Purpose-driven Leadership

Abstract

Today, an increasing number of successful companies around the world are experiencing a major change in the way they understand leadership. From the traditional leader at the top model, they are moving toward a paradigm whereby leadership is distributed throughout the entirety of the firm. Challenging the vertical notion of the traditional leadership models, the essence of purpose-driven leadership is presented in three undertakings: Discovering your leadership purpose, helping others to discover their purpose, and connecting personal and organizational purpose. These three are the same for all levels of the company and are exercised in all directions (top-down, horizontal, bottom-up). Practical examples and recommendations for development are provided.

“No man can live the dream of another man.” With these words, Jeff Gravenhorst, the CEO of the Danish multinational ISS Facility Services initiated a worldwide program called “find your apple.” Its aim was to create a sense of purpose among its more than 500,000 employees. Through this initiative, the company regularly invites employees to gather into small groups, where members of its maintenance, cleaning, and catering services—with the aid of trained colleagues—help each other reflect on their raison d’être and the purpose of their work. In creating a purpose-driven company, Jeff didn’t make a speech about purpose. Instead, he let purpose speak for itself.¹

Today, an increasing number of successful companies around the world are experiencing a major change in the way they understand leadership. From the traditional single leader at the top model, they are moving into a paradigm whereby leadership is distributed throughout the entirety of the firm. The reason is simple: in this new, ever-changing world, we need not only colleagues’ head, we also need their heart. In other words, rather than leaders surrounded by followers, the new environment demands leaders surrounded by leaders, a phenomenon that researchers describe as shared leadership. Shared leadership is a system of mutually influential interactions in groups at different levels with the aim of achieving a collective goal.² Though shared leadership may be based on various elements, in this chapter, we focus on a form of shared leadership that is based on the idea of shared purpose, which we refer to as Purpose-driven Leadership (PDL).

In the traditional leadership paradigm, “communicating purpose is the most central of all leadership behaviors.”³ As such, purpose should be developed at the upper echelons of the company—often with the assistance of a consulting firm—and then communicated downward throughout the company. The goal of this communication is to align the whole of the organization around a predefined purpose. While alignment has been considered the key to attaining extraordinary performance in the past, new studies are finding that it may no longer be the right approach to succeed in the creation of a common purpose.⁴

Shared purpose cannot simply be invented at the top—only to be imposed downward. The reality is, purpose already exists and is alive.⁵ This is the paradigm shift and it challenges our traditional understanding of leadership. In that, it is not merely about communicating the firm’s purpose but rather discovering (and rediscovering) the shared purpose that already exists within the company. In the PDL paradigm, influence is not in the hands of one or a few, but in the hands of all who share the purpose and thus are eager to make it come to life in their work. These actions cannot be taken solely by the group leader, but must be taken by the group as a whole. The result is not just a relative level of employee alignment, but an authentic commitment by each employee to fulfill his or her responsibilities with a sense of honor and obligation that only arises from a fully internalized understanding of the shared purpose.

In an organization run by PDL, living examples are more powerful than communication. Or, should we say, giving example is the only valid way to communicate. And along with this, other leadership skills become increasingly important. For example, shared leadership research has found that leaders who value and respect the purpose of their collaborators and colleagues as much as they value and respect their own are more effective.⁶ Further, leaders who are willing to support those in the development of their purpose receive more help in return. Finally, leaders who base their relationships on trust, freedom, and respect develop stronger bonds of shared leadership. And this transformation happens more naturally than one would think, as all human beings essentially have a calling to act as leaders. It is not just an option; humans need leadership for personal fulfillment and to reach their full potential. Purpose-driven leadership releases a greater potential of human capacity, helping individuals reach higher satisfaction and meaning at work.

However, in order to better understand the new challenges of PDL, we need to review briefly the underlying approach of the traditional leadership models.

Traditional Leadership Models

Leadership has been studied during the twentieth century under different aspects, as a subject for sociology, politics, psychology, pedagogy, ethics, and business. These studies have mostly focused on the person at the top of the group, organization, or society. Theories developed in the first half of the twentieth century looked at the distinctive innate qualities that were common in great social and political leaders, such as Lincoln or Gandhi. However, in 1948, research analyzed many of these studies and concluded that there was no combination of traits that consistently differentiated leaders from non-leaders in different situations.⁷ In fact, we have seen a person can be a good leader in one situation and a bad one in another.

In the 1960s, the analysis moved from qualities to actions, and focused on how leaders should behave in different situations. One of the best-known models from that time was the situational leadership framework.⁸ In this model, different management styles are more effective for specific subordinate types. The subordinates were then classified into four categories, from lowest to highest maturity, depending on their levels of competence and motivation.

Starting in the seventies, studies of leadership focused more on the relationship between leaders and subordinates. One of the first studies with this focus was the Leader-Member Exchange.⁹ According to this theory, leaders build high/low quality exchange relationships with their subordinates, depending on the level of trust, respect, and obligation between the manager and each subordinate. Later, leadership was defined more specifically as a relationship of influence between the leader and his or her followers (now called collaborators).¹⁰ Out of this set of theories, two main schools have dominated the field of leadership studies in the last decades: transformational and servant leadership.

During the nineties, transformational leadership was embodied in a type of leader with great energy for change and the ability to manage large organizations. The essence of the transformational leader was characterized by a radically new vision: he or she possessed an image of an achievable future that improved upon the present situation and proved appealing to his or her followers. Transformational leaders are characterized by extraordinary will, and distinguish themselves by four main characteristics: charisma, inspirational motivation, intellectual stimulation, and individualized consideration.¹¹

Transformational leadership could be found, for example, in the case of GE under the Jack Welch tenure. “Revered widely as a charismatic and exemplary CEO,” Welch was fawned upon by media commentators as the best CEO of his generation, depicted glowingly in several hagiographies as a master transformer of a business. His leadership style was admired and emulated by many “as pedagogue, physician, architect, commander and saint.”¹² Mainly due to its popularity and proven effectiveness in moments of change, transformational leadership is still one of the main models taught in training courses and business schools.

The second approach, called servant leadership, “originates from the natural feeling of wanting to serve, to primarily serve. Only then the conscious decision appears to aspire to lead.”¹³ The essence of the servant leader is characterized by a radical mission: a commitment to “serving others.” In this regard, the influence of servant leadership is deeper than that of transformational leaders, as it appeals to the need for people to find meaning in their work. Servant leaders are rooted in humility—extraordinary modesty—as these leaders put themselves and their vision in the service of a higher purpose. A plethora of anecdotal evidence has been used in the past to show examples of the servant leadership approach. Think for example on Jack Lowe, CEO between 1980 and 2004 of TD Industries, a US-based mechanical contractor ranked as one of the best companies to work for by the Fortune magazine. Based on a “servant leadership philosophy as the foundation of trusting relationships in the organization,” he established outstanding levels of trust and was able to make radical changes in the organization.¹⁴

These two perspectives—transformational and servant—are not mutually exclusive. In fact, they necessarily complement each other. When transformational leaders forget the social character of the organizational purpose, leadership becomes an act of self-aggrandizement, the seeking of personal glory. Some authors call this the narcissistic leader.¹⁵ On the other hand, leadership without a challenging vision will eventually turn into a bureaucratic form of paternalism, which at an organizational level leads to inertia and stagnation. These corruptions of leadership can only be avoided by a careful balance of transformational and servant leadership, in a positive combination of influence styles. In fact, some studies show that leaders in companies with the highest growth present a pattern of leadership characterized by both extraordinary will and humility, skills that combine the two schools. Such leaders show a combination of “compelling modesty” and “unwavering resolve.”¹⁶

Challenging the Hierarchical Leadership

The traditional leadership models have a common characteristic: they are all hierarchical. These models understand leadership as a top-down process from those with more formal power (i.e., the managers) to those with less formal power (i.e., the employees). Through decades of development, employees have been granted a more proactive role in this process, evolving from mere subordinates, to followers, and finally, to collaborators. The results are clear: the more proactive employees can become, the better is the resulting performance.¹⁷ However, the dynamic is essentially the same: only the person in the highest position of the hierarchy can exercise leadership. Even in the case of empowering leaders, that is, leaders who share some aspects of the decision-making power, leadership is a privilege reserved only to the top position in the relationship.

In a business world characterized by accelerated transformation, the trend of leaders becoming less authoritarian and collaborators becoming more proactive is self-evident. The traditional idea of a leader at the top—or any position in the middle—is that of the one who knows best where and how to react to the changes in the market. This now, at the very least, is controversial. But the hierarchical model resists, and leaders remain attached to hierarchical power, even at the expense of losing leadership potential in the organization. Mainstream research keeps digging in the same direction: revisiting the benefits of empowerment, proactivity, and employee voice, without solving the structural problem that results from confining the leadership role to a single person in power.

However, the association between leadership and hierarchy is a self-imposed limitation on the essence of leadership as an influence relationship. Leadership can be exercised top-down, laterally, and/or bottom-up, as long as people involved in the relationship accept their role and responsibilities. Besides, sharing leadership does not necessarily damage the benefits of a hierarchical structure. Indeed, hierarchies have a managerial and controlling function that does not overlap with the leadership process. Hierarchies are in place wherever there is a need to exercise power. But leadership is not about power. In fact, power-based leadership only produces poor leadership results, such as in the case of transactional leadership. PDL, a deep relationship of mutual influence that creates a real sense of purpose, is based on trust. And trust does not require any particular position of power. Even those in a position of power need to exercise their power in a way that does not destroy trust because managers cannot force true commitment using their power, but only by engaging in trustworthy behaviors.¹⁸

The main problem is: how do we create co-leadership dynamics within an organizational structure? Although shared leadership processes have been studied for a long time, they usually operate in contexts that lack hierarchical structures, like in the case of self-managed teams.¹⁹ The results of these studies show some advantage to shared leadership as compared to hierarchical leadership in areas such as task satisfaction, but generally fail to deliver better performance results. As a result, shared leadership still remains largely in the sphere of managerial theories, especially in the area of team dynamics, rather than being applied in real world cases. As leadership researchers have recently revealed, “Despite the widespread attention given to the importance of shared purpose, it is the rare leader who successfully establishes it.”²⁰

The Rise of Purpose-driven Leadership

Traditional leadership theories and training courses focus on “What” leaders do and “How” they do it. New leaders want to learn from examples of successful leaders as to how to become leaders themselves: how to make tough decisions, how to create a transformational vision, how to develop loyal followers, and so on. They treat leadership as a competency, where behaviors or skills can be learned, or even worse, as a technique that can be replicated. However, purpose-driven leadership is much more focused on the “why” and the purpose. Rather than looking at what leaders do, PDL is more interested in understanding why leaders do what they do.

Think about Mandela, Gandhi, Lincoln, Muhammad, or Jesus Christ. The very essence of their leadership is not in “what” that they did, but “why” they did it. And this is something that cannot be imitated, because the “why” is exclusive and specific to every individual. Every purpose-driven leader has a unique “why” that makes each leader different from any other leader. Personal purpose encompasses life’s meaning and indicates what one lives for, his or her deepest aspirations. Personal purpose is unique to every individual, and only he, or she, determines the real meaning and relevance of a personal purpose. It indicates what that person stands for, what makes that person unique. Thus, the development of a purpose-driven leader does not consist of acquiring a list of competencies and techniques to become as similar as possible to the role model leaders of the moment. Rather, it is the process of personal development and the discovery of purpose that will make the leader’s life truly authentic and meaningful. Because of this, in PDL, every leader is different and must be different.

In fact, having worked with thousands of leaders from around the world, Nick Craig of the Core Leadership Institute has never found two to be the same. Beyond and beneath the standard and superficial “save the world” aspirations are the powerful and unique gifts of purpose. These purpose statements give the flavor of just how unique:

• I am the LEGO poet who builds a bridge from head to heart (Max, senior HR executive).

• Input = ∫Data ∗ People @me (Rikkya, senior finance executive).

• I come, I learn, I fix (Jeff, software development executive).

Based on our research and experience, the essence of PDL is based on three undertakings: first, the discovery of personal purpose; second, helping others find their personal purpose; and finally, connecting personal to organizational purpose (see Table 5.1). These three are the same at all levels of the company. It is not a linear model, neither is it top-down, horizontal, nor bottom-up. It is concentric and acts in all directions.

Table 5.1 Fundamentals of purpose-driven leadership (PDL)

Discovering Your Leadership Purpose

A leader, before leading others, leads himself. Often PDL is presented as if the leader were naturally and irrevocably connected to his personal purpose, as if purpose-driven leaders were born with their purpose imprinted. But nothing could be further from the truth. Personal purpose is developed through great efforts, forged through an interior dialogue, by leaders who are determined to keep their personal purpose in their memory and reflected in their actions. And this is done constantly, every day. Through personal purpose, leaders find energy to influence those around them. This question, that many companies are increasingly discovering, is fundamental to understanding purpose-driven leadership and the dynamics that allow its expansion throughout organizations. It is what some call “leading from purpose.”²¹

The “discovery” of purpose has two implications. The first one is related to understanding your personal purpose. Individuals must ask themselves why they want to become leaders, why they want to influence others.²² Leadership purpose springs from one’s identity, “the essence of who you are.”²³

For many leaders, this identity lies in key childhood experiences. Ranjay, a senior HR executive, knew that his earliest memories were of being on stage. He loved being in the spotlight, performing alone or as a cast member. If he did not have a script he liked, he would write one. Example after example throughout his life re-enforced a common thread that clarified his purpose, “Bring people to center stage, Lights! Camera! Action!” Once he realized this, his career and personal life made sense in a way they had not before. He knew now who he was and what he brought to a meeting or moment that was his unique gift.

Some characteristics of leadership purpose are as follows:

• It is related to the past, present, and future of who you are and who you want to be.

• It captures the unique gift you bring to the world. Ask, if someone with the same skills you have were to do the same job you do, what would be different? What would be different in your company if you were not working there?

• It is related to your inner motivations and values.

• It is not invented or chosen on an ad hoc basis, but is encountered or found from within (sometimes by trial and error).

• When you are connected with that purpose, it provides focus and energy.

• It affects all parts of your life. In work, family, friends, and social activities. Purpose can have different manifestations, but the essence remains the same.

The second implication is about rediscovering the purpose in everything you do, is about the capacity to recognize purpose in the daily activities and interactions with others.²⁴ In this sense, personal purpose is not a destination but a “path.” Purpose gives meaning, but does not replace the personal effort of finding meaning in daily matters. Purpose must be always surprising, always new, and always present. Purpose is what makes every person different from others, and at the same time, it makes every day different from all others.

Discovering and rediscovering personal purpose is a completely different approach to traditional leadership and, in our experience, it is much more effective. For every person needs to understand the unique gift they bring to the world. It is the natural way individuals encounter their leadership potential.

Helping Others to Discover Their Leadership Purpose

Purpose-driven organizations are full of intimate relationships developed around purpose because purpose is entirely personal but not solitary. It is a “path” that co-creates with the purpose of others. It is a personal voyage ingrained in a collective journey. Think of a sailor who travels in a boat with a crew and a direction. His purpose cannot be disconnected from the purpose of his crew. Purpose is not a lonely, self-referential point but rather has impact and transcends the purpose of others.

This reality can be seen in many of the great leaders studied throughout history. These leaders received help from others to discover and rediscover their own personal purpose and, at the same time, they helped others to discover and rediscover their purpose. One person can do this even with a very small number of people, but its effect multiplies as leaders implicitly show others how to do the same with the other people they have in their sphere of influence. It is like a drop of water on a lake that ripples ever outward.

Helping others to discover their purpose includes sharing your own purpose while at the same time “listening” and embracing the purpose of others. It goes in a bidirectional way. It means helping others and receiving help from others. Sharing your personal purpose will be necessary for the discovery of purpose as “you can’t get a clear picture of yourself without trusted colleagues or friends to act as mirrors.”²⁵ It keeps the flame of purpose alive and glowing even brighter. When you share your purpose with others, it extends a commitment to your own purpose as well as helping others discover theirs.

Helping others to discover their purpose means not only caring about “what” others do but also about “why” they do what they do. It is about embracing and accepting diversity. And of course, everyone must be conscious that it is always the other person who decides how and when to share their purpose. Helping others to discover their purpose is like a dance where the other person establishes the rhythm and the tempo.

This is quite different from what is usually taught in leadership courses. This kind of influence is not based on charisma or on inspiring rhetoric. It comes from personal contact. It is a kind of leadership that takes place in an intimate way.²⁶ This is rarely appreciated on the outside and many times is exercised without either the leader or the person who is led realizing it. It is what some call “true leadership.”²⁷ Exceptionally, this leadership is exercised through concrete actions (e.g., acting as a mirror to discern and reflect another’s purpose), but ordinarily, and principally, this leadership is exercised by friendship and love of benevolence.²⁸ Because, as research has consistently demonstrated, purpose-driven leadership is always accompanied by employees’ “efforts to provide emotional and psychological strength to one another.”²⁹

This might be surprising, but research is consistent in demonstrating that without intimate and trustworthy relationships, it is not possible to develop purpose-driven leadership.³⁰ Indeed, it is not by coincidence that purpose-driven organizations spend considerable amounts of resources and time with their employees in hopes of developing more meaningful relationships. While for many companies these may be simple socialization exercises, for purpose-driven companies these are seen as one of the most effective ways to expand leadership.

Connecting Personal and Organizational Purpose

The third basic fundament of PDL entails finding connections between personal and organizational purpose. As purpose is expansive (personal and organizational), its natural development is about discovering points of intersection. Purpose-driven leaders not only influence because of their personal purpose but because of the way they integrate personal purpose at work and, ultimately, connect it with the shared purpose of the organization.

At the beginning of his tenure as CEO of Ben & Jerry’s, Jostein Solheim did not know what his purpose was. He was happy riding the wave of the Ben & Jerry’s purpose of changing the world by creating amazing ice cream through linked prosperity for everyone connected to the business. Yet, 18 months into a 24-month turn-around assignment, the question of what he should do next pushed for an answer. Should he take a promised two-level promotion or stay at Ben & Jerry’s? It was not helpful to look through the lens of the company’s purpose. Jostein needed to know what was his journey that he needed to take and how did it fit, or not, with Ben and Jerry’s.

When Jostein looked at his purpose “to thrive in paradox and ambiguity for things that really matter,” it called for him to stay. He realized that if he took the promotion, other people—his staff at Ben & Jerry’s—would be living his purpose. To run Ben & Jerry’s with both founders still on the board while also being part of a huge multinational consumer goods company (Unilever) was the definition of paradox and ambiguity. Few would have said yes, but Jostein’s purpose was perfectly designed for this adventure. When he announced that he was staying, the team that was the magic behind the brand realized that here was a guy who really believed in the purpose of Ben & Jerry’s.³¹

When leaders connect their own purpose to the organizational purpose, their influence intensifies. This connection creates an effect that enhances purpose-driven leadership beyond the individual possibilities of each of its members. By these connections, leaders create a common source from which they draw leadership. Personal purpose is the essence of PDL, but it is ultimately the connection to corporate purpose that gives the individual the authority to act as a leader. This requires putting the company’s purpose at the center of leadership. In this sense, organizational purpose acts as a source of authority for being THE leader within the organization. Individuals can exercise some kind of leadership based on his or her personal purpose or charisma, but that it is quite distant of what we talk here. PDL is about embracing organizational purpose from the perspective of personal purpose. PDL demands low “ego” in a context of “commitment, cooperation and openness to change”, fostered by a sense of common purpose.³²

This kind of leadership does not require a gifted person, but simply a person willing to put their gifts to the service of a collective purpose. As stated by Manuel Jimenez, CEO of a major auto parts company in the south of Spain: “in our company, the warehouse lads and distribution porters—many of them without even basic studies—understand very well what leadership is. They share a common purpose, that is what makes them leaders.” This form of leadership can often be seen, for example, in top performing sports teams. In such teams, the maximum potential of leadership is not based on technical skills or knowledge, but in leadership born from common purpose. There, all members share the same purpose, and, in turn, exert continuous and sustained influence to reinforce the leadership of others. In fact, in sports teams, success or failure is often attributed to the generation of what we could call multi-influence leadership. This phenomenon has been studied by many management experts, and in recent decades there has been a growing interest in applying it to business practices.

Integrating Traditional and Purpose-driven Leadership

Discovering your personal purpose, helping others to find their personal purpose, and connecting the personal and organizational purpose are the fundamentals of purpose-driven leadership. These three undertakings offer a new perspective on leadership that enhances the traditional approaches, unveiling the leadership potential of every individual, providing authenticity and unity in leadership. To the extent that organizations combine PDL with other leadership arrangements as a compelling vision (transformation leadership), service (servant leadership), or adapting their leadership styles to the different contexts (situational leadership), they can reinforce their leadership influence and make it more inspirational and effective. Indeed, all these arrangements are necessary for organizational purpose to develop.

However, the full development of PDL requires a fundamental change in the logic of leadership. It requires overcoming the strong inertia exerted by the top-down leadership model, which is the most common model applied in organizations today. We must move away from hierarchical leadership, where only the vision of the “boss” matters, toward shared leadership, which is grounded on a combination of personal and shared purpose. Managers must learn to be “leaders of leaders,” developing the leadership of others and helping them to do the same by cascading leadership throughout the entire organization. Thus, leadership, without losing its essence, must overcome the personalistic features of the hierarchical model and move on to lead purpose through a shared leadership model. In order to develop this, it will be essential for managers to overcome the idea that “they are the leaders” and others should be, and remain, their followers. Those in management positions must see others as potential leaders, not just as followers. Consequently, managers must avoid having employees merely following them by focusing their efforts on everyone, themselves included, so as to encourage every individual to pursue his or her own purpose within the context of a shared purpose. In this sense, all levels of employees must seek to change the perception of their roles, since they are no longer followers, but leaders that share a common purpose.