HBS professor explains how corporate purpose is often misunderstood - Business Insider

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There are 2 types of purpose, according to a Harvard professor — but only one of them boosts company productivity. Here's the question every manager should be asking to focus on the right kind of purpose.

," she has found that companies driven by a certain kind of purpose are more productive, regardless of industry or country.

"What's going on is that there are some firms that are able to run genuine continuous improvement, that genuinely treat their employees with dignity and respect, that can run teams that work together well, that promote on the basis of performance — not just on the basis of quantitative metrics, but genuinely on the basis of performance."

Henderson noted an important distinction between two primary types of purpose. Organizations that used their purpose primarily to build camaraderie, creating a familial atmosphere, saw no positive or negative impact on their bottom line; those that used their purpose primarily for mission alignment, answering the "why" of everyone's work, outperformed their peers.

Henderson is part of the increasingly loud group that says if corporations do not abandon profits at all costs and recognize this transition from free to expensive, countries will experience significant economic and social destabilization. "Really transforming organizations is really, really hard. We have to do it at scale in the next 20 years and really transform the society," she said. "A purpose," as long as it's implemented correctly, "can help.

 

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