My Guilty Pleasure has a name, Jeremy Clarkson. Since 2002, I have enjoyed his politically incorrect statements and sarcasm on programmes like Top Gear, The Grand Tour and Jeremy Clarkson's Farm. Now I do have to admit that his unfortunate lashing out at Meghan Markle or his insulting of Charles Streeten, a lawyer struggling with dyslexia, are not immediately recommended. It goes without saying, then, that the organisations he works for, such as the BBC or Amazon, face permanent crises. Some consolation they might take from the fact that they are not the only ones facing crises.
After all, do you remember which word In Britain was named word of the year 2022? The word 'permacrisis'. And if the dictionary is to be believed, this refers to 'a sustained period of instability and uncertainty resulting from a series of catastrophic events'. In management literature, 'permacrisis' is used to describe the unenviable situation in which organisations, and their leadership, find themselves today. Think of inflation, resource shortages, global turbulence, and all this against the backdrop of labour market scarcity. Professional life is no fun, even in an amusement park but this entirely aside. Business leaders must try to still shape a sustainable future for their organisation, and its members, within this permacrisis and this both on a business and human level.
A lot of Business schools, consultants and a bevy of scientists are therefore calling for us to start working on Purpose within organisations. By working towards a 'higher' purpose that transcends operational business objectives, we get better results for society, the organisation and the individual. Not surprisingly, as a founding partner of a Purpose-driven organisation, I subscribe to this. But the naive hope that getting started with Purpose automatically leads to sustainable results, that is what I am wary of. Hence, we dedicate this article to 'Purpose, the ugly, the bad and the good'.
'The ugly' implies a warning against reducing purpose to 'the why question' and against an overoptimistic view of spectacular numbers. I therefore take you into the wonderful world of cognitive bias.
'The bad' starts from economic theory and why classical market forces are in urgent need of renewal.
And we conclude with 'the good'. In this section I discuss six critical questions we should ask ourselves about purpose and the well-founded answers to them.
The ugly
Have you ever heard of availability error? Well, that's the cognitive bias that if we see something many times we are also going to attach more importance to it. And 'Purpose', we get to see that more than often today. Hell, I can't open a Whatsapp anymore or I get an unsolicited 'exclusive' video showing the late Steve Jobs telling me that Apple doesn't want to sell us smartphones. Nay, they want to make our lives more pleasant, the sweethearts.
I don't know about you dear reader but 'pleasant' is now not exactly a word that comes to mind when seeing Apple's prices. Just try living a 'pleasant' life with one kidney, after all, you had to sell the other one to finance the purchase of an Imac for the daughter. Even on Youtube and LinkedIn, the radicalised Simon Sinek followers shout it out, success starts with a good 'why' - 'the why', just look at Apple.
And this is where confirmation bias comes into play again: if we have become convinced of something then we only select supporting evidence. Of course Apple is successful, but is their 'why' the main or only reason? How many videos have you watched or been forwarded around what we can learn from Samsung and Huawei? These are companies that you can hardly accuse of having a great story, but have been very successful in taking first and third place in the global mobile market.
It is no different in popular management literature. Today, for instance, we are bombarded with high-profile figures on how betting on Purpose leads to more engagement which in turn leads to more results. That sounds logical, after all. And of course, there is some evidence that certain dimensions of social performance are correlated with long-term shareholder returns. We also use some of those figures on our website, albeit with a critical note but more on that later. The problem is that we still only look through popularly coloured glasses and therefore risk losing ourselves in blind naivety. For instance, most studies show that the average socially responsible investment fund does not beat the market.
And if you want great returns, consider 'sin-stocks' because they are still performing fantastically well. For instance, US alcohol sales rose 55% from March 2021 thanks to covid. And judging by my empties, we can indeed extrapolate those figures to Europe. It is also true that more than 70% of consumers say they would choose products from ethical companies while this is hardly noticeable in their buying behaviour. Acerta says that 1 in 2 twentysomethings consider changing jobs with more meaning. Nice, but putting an intention into practice is another thing altogether.
Does that mean we should then disregard the theme of Purpose? No, the problem today within organisations is not themes such as 'purpose', 'sustainability' and 'well-being' but rather their superficial and often naive interpretation. And this unfortunately demands time, resources and energy we need to answer a fundamental question. And that question is: under constant pressure, how do we continue to build our market forces and economy?
