The Power of Deep Purpose: How It Drives Extraordinary Performance – Insights from Ranjay Gulati

Ranjay Gulati, a professor of Business Administration at Harvard Business School, is a leading thinker in the area of organizational behavior and management. He is the author of several books, including his latest work, “Reorienting Management: Creating a Purpose-Driven Organization,” in which he explores the concept of deep purpose and how it can drive extraordinary performance in firms.

Gulati admits that writing about purpose was a departure from his usual focus on econ, math, and computer science. However, he found the topic to be both uncomfortable and exciting, as it forced him to reflect on his own growth as an individual. He also recognized that purpose can help create a positive work environment that benefits all stakeholders, including shareholders, customers, and employees.

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Traditionally, job satisfaction has been the primary way that firms aim to engage employees. However, Gulati argues that this approach is limited in its ability to inspire employees to go above and beyond their job responsibilities. Instead, firms should focus on creating a sense of deep purpose, which can help employees feel connected to something greater than themselves.

According to Gulati, deep purpose involves answering three key questions: What is the company's mission and why does it matter? What is the employee's role in achieving that mission? And how does the employee's work contribute to the larger goal?

By answering these questions, employees can feel a sense of ownership and pride in their work. They become more engaged and motivated to achieve the company's goals, leading to better performance and productivity.

Moreover, when employees feel that their work has a meaningful impact, they are more likely to stay with the company long-term, reducing turnover and recruitment costs. Gulati points to several companies that have successfully implemented deep purpose as a key driver of performance. For example, The Container Store, a retail company, has a strong purpose of helping customers organize their lives.

This purpose is reflected in every aspect of the company's operations, from product selection to customer service. As a result, employees feel proud to work for the company and are highly motivated to deliver exceptional customer service.

Similarly, Patagonia, an outdoor apparel company, has a purpose of using business to inspire and implement solutions to the environmental crisis. This purpose is reflected in the company's sustainable business practices and advocacy for environmental causes.

Patagonia's purpose has helped the company attract and retain passionate employees who are committed to making a positive impact on the world.

RanjayGulati's research suggests that deep purpose is a powerful driver of performance in firms. By answering the three key questions of purpose, companies can create a positive work environment that engages and motivates employees to achieve the company's goals. This, in turn, leads to better performance, reduced turnover, and increased shareholder value.