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People want jobs that have a Purpose, a deeper dimension of meaning and usefulness than mere profit or sales. How can we transform our companies and our world through Purpose? A campaign is the answer. Ultimately, a campaign turns purpose into action.
April 3, 2009
The Purpose of Regulation
Nikos

Those who suggest that greed was the cause of the current crisis remind me of those who suggest that gravity is the cause of airplane accidents. The problem with a focus on values, common in the literature about leadership, is that allows for quick diagnosis but provides no prescription. One cannot regulate values. I hope that the new wave of regulations accepts people as they are, but expects the most important of our firms to evolve to institutions.

This in turn means that each of them must have a Purpose beyond mere profit and to be constituted in a way that allows it to serve it.

Nobody has spoken more eloquently about the Purpose of a constitution, the preeminent regulation, than Emanuel Kant who wrote “…

“The problem of organizing a state, however hard it may seem, can be solved even for a race of devils, if only they are intelligent. The problem is: Given a multitude of rational beings requiring universal laws for their preservation, but each of whom is secretly inclined to exempt himself from them, to establish a constitution in such a way that, although their private intentions conflict, they check each other, with the result that their public conduct is the same as if they had no such intentions.”


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March 26, 2009
Geithner’s Plan is Fit for Purpose
Nikos

I like the Geithner plan and I am optimistic that it will work. Reading it made me think of Winston Churchill who had said that Americans will eventually do the right thing- having previously exhausted all other possibilities.

I like the plan because it provides a solid basis for a successful campaign. Its target is the real problem: by the time the Banks realized that they had a lot of bad assets, all private investors were too nervous to buy them. Furthermore, its implementation depends on leadership teams and organizations that exist in America. They are not angels, but rather funds and fund managers given incentives to solve the problem they created. Yes, it is like asking the snake to eat its own tail.

There will be many that will argue that the incentives to the investors make the plan unfair to the tax payer, that there is nothing really innovative about it and it does not address the needs of the neediest. All these objections are valid. However, they attribute to the plan a purpose that it does not have. The sole Purpose of the plan is to make the financial system work. Its legitimacy, therefore, will depend solely on its success. If it succeeds in producing movement in the market, then movement will make for order.

History is what allows me to be optimistic that the plan will work. The plan is very similar to the one that worked 15 years ago with the Savings and Loans crisis. The outcome of that crisis was not ideal, but the campaign worked and the heroic Purpose of cleaning the stables was achieved. This afforded us higher aspirations, but only later.

The financial crisis we have been living with is like a massive traffic accident that has caused several casualties and is keeping the rest of us in a jam. It has been caused by a number of reckless drivers exhibiting the worst in human nature and drunk by cheap credit. The fact that the traffic lights had not been working and no police were deployed in time did not help. Until today, only the most serious of the casualties have been removed but the rest of us are still immobilized, unable to go to work. Geithner`s plan is good for removing the damaged vehicles so the rest can move again. It does not provide for the prosecution of the guilty, the expenses for treating the injured or a new system of traffic lights. But for the first time in six months we can see movement as a clear possibility.


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March 24, 2009
Blogger Christine Thompson goes Back to Basics
Nikos

The Purpose of a Business

March 20th, 2009 · 3 Comments · Back to Basics

www.christinethompson-blog.com

I’ve been musing on the question of Purpose while reading the Wall Street Journal and online business press, trying to understand how so many bright people can have caused so much lasting damage.Purpose

Why Do Companies Exist?

There are those who think that businesses exist for solely utilitarian reasons: to satisfy customers, generate profits, create shareholder value or make the founders rich. You get the drift… Thousands of business pundits will tell you so.

Others think that businesses should be animated by some larger, enduring values-based Purpose, one that serves as sort of a moral compass to inspire and keep the organization and its people on a chosen course.

Classic examples of companies with a clear sense of Purpose include:

  • Johnson & Johnson: “to alleviate pain and disease”
  • Merck: “in the business of preserving and improving human life
  • Disney: “to bring happiness to millions”

Those of us who worked at Apple in the 1980s were inspired by this mantra: Changing the way people live, learn, work and play. We were indoctrinated in this belief system, starting with Orientation, our first day on the job (think brainwashing, Apple style!)

It’s safe to assume that this notion still animates the company.

A Resource for Purpose-Seeking Organizations

Thought leader Nikos Mourkogiannis writes eloquently on this subject in his book Purpose: The Starting Point of Great Companies. I recommend it for founders, CEOs and senior executives who want to build and lead organizations capable of making lasting contributions.

Mourkogiannis describes Purpose as something larger and more enduring than strategy (in fact strategy exists to deliver on the organization’s Purpose).

A successful Purpose both drives a company forward and helps build sustainable competitive advantage. In the hands of an effective leader, Purpose becomes the engine of a company, the source of its energy. And you can tell, by a loss of energy, whenever there has been a lessening of Purpose…. This may precipitate some kind of crisis…

Great companies remain true to their Purpose over a period of 20 years or more, says Mourkogiannis. This theme is also echoed in the business classics Built to Last and Good to Great.

Doing Without a Sense of Purpose

Organizations that lack a shared sense of Purpose run the risk of degenerating into warring fiefdoms, inhabited by employees who feel enslaved to their paycheck, going through the motions for customers who feel hostage to uncaring front-line robots. We’ve all encountered companies with these characteristics (and some of us even work for them!)

If their products and services meet authentic market needs and their business model is robust, for a time such companies can survive, and the lucky ones even thrive. For a while…

But at some point they’ll be like cars whose drivers go faster than the area illuminated by the headlights… CEOs sometimes describe this situation as “having outgrown the company’s mission.”

Companies without Purpose can cause tremendous societal harm when they decline or implode, leaving thousands without jobs, customers with no one to maintain the products they’ve bought, and communities with an eroding tax base.

These days we face a daily onslaught of depressing business stories. Articles that detail the unraveling of corporate empires, the destruction of people’s retirement portfolios, the impacts on local communities struggling with demands for increased social services at a time of dramatically reduced revenues.

We’re seeing unparalleled wealth destruction as a consequence of all too many morally impoverished institutions.

It’s become personal.

As I fill out my tax forms and prepare to write a check to the IRS, it makes me angry to know that taxpayers like me are being forced to pay the price of organizations that operated without a larger sense of Purpose, those former greed-fueled Wall Street empires that were caught up in global financial shell games.

I hope the next generation of business leaders take a different path.

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