis among components).

Ultimately, the model should evolve to provide business insight through the identification of best practices for the creation and stewardship of corporate purpose, and for organizational support and nurturing of success within each component step of the model. Equipped with this information, leaders and managers who see the value of the purpose-driven approach would be much more likely to take action for the benefit of their organizations.


(1)Spence, Roy, and Haley Rushing. It's Not What You Sell, It's What You Stand For: Why Every Extraordinary Business Is Driven by Purpose. New York: Portfolio, 2009. Print.

(2)Not to be confused with the recent personal faith / self-improvement following that has developed around The Purpose-Driven Life by Rick Warren.

(3)Collins, James C., and Jerry I. Porras. Built to Last: Successful Habits of Visionary Companies. New York: HarperBusiness, 1994. Print.

(4)Kiechel, Walter. The Lords of Strategy: The Secret Intellectual History of the New Corporate World. Boston, MA: Harvard Business, 2010. Print.

(5)Collins & Porras, 1994

(6)Reker, G.T. "Personal Meaning, Optimism, and Choice: Existential Predictors of Depression in Community and Institutional Elderly." The Gerontologist 37 (1997): 709-16. Print.

(7)Amabile, Teresa, and Steven Kramer. "How Leaders Kill Meaning at Work." McKinsey Quarterly. McKinsey & Company, Jan. 2012. Web. 18 Mar. 2012. <https://www.mckinseyquarterly.com/>.

(8)"Intention." Merriam-Webster. Merriam-Webster. Web. 18 Mar. 2012. <http://www.merriam-webster.com/dictionary/intention>.

(9)Mendes, George. "What Went Wrong at Eastman Kodak." Publication. St. Andrews: Strategy Tank, 2006. Print. (PDF version downloaded from: http://strategytank.awardspace.com/articles/What%20went%20wrong%20at%20Eastman%20Kodak.pdf on 03/19/12.)

(10)Eagleman, David. Incognito: The Secret Lives of the Brain. New York: Pantheon, 2011. Print.

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Purpose-Driven Organizations: a Basic Conceptual Model by Steven Beauchem is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.

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