Unleashing the Power of Purpose: Insights from Ranjay Gulati
Ranjay Gulati is a renowned business expert who wears a number of very impressive hats. He’s a tenured Harvard Business School professor, author of six best-selling books on the topics of leadership, strategy, and organizational effectiveness, a leading business researcher, and sought-after speaker. On May 23, 2023, he drew upon his experience in each of those realms to put forth a thought-provoking presentation to LWCC employees, agent partners, and policyholders, as well as business and community leaders, regarding the challenges faced by companies of all sizes and the crucial role purpose plays in sustaining their success.
Having been a former student of Gulati, LWCC President and CEO Kristin Wall was inspired to bring him to LWCC to share his insight with employees and stakeholders.
“We say a lot here that the employee experience drives the customer experience,” said Kristin, speaking directly to LWCC employees. “You are the ones who influence safer workplaces, who take care of injured workers and their families, who keep relationships with independent agents, and who do right every single day by the policyholders who essentially own this company.”
Preserving the Passion of Small Business
Gulati's interest in the role of purpose at the organizational level was initially sparked by his exploration of small companies that have experienced rapid growth. His research revealed a common sentiment among their founders. As these companies expanded, they often lamented the loss of the intimate "family spirit" and the unyielding passion that characterized their early days. In short, they were missing their purpose, the ambition that comes to smaller businesses when they believe they are working towards something big. While Ranjay had long focused on the “what” and “how” behind businesses, he had rarely given a thought to the “why,” until these targeted conversations and astute observations revealed to him that the “why” just may be the most critical element of all.
“Purpose,” explained Gulati, “is a unifying idea of the problems you want to profitably solve. It’s about the value you want to create.”
The Rise of Purpose-Driven Business
In today's business landscape, much like Gulati’s research, purpose has become increasingly emphasized, with a remarkable shift observed across organizations of all sizes and industries. A mere glance at a standard company website is evidence enough that the way we think of and speak about our organizations has changed significantly. According to Gulati, only about 15% of companies used website space to discuss their purpose a decade ago. Today, an impressive 85% proudly highlight their mission and values. Statistical evidence further confirms the advantages of purpose-driven companies, showing that they consistently outperform their non-purpose-driven counterparts, especially during challenging economic downturns. These organizations have even been shown to be more trustworthy in the minds of consumers.
The Organizational Impact of Purpose
While it was clear that the role of purpose had a meteoric rise, Gulati strove to understand its benefits. What exactly did businesses stand to gain from identifying, communicating, and pursuing a purpose? The answer, according to his in-depth analysis comes down to three fundamental elements:
Purpose provides direction, bringing clarity amidst turbulent marketing conditions and enabling focused decision-making. If a business is a ship lost at sea, its purpose is the lighthouse in the harbor.
“Purpose doesn't give you all the answers,” Gulati noted. “Purpose doesn't actually answer anything. It's not like a magical algorithm. Purpose gives you a framework to think about the choices and how to solve your organization’s problems.”
Purpose unlocks the productivity and inspiration of employees. It’s called “discretionary effort,” and its what employees can tap into when they are finding meaning and a sense of impact in their work. Studies indicate that the discretionary effort that comes from employees inspired by purpose allows them to be more than twice as productive as their merely satisfied counterparts.
“We all want to do something bigger than ourselves,” elaborated Gulati. “We're not living to just survive. We want to have an impact. We want to have legacy. We want to be remembered for something.”
Outside of business walls, purpose also has a positive impact on consumers, suppliers, and ecosystem partners. Organizations who are driven by purpose foster greater trust and confidence than those lacking purpose, and all their relationships, both internal and external, are better for it.
Beyond Mission Statements: Embedding Purpose in Organizational DNA
As he concluded his presentation, Gulati underscored that purpose extends far beyond a mere mission statement. It requires a concerted effort to integrate it into the very DNA of an organization. Aligning the entire workforce with a shared purpose necessitates more than just words on paper—it demands authentic buy-in and a deep-seated belief in the mission's significance.
By embracing purpose as a directional compass, motivational catalyst, and relational cornerstone, companies can unlock their true potential and foster a better world around them. At LWCC, we operate with a purpose of helping Louisiana thrive, a vision of being a catalyst to elevate Louisiana’s position in America, and a mission to better Louisiana one business and one worker at a time. By bringing the incredible message and insights of speakers like Ranjay Gulati to the Foster Learning Center, we hope to drive our own initiatives forward by helping others do the same.
Frequently asked questions
This is a sample two line introductory paragraph that serves as an intro on the blog/article preview. This is just sample text serving as a placeholder.