SmallBizLady: WHAT EXACTLY IS AN “INVISIBLE LEADER” AND WHY IS IT THE MOST POWERFUL ASPECT OF AN ORGANIZATION?
Zach Mercurio: One of the biggest misconceptions about what both motivates employees and attracts customers is “what” an organization does (it’s products or services); what an organization “gets” for what it does (profit, metrics, paychecks); or a charismatic person (CEO, supervisors).
However, compelling research finds that a clear purpose – the reason for which the company exists – is actually the most powerful motivator of our behaviors, attitudes, and commitment to businesses as both employees and customers.
The common purpose of a business is that “invisible leader” and when we can make the purpose more important than a metric or a person, results follow.
SmallBizLady: ISN’T THE “WHY” IDEA OF “PURPOSE” TOUCHY FEELY, WISHFUL THINKING? IS PURPOSE A BUZZWORD OR FAD? WHAT MAKES IT DIFFERENT?
Zach Mercurio: When a business no longer serves its purpose or demonstrates his human value, it dies.
Perhaps more powerfully, psychological research since the 1950s has found that we are all wired as human beings – both employees and consumers – to search for purpose.
People crave being a part of something bigger, of having a story to connect their work and lives to. Small businesses are especially primed to connect people to purpose both because of their size and connection to many stakeholders in their communities.
SmallBizLady: WHAT IS THE BIGGEST MISTAKE LEADERS MAKE WHEN TRYING TO MOTIVATE/INSPIRE THEMSELVES/PEOPLE WITHIN THEIR ORGANIZATIONS?
Zach Mercurio: We still seem to live in a time where business leaders think people are motivated by results. Research finds this is not the case. The problem with results is precisely the fact that you can achieve them. Then what? We can meet that goal, get that salary increase, increase profits – then what? When you follow the “then what” to its end, we often find an emptiness – an emptiness that the bigger purpose fills.
As business leaders, when we can clearly articulate our reason for existing – what human problem we exist to solve through our products or services – we create an everlasting goal that can’t be fulfilled. We don’t just build a business. We build a legacy.
SmallBizLady: HOW WOULD I INITIATE A CHANGE TO A MORE PURPOSE-DRIVEN LIFE OR ORGANIZATION?
Zach Mercurio: For small businesses, I would recommend starting with these four steps:
- Clarify your purpose for performance. Businesses with a purpose beyond profit have been found to be no more profitable than other businesses. However, businesses with a clear purpose that is consistently communicated and proven both internally and externally tend to outperform peers by 6:1 on average.
To clarify your purpose, make sure you have a clear answer to the question: Outside of what we do, how we do it, or what we get for what we do – why do we exist?
Write it down and make it visible.
Then, test that purpose with employees, customers, and other stakeholders. Does it emotionally resonate? If so, you’re on the right track.
- Engineer the expression of purpose. People are the medium of an organization’s purpose. Ensuring there are shared, clear expectations of what the expression of the purpose looks like at each level of the organization is critical.
- Make purpose the “boss” of your strategic decision-making. To understand whether your organization operates from purpose, examine your decisions. Instead of being one factor in strategic decisions, purpose should be the determining factor. Ask other organizational leaders and members: “How do we make decisions here?” Have them draw out the process. If the process of making decisions is unclear and not controlled by purpose fulfillment, you may be at risk for purpose misalignment.
- Optimize your business culture for purpose. Research finds that when people have regular contact with the beneficiaries of their work they are more productive and motivated. The key to creating a culture of purpose is to make sure the end user stays at the center of it. For example, before you tell employees what to do and how to do it, show them why it matters. Be a story-collector and a storyteller.
SmallBizLady: IF I AM LOOKING TO START LEADING A LIFE/ORG W/MORE PURPOSE, WHAT’S THE 3 CORE BELIEFS THAT NEED TO BE IN PLACE TO THRIVE?
Zach Mercurio: To lead a business from purpose, everyone involved in the operation should:
- Believe that the work matters
- Believe in a bigger, human-centered purpose, and
- Believe in proving that purpose everyday through policies, procedures, and practices.
SmallBizLady: SIMON SINEK WRITES A LOT ABOUT PURPOSE IN THE WORKPLACE. WHY IS YOUR BOOK NEEDED? HOW IS IT DIFFERENT?
Zach Mercurio: Purpose has become popular and stimulating as an “idea,” which makes it easy to misuse. And, much of the work on purpose and business is theoretical. I start where thought leaders like Simon Sinek leave off. Purpose is useless unless it is practiced. And research finds there are key practices, like the ones I just mentioned, to building a purposeful company.
SmallBizLady: YOU SAY IN THE INVISIBLE LEADER THAT PROBLEMS ARE MORE IMPORTANT THAN SOLUTIONS. WHAT DO YOU MEAN BY THAT?
Zach Mercurio: Ultimately, people aren’t emotionally moved by the solutions your offer. Anyone will be able to copy what you do or how you do it, but they can’t copy, at your core, why you are.
When business leaders are able to stay focused on the human problem they solve or human need they fulfill, they speak a common language among diverse stakeholders and can inspire emotional commitment.
And, research finds that emotional commitment is the most sustainable type of stakeholder commitment.
SmallBizLady: MILLENNIALS/GENERATION Z TALK A LOT ABOUT NEEDING TO WORK FOR AN ORGANIZATION THAT HAS A POWERFUL PURPOSE. WHY IS THIS?
Zach Mercurio: A study that just came out seems to indicate that our upcoming generation, Generation Z, is prioritizing purpose in work over almost anything else. The same is true when it comes to purchasing behavior.
One example of this is that this generation is indicating that they prefer to work in the public or non-profit sectors over the private sector. This is indicative of the desire to make a difference that has been stoked by generations seeing their parents disengaged at work and an interconnectedness to others facilitated by technology.
But while many talk about purpose as a generational need, it is important to understand that the search for purpose and meaning is a human need that is universal across generations. These younger generations are just more vocal about it.
SmallBizLady: HOW CAN LEADERS CREATE A CULTURE OF SIGNIFICANCE AND MEANING?
Zach Mercurio: In addition to re-humanizing the everyday narrative of the business, two other critical ways of fostering a culture of significance in the company are:
- Rewarding purposeful behaviors such as helpfulness, customer focus, etc. versus simply performance is key. Your culture is ultimately the behaviors your reward. Traditional organizations tend to reward self-serving behaviors.
- Ensure that the communication of the purpose is clear throughout an employee life-cycle and that shared language is used to communicate it among managers and supervisors.
SmallBizLady: WHAT IS THE FORMULA FOR FIGURING OUT YOUR COMPANY’S PURPOSE (AND YOUR PERSONAL PURPOSE, TOO)?
Zach Mercurio: First, it is critical to uncover why the company was founded in the first place. What was the market and human need? Why did the founder start the company? Is that “why” still clear?
Second, it is important to clarify and crystalize that purpose. Make sure it is clear to all stakeholders. And make sure the purpose is detached from what the company does or what it gets for what it does.
Third, ensure that core values and principles are in place to maintain purpose alignment. How will you know if you are straying from your purpose? What will you do to course-correct. Building purpose into your strategic planning is powerful.
Finally, ensure that the purpose is delivered at all levels of the company. After any in-person or digital interaction, can people know and feel why you exist? This is the standard of a purposeful organization.
SmallBizLady: WHAT ARE SOME OF THE EFFECTS OF LEADING MORE WITH PURPOSE? WHAT HAVE YOU FOUND THROUGH YOUR RESEARCH?
Zach Mercurio: Because the search for purpose is characteristic of all employees and stakeholders, research has found that businesses with a clear purpose beyond profit outperform the market by an average of 6:1. Globally, purpose-driven brands are 15x more profitable.
Research has also found that people with a strong, pervasive sense of purpose at work…
- Live up to 7 years longer (NIH, 1998; Carelton, 2014)
- Are twice as likely to learn something new each day (Gallup, 2013)
- Are 42% more likely to regularly experience contentment (Leider, 2009)
- Are less likely to be clinically depressed (Journal of Clinical Psychology, 1980)
- Are less likely to suffer from anxiety and depression in teenage and college years (PNAS, 2014)
- Have a 20% longer tenure where they work (NYU/Imperative, 2015)
- Are 50% more likely to be leaders, be promoted (NYU/Imperative, 2015)
- Are 64% more fulfilled at work (NYU/Imperative, 2015)
- Quadruples the likelihood of being engaged at work and in school (Gallup, 2013)
- Is ranked the #1 factor in job satisfaction, and is more than 2x more important that the next factor, organizational leadership (Happiness Research Institute, 2015)
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