Every leader knows teamwork is essential. But in our experience with hundreds of organizations, we’ve seen much of the time and money spent on team building is in fact a complete waste.

Meaningless jargon, endless mission and vision iterations and PowerPoints detailing the organizations’ commitment to respect and integrity have little impact on business performance.

Our experience mirrors the data. A study of more than 500,000 workers in U.S. companies said camaraderie alone doesn’t translate into business results.

In their Harvard Business Review article, “The Kind of Purpose That Makes Companies Profitable,” professors George Serafeim and Claudine Gartenberg unpacked employee beliefs across a sample of 429 U.S. companies to identify two types of companies with purpose. They wrote: “The first type, high purpose-camaraderie organizations, includes companies that score high on purpose and also on dimensions of workplace camaraderie (e.g., ‘This is a fun place to work’; ‘We are all in this together’; ‘There is a family or team feeling here’). The second type includes high Purpose-Clarity organizations that score high on purpose but also on dimensions of management clarity (e.g., ‘Management makes its expectations clear’; ‘Management has a clear view of where the organization is going and how to get there’).”

The authors found that only the high Purpose-Clarity organizations exhibited superior accounting and stock market performance.

Top performers value a good work environment. They also want to accomplish exceptional results. Without a true purpose – i.e., succinct clarity about how you serve customers – endless decks detailing mission, vision, values, etc. become nothing more than – as one of our clients calls it – “a word salad.”

Purpose is a hot topic these days, but not everyone gets it right. There’s a big difference between a feel-good purpose and a customer-driven purpose that drives business results. The true and noble purpose of an organization is to improve the lives of its customers.

We don’t believe in a transactional approach to business. It commoditizes an organization and creates a poor work environment. The research and our personal belief system point us in the opposite direction.

In our executive sessions, we focus on the connection between profit and purpose. Money and meaning are the dual pillars of a successful strategy. When leaders activate a sense of purpose in the hearts and minds of the team, it creates a high performance organization. Teamwork becomes easier when everyone is pointing in the same direction.

A camaraderie purpose – we want to be a best place to work – or a philanthropic purpose – we want to do good in the community – are noble endeavors. But they won’t create the competitive differentiation required to win the market, nor will they attract top talent who wants to win.

We worked with a chief financial officer who asked us with sincerity, “Is this purpose stuff just fluffy?” Our answer was it’s only fluffy when you’re not specific.

The Harvard Business Review authors concluded that “purpose does, in fact, matter. But it only matters if it is implemented in conjunction with clear, concise direction from top management.”

Everyone wants a great place to work. Top performers also want to drive exceptional results.

Being nice is, well nice. Being clear is even more important.


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