What’s the role of leadership

Grant Leboff: Shuan what’s the role of leadership? How do leaders make sure that they create a purpose-driven organization? What can they be doing?

Shuan Smith: Well purposeful leadership is about doing not saying so it has to be just more than words. It has to be the way that you actually behave and that really starts at the top levels of the organization because that’s what people pay attention to. What is it that my senior executives are doing? What are they paying attention to because that’s what I’m going to pay attention to? Purposeful leadership is about focusing on the right things. Also being prepared to take those tough decisions. We call it ‘sticky moments’ but in any organization you have those moments when there is a trade-off when there’s a conflict between perhaps making a little bit extra money or doing the right thing for customers.

How you respond, the decisions that you make say volumes about how important your purpose is. To give you an example from the Premier Inn example that I used earlier. After having defined the purpose there was a meeting of all of the senior managers that I was running… facilitating. We talked through the purpose and told people what was going to be happening. One of the regional operations managers who ran a big region in the UK said to his Managing Director, Patrick Dempsey, “Well Patrick I’m really inspired by this purpose making guests feel brilliant through a great night’s sleep but when we unveil it when we talk to our people about it you know what they’re going to ask us, what they’re going to say”

“What they’re going to ask is what are you going to do about those 15,000 rooms that don’t have air conditioning or double glazing. Where people are hot and have some noise interruption every night, what are you going to do about them?” Patrick looked at his financial officer and said, “How much is it going to fix us to fix it?” I won’t tell you what the sum was but it was a significant number of million and Patrick said, “Okay let’s announce that we are going to refurbishing those rooms over the next six months. An email went out to the organization to say that and it’s that kind of behavior that really brings purpose alive.

It’s the prove point, it’s the litmus test, it’s the stick moment and how you respond to that sticky moment is really whether your people are going to pay attention or not.

Grant Leboff: If an organization comes up with their purpose, they go through, they’re speaking to customers, identifying it, speaking to employees and stakeholders; they’ve done all that. What else can they do to really make that purpose come alive in the first instance? In the Premier Inn example, I’m not saying it was not an easy decision because I’m sure it wasn’t, but there was a demonstrable difference, “We are going to refurbish those rooms and now you can see we are very tied to the purpose.” In some ways it was a good thing that he had those rooms to refurbish, but if you don’t have that, if you don’t have some grand gesture that can be made, how does a leadership team say to employees, “This is serious”? How do they put that across?

Shuan Smith: Well let’s take another example, let’s take Amazon. Amazon have been in the news quite a lot recently over the whole issue of corporate tax and so on. Amazon’s purpose is to become the world’s most customer-centric company. That’s what their purpose is. A lot of the innovation that they are bringing in, things like drones for example, one-hour delivery slots. All of these things are about demonstrating being the utmost customer-centric company. Part of that is also about sustaining it for long-term and paying taxation in the geographies in which you operate is part of that too.

There is a disconnect if you will between becoming the world’s best most customer-centric company and actually trying to avoid paying tax in those organizations or in those territories in which you operate. It’s even that kind of behavior too, that has to be concurring with your purpose. As you say it is those the grand gestures, it is those things which really set you apart in terms of the customer experience but also the way you behave in an everyday, on an everyday basis that reaffirms it or dilutes it.

Grant Leboff: That’s the point isn’t it, that people have to understand because I think you go into, and I know it’s not the same, you go to another companies and they’ve got a mission statement on the wall. That’s what it is, it’s a mission statement on the wall and the point of purpose is it’s not just an idea on a piece of paper but it’s something that’s actually lived by the entire organization.

Shuan Smith: Absolutely right and in fact ideally it shouldn’t be something that you would feel the need to communicate externally to customers. It’s really about who you are as an organization. Now it may well be that you choose to communicate a version of it to customers, and that’s absolutely fine, but the fundamental reason for having a purpose is it becomes the true north for the organization. Helping people to align together and to working in harmony towards achieving that. Of course it’s not I don’t want to be ethereal about it, it’s not one of those ethereal things. There’s a strong economic reason for doing so.

Havas Media which is one of the world’s largest media companies conducts an annual survey called ‘Meaningful Brands’. In their 2015 Meaningful Brands survey they asked customers to identify those organizations, those brands, that they identify with at a values level, that they felt were meaningful. Those organizations outperformed the average by 133%. They had double the impact in terms of marketing spend, and they had a 46% greater share of spend of those customers. The paradox is that purpose drives profits. If you just drive for profits in a short-sighted kind of way then usually it’s not sustainable but if you create a purpose then create value for your customers, then the profits will follow.

There may be small changes to the spoken word in this transcript in order to facilitate the readability of the written English