The purpose-driven enterprise was one of the most popular CEO panels at the World Economic Forum in Davos this year and last, and seems to be the corporate equivalent of the search for the Holy Grail. Indeed, instilling a sense of purpose in our organizations is critical – especially in the still-lingering aftermath of the Great Recession. We’ve lost trust in our institutions. But perhaps more alarming, we’ve lost trust in the motivations of those who would lead them. It’s not just a U.S. phenomenon, either. It’s a global challenge – and opportunity.

Doug Ready, Senior Lecturer in Organization Effectiveness at the MIT Sloan School of Management, studies what it takes to build what he calls “game-changing organizations.” In a recent conversation with me for the MIT Thought Leader Series, the renowned expert on global leadership and organizational effectiveness shared his views on the topic.

“While purpose is vitally important, it’s not enough,” he believes. “You can create a beautifully written purpose statement – even one that truly excites your people – and still be fired for not delivering value to your customers. Truly game-changing organizations are, at the same time, purpose-driven, performance-oriented and principles-led.”

Given today’s volatile and trust-deficit business environment, leadership is a complex topic. But Ready thinks of it in simple terms: there are both a “doing” aspect and a “being” aspect to leading, he says. It’s a notion that may have always existed, but it’s more important than ever. As leaders, it’s not only what we do, it’s how we do it.

Ready explains the “doing” part of the leader’s job: “Leaders tell powerful stories that connect their companies’ heritage and past to the challenges they face in the future. They express humility and ask for help. They set out to build a collective leadership capability throughout their organizations. They drive disciplined decision-making, but with a focus on the future, enabling their companies to drive innovation and growth. They work hard to align the messages from their stories with the day-to-day realities faced by leaders and employees at the customer interface. In other words, if they talk about being the innovation leader, they make sure to reward innovative behaviors.”

It’s a tall order for any leader. But it’s also not enough on its own – because the leadership journey isn’t just about one leader, it’s about the entire enterprise.

According to Ready, leadership is a privilege. “Our job as leaders becomes one of creating the environment where many other leaders can come into their own and flourish. This is where the “being” aspect of leading comes in.”

This is the next-generation leader’s mindset; one that Ready has found the world’s most highly effective leaders embrace. He discussed the six elements that comprise the “being” aspect of leadership.

  1. Purpose allows leaders to help employees connect the dots between organizational purpose and individual meaning.
  2. Leaders who talk about their organization as a “special place” tell more authentic stories about the signature differences that makes their company unique.
  3. Context comes from taking a variety of assignments in different businesses and in different locations around the world, helping leaders see how the various pieces of their organization fit together, as well as where it fits within the broader world stage.
  4. Perspective is derived from deep reflection, self-assessment and reaching out to as many learning and coaching sources as possible.
  5. Community is created by building powerful relationships with other leaders around the world – inside and outside of the company.
  6. Resiliency enables leaders to pick themselves up after faltering, allowing them to quickly pivot to the future and to bring their people with them in an energizing way.

As Ready puts it, building game-changing organizations isn’t about just coming up with a sexy purpose statement, but rather doing the hard work of creating companies that are purpose driven, performance-oriented and principles-led.

Hal Gregersen is executive director of the MIT Leadership Center and a senior lecturer in leadership and innovation at the MIT Sloan School of Management. He is the author The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators and founder of The 4–24 Project. As part of the MIT Leadership Center Video Series, he sits down with innovative leaders to explore how they are solving the world’s most challenging problems.

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