Your Purposeful Leadership North Star: A Timeless Catalyst for Transformational Change

Maybe about now, you may be wondering why I created a newsletter on purposeful leadership. If you already understand and practice purposeful leadership then it's likely to be a “no-brainer”. However, for others, given the noise you may still be wondering what it is, whether is it worth it, and how to act more purposefully.? So, I thought I'd dedicate this article to talking about purpose and purposeful leadership in more detail, briefly covering Its history, cemented some 270 years ago and its evolution over time to now, why it is important, and how you can find your purpose and some useful tips.

So, What is Purpose and How Does it Apply to You as a Leader?

Nowadays, it's hard to come across news or online articles without encountering the word "purpose" somewhere. It seems that almost everywhere I look, whether it's academic researchers, global consulting firms, or large corporations, everyone is trying to understand or act with purpose. Lately, there has been a growing amount of attention, maybe even noise, from investors or parts of the media focusing on sub-topics like sustainability or DE&I that cloud this topic and its intent. ?So, the logical question is, what is a purpose? When discussing purpose with clients, they often claim to have one. But what some have is more of a marketing statement to sell their product or service, rather than what their company truly stands for. To assist, we refined the meaning, not because we want to create another buzzword, but to help distinguish the difference between what they want their product or service to be known for versus what their entire company stands for. Your Custodian Purpose is a transformative statement that lies at the very essence of a company's reason for existence. It shapes the fabric of company culture and captures the responsibility, care, and action a company takes to preserve, safeguard, and improve the interests of all of its employees, customers, stakeholders, society, and the world it operates in today, and for generations to come. It sits alongside the goal of making a profit, but it does not pursue profit for profit’s sake as Milton Friedman argued, or profit to the detriment of what you are ultimately trying to protect and safeguard. As an icon in the outdoor industry, Patagonia stands as a beacon for others. “Patagonia is in business to save our home planet”. They do this through their commitment to “build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis”. Later in the article, I’ll explore how you can define your purpose.

If the above helps clarify purpose, then purposeful leadership should be clear. In my view, it’s your behaviours, actions, and decisions that you display or enact to bring to life your company's purpose or your purpose aimed at safeguarding and improving the interests of the people around you, including your family, friends, coworkers, customers, and the community in which you live and work.

A Journey Through Time. Can The Past inform The Future?

You may be surprised to learn that purposeful leadership isn't a trend that has popped up in recent years or evolved on the back of the sustainability agenda.? To truly understand its importance, we must journey back in time, some 270 years ago and look at Adam Smith, the Scottish economist and philosopher who laid the bedrock for modern economics. Raised by a strong-willed mother who probably significantly influenced his beliefs, Smith authored two monumental works: The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776).

Smith wasn't just an economist; he was a visionary who understood the interplay of natural, political, social, economic, legal, environmental, and technological elements in shaping nations. He dissected the distribution of wealth and power, positing that purposeful interactions among these factors pave the way for a prosperous society. His pioneering mindset reminds us that purpose has always been a driver of progress. You can read more about him in a post by my Co-founder Brent.

How Purposeful Leadership Differs from Servant Leadership

Introduced in 1970, Robert Greenleaf’s concept of Servant Leadership was a response to the growing need for a more human-centred approach to leadership instead of the hierarchical models that existed at the time and also possibly as a reaction to the leadership styles that evolved from Milton Friedman’s Capitalism and Freedom concept originally published in 1962. In essence, servant leadership is a transformative approach to leadership that prioritises the growth and well-being of followers.

Purposeful leadership is about aligning the organisation's goals, operations, and culture with a broader societal mission. Leaders focus on pursuing a purpose that transcends profit, integrating it into the core strategy and daily operations. The leader seeks to create value for all stakeholders, including employees, customers, the community, and the environment.

So, while servant leadership focuses on other people’s needs, purpose-driven leadership strives to align the organisation's purpose, mission and activities with larger societal goals, aiming to create broader impact and long-term sustainability.

The Modern-Day Purpose Revolution

While both leadership styles emphasise moving beyond personal and immediate organisational gain, Greenleaf's 50-year-old concept of leadership, while critically important and still relevant today, fails to meet the needs of all stakeholders. Fast forward to the current time—George Serafeim, Harvard's Professor of Business Administration, through his groundbreaking book, "Purpose + Profit: How Business Can Lift the World," echoes Smith’s and Greenleaf’s ethos in a modern context. Serafeim's research underscores the shift in global business landscapes, where environmental and social issues are not just relevant but essential to everyday commitment and equally as important as profit so that the ideals under servant leadership don't become the enemy of progress.

Leaders worldwide are beginning to see that embedding purpose into the core of their operations is not just morally right, but commercially beneficial. Take a look at the common example of Yvon Chouinard at Patagonia, who epitomises what it means to be a purposeful leader and to create a purposeful company. Having always been environmentally conscious, Patagonia changed their mission from a product/purpose hybrid of "Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis" to the clear purpose-driven mission "Patagonia is in business to save our home planet."

Why Purpose Matters Now More Than Ever

Serafim argues that the "concept of purposeful companies challenges two business myths. First, the idea that business is solely about making money while finding purpose is only possible in non-profit or public sectors. The second myth is that pursuing purpose in business is futile because it conflicts with making a profit". While combining the two can be difficult, it is possible by requiring leaders and companies to structure their operations, products, and business models differently, and accept higher career and organisational risk levels. Despite the current attention and shareholder opposition on topics like DE&I in the US, there is still a flow of funds from venture capital, private equity, enterprises, and government investments into purposeful initiatives and ventures. Serafeim provides a plethora of data proving that companies leading with purpose outperform their peers. Through our extensive research at Exeden and our desire to provide evidence-based solutions, we know that 90% of employees who work at companies with a strong sense of purpose say they are more inspired, motivated and loyal. Companies with a Purposeful Character measurably lift their company performance between top and bottom quartile companies with profit growth of +3.8%, revenue growth of +15%, EBIT Margin of 5.8%, ROE of 6.8%, TSR of 10.5% and even customer satisfaction of 10.2%.

Moreover, purposeful leadership is not just an organisational pursuit. Aligning one's career or actions and behaviours with a meaningful purpose can bring personal satisfaction beyond simply being labelled a "do-gooder." I haven’t always acted with purpose, and like everyone else, at times I’ve stumbled when deciding whether to act with self-interest or with purpose. However, my recent journey toward aspiring to be a purposeful leader at Exeden is deeply personal. In 2017, my mother passed away before I could say goodbye. Her life's work was dedicated to uplifting others, and my co-founder Brent’s ethos and work sparked a fire within me to honour her legacy through meaningful actions. As Brent and I worked the “why” for Exeden, our company found its purpose—our “north star” in our mission to make a positive impact on the world. Now, purpose guides both our company, and we donate 100% of our annual dividends to organisations dedicated to uplifting disadvantaged or underrepresented talent in our community.

Therefore, a purpose shouldn’t just be an accessory; it should be a pursuit. In our rapidly evolving world, companies and individuals that fail to anchor themselves on a purpose risk veering off course. Purposeful leadership galvanise teams, fosters innovation, and builds resilient organisations that serve the needs of all stakeholders. It translates into tangible benefits: higher employee motivation, increased customer loyalty, and superior financial performance. And, as an individual, if you want more meaning in your work or life, then don't wait for your company; start with your purposeful leadership practice. The benefits for you as an individual are equally rewarding.

Tips for Individuals to Explore and Live Their Purpose

Defining your purpose can sometimes feel daunting or superficial.? You may be struggling to meet today’s challenges of rising interest rates and cost of living pressures, processing the sad state of geopolitical conflicts, or even going through a corporate restructuring that results in a layoff. In these situations, you may place your personal needs ahead of the needs of others or the community.? However, here are some thoughts:

• Define Your Purpose or, if that’s difficult, List What You Will Start or Stop Doing. To define your purpose, I suggest engaging in a thoughtful exploration with people you value, who can challenge your thinking constructively. When I sought advice from Brent about my desire to develop a coffee brand that only sourced beans from women-run farms, he said, “That sounds interesting and noble,” and then challenged me to consider doing what I’m good at and passionate about. It took me some time to reconcile his advice, but ultimately led me to Exeden. Like my experience, your purpose may reveal itself when you least expect it. Remember, for some, finding a clear purpose takes time. In my earlier days, I focused on what I would try to do or learned from my failures to work out what I wouldn’t do. Sometimes, the latter is easier to define. Hubert Joly, a senior lecturer at Harvard Business School and co-author of "The Heart of Business", provides a simple model of four intersecting circles to help define a company's purpose. I believe it’s a useful tool for individuals trying to work out their purpose as well. He asks the following questions which I've modified for personal use; "1) What does my world need; 2) What am I passionate about; 3) What am I uniquely good at; and 4) Is there a way I can create economic value". If you're still struggling to work out your purpose, another method to explore is defining your core values. Understand what’s truly important to you by asking yourself: What are your values? What tasks make you feel alive and engaged? Even if your job doesn’t seem to align with your values at first glance, focus on how your work helps others. Applying your values to your daily tasks can significantly influence how you feel about your work. A great episode on the Imperfects Podcast by The Resilience Project delves into this topic.
• ?Shift Your Perspective. Finding purpose often begins with a change in perspective. Focus on something or someone other than yourself. You don’t need an expensive vacation or a complete career change. Instead, you can start making small differences in the lives of those around you. Help a struggling colleague, cheer up a coworker, or practice small acts of kindness daily. These gestures can transform your mindset and sense of purpose. In 2005, when our son was diagnosed and treated for a brain tumour, it was hard for me to think about anything else, including my work, other than our son and my family. Fortunately for me, I was supported by two amazing women at work. Elise was amazing, she effectively did my job for me, and Mary, whom I reported to, organised for the company to fly my mother-in-law over from NZ to help our family. While this is an extreme example, it taught me how to change my perspective, embrace gratitude as a regular practice, be thankful for what I have and not what I don’t have, and appreciate that at times it’s really hard to look outwards when you are dealing with critical personal needs.
• ?Seek Alignment, Stay Committed and Be Kind to Yourself. Acting purposefully won’t always come naturally. Just like a muscle or a learnt behaviour, it needs training. Purposeful leadership is also a journey, not a destination. Continually evaluate and pivot as your understanding of your purpose evolves. Find or create opportunities at work that align with your purpose. This might mean advocating for projects that resonate with your values. The more you practice purposeful leadership the more it will feel natural and the more likely you will be to repeat the behaviour or action.? Know that you will make mistakes along the way, so be kind to yourself. It’s always easier if you acknowledge and openly talk about any mistakes or what you want to change or do as that process leads to better insight and clarity in thought and action.? And remember that sometimes others cannot see what you can see or what you are trying to do. It doesn’t mean they are right or oblivious to the need, maybe they are still shifting their perspective, or their priority right now is on themselves or their family so be patient with them.
• ?Maintain a Reflective Journal. Take time to understand what truly matters to you. Reflect on your passions and how they align with your career. Keeping a daily or weekly journal of your accomplishments is an incredibly powerful practice. Each week and month, spend a few minutes adding to it, focusing on what you did, what you could do differently or continue doing, and how it made you feel. Over time, you’ll build a journal of the difference you’ve made, and the positive reflection will reinforce the benefit of acting purposefully and give you something to lean on when times are tough. I’ll include a list of the top 20 purposeful leadership actions others have demonstrated to me or I have seen around me that I have been grateful for and have subsequently used as a guide for my purposeful leadership action. I’m sure you may have your own, so feel free to share in the comments for others to learn from your experience.

Forward Momentum

Leading with purpose in your work or life is a journey, not a destination. It's not something that will happen overnight. If you question your values and are willing to look at what you do in a new way, you can find meaning in what you do. Even small acts can make a difference to your co-workers and other people you interact with, and many times these actions will bring even more joy and fulfilment to you than to the person you're helping.

I appreciate the wisdom from Jim Coulter, who remarked in a recent Bloomberg Live interview: "The world is like a relay race. The baton has been passed from scientists to prophets to policymakers and now to us—the doers. Like each relay, the last leg is usually the fastest, driven by a sense of optimism" and newfound purpose, courage, or skills. As we reflect on Smith’s nearly 300-year-old insights, it becomes apparent that while progress is incremental, it's not about perfection but about ongoing, purposeful action.

The path to purposeful leadership is not just a calling from history; it’s an exigency of the present. So, embrace it with vigour, but let’s hope the last leg of the relay race as purposeful leaders doesn’t take us 100 years.

Thank you for reading. As always, feel free to follow, share, or comment with your thoughts and experiences related to purposeful leadership.

#Leadership #HumanResources #Culture #Strategy #Sustainability #Purpose #PurposefulLeadership #PersonalValues #CustodianPurpose #PurposeDriven #PurposefulCharacter

For over three decades, Russell has passionately led diverse HR and non-HR functions, notably serving as Chief People Officer for a global company across 24 countries. Co-founder of Exeden, he challenges traditional HR norms and inspires action to foster purpose-first workplaces that deliver outstanding value to customers, communities, society, and shareholders. Leveraging his hands-on experience, research, and time spent with other practitioners and thought leaders, Russell writes insightful articles on Purposeful Leadership. His impact and passion for people go beyond businesses, where Exeden has committed to donating 100% of its annual dividends to organisations dedicated to uplifting disadvantaged or underrepresented talent in our community.