Summary of The Economics of Higher Purpose

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Business educators Robert E. Quinn and Anjan Thakor define a business’s purpose in clear practical terms any leader will understand. They repeat and reinforce their mantra: Your authentic purpose already exists. You must discover it, not invent it. Every business decision and action a leader takes must reflect his or her organization’s reason for being, despite the cost. Only then will your employees believe in and embrace your purpose. Only then will you ignite the loyalty and effort that an authentic, shared mission inspires. Profits will follow.

About the Authors

Robert E. Quinn is a business professor emeritus at the University of Michigan. Professor Anjan V. Thakor teaches at the University of Washington Olin School of Business.

 

Summary

Abandon the “principal-agent” myth. Employees are not naturally lazy. They seek purpose. Don’t micromanage them, inspire them.

Classic economics argue that people act in their own self-interest and exert the least effort possible for the most gain – that is the principal-agent problem. Under this philosophy, managers must watch, prod, reward and punish workers. This managerial approach, which has prevailed for decades if not centuries, creates exactly what its managers expect: disengaged, unenergized workers who need constant micromanagement. But when organizations adopt and maintain an authentic purpose – one that guides all their decisions – employees embrace the organizational purpose as their own. A shared purpose ignites camaraderie and collaboration, improving performance and then profits.

Authentic purpose can never speak directly to financial goals. Improved financial performance emerges from higher purpose. Higher purpose doesn’t mean corporate charity. Your firm needn’t sacrifice its business goals to do good. Instead, link your company’s purpose to its strategy, objectives and business success.

True purpose guides few organizations...


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