The Purpose Effect

Building Meaning in Yourself, Your Role and Your Organization

Dan Pontefract
Elevate Publishing © 2016
272 pages
[@] getab.li/27321
Book:

Rating Take-Aways

8
9 Applicability • “Purpose-driven” firms put principles above profits. They focus on their customers,
employees or “team members,” the community and society, as well as profits.
7 Innovation
7 Style • The “Purpose Effect” has three components:
• “Personal purpose” centers on each employee’s individual identity and commitment.
  • “Organizational purpose” concerns a firm’s “principles, ethics, leadership and culture.”
Focus • “Role purpose” focuses on turning each worker’s job into a “calling” that aligns with
his or her personal sense of purpose.
Leadership & Management
Strategy • The alignment of these three elements creates an energizing “sweet spot.”
Sales & Marketing
• The Purpose Effect inspires employees by making their jobs meaningful.
Finance
Human Resources • Purposeful organizations follow the concept outlined in the “Good DEEDS” acronym:
IT, Production & Logistics “Delight, Engage, (Be) Ethical, Deliver” and “Serve.”
Career & Self-Development
• To put it into action, make customers feel great, engage with your employees, operate
Small Business ethically, always be fair and serve all stakeholders.
Economics & Politics
Industries
• Purpose-driven companies set out both to earn profits and to improve society.
Global Business
Concepts & Trends

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getabstract

getabstract
Relevance
getabstract
What You Will Learn
In this book summary, you will learn:r1) What distinguishes “purpose-driven” companies, 2) How to build the three
components of the “Purpose Effect” and 3) How to find the “sweet spot.”
getabstract
Recommendation
Consultant Dan Pontefract, who also wrote the bestseller Flat Army: Creating a Connected and Engaged
Organization, explains how companies can establish meaningful goals, provide energizing workplaces, and make
significant contributions to their communities and society. Such “purpose-driven” companies put principles ahead
of profits, but they find in the long run that being purpose-driven is good for business. Pontefract shows companies
how to reach a meaningful “sweet spot” where three important roles come together: each employee’s “personal sense
of purpose,” the company’s “organizational purpose” and the “role-based purpose” employees feel when they are
in positions that align with their personal priorities and beliefs. getAbstract finds that businesspeople who seek a
sense of direction for their organizations will benefit from this detailed, practical, inspirational book – and so will
students of business.
getabstract
getabstract

getabstract
Summary
getabstract
Behind the Scenes Making Sausage
getabstract
Johnsonville Sausage LLC, headquartered in Sheboygan Falls, Wisconsin, produces
“When the culture meatballs, sausages and bratwurst. It employs 1,500 people it refers to as “team members.”
of an organization is It sells more than $1 billion in meat products annually.
harmonious – when
team members feel as
though their opinion In 2015, a fire destroyed Johnsonville’s plant in nearby Watertown. One hundred
and contributions
matter – a causal Johnsonville members had no place to go to work and nothing to do. Johnsonville’s
relationship between management decided to keep paying them their full salaries. In return, it asked its members
increased team
member commitment to volunteer for community work for 20 hours each week and to spend another 20 hours
and bottom-line each week on self-education. These activities occupied its Watertown workers for nearly
improvements becomes
a likely outcome.”
a year until a new plant opened.
getabstract
Johnsonville Sausage has been a special place to work ever since Ralph C. Stayer founded
the company in 1945. Its “culture statement” says Johnsonville’s goal is to “become
the best company in the world,” something it characterizes as a “moral responsibility.”
The firm serves “the best interest” of its stakeholders and the “personal growth” of its
members. Johnsonville’s intranet publishes the “personal development commitments” of
getabstract each member.
“When an individual
performs in a role
so that meaning and A drive to implement the “Highest Impact on Customer Service” (HICS) is the foundation
fulfillment [are] of Johnsonville’s business strategy. Team members work continually to implement it.
demonstrated, good
things can happen for Johnsonville’s purpose transcends profits. Its culture statement represents the firm’s deeply
all stakeholders.” held ethos, by which the company lives daily – even in the toughest times.
getabstract

Johnsonville executive Cory Bouck explains, “It would be morally wrong to hold people
to incredibly high standards without also giving them every opportunity and resource to
stretch and grow themselves in order to be able to deliver against those high standards.”

The Purpose Effect                                                                                                                                                                   getAbstract © 2019 2 of 5

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 “Purpose-Driven” Firms
Many notable organizations across a broad range of industries have set an example of how
purpose-driven companies act. Consider these examples:
getabstract
“While purpose in • In-N-Out Burgers, a fast-food chain, pays new employees an above-the-minimum wage.
the workplace is
imperative, leaders are • Gravity Payments, a credit-card processing company, pays every employee at least
potentially overlooking $70,000, based on a Princeton study finding that $75,000 represents the ceiling for
its significance to the
overarching health of emotional well-being. Gravity’s CEO lowered his salary by $90,000.
our civilization.” • Fairphone, which makes mobile phones, uses “conflict-free minerals” to manufacture
getabstract
“ethical” cellphones.
• Ikea manufactures a wide range of furniture, following a core business plan that calls for
“prices so low that as many people as possible will be able to afford them.”
• In 1982, Johnson & Johnson quickly ordered stores to remove 31 million bottles of Extra
Strength Tylenol from their shelves when a criminal poisoned a few bottles with arsenic,
killing seven people. The company reportedly lost more than $100 million, but cemented
getabstract its long-term reputation for caring about its consumers.
“When an organization
and its team members
are indeed on the The “Purpose Effect”
same page – when the Purpose-driven firms base their activities on the Purpose Effect, which concerns the
sweet spot is being
demonstrated by all organization’s purpose beyond making money, the roles that its team members play
parties – a collective within the organization and their individual motivation. The organization, individual team
sense of community can
be felt.”
members and society all benefit when each element is in place.
getabstract
The Purpose Effect engages and fulfills team members and engages them. In this
atmosphere, people do better work. If an organization’s purpose conflicts with employees’
purposes, they will be unhappy at work. But the Purpose Effect ensures that all workers feel
that their jobs represent more than just paychecks. They want their work to be meaningful
getabstract and to give them a genuine sense of purpose. As management expert Peter Drucker
“The sweet spot
is less a gentle explained, “To make a living is no longer enough. Work also has to make a life.”
overlap between
three categories of
purpose, and more The Components of the Purpose Effect
the result of dynamic The Purpose Effect emerges at the intersection of three essential factors:
tension between three
often contradictory
demands.” (Box of 1. “A Personal Sense of Purpose”
Crayons consultancy Each team member should have a special, motivating purpose that addresses “what, who
founder Michael
Bungay Stanier) and how.” Personal purpose calls for knowing who you are in terms of three aspects: First,
getabstract develop yourself. Be determined to improve and grow. Ask, “What am I doing to evolve
myself?” Second, define what your life should be, and redefine it regularly. Ask, “Who am
I in life and at work?” Third, decide every day to act in a moral, ethical and responsible way
in keeping with the person you choose to be. Ask, “How will I operate and be perceived
by others?”
getabstract
“What was the sweet
spot for a team member
2. “Organizational Purpose”
one day in [his or her] This is why your company exists. Organizational purpose defines who and what
role can vanish the next the company is to itself, team members, customers, its local community and
when, for example, an
unexpected workforce society as a whole. Organizational purpose concerns “principles, ethics, leadership
reduction plan is put and culture.” Organizational purpose requires the implementation and deliverance of
into motion.”
getabstract solid “fair practices” to all team members. This involves compensation (pay your
people fairly); performance management (substitute “coaching and mentoring” for
“in-depth scrutinizing”); and “recognition” (58% of all team members want more
workplace appreciation).

The Purpose Effect                                                                                                                                                                   getAbstract © 2019 3 of 5

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 3. “Role-Based Purpose”
Every organization assigns people to certain roles to meet its goals, and every team
member’s role should be meaningful. Most people define themselves according to their
work; that’s why their roles at work are so important. Employees’ role purpose should
getabstract completely align with their “personal and organizational purpose.” For role purpose to
“An organization
without purpose [could] emerge, companies must treat their employees well.
miss out on keeping or
hiring high-performing
individuals.” Team members who have a sense of the purpose about their roles don’t think of their jobs
getabstract as meal tickets. Instead, each person views his or her job as a “calling.” This is how you
want your employees to feel about their work. University of Ottawa research indicates that
76% of people who see their jobs as callings are “always engaged” at work.

The “Sweet Spot”

The sweet spot of purpose is where the three areas come together in a “reciprocal
relationship.” A balanced sweet spot emerges only when these main components work
together. This aligned structure supports members of the staff, “teams, the organization,
getabstract customers, owners and, perhaps most importantly, society as a whole.” The sweet spot
“An organization’s isn’t a final destination. Instead, it’s “an outcome of the alignment between personal,
purpose is not to drive
shareholder value, organizational and role purpose.” To reach the sweet spot, organizations first need a
for that is an outcome declaration of purpose.
of delivering sound
customer value.”
getabstract The declaration of purpose of Deere & Company (previously known as John Deere, still its
trade name) states, “We are committed to serving those linked to the land, thereby helping
to improve living standards for people everywhere.” Whole Foods’ purpose is, “Helping
support the health, well-being and healing of both people – customers, team members and
business organizations in general – and the planet.” Patagonia’s purpose is to “Build the
best product, cause no unnecessary harm, use business to inspire and implement solutions
to the environmental crisis.”

“Win-Win-Win”
getabstract
“The ethical ethos Many companies have a shortsighted focus on profit alone. Such organizations should
of organizations is broaden their perspectives. Mana Ionescu, the founder of Lightspan Digital, a purpose-
central.” (sociologist
Corey Keyes)
driven Chicago firm that offers professional content marketing and social media services,
getabstract says that companies need win-win-win strategies.

These tactics create profits as well as giving customers solid value, making significant
contributions to society, and providing meaningful, rewarding and satisfying work for their
employees. However, win-win-win will work only if all team members, no matter what
their individual roles and authority, perform as both “leaders and followers.”

getabstract The culture of a win-win-win organization is “open, connected, collaborative,

“Companies in which
more employees participative”; it’s based on “general reciprocity.” This means that all team members work
perceive their together for the common good and understand the organization’s goals of achieving a
workplaces as ethical
report higher retention
high level of service as well as a profit. Everyone in a win-win-win organization should
rates, more positive have a “purpose mind-set.” That is, all team members should feel passionate about their
work and supervisory work and their performance. Everyone should commit to developing a “meaningful and
relationships, better
dispute resolution, engaging” workplace.
and enhanced
productivity.” (Keyes)
getabstract The “Job Mind-Set”
The purpose mind-set stands in marked contrast to the job mind-set, which shapes the
actions of employees who do their jobs simply to earn paychecks, and the “career mind-

The Purpose Effect                                                                                                                                                                   getAbstract © 2019 4 of 5

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 set,” under which employees focus primarily on advancing their careers so they can earn
more money and accumulate more power and prestige.

Both of these money and power-oriented mind-sets undermine the purpose mind-set. When
getabstract
“An individual who you educate your employees about their personal, organizational and role purposes, address
seeks a personal these negative mind-sets directly. Explain why they aren’t in alignment with how people
sense of purpose in
life…is constantly think in a purpose-driven organization.
developing, defining
and deciding [his or
her] values, priorities,
“Personal Declaration of Purpose”
attributes and general Each team member should create his or her personal declaration of purpose that answers
ways of conducting the all-important question, “Who am I in life and at work?” This brief written document
themselves.”
getabstract provides each person with an “ongoing definition” that changes depending on evolving
circumstances. You can’t achieve balance – the sweet spot – among your personal,
organizational and role purposes unless you know the personal purpose that brings meaning
to your life.

“Good DEEDS”
getabstract Organizations that are formally or informally dedicated to their purpose subscribe to the
“In a world where goals outlined by the Good DEEDS acronym:
anything or anyone can
be owned, manipulated
and exploited for • “Delight your customers” – Remember, customers are the top priority; strive to make
profit, everything and
everyone will eventually them happy.
be.” (University of • “Engage your team members” – Helping your team members flourish will create a
British Columbia law
professor Joel Bakan,
sense of communitas, denoting a “feeling and spirit of togetherness.”
“The Corporation”) • “(Be) ethical within society” – Make a positive contribution, and have no negative effect
getabstract
on people or the environment.
• “Deliver fair practices” – Offer top value for a reasonable price.
• “Serve all stakeholders” – An organization’s stakeholders include its “customers, team
members, the community and owners.”

Purpose Is Good Business

McKinsey & Company advises companies to “integrate environmental, social and
getabstract governance issues into their business model – and act on them.” Purpose-driven companies
“By working faithfully achieve “positive productivity gains,” and they enjoy “short- and long-term growth”
eight hours a day you
may eventually get to be and “financial benefits.” Deloitte reports that 73% of team members in purpose-driven
boss and work 12 hours organizations feel “fully engaged” in their work.
a day.” (journalist
Robert Quillen)
getabstract Companies that operate with purpose are on the path to becoming productive, successful
enterprises with engaged team members. Their focus is to improve society as well as to
increase profits. This isn’t just smart business; it’s also the moral, ethical thing to do. Futurist
Buckminster Fuller probably said it best: “Make the world work, for 100% of humanity,
in the shortest possible time, through spontaneous cooperation, without ecological offense
or the disadvantage of anyone.”
getabstract
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About the Author
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Dan Pontefract is “chief envisioner” of TELUS Transformation Office, a consulting firm that helps organizations
enhance their corporate culture and collaboration practices. He also wrote the bestseller Flat Army: Creating a
Connected and Engaged Organization.

The Purpose Effect                                                                                                                                                                   getAbstract © 2019 5 of 5

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