The Heart and Soul of High-Performance Companies
Forbes, Best Business Books of 2022
The Next Big Idea Club, Best Leadership Books of 2022
Thinkers50 Top 10 Best New Management Books for 2022
Axiom Award Bronze Medalist for Business Ethics
A distinguished Harvard Business School professor offers a compelling reassessment and defense of purpose as a management ethos, documenting the vast performance gains and social benefits that become possible when firms manage to get purpose right.
Few business topics have aroused more skepticism in recent years than the notion of corporate purpose, and for good reason. Too many companies deploy purpose, or a reason for being, as a promotional vehicle to make themselves feel virtuous and to look good to the outside world. Some have only foggy ideas about what purpose is and conflate it with strategy and other concepts like “mission,” “vision,” and “values.” Even well-intentioned leaders don’t understand purpose’s full potential and engage half-heartedly and superficially with it. Outsiders spot this and become cynical about companies and the broader capitalist endeavor.
Having conducted extensive field research, Ranjay Gulati reveals the fatal mistakes leaders unwittingly make when attempting to implement a reason for being. Moreover, he shows how companies can embed purpose much more deeply than they currently do, delivering impressive performance benefits that reward customers, suppliers, employees, shareholders, and communities alike. To get purpose right, leaders must fundamentally change not only how they execute it but also how they conceive of and relate to it. They must practice what Gulati calls deep purpose, furthering each organization’s reason for being more intensely, thoughtfully, and comprehensively than ever before.
In this authoritative, accessible, and inspiring guide, Gulati takes readers inside some of the world’s most purposeful companies to understand the secrets to their successes. He explores how leaders can pursue purpose more deeply by
navigating the inevitable tradeoffs more deliberately and effectively to balance between short- and long-term value;building purpose more systematically into every key organizational function to mobilize stakeholders and enhance performance;updating organizations to foster more autonomy and collaboration, which in turn allow individual employees to work more purposefully;using powerful storytelling to communicate a reason for being, arousing emotions and building a community of inspired and committed stakeholders; andbuilding cultures that don’t merely support purpose, but also allow employees to link the corporate purpose to their own personal reasons for being.
As Gulati argues, a deeper engagement with purpose holds the key not merely to the well-being of individual companies but also to humanity’s future. With capitalism under siege and relatively low levels of trust in business, purpose can serve as a radically new operating system for the enterprise, enhancing performance while also delivering meaningful benefits to society. It’s the kind of inspired thinking that businesses—and the rest of us—urgently need.
Leaders who want their businesses to do good must do more than talk about service, argues Harvard Business School professor Gulati (Management) in this fervent if familiar manifesto. Plenty of businesses claim to be purpose-driven, but "public professions of purpose often appear as little more than public relations exercises." In order to establish a real mission, business leaders must ensure that the daily ins and outs of their operation support "emotional engagement and a sense of community." Leaders should remember, too, that a company ought to take a long view and think in terms of decades, not quarters. Gulati encourages leaders to "linger in a space of ambiguity" as they balance shareholder values with a desire to do good, and to be willing to make trade-offs "between stakeholders and between commercial and social logics." He surveys successful companies that have a purpose-driven culture Etsy, Gotham Greens, and Warby Parker among them as well as businesses that have seen setbacks because they don't, including Facebook's half-hearted efforts to oust white supremacist groups from its platform and subsequent loss of user trust. His call for change is commendable, but business readers will have seen this all before, and the execution is hampered by buzzwords and insufficiently concrete action steps. In a crowded field, there isn't much to set this one apart.