Formerly Professor of Food and Beverage and Service Operations Management at EHL, Ian Scarth has a background in strategic development and leadership within the hotel and hospitality sectors. In this article he gives his views on what purpose-driven leadership is, and what it means to be a purpose-driven organization.
‘Purpose-driven organization’: What does it mean?
Many leaders claim to have a purpose that’s clear, well defined and communicated throughout their organization. However, making that purpose sustainable so it adapts to ever-changing business needs and keeps up with market expectations while all the time keeping team members informed and on-side, is a much bigger challenge.
Yet, being on-side and involved is high on the wish list of employees that now seek an inclusive working environment in which to develop and grow. Purpose-driven organizations are very clear about their need to create economic benefit, maintain legal obligations and generate long-term shareholder value. However, in today’s business world, these are givens that need to be complimented by less tangible and harder to measure stakeholder expectations.
This 'Higher Purpose' is more aspirational and provides a sense of meaning that attracts support from employees at all levels. It also appeals to buyers that want to feel they are considered and that their needs are being imbedded into the process of designing both products and services.
The value of purpose-driven leadership in challenging environments
The early 21st century has delivered extraordinary challenges. The recession of 2008, the devastation of Covid-19 and its economic aftermath, the complexities of Brexit, an uncertain US election fought in a climate of never seen before hostility (VUCA).
These events have helped many leaders reach a similar conclusion: not only do they need to acquire a different set of skills themselves, but they also need to get their employees on track and involved to a greater degree than ever before. The circumstances have also raised employee expectations and a desire on their part for greater involvement and inclusion in the control of their own destiny and the achievements of the organizations.
What motivates employees in 2022?
- Employees today are seeking increased participation in the construction and fulfilment of company strategy.
- They are expecting their organizations to show increased empathy and inclusion in all stages of the planning, actioning and reviewing processes.
- Today’s employees value their self-worth more than ever and expect leaders to respect and nourish that worth.
- A company’s purpose needs to reflect the ambitions of its people, ensuring that while delivering shareholder value, ROI and market share, it focuses on the needs of internal stakeholders as never before.
- Employees appreciate the benefits they get from their employers and become unsettled if these are taken away. Over the last eighteen months of Covid, many companies have changed their employee benefits and shown greater levels of trust in their staff, realizing for example that working from home does have benefits and can be a win-win. Taking such benefits away or reducing them without serious consultation, will impact cultural beliefs and challenge organizational stability.
- Organizations need to involve employees in the process of reassessing the pros and cons that have come out of the Covid crisis, before making snap decisions about returning to any elements of the old norm.
The benefits of inclusive leadership
Dictatorial leadership has to become a thing of the past, while inclusive and involved leadership a thing of the future. This is a hard concept for some leaders to come to terms with and may require executive coaching to adapt their leadership style. However, failure to grasp this notion will lead to dissatisfaction on the part of those being led and frustration on the part of the leader.
Thought must be given to how the organization articulates and communicates its purpose to the wider business. For example, the waiter’s purpose will certainly differ from that of the chef’s, who is more focused on product than service. However, they are both vital in the company’s efforts to achieve its overall purpose of exceptional customer satisfaction. The same level of cohesiveness must be achieved for other service businesses that now or have always had remote or hybrid teams - another core skill for leaders of the future.
Removing barriers to service excellence
When purpose and passion are aligned, the journey toward a 'Higher Purpose' becomes smoother and more impactful. The bumps and bends in the road are left behind as the organization takes advantage of the freeway ahead to accelerate towards its agreed milestones. If any waiter has passion fueling an agreed purpose and more freedom to achieve it, his guests will certainly enjoy a more memorable dining experience.
All too often in the past, employees have been asked to show passion, without any ownership of the purpose and have not been provided with the time or tools to express that passion. They are set-up in firefighting mode and must battle just to survive the working day.
Offering the best pay rates will no longer attract and retain inspired employees; life is too full of stress, uncertainty, and depression. Today’s high-performance environments have to be built on a foundation that includes both tangible employee benefits and intangible experience that meet the challenges of today’s working environment.
Failure to deliver these intangibles will almost certainly result in employee dissatisfaction and a higher degree of stress, anxiety, depression, and demotivation, all of which were growing in the workplace well before Covid came along.
I’ve noticed a growing number of CEOs calling for a return to the office on the grounds that working from home is reducing productivity. This may well be the case. It’s also very probable that many people are looking forward to a return to the workplace, as they miss colleagues and the camaraderie that is not available at home or over Skype/Teams. Taking such steps without identified objectives and clarity of purpose could transport business practices back into the old norm, and not provide the employee with the involvement and participation they desire.
How people-centric management breeds service excellence
Two case studies
I recently spent a year observing the hospitality operations at an English West Country Championship football club, at which the purpose was only occasionally communicated out by leaders in a very unclear and confusing way to their departmental heads. Thus, there was nothing to cascade down the organization in any consistent format, and departmental managers tended to adopt an individual approach that resulted in numerous independent silos.
Passion had been sucked out of employees because little respect was shown to them by their superiors, who in turn received constant criticism from above when things went wrong. The pressure departmental managers were put under to hit targets that maximized nothing but profit, was not supported by any training, coaching or mentoring. When I walked the stadium and asked senior managers what their vision, purpose and goals were, I was often met with blank faces. Communication between the leadership and their workforce was infrequent and often focused on the negative rather than the positive.
Training was always challenging due to the high volume of casual staff used. However, this issue was never discussed or addressed, resulting in inconsistent standards and an absence of any real pride, which was a shame in such an exciting working environment. Staff turnover was high, I witnessed a 76% turnover in full-time hospitality staff during my year of observation (pre-Covid). I always felt that HR was seen by both the leadership and the workforce as quite an insignificant department, which is strange as they operated in a highly competitive service sector.
On the other hand, I’ve had the pleasure of working with a fine five-star London hotel, The Landmark. It was voted fourth best (cross sector) employer in the Sunday Times best companies to work for 2020 awards, as well as being the holder of a Platinum Level, Investor in People certification. At the time of the award, The Landmark London was the first and only hotel in the world to be awarded the Platinum accreditation. The GM was very approachable and had built a culture of people first. Staff members where respected, encouraged to get involved and supported in their work. Team members had ownership of service delivery and knew their purpose, working towards it with pride and enthusiasm. Staff were supported by a high-profile HR department that operated from within the hotel's core.
I doubt you could become the UK’s 4th best employer if you didn’t have this people-centric approach and clear sense of purpose. It is no coincidence that the hotel won the AA Hotel of the year award 2019-20. Involving their team in the development of the hotel has paid dividends. As you can see from the data below, this has been a steady but impressive progression toward ever increasing service quality:
Best Companies to Work For Rankings, Sundays Times:
- Number 4 for the Top 100 Companies to Work for, The Sunday Times Best Companies, 2020
- Number 6 for the Top 100 Companies to Work for – 2019
- Number 27 for the Top 100 Companies to Work for – 2018
Travellers' Choice rating:
Source: Traveller's Choice Awards, 2020
Purpose-driven leadership in practice
Once a company has a clear vision of its purpose, it can go on to develop the purpose-driven individuals that will undoubtably have to implement this new approach. Transferring this sense of purpose to employees no doubt puts communication as one of the core skills that must be honed by leaders of the future.
As the new purpose is communicated out and starts to cascade through the organization, ownership becomes instinctive and natural to all motivated frontline staff. For example, a waiter’s personal purpose could be to ensure that customer expectations are surpassed and a memorable experience is delivered. In which case, the company needs to fully support the waiter in achieving that purpose, which in turn contributes to the wider company purpose of providing “exceptional customer satisfaction”.
How this is achieved is related to the ownership of that purpose. This does not eliminate the need for standards, procedures and processes, but does give the owner (the waiter) the freedom to apply his own personality and creativity to the task in hand and develops a want to participate in the original standard setting process to which he is working. Purpose-driven leadership gives this ownership and demonstrates trust and in turn trust leads to a feel-good factor that adds to the organization’s cultural foundation.