Deep Purpose: The Heart and Soul of High-Performance Companies
Ranjay Gulati
304 pages, Harper Business, 2022
Many business leaders have crafted inspiring purpose or mission statements, and companies talk glowingly about purpose, but when it comes to specific decisions and policies, most act in ways far from enlightened.
However, a few select firms that I studied take purpose far more seriously than the rest, setting lofty ambitions and making powerful, meaningful strides toward attaining them. In my book, Deep Purpose: The Heart and Soul of High-Performance Companies, I draw on my research findings to show how having a true purpose—a reason for being beyond profit—is key to supercharging financial performance while also making a positive social impact.
As I found, deep purpose companies treated purpose as an existential intention that informed every decision, practice, and process. They adopted purpose as their operating system, perceiving it as a vital animating force with near-spiritual power. As a result, they navigated the tumultuous terrain of multi-stakeholder capitalism far more adeptly than most, increasing value for all stakeholders, including investors, over the long term. The passionate embrace of purpose unleashed a range of benefits, including better strategy-making, a highly engaged and passionate workforce, and tremendous loyalty from customers, suppliers, and other external partners.
In the course of my research, I found an interesting connection between deep purpose, autonomy, and innovation. Leaders who go deepest on purpose seem unusually dedicated to tearing up the conventional bureaucratic playbook and positioning their companies for innovation, agility, and growth. They give lower-level employees and managers more autonomy, flattening their hierarchies, which fuels trust in the workforce and commitment to the purpose.
In this excerpt, I look at the global Indian firm Mahindra to show how deep purpose goes hand in hand with building an innovative, high-performance organization.—Ranjay Gulati
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It was 2020, and small farmers in the Indian state of Haryana had a problem. Their crops were ready for harvesting, but there weren’t enough agricultural workers to do the work. These local farmers weren’t wealthy. Each harvest could make the difference between a small measure of prosperity and poverty. If the farmers couldn’t find a way to get their crops out of the ground, they, their families, and the communities that relied on them would be ruined.
A heroine came to the rescue: a team member at the global Indian firm Mahindra’s farming equipment business (FES) named Shipra Kumari. A $19.4 billion conglomerate founded in 1945, Mahindra operated in one hundred countries and maintained a large portfolio of businesses spanning the automobile, financial services, IT, and real estate industries, to name a few. Its FES sold tractors, harvesters, and other machinery, claiming a 40 percent market share in India. On this occasion, Kumari learned of the farmers’ plights and felt moved to act. “The crop was ready, and the farmers were helpless,” she told me. “Everything can wait but not agriculture, so it was a huge concern for me as a Mahindraite. It was time to step up and act.”
On her own initiative, Shipra called the local department of agriculture to track down how many harvester machines were available in the area, where they were located, and where exactly their owners would be taking them to perform harvesting tasks. With this information, Shipra could connect farmers to available equipment in their immediate areas that could harvest their crops. “It wasn’t an easy task,” she recalled, “but I thought that no, I have to do it, like it was a big thing I wanted to do for the farmers.” Shipra didn’t expect to book any revenue as a result of her efforts—it just seemed like the right thing to do. And indeed, it was. Thanks to her quick thinking, over a dozen local farmers salvaged their crops.
This act of goodwill wasn’t an isolated incident. As a business, FES strove to use technology to make a difference in the lives of small farmers—a mission whose pursuit, as one employee told me, gives him “immense pleasure.” FES developed a new farming-as-a-service (FaaS) offering that would increase farmers’ productivity and improve their livelihoods. Unlike other companies, FES initially offered FaaS for free to farmers—a strategic move that differentiated their offerings while also allowing small farmers access to state-of-the-art technology. To help more women succeed in farming, FES began an initiative to help them build their farming skills, secure low-cost tools, and find ways to supplement their incomes.
FES’s enlightened business practices didn’t spawn from some high-level corporate directive. They were local actions taken independently as interpretations of Mahindra’s broader corporate purpose. During the late 1990s, under the leadership of then-managing director and now chairman Anand Mahindra, Mahindra adopted a limited purpose: to show the world that an Indian company could produce world-class products and services. Few at the company understood this purpose or utilized it in their business activities. During the 2000s, as the company globalized, Anand realized that Mahindra needed to institute a new, broader reason for being to unify and embolden its far-flung operations. In 2010, the company adopted a purpose captured in a single word—“Rise”—and articulated in the following statement: “We will challenge conventional thinking and innovatively use all their resources to drive positive change in the lives of stakeholders and communities across the world to enable them to Rise.”
Delivering on Rise meant pursuing three themes: “Accept no limits,” “Alternative thinking,” and “Driving positive change,” all of which defined the overarching concept of rising up to transcend obstacles, challenges, or conventional wisdom. As Anand explained to me, Rise entailed a new, much more profound awareness of work and its meaning. It meant “seeing our work as an intrinsic part of who we are and what we want to be,” not just doing a good job but “doing a job that impacts people’s lives and helps other people to Rise.”
Once Rise launched in 2011, Anand and his leadership team spent the next several years exhaustively communicating, embedding, and sustaining it across Mahindra. Studying these efforts, I noticed an impulse on the part of leaders to depart from a rigid command-and-control mentality and allow for more autonomy. Leaders drove the Rise initiative, but they never wanted the purpose to feel like a top-down directive. Rather, they intended to inspire business units across the company to make decisions as they saw fit, but in a consistent way built around a clear vision of the company’s intentions.
Mahindra’s leaders allowed each business to implement and sustain Rise internally as it saw fit. The farm equipment business interpreted Rise as “democratizing technology for small land holding farmers globally” so that they could enjoy more economic prosperity. Mahindra Auto lived Rise by fostering long-term relationships with stakeholders, helping suppliers and dealers that ran into financial trouble and declining to lay off employees at one of its manufacturing subsidiaries. Mahindra Finance not only marketed products to formerly unserved rural customers; it also hired local employees, offering them new growth opportunities. As Rise became more firmly embedded, one leader told me, “We were living the Rise pillars consciously and in a more widespread way. Many leaders were taking initiatives in their own areas, independent of process and structure. People were consciously making choices aligned with Rise.”
Autonomy linked to and enabled by the purpose injected palpable energy into Mahindra and enhanced its performance. The company’s profits more than doubled between 2011 and 2018, gains leaders partly attributed to employees’ enthusiasm for Rise. Several employees I interviewed spoke with obvious excitement about Rise. They told me the purpose energized them not only at work but in their personal lives, inspiring them to exercise more and cultivate other positive changes.
At Mahindra, largely autonomous business units drive the agenda under the umbrella of a purpose—and it shows.