144 How to Align Around Deep Purpose and Achieve High Performance with Harvard Business School’s Ranjay Gulati | Partnering Leadership Global Thought Leader

Mahan Tavakoli:
Welcome to Partnering Leadership. I'm really excited this week to be welcoming professor Ranjay Gulati. Ranjay is the former unit head of the Organizational Behavior Unit at Harvard Business School. And until recently, he chaired the advanced management program, which is the flagship senior leader executive program at the school.

Ranjay's latest book is Deep Purpose, The heart and soul of high performance companies. I really enjoyed the conversation with Ranjay, because he goes beyond convenient purpose and the purpose statements many organizations have used to talking about what it takes to truly be purpose driven. And I'm sure you will enjoy this conversation too, and learn what you can do as an individual, as a leader of teams and organizations to achieve more of that deep purpose. 

I also enjoy hearing from you. Keep your comments coming. mahan@mahantavakoli.com. There's a microphone icon on partneringleadership.com. Really enjoy getting those voice messages, don't forget to follow the podcast. Tuesday conversations with magnificent change-makers from the greater Washington DC DMV region and Thursday conversations with brilliant global thought leaders like Ranjay

 Now here's my conversation with Ranjay Gulati. 

Mahan: 
Ranjay Gulati Welcome to partnering leadership. I'm thrilled to have you in this conversation with me because I love your book the purpose, the heart and soul of high-performance companies

I've been spending so much time with it most specifically, because you share so many insights that help us reflect on how to actually materialize purpose, not the generalities of it, but the specifics of it.

 But before we get to some of your thoughts on purpose, Ranjay, would love to know whereabouts you grew up and how your upbringing impacted the kind of person you've become. 

Ranjay Gulati: 
Mahan, thank you so much for inviting me. I'm delighted to be here today. And so I'm glad to be meeting you. but let me dive right into your question. I grew up, at home, my mother was an anthropologist, from teacher down into a business woman, for a series of accidents. And she was fascinated by tribal Indian belief, and her belief was, they have a very sophisticated aesthetic sense that in the west, we think of these people as primitive. Anything but primitive. They are very sophisticated people. As an anthropologist, she studied that.

And then she came up with the business idea was, she herself find wearing printed cloth garments made with hand printed fabrics, these women made and wearing them. And then her friends would ask her, I want to get one like that, where can I get it? And since, she started this business, doing that not to do that at scale, she needed to help these villagers to scale up their printing operations.

They didn't have money, no capital, so she started lending them money, teaching the business skills, helping them expand, showing them how to do it, But it was kind of part of business. I had this idea then and her purpose was very much about bringing eastern rural aesthetics to the western mind. Help connect bridges, but also bring the appreciation.

But in that process, guess I must've seen a purpose driven business. A business animated by an idea, not just buy an idea. As I sort of digging into that, maybe come to realize my first encounter with this, was when I was very young.

Mahan: 
That story communicates your exposure to purpose from early on in your childhood. I also appreciate the fact that you have the authenticity to share that maybe you wouldn't have viewed the need for organizational purpose the same way five, six years ago. 

So you have learned and grown as a result. Over the past few years, what has helped you and driven you to understanding the greater need for purpose on an organizational context? 

Ranjay Gulati: 
As an educator, I was chairing the audit advanced management program, which is a senior leader program at Harvard Business School. And these are senior leaders all over the world. They come on campus for eight continuous leases. They live on campus, no families, nothing, and then class six days a week. 

And most of them average age is about 50 to 53 years old. And to me, what I found most intriguing in that context was, each challenge many of them when they came at that stage and age were interrogating their own books. We kind of reached that midlife stage and you're eight weeks away from work and life and family, it naturally triggers a period of introspection. And I also put in place a poaching curriculum by each of them bought a coach for eight weeks to help them with that introspection. So what is my purpose as a leader in my job? And the next question was, what is my organizations purpose, and why does it exist? As one of the senior leaders of the organization, have we thought about it? And they started asking me this question,

I would dodge and back these questions because I didn't get it.. So my students have been my biggest teachers.

Mahan: 
That mindset Ranjay is an important mindset for all of us. You didn't come to it as an educator with the all-knowing answers, you came to it as an educator who is also a student of the executives you were interacting with, understanding this yearning for purpose, that more of us have and more organizations and organizational leaders have.

Now, one of the things you mentioned Ranjay is that business books, quite often talk about the knowing doing gap, which is a real gap. A lot of people know what they're supposed to do, but don't do it or aren't able to do it. However you say with purpose, most leaders don't even know what it means to be fully purpose driven. So how do you define purpose? What is that purpose drive from your perspective Ranjay?

Ranjay Gulati: 
First of all, I think it's important to clarify, purpose is not a bubble statement.

Mahan: 
So having something written that you put on the wall or in your annual report, doesn't do it. 

Ranjay Gulati: 
Exactly. And we get hung up on the idea that purpose is a purpose statement.

I also want to clarify that I distinguished purpose from deep-purpose. And I think it's important you understand these ideas that in one level, a purpose of an organization, if you want to define it that whether it's embodied in a statement or in the way they practice it has four components. The first, it has goals. What do you want to be? The second one, it has some idealistic elements to it which might call duties or responsibilities. The third one is, acknowledges and encompasses a multiplicity of stake holders.. Who are we here to serve? And the fourth one is, which is, it usually has a longterm horizon, a long-term cost about where are we going to be in the future? And so it's important to understand that purpose as we think about it, has a number of elements to it. Now, what I learned from my interviews at a variety of companies, Microsoft being one of them, leaders and members secretly talk about daughters in soulful way, in kind of this really animated, energetic things. It's not a tactical tool. 

The second part of my answer to this purpose is not a management tool or an instrument for change management. Purpose is existential intent. It's deeply believed. It's knowing to doing and from doing to be one. And I think it's doing to being, which is not my same book. This is something at west point teaches all leaders in their programs. This is going to go from knowing to doing, to be.

Mahan: 
That is where the struggle is for a lot of leaders. One of the CEOs that I talk about quite often is Satya Nadella. And you quote him in saying that writing a purpose statement is easy, what comes next matters. And it's that doing and that being, that has been a struggle and has made to a certain extent, Ranjay purpose a buzzword that many people, including many employees of organizations, shake their head, wondering whether it has any context or any meaning. 

So one of the things I enjoyed and appreciated about your book is that you also went into convenient purpose and how some organizations are using purpose for their convenience, that has spawned this cynicism on behalf of a lot of people talking about purpose. 

Ranjay Gulati: 
So there are two parts to your question. I want to just answer that. First of all, on face level, face value, the Microsoft purpose statement, which is to empower every person and every organization on the planet to achieve more is kind of just a bunch of words. You're like really Ranjay? It did take the nine months to get there. And you might say that's really, their PR person clearly was not doing that job because I could have done that in half a day. 

But the process of getting there, the process of debating that question among the leaders at all levels and asking the question of, let's ask ourselves to then come up with the word it's the process of getting through it, that was very important. And then of course, figuring out how do we cascade it and animated into the organization? That's the WhatsApp they were saying that it's easy to come with a purpose statement, what comes further. And the bulk of my book is really about that. 

Now the second part of your question is the deep rooted cynicism about purpose that is building up rightfully so. In fact financial times had an article titled the baffling search for purpose in a purpose statement. And the cynics, there was another academic article actually written decades ago when they didn't even talk purpose and mission statements. And it was by Christopher Bart. It was called Sex Lies and Mission Statements. 

Because you think about it. Theranos had a purpose statement to facilitate the early detection and prevention of disease and empower people everywhere to live their best possible lives. Where do pharmaceuticals responsible the Oxycontin epidemic, paying fines and admitting guilt said compassion for patients and excellence and spines inspired our pursuit of new medicines. So when you listen to that, you can see why people become very cynical about purpose.

Mahan: 
That cynicism, extends to you talk about this convenient purpose and Facebook being a poster child of convenient purpose. It's one of the examples I hear also quite a bit about in that lot of times there's conversation about purpose being necessary for organizations to succeed. Facebook has been very successful, has been making lots of money. However, you go into the fact that this is convenient purpose, on behalf of Facebook, it's not real deep purpose. 

Ranjay Gulati: 
So look, anybody can make money with a fantastic business model. The question is the opportunity space they leave behind when they could've done if they had a purpose too. You can't fault them for having an amazing business model that they figured out. Unfortunately, that business model seems to conflict with members' expectations of privacy and how they expect to be treated, or the information is to be treated.

I think the problem is companies engage in what is also called virtue cloaking. Using purpose as a virtue cloak. So when you parade on a purpose, especially when you're in Congress in 2016, and you say, " to give people the power to build community and bring the world closer together". Imagine if they had actually done that.

Imagine in 2016, they had actually done that, would they be a better company today? Would they be an even more profitable and just don't know the answer, I'm just doing a thought experiment with you. Would they be a worst company today? Would they be making less money today? Would they be like their earnings and profitability down the toilet?

 I don't know. I don't think so. I think we create these kinds of pupils of words and my concern, is that sometimes this does a disservice to even those who are genuinely trying to do purpose because you've paid everybody with the same brush.

Mahan: 
The reason I also specifically mentioned it in addition to the fact that you cover it in the book, Ron Jay is that Facebook is a great example of the fact that it's. Organizations, board of directors or shareholders getting in the way of achieving purpose. If there is any organization where one person has total control over the board and over decision-making it's Facebook.

We can't use stakeholders or boards of directors as an excuse for not pursuing that deep purpose. Convenient purpose can exist, whether you are a small company of a few people or a multi-billion dollar company that is driven by one individual. So their choice is the choice of leadership.

 It is not the constraints that are around us. 

Ranjay Gulati: 
You know Mahan, I think we're at an inflection point in business, and society, employees, customers, and other stakeholders are going to expect much more of business and of business leaders. In the world where information transparency is only growing, of course, misinformation is also growing, but I would like to believe that there is going to be greater transparency and leaders and businesses are going to be held more accountable for their actions and choices, but also then non justice. Being silent or neutral is getting harder and harder for business leaders to do. That I can sit on the sideline and say, well, not really what we do with a business company, we don't have to get involved in these social political issues. I think this is going to be a real challenge for many leaders going forward.

Mahan: 
On the flip side of it, Ranjay one of the pushbacks on purpose from some of the business leaders I interact with is that they see it as this vague idealistic thing for the organization. While in the book, you also say you need practical idealism to make purpose work and talk about the foundational principles of practical idealism. 

Ranjay Gulati: 
So thank you for bringing that up. Mahan. I feel that purpose has been hijacked. It's been hijacked by the extreme right wing at some point, by a purpose with shareholder value. Maximization has been hijacked by the left wing, but it becomes purposes, anything but broth,

Let's be very clear of what a commercial business enterprise, which typically has shareholders who are risking that capital and expect something in return for that risking of that capital, you have to deliver some returns. And the question for the leader is balancing those returns against responsibility to society and community because you can't externalize all the social stuff and privatized all the profits.

So you're saying I'm going to pollute. I'm going to cause all these negative externalities for everything around me, I'm going to privatize the profit. That's not acceptable anymore, but the other extreme that I'm going to completely relegate profits to non-existence, because I'm atoning for past sins, I think is also impact. And I think a lot of these leaders talk about the messy world and they really use the word a lot, the messy world of practical idealism.

 Mahan: 
It is a messy place. And I love the quote you had "when you have purpose, it lets you make demands of your stakeholders" and you give a great example of Gotham Greens with the art of trade-off in that, as you said, on one end of the spectrum, people have been driving and for the past 40 years, shareholder returns is all that matters on the other extreme, questioning whether organizations should even be seeking that profit.

 However, the real intersection in the middle, that messy middle is where organizations need to reside and go after. And to me, Gotham Greens was a great example of having to make trade-offs to stay in that messy middle. 

Ranjay Gulati: 
So Mahan, what is interesting is, the messy middle is very messy to begin with also it's messy. It's messy middle is because people have characterized the messy middle as win-win. Okay. I get it. That means businesses need to do things that are good for them and bad for business and good for society. Some people have the rightfully taken issue with this frame.

Which is that's a cop-out, that is giving businesses free pass by saying, I will only do good things when I can make money doing them.

 That's not good enough. So that means you only do good when I can profit from doing good. I won't do good otherwise. I will pay my employees well, if they do a good job and I'll call it charity because I did give them a good salary. That's not charity. This kind of win-win is another confusing place to be because yes, you aim for that, the sweet spot in life is where it can be a win-win proverbial win-win. But what about the messy spaces of whether it's good for economic, but not for society or it's good for society and not for my economics. That of bag no space and holding onto that space, living in the tension of being in those boxes as well is what leaders need to understand how to do, and purpose gives you a frame of reference to navigate your way through that.

Mahan: 
That is so important Ranjay in that, this kind of thinking is part of what gets in the way, because it makes people more skeptical of whether organizations care enough to be purpose-driven and it makes it less likely for the leaders to have the hard conversations that it takes to strike that balance in that when you're seeking only the win-win, then you end up not making decisions and feeding into that same narrative that makes people more skeptical of purpose, rather than saying, these are really hard choices, these are really hard decisions. It's messy, and we are making the decisions with this messiness, which is why, again, with the Gotham Greens example, it's having that dialogue and that conversation with the team members and others, to understand the difficulty of making the decisions. 

Ranjay Gulati: 
So Gotham green is a great example of the agro business. For those who don't know, doing urban farming on urban rooftops and on produce that has high spoilage. So, you know, it gets spoiled easily. So if you have it in the city, you don't have to travel very far and all that stuff. The big decision was what do we do with the packaging? And should we use plastic caviar, really environmentally conscious, we don't want to use bad plastic, but nothing else keeps produce fresher longer.

 You make the hard choice, but with the determination to find a substitute, as soon as one might become available. And they haven't found one, but it's also interesting though, that Gotham Green didn't have a purpose statement for the longest time. You can be having, living purpose without a purpose statement.

 Let's be very clear. Purpose is about having clear intention for yourself, not just for the world, I'm putting a PR document out there, it's for yourself. Why am I here? What is our own objective? And that brings clarity to your employees, it brings clarity to your customers, it brings clarity to your suppliers, clarity to your other stakeholders, and it clarity more than anybody, for your self in making those hard justice. 

And I think that's why people, when they say purpose gives you the ability to make demands of their staff because they know what your purpose is too. You're not hiding it from them.

Mahan: 
That's why in the book, you repeatedly talk about that intention, which is really important, but you also mentioned there's different levels of benefits that organizations driven by deep purpose get.

Ranjay Gulati: 
So one of the big question marks for everybody is, purpose and performance, are these correlated, at least weakly correlated, like, come on the holy grail here is can my business perform better? there's all kinds of assertions about the data, what measures of purpose and I won't quibble with you, but people that found a weak correlation, but they don't know why.

You can arm wave and say purpose drives performance, because it matters. Come on. Just think about it. It seems obvious right? I wanted to dig into the specific pathways, that purpose makes available to a leader and an organization to drive that performance.

What are the mechanisms, if you will, by which purpose can or should, and that enhance performance. So rather than get into the empirical debate around, does it, or does it not? I just said, let's look at the positive benefits of purpose on performance. And I find, identify four of them that I tried to then extend that.

Mahan: 
And, You talk about the need for leaders to be able to convey the purpose. That's, one of the challenges that I have seen in that it is not repeating the purpose statement. It is aligning with purpose. But you also use Marshall Ganz, his framework on how to convey that sense of deep purpose in order to align everyone around the deep purpose. 

Ranjay Gulati:
I talk about the idea of disseminating purpose by telling a big story. It's really about storytelling and building a narrative. It's not a messaging communication exercise. And for those who don't know Marshall Ganz, Marshall Ganz is a former political organizer who looks at how political activists mobilize masses around a cause.

 Just think about that, the idea of taking strangers and getting them animated about an idea. You can see why, when I was looking at how companies and leaders are doing it inside the organization, then I saw what he had done. There was a resonance because these leaders who are trying to infuse that purpose into the organization. This is not a communication biotics systems. We are trying to capture people at that emotional level. It's not a head only conversation. It's a heart conversation. We're trying to get them to deeply believe in a common cause and how you do that. And I found a number of very impressive leaders who did this masterfully, and to appreciate what they did, I went and interviewed people on the receiving end. I didn't just talk to them. I wanted to talk to the other side of people as well.

Mahan: 
For me as I reflected on the framework and what it has to do with purpose, I saw more of the most effective purpose driven leaders going through the process of telling those stories of the self, stories of the us, and stories of the now. So, it is really important for leaders to be able to do that to be able to achieve that deep purpose. Now, there are a lot of organizations that might at some point or another, be purpose-driven many instances and they're starting stages. 

But purpose is something that needs to be focused on, on an ongoing basis, and you talk about purpose de-railers, we've seen many organizations, including Boeing being one of the more recent examples of an organization, which had at one point was purpose driven, however, flew off track, with respect to their purpose. So how can leaders avoid the purpose derailers and keep the organization consistently focused on that purpose?

Ranjay Gulati: 
So, you know, purpose is something like wallpaper. We can easily take it from them. At some point it becomes kind of part of taken for granted, even in our own lives. Right. Unless you remind yourself that, Hey, why are we here? I'm not going to wake up every morning and say, why am I here?

It's just kind of like, okay, what am I going to play? And also the busy-ness clouds this out easily. And just the way it does it for us, this purpose, what I call a purpose decay. Purpose decays over overtime, and it happens to us in our own lives, but it also happens to organizations. And then the leader's job is to kind of, how do you jumpstart this back? So Johnson and Johnson is a great example, a company with a credo, which did this famous tylenol response, then having a decade of crises and congressional testimonies and fines.

 And then they have a CEO, Alex Gorsky who come to this, we got to challenge our credo. Why do we have one look what we're doing? sometimes we have to jumpstart as a leader for ourselves and for organizations, we've got to like have a little shakeup. 

 Most salient in small companies, by the way where founders, when they leave or the company grows very fast and you see this kind of purpose decay happened.

Mahan: 
You also wrote an HBR article, "Soul of a Startup" where you talked about some of those intangible somethings that those organizations have. And at a certain point they can lose it. that's why it's essential for that purpose to be an ongoing part of the thinking and the conversation for it to be deep purpose.

 Because over time it can decay. It's not one and done. It's not something that the leadership of the organization can put to the side. 

Ranjay Gulati: 
I saw this most clearly in the case of fast growth start-up. Where everyone has this nostalgic sense of the good old days. In the good old days, we could do this and that, good old days, we did that. And you're like, what were the good old days? I want to know what is good old days that you are so nostalgic about.

 And then we'll know where was the culture and the foosball table. Like, no, no, no, that's not good enough for me. I want to pin it down. What are those good old days? And that's what led me to that article that you described. I touched on it in the book as well, where part of losing our purpose is what the good old days has also catch.

Mahan: 
Ranjay, you also mentioned sense of purpose, starts with the individual 

Ranjay Gulati: 
Let's be very clear. We are facing a meaning crisis in the world. I think COVID has forced many of us to confront painful death and loss, illness directly indirectly, we've seen it, we've read about it, we've watched it, and all this forces deep introspection about why am I here our own mortality, and this need for meaning is greater than ever before.

And you can see manifestations through the great resignation or the great reshuffle. You see the data kind of out there. And then the question also is that people expect more from their jobs, this idea that I can compartmentalize my life, and have a day job and then have my life, which starts at 5:00 PM when I get off of work, I think is less acceptable. And by some estimates, the younger people, even most of them they expect even more. 

As people want more coherence in their lives, what is it that we as business leaders are going to do to deliver that for them. And that's going to be a huge competitive advantage. In the war of talent, whoever can help people have a more meaningful existence through work. I think Kathleen Hogan, the CHR or Microsoft said it very well, when she said you don't really work for Microsoft until Microsoft works for you.

Mahan: 
That is important for us to understand on an individual level and on a leadership level, as we want to take our organizations to that stage of a deep purpose. In addition to your own book, Ranjay, are there any leadership resources, practices, that you typically find yourself recommending as the executives that you interact with on an ongoing basis, whether at HBS or just in your own work, seek to want to understand and become more purpose-driven individually and in leading their organizations. 

Ranjay Gulati: 
I want to just take a moment to acknowledge a number of great colleagues at work whose work I would highly recommend, and I'll just rattle off number of people's works for you that I think would be hugely helpful to anybody. I think it's, first of all, let's be very clear. The starting point for all, this is having a growth mindset, As Carol Dweck would call it, we have to have a growth mindset to be willing, to expand our own thinking and challenge our own beliefs and hypotheses about things. That's what I find those very helpful to me. There's a number of great bodies of research. I mean, Bill George, my colleague wrote about authentic leadership, Rosabeth Moss Kanter had this great article called how do great companies think differently?

Julie Batillana has, another article called the dual purpose playbook. Mike Beer has written a book called higher ambition farms. Rebecca Henderson has an excellent book called Reimagining Capitalism. George Serafeim and his colleagues have written about the value of corporate purpose. And then there is Bower, Leonard, and Paine on Capitalism at Risk.

 I can share with you, there's a lot of people who are engaged in meaningful conversations in this space today, both at the individual level, what's my purpose. And at the organization level, what's the purpose of an organization. And even at the societal level, what is the role of capitalism in modern society?

Mahan: 
Those are great recommendations. In addition to your own book, Ron, Jay, which, what I found is not only taking a lot of notes but also challenging myself to think about some of the questions you asked some of the frameworks you present, because I think it requires a deeper level of thinking.

So how can the audience connect with you? Find out more about your work and your book Ranjay? 

Ranjay Gulati: 
I'd be delighted. My easiest way to connect with me is on LinkedIn, reasonably active. I don't flood LinkedIn with posts every day, but I would say every week or two I'll post something very pithy 500 words, or less. and so I would say my preferred medium is LinkedIn or maybe Twitter. as the two places where I love to interact, otherwise you're welcome to give me feedback on the book.

 You can post them on LinkedIn. You can post it on Amazon or whatever your preferred medium of communicating is. I feel as a, researcher, it's important to share our messages with people. And so I'm trying my best to do that. I want to remind everybody what Henry David Thoreau said, it's not enough to be industrious, so are the ants. What are you in depth about? What are you industrious about.

Mahan: 
That is beautifully put Ranjay as there's, so much in your book. And you also say in there that this book has detailed a new mindset about purpose, one that requires executives to think and rethink about what they do, but rethinking isn't enough. You must move forcefully to put deep purpose into practice if you want to reap its benefits. And I agree with that. What you've done with this book is your getting us to ask the questions and to think, and to rethink what's most important is to actually practice, which is the hardest part. 

So I really appreciate the insights that you have shared through this book and you continue to share Ranjay Gulati. Thank you so much for joining the conversation with partnering leadership.

Ranjay Gulati: 
Thank you very much Mahan, it was a pleasure to be here with you today.