In the last year, we saw the continued emergence of radical transparency in business. We the saw the advent of social advocacy in the workplace, and against a tumultuous political and environmental backdrop, we saw senior leaders take a more active role in purpose.
Beyond this, we saw the power of purpose brought to life by organizations who align both leadership behaviors and organizational impact to purpose; bringing together individual mindsets and actions with the collective weight of enterprise to do work that truly matters.
At Karrikins, we call this idea purpose-aligned leadership.
Purpose-Aligned Leadership: Leaders who materially align products, operations, R&D, brand, employee value propositions, investment strategies, and CSR to a clear and compelling purpose. They role model alignment every day, dedicate time and money to activities that support purpose, and hold others fiercely accountable to do the same.”
We contrast this idea by leaders who exploit purpose – senior executives concerned with short-term financial results, unwilling to do the hard work of alignment.
Purpose-Hawking Leadership: Leaders who claim to be driven by purpose but are primarily interested in good PR and marketing. Purpose does not meaningfully direct behavior across the organization because leaders lack the commitment to authentically embed it. Purpose-hawking leaders manipulate external narratives without any real attempt to change the way business is done.
So, how does purpose-alignment come to life? How do CEOs align individual behaviors and organizational direction to purpose? What does this journey look like? For Indrya Nooyi and Pepsi, the journey to purpose-alignment began almost 13 years ago.
PERFORMING WHILE TRANSFORMING: INDRA NOOYI & PEPSI
When Indra Nooyi assumed the Chief Executive mantle at Pepsi in 2006 she became one of the most powerful women in the world. She wasted no time announcing a new, bold direction for Pepsi, focused on “delivering sustainable growth by investing in a healthier future for people and our planet.” This idea would be encapsulated in Pepsi’s new mission and purpose statement: “Performance With Purpose (PwP).” But the journey to purpose-alignment is long – and multi-nationals do not change on a dime.
In the burgeoning days of PwP, Nooyi would draw intense criticism. Pepsi was notorious for its large-scale water pollution. The beverage company has an ugly history of human rights violations. And, along with long-time nemesis Coke, it has been chastised as a leading factor in the rise of global obesity, especially in children.
Despite this, Nooyi kept her eye on the long game. Pepsi would ensure that by 2025 that 100% of wastewater conforms to high environmental standards protection, while also providing access to safe water for a total of 25 million people. Pepsi would commit to the expansion of its Sustainable Farming Program (SFP) to increase environmentally responsible agricultural practices and to advance respect for worker’s fundamental human rights across 7 million acres of land. It would address the obesity epidemic by ensuring that two-thirds of its global beverage portfolio would have less than 100 calories; reducing total added sugars, fats, and sodium.
Through the challenges, Nooyi’s ability to hold the nerve despite criticism, poor financial performance, and negative media would be one of Nooyi’s biggest accomplishments as CEO. She would demonstrate the courage and foresight to introduce a purpose and organizational agenda that would look nearly twenty years into the future for its completion. It would have been easy to succumb to short-term financial pressures, especially when your number one competitor would dominate in comparative stock performance. It would have been convenient to revert to legacy product approaches when critics would lambast you for overcommitting to healthy products, effectively torpedoing the company’s performance in the short run. But being a purpose-aligned leader is about doing the hard work of deselecting legacy initiatives that no longer fit your purpose. It’s about refocusing investments that might not generate short-term impact and saying “no” when “yes” feels easier.
Almost twelve years after Performance With Purpose was introduced, Pepsi has a new CEO in Ramon Laguarta and has seen steady growth over the last five years while continuing to bring the initiative’s agenda to life. Nooyi has proven that making the right decision is often the most difficult one as well.
THE DIMENSIONS OF PURPOSE-ALIGNMENT
Because alignment is challenging, leaders must actively drive alignment across their organizations. This is not a passive process. It requires deliberate, disciplined leadership and active and continued focus over time. We believe there are four drivers that help create alignment to purpose: clarity, commitment, confidence, and application.
To better realize how these dimensions apply to real-world leaders and organizations, let’s dive into the story of Adobe and Shantanu Narayen. Their journey would begin in 2009 when the company’s growth had all but stalled.
BURNING THE BOATS: SHANTANU NARAYEN AND ADOBE
Adobe was founded to “redefine how people engage with ideas and information—anytime, anywhere, and through any medium.” But advent of digital media would bring sweeping changes to industry, and nearly a decade after the new millennium the organization would find itself lagging behind the new ways consumers were engaging with content, ideas, and information.
Adobe CEO Shantanu Narayen was at a crossroad: define a new purpose and organizational direction for the new media industry or continue to pursue legacy approaches – notably anchored in Adobe’s ‘software-in-a-box’ strategy. He chose the former: seeking to reshape Adobe into a global leader in digital media and digital marketing solutions, restating the organization’s purpose to “empower everyone – from emerging artist to global brands – to bring digital creations to life and deliver immersive, compelling experiences to the right person at the right moment.”
Narayen would have to transform Adobe’s business to align to its newly-defined purpose. He would need to break from legacy businesses that no longer aligned to this new purpose, he would need to reprioritize millions of dollars of operating expenses to acquire and expand new digital-centric products, and he would need to do so barely a couple years after the 2008 stock market crash.
To more effectively understand how Adobe would bring this new purpose to life through its business and leadership, we need to examine how Narayen’s journey fits into the dimensions of purpose-alignment.
Clarity of Expression: In 2012, Narayen would clearly announce Adobe’s renewed purpose during a full-day of Wall Street briefings.
Commitment to Alignment: Between 2011 and 2012, Narayen would shift $200 million in operating expenses towards new, high-growth initiatives that aligned to Adobe’s new purpose.
Confidence in Ambition: Revenue would continue to decline around the same period, but Narayen would remain confident in his ambition to align Adobe to purpose – acquiring Omniture for $1.8 billion to build out what we now know as Adobe Analytics and eventually, the Adobe Marketing Cloud.
His confidence would be highlighted once more in 2013 when Narayen would decide to burn the boats and go all-in on its new purpose, moving all of Adobe’s products and services to the cloud
Amplification of Value: By the time the dust settled from Narayen’s push towards purpose-alignment and greater digital focus, Adobe had transformed into a cloud-first, SaaS giant providing immense value to several core stakeholder groups.
Adobe’s shareholders would see exponential growth, the organization would empower a new generation of marketers ‘close the loop,’ it would shift the way creators design digital experiences, and would even create new opportunities for its employees to align to purpose through initiatives like Project Marvel and the Adobe Experience-a-Thon.
THE CHOICE IS YOURS
At Karrikins, our ask of you is to choose to become a purpose-aligned leader. Don’t settle for pithy marketing copy about why your company matters – make it real. Change mindsets, behaviors, and expectations, and visibly demonstrate to employees, suppliers, distributors, investors, and customers what it means to be a purpose-aligned leader.
We believe it is a worthy ask. In choosing to do so you will create sustainable growth and impact that goes beyond any quarterly report. Doing this will help your organization manifest a future of increased value creation and impact; that grows exponentially rather than incrementally.
Thank you for reading on. This article is part of a series on purpose-alignment. We dive deeper into the research, concepts, and thinking in the following whitepaper — ‘Purpose-Aligned Leadership: From Purpose Driven to Driving Purpose,’ click here to learn more.