Purpose Leads to Performance

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Good morning.

I’m in San Francisco, where I moderated a panel on digital transformation yesterday afternoon at the annual Salesforce extravaganza, with McKinsey’s Vivian Hunt, MediaLink CEO Michael Kassan, and Red Hat CEO Jim Whitehurst.

Whitehurst did a particularly good job explaining why the best companies pursuing technological transformations also are putting purpose at the center of their business. In a 20th century business model, he said, where workers perform tasks prescribed by their managers, money may have been a sufficient motivator. But in the 21st century, the prescribed tasks are increasingly automated, and workers are being called on to innovate and exercise judgement and creativity. To get the best from them, it helps to provide an aspirational goal—a “North Star”—that can guide and inspire their efforts.

In other words, higher purpose leads to better performance.

And since it’s Friday, some feedback. LT gave the following response to yesterday’s post about the ten questions business leaders must ask about their impact on society:

“A good list, but I would add an 11th question: ‘What’s the plan when an activist shareholder like Carl Icahn, who wouldn’t appear to care two hoots about the answers to those 10 questions, makes a run at the business?’”

Good question. More news below.

Alan Murray