Creating a Purpose-Driven Organization

Harvard Business Review

by Robert E Quinn. and Anjan V. Thakor

 

When Gerry Anderson first became the president of DTE Energy, he did not believe in the power of higher organizational purpose.

We’re not talking about having a clear mission that focuses largely on how a business will generate economic value. DTE had one that set out the goal of creating long-term gains for shareholders, and Anderson understood its importance.

A higher purpose is not about economic exchanges. It reflects something more aspirational. It explains how the people involved with an organization are making a difference, gives them a sense of meaning, and draws their support. But like many of the leaders we’ve interviewed in our research, Anderson started his tenure as president skeptical about how much it mattered. The concept of higher purpose didn’t fit into his mostly economic understanding of the firm.

But then the Great Recession of 2008 hit, and he knew he had to get his people to devote more of themselves to work. Even before the financial crisis, surveys had demonstrated that DTE employees were not very engaged. It was a classic quandary: Employees couldn’t seem to break free of old, tired behaviors. They weren’t bringing their smarts and creativity to their jobs. They weren’t performing up to their potential. Anderson knew that he needed a more committed workforce but did not know how to get one.

That was when retired army major general Joe Robles, then the CEO of USAA and a DTE board member, invited Anderson to visit some USAA call centers. Familiar with the culture of most call centers, Anderson expected to see people going through the motions. Instead he watched positive, fully engaged employees collaborate and go the extra mile for customers. When Anderson asked how this could be, Robles answered that a leader’s most important job is “to connect the people to their purpose.”

At USAA, he explained, every employee underwent an immersive four-day cultural orientation and made a promise to provide extraordinary service to people who had done the same for their country—members of the military and their families. That training was no small investment, since the company had more than 20,000 employees. Its lessons were continually reinforced through town hall meetings and other forums where people at all levels asked questions and shared ideas about how to fulfill their purpose.

Before the recession, Anderson would have rejected Robles’s statement about purpose as empty, simplistic rhetoric. But having run into a dead end in figuring out how to make his own organization thrive, Anderson was reexamining some of his basic assumptions about management, and he was open to what Robles was saying.

When Anderson returned to DTE’s Detroit headquarters, he made a video that articulated his employees’ higher purpose. (He got that idea from Robles, too.) It showed DTE’s truck drivers, plant operators, corporate leaders, and many others on the job and described the impact of their work on the well-being of the community—the factory workers, teachers, and doctors who needed the energy DTE generated. The first group of professional employees to see the video gave it a standing ovation. When union members viewed it, some were moved to tears. Never before had their work been framed as a meaningful contribution to the greater good. The video brought to life DTE’s new statement of purpose: “We serve with our energy, the lifeblood of communities and the engine of progress.”

 

Every organization has a pool of change agents that usually goes untapped.

 

What happened next was even more important: The company’s leaders dedicated themselves to supporting that purpose and wove it into onboarding and training programs, corporate meetings, and culture-building activities such as film festivals and sing-alongs. As people judged the purpose to be authentic, a transformation began to take place. Engagement scores climbed. The company received a Gallup Great Workplace Award for five years in a row. And financial performance responded in kind: DTE’s stock price more than tripled from the end of 2008 to the end of 2017.

Why did purpose work so well after other interventions had failed? Anderson had previously tried to shake things up by providing training, altering incentives, and increasing managerial oversight, with disappointing results. It turned out that his approach was to blame—not his people.

That’s a hard truth to recognize. If, like many executives, you’re applying conventional economic logic, you view your employees as self-interested agents and design your organizational practices and culture accordingly, and that hasn’t paid off as you’d hoped.

 

Original article can be viewed here.