Importance of common purpose to firms’ growth

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DOES your team have a common purpose?

People Management Issues Robert Mandeya

Teams without common purpose are rudderless, clueless and have no hope of achieving at a high level over time. I would like anyone in a position of leadership of whatever entity, business or otherwise, to ask themselves: “does my team have a common purpose?” If you are unsure or the answer is no, find a common purpose and communicate it soon.

Common purpose

Regardless of the verbiage used — vision, mission, strategy, identity, purpose — no team sustains effective performance without the benefit of a single compelling idea that drives it forward. Let me relish the story of one very successful CE (at least according to my assessment) of a leading American electric company back then. My assessment is based on the award-winning fit of the CE in question, in the Fortune 500 magazine.

During his 20-year tenure as CE of General Electric (GE), Jack Welch dramatically demonstrated the importance of common purpose. When Welch took over in 1981, GE contained 42 strategic business units: appliances, lighting, transportation, motors, medical materials, industrial electronics, aerospace, financial services, etc.

The profound challenge for Welch became how to develop a common vision for such seemingly unrelated disciplines. He said: “We were in so many different businesses. In those days, if you were in a business that was profitable, that was good enough reason to stay in it.”

Welch believed that strategy is not a lengthy action plan. It is the evolution of a central idea through continually changing circumstances. He said: “The winners in this environment will be those who insist upon being number one or number two in every business they are in — the number one or number two leanest, lowest-cost, worldwide producers of quality goods and services . . .”

Welch also said,“. . . where we are not number one or number two . . . we have got to ask ourselves (management guru) Peter Drucker’s very tough question: ‘If you were not already in the business, would you enter it today?’ And if the answer is no, face into that second difficult question: ‘What are you going to do about it?’” Welch’s simple ultimatum was that those businesses would be fixed, sold, or closed.

Welch did his best to convey or communicate the idea: “. . . I repeated the No. 1 or No. 2 message over and over again until I nearly gagged on the words . . . The organisation had to see every management action aligned with the vision.”

But while “one or two, fix, sell, or close” passed the simplicity test, and most employees understood and agreed to it intellectually, the emotional leap was a more difficult process. Welch spent a good deal of time in his first five years earning the nickname “Neutron Jack” (he left buildings intact but the people were gone). One quarter of GE’s employees left the company during this period, 118 000 in total. As Welch himself admitted, “The turmoil, anger, and confusion were everywhere.”

On the other hand, under Welch’s leadership GE’s revenues improved from US$27 billion to US$130 billion. Market value jumped from US$12 billion to US$410 billion. Welch presided over more than 600 acquisitions and aggressively pushed GE to enter newly emerging markets.

By the end of Welch’s reign, GE was the largest and most valuable company in the world. In 1999 Welch was named “Manager of the 20th Century” by Fortune magazine.

Many of the business methodologies and leadership concepts he espoused continue to be emulated by corporate executives the world over.

I can speak to the importance of this fundamental lesson from personal experience. In a 25-year career that has spanned civil service, training consultant practice, politics and business, I have observed teams without a common purpose. I have been a member of teams without a common purpose. I have been the leader — shame on me — of teams without a common purpose. I can vouch with certainty “those teams do not work”. In contrast, teams that know with confidence what they are about can become juggernauts. Perhaps my favourite and most esteemed example of a common purpose is the creed that finds expression in the American marine forces during combat times, which reads as; “To seek out, close with, and destroy our enemy, through fire and manoeuvre.”

No ambiguity there. It is not by coincidence, therefore, that US Marine Corps is one of the best teams in the world.

Common purpose does not have to be complex or blindingly original. To the contrary, it should be simple and reflect common sense. It does not have to come from some “divine levels”, although it might. It can come from you. Not everyone has to agree, and there may be pain in the implementation, but everyone must understand the common purpose.

I have always hinted to my participants that change is always unsettling, “disruptive” for many and leadership must always be strong and focussed in implementing change. People naturally are always so “perched” in their comfort zones and any attempts that threaten the comfort zone is met with very hostile resistance at times.

My advice is: use your own business savvy in the discovery process. Read and study. Consult with your team and other valued advisors. Take advantage of both internal and external resources. The goal is to find a common purpose that is compelling and makes sense. Then you must communicate until you nearly “gag on the words.” Finally, follow through to make sure that your team acts to carry out that purpose. You may not become “Manager of the Century,” but you will see improved business results.

Mandeya is a an executive coach in human capital development and corporate education, a certified life coach in leadership and professional development at the Institute of Leadership Research and Development. You can contact him on lead.inst.dev@gmail.com, mandeyarobert@gmail.com.

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