This post originally appeared at the MBA Blog of Said Business School.
In Trinity Term one of my favourite MBA electives was the Nature of the Corporation. In this course we asked, “what’s the purpose of a corporation?”, “do companies need to have a clear purpose?”, “how many corporations adhere to a healthy reason for their being?”, “is this reason good for shareholders alone or does it have a wider positive impact?”, and “which of these two approaches is more sustainable?” Though such questions risk coming across as grandiose, self-important, and overly philosophical, thinking about them can be instructive.
On the course, we came to learn that corporations which lack a clear and systemic purpose tend to drift towards ill-conceived aims such as the singular pursuit of maximising profit for shareholders. But this tendency is problematic. This is because purpose informs values, strategy, and day-to-day decision-making. And so, if the sole purpose of a business is to maximise profits for its owners what’s to stop it from engaging in dubious practices that produce gains for a few at the expense of many? One example of this is Volkswagen. The car manufacturer cheated emissions tests so it could save millions of dollars but in doing so, it knowingly violated the Clean Air Act by putting cars on the road that emitted up to 40 times more pollution than was allowed. (The company was subsequently fined billions of dollars.)
In contrast, companies that adhere to the systemic purpose of acting to the benefit of not just shareholders, but also other stakeholders (customers, employees, suppliers, the community and environment within which the business operates), tend to perform better in the long run. Research shows that these companies are more innovative and resilient; they have more motivated employees; they have a lower cost of capital, and are less exposed to regulatory scandals. All in all, companies that pursue a clear, multi-dimensional, and healthy purpose outperform those do not.
While thinking about corporate purpose I was also reflecting on a personal question: “what’s my purpose in life?” For a long time, I have struggled to articulate a coherent response to the question and this is not uncommon. Many of us find purpose vague, impractical, and too preachy to honestly consider. Moreover, on the MBA programme we are so busy with classes, assignments, socials, and career anxiety to think about a seemingly unproductive question. But think about it we must. Because as the American scholar Clayton Christensen once wrote, “the type of person you want to become—what the purpose of your life is—is too important to leave to chance.”
Why is purpose in our personal lives so important? Research shows that people who are clear about their purpose—people who are able to craft and make sense of their being—are more satisfied with life. They enjoy their work more. They have higher self-esteem. And, they are less prone to depression and anxiety symptoms. Most of us already know this intuitively. Think about your own life and the decisions you’ve had to make the in past. Were things more or less clear when you knew your values and what you stood for? Alternatively, were you more or less engaged with life (i.e. living vs. existing) when you had a vivid sense of direction?
As our MBA programme concludes we are faced with the question, “what next?” In answering this question we can choose to go wherever the wind blows or we can be more proactive and seek answers informed by a greater question, “what’s your purpose?” Albert Wenger, a prominent venture capitalist who gave a talk at Saïd Business School earlier this year, writes that “this is the single most useful question to ask anyone who is taking time out to think about what to do next.” I agree. Without purpose we risk drifting toward singular aims—money and status for example—that may provide gains in the short term but great losses in the long term. Fortunately, it’s possible for all of us craft a purposeful life if we spend some time thinking about it.
As freshly minted MBAs, how can we achieve this? The New York Times columnist David Brooks put it elegantly in his book ‘The Road to Character’ when he wrote, “…you don’t ask, ‘what do I want from life?’ You ask a different set of questions: What does life want from me? What are my circumstances calling me to do?” This is how you find purpose. This is how you craft meaning. You find a way contribute to the world and in doing so it contributes to your well-being.
In recognition that we all have different interests and experiences, Brooks adds: “…all of us are given gifts, aptitudes, capacities, talents, and traits that we did not strictly earn. And all of us are put in circumstances that call out for action, whether they involve poverty, suffering, the needs of a family, or the opportunity to communicate some message.” In other words, to craft a purposeful life, you start with who are and what you’ve been through, and then you leverage those elements to make some personally meaningful contribution to the world.
None of this needs to be dreary by the way. Your purpose (or purposes, should you have more than one) could be crafted simply—to be a good friend, parent, spouse, or member of your community. It could also be crafted ambitiously—to fight climate change, empower the disadvantaged, or end poverty. Whatever the purpose, if it leads to a life that resembles an ideal once described by the psychologist Alfred Adler—“to be interested in my fellow man, to be part of the whole, [and] to contribute my share to the welfare of mankind”—then such a life will be one that’s truly worth living.
P.S. Many thanks to my classmates Armand, Candice, and Dana, who read an early draft of this essay.