Positive Leadership

Creating purpose-driven teams (with Ranjay Gulati)

May 24, 2023 Jean-Philippe Courtois Season 6 Episode 2
Creating purpose-driven teams (with Ranjay Gulati)
Positive Leadership
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Positive Leadership
Creating purpose-driven teams (with Ranjay Gulati)
May 24, 2023 Season 6 Episode 2
Jean-Philippe Courtois

For Ranjay Gulati, the pursuit of profits without purpose is no longer a sustainable business model.

But taking purpose beyond a statement and embedding it into teams takes work - and it starts with yourself as a leader.

In this episode of Positive Leadership podcast, JP speaks to the Harvard Business School professor dedicated to unlocking purpose at work. 

Subscribe now to JP's free monthly newsletter "Positive Leadership and You" on LinkedIn to transform your positive impact today: https://www.linkedin.com/newsletters/positive-leadership-you-6970390170017669121/

Show Notes Transcript

For Ranjay Gulati, the pursuit of profits without purpose is no longer a sustainable business model.

But taking purpose beyond a statement and embedding it into teams takes work - and it starts with yourself as a leader.

In this episode of Positive Leadership podcast, JP speaks to the Harvard Business School professor dedicated to unlocking purpose at work. 

Subscribe now to JP's free monthly newsletter "Positive Leadership and You" on LinkedIn to transform your positive impact today: https://www.linkedin.com/newsletters/positive-leadership-you-6970390170017669121/

JEAN-PHILLIPE COURTOIS:  I'm Jean-Philippe Courtois, JP. This is Positive Leadership. The podcast that helps you grow as an individual, a leader, and ultimately as a global citizen.


RANJAY GULATI: Can an organization where you work give you meaning and purpose? The cynical view is, it’s a brainwash, “I want you to work harder and I'm going to suck you into my company and make it part of your life, and that’s it, you’re going to be completely all over this!” And the phrase we then use is, work-life balance. What a horrible phrase. What am I, dead at work? And so we need to rethink our relationship with work. 


JEAN-PHILLIPE COURTOIS: We all want to have an impact on the world, being ourselves. So how do we create an environment where people experience what they do as a calling? My guest today, Dr. Ranjay Gulati, is an award-winning professor at Harvard Business School, who for the last 25 years has studied and written about leadership in troubling times. His latest book, Deep Purpose: The Heart and Soul of High-Performance Companies, shows how companies can embed purpose much more deeply than they currently do, delivering impressive performance benefits that reward employees, suppliers, customers and shareholders alike. I was super excited to speak to Ranjay and to be able to share our conversation with you all. He’s so articulate and clear-minded and his perspective is very much needed. We cover lots of ground in this episode. How to unlock growth using purpose as a foundation. How to create a more human context in which people experience work differently. And how to make purpose an existential intention that informs every decision, practice and process. Wherever you are at in your leadership journey, there will be something practical you can use. Make sure you stay with us to the end. 


So great to have you on the podcast. Everyone, welcome Ranjay.


RANJAY GULATI: Jean-Philippe, it’s a pleasure to be here with you. Thank you so much for having me today. 


JEAN-PHILLIPE COURTOIS: So, Ranjay, in your book you say a few things that made you interested in researching and writing about purpose. I think one was teaching on the advanced management program which gave you the opportunity to meet some inspirational, purpose-led leaders. But really what’s interesting that appeals the most from my experience, that influenced you the most, was your mother in her purpose-led business. So can you tell me more about that early example of a deep purpose, and what you drew from that personally.


RANJAY GULATI: Yeah. And you know, Jean-Philippe, it’s interesting you asked me that question, because there’s a French connection in that example, actually.




RANJAY GULATI: My mother was doing her master’s degree in anthropology, and she had her master thesis was on tribal Indian women who handprinted their fabric and then wore it as saris. And so, she wrote her thesis on this and she had this idea that the same kind of printing could be used on western women clothes. And part of her agenda was she taught at the American School, and she wanted to show everybody that Indians, even though we may be poor, we have a very sophisticated aesthetic sensibility. 




RANJAY GULATI: Anyway, she left the school, and she had this idea she was going to start a business, because she thought she wanted to show the Western world how great India is, and of course help these women in the villages, but also start her own business. She needed a job. And off she went to Paris, actually, with two suitcases of samples in 1972 going door-to-door from fashion house to fashion house. Convinced a couple of fashion houses that this was real. And that began a business. But I saw kind of the energy in the organization very early. And then it grew dramatically very fast to very large, a few thousand employees. And at one point she said, “I want to shut this down. I feel that we’ve lost our soul.” I never understood what she meant. I was seeing a business, and I was like, no one downsizes their business on purpose, right? You only grow it. But she couldn't master the scaling problem. And I kind of forgot this example. But somewhere in the back of my head it was there that...and then I did a bunch of interviews of startup CEOs. And I had the same discussion with them saying, “When you grow big, what do you lose in the scaling?” And they would keep saying, “We lose the spirit, we lose the family, we lose that intimacy, we lose that energy, entrepreneurial.” And I wrote an article then from that called “The Soul of a Startup.” And that was my beginning foray into the topic of purpose.


JEAN-PHILLIPE COURTOIS: Very interesting. I'm sure we’ll come back to that later on in the discussion, Ranjay, to understand what does it take actually to keep this slight up as a purpose for any business organization that scales and grows. I just thought, if you don't mind, really about the definition, actually. I'm interested to find out about your definition of purpose. I know it’s become central to your work. Because initially I think when you began your career working, unlocking business potential, you said you were not that much interested in purpose actually. It was all about the what and the how –you were not interested in the why. So what has changed, beyond your mom’s story, which we heard, what else changed in your career as you experienced different stories, people, organizational research? 


RANJAY GULATI: Well, there were several pieces. I was going to go on a sabbatical, and when you’re thinking of a sabbatical you’re like, what am I going to do with myself? I want to do something. I don't want to just sit and watch TV or go for walks on the beach. So I'm thinking, what am I going to do? And I was trying to understand what is going on in the world around us. And there were several pieces that came together for me. Number one, I was doing some work with BlackRock, with Larry Fink and with his team and his board also, and in that process, Larry shared his letters with me, I read the letters carefully. I asked him, “Why do you as an investor care about purpose?” And he was shaming me almost saying, “You business school people, this is a topic that is so important.” But for him, it wasn’t some left-wing idea, it was really about businesses need to have a long-term vision. Any business needs to have a long-term vision. If you’re an investor, you are in the risk business, and you’re trying to de-risk a business, you’re looking to see if they have a long-term vision. And if you’re long-term vision, you have to think about climate risk and community risk and all those risks. It’s part of the risk management profile for any business imagining long-term success. So I saw that. But I was still sceptical. Then I actually, took something close to you again, I saw Microsoft’s transformation story, and I interviewed Satya along with other leaders. And Satya was like, yes, we needed a strategy, we needed an implementation plan, but we needed to have a purpose. I still didn't believe it. I had so much scepticism, because the media talks about purpose washing, virtue scamming, all these beautiful labels, actually, for this kind of stuff. I can’t believe just say it. And I had my own biases. But I needed to see it. And I saw it multiple times in companies where they said, let me show you how our company has transformed itself. I saw Lego. I saw Etsy. I saw Gotham Green, I saw Livongo. And so I'm seeing now data coming at me of companies, and I had to rethink. I said maybe in my entire career I have missed something, an unlock into organizational potential.


JEAN-PHILLIPE COURTOIS: So Ranjay decided to dig in. He interviewed 200 business leaders about the underlying construct that shaped their actions. Looking for patterns in the data and where they were in terms of putting social imperatives at the core of their operational decisions. Examining what kind of leadership was needed to over perform across people, profit and the planet. And what he found was that the companies exist at different places along a spectrum. For some, it’s a risk management exercise, a defence posture, a need to comply to be in business. At the other extreme there are companies where it’s deeply engrained in the business culture where the founder says, “It’s my moral principle. It’s my belief system. I'm going to do it however much it costs, I don't care.” But most companies exist in the middle zone where you come to realize that having a more expensive understanding of value is good for business. But the problem when you are serving many masters is you have to make trade-offs – short term versus long term. 


RANJAY GULATI: So we think of this middle zone as win-win. “If I do social value, I can also make money.” Not always. Sometimes you’re apportioning value. So this is the messy middle. You have to serve your employees, you have to serve your customers, you have to serve your communities, you have to serve your planet. How do you do that?


JEAN-PHILLIPE COURTOIS: That’s a very tough challenging exercise. I can witness some of that in some discussions I had myself as a non-exec director in some boards, Ranjay, it’s hard. It’s hard to serve all those masters, and a balancing act about the way you drive your business, and you drive it for all the stakeholders as we say. It reminds me of a great conversation I had actually last year on this podcast, I think he was a friend of yours as well, Hubert Joly. You know Hubert, I think. 


RANJAY GULATI: Yes, of course. I know Hubert.


JEAN-PHILLIPE COURTOIS: Good discussion with Hubert, his leadership principles, which are to pursue a novel purpose, putting people at the centre, unleash human magic, and treat profit as an outcome. This principle that you are both talking about really serve as beacons for the next year of capitalism. So as we just discussed, I believe I think like you, capitalism needs to be somehow reshaped, and we’re starting to see the shape driven by ESG discussions, which are really an investment in how to have discussions to happen in a business. And you touched on some other really interesting points in your book about why we need deep purpose, especially, as you put it, social institutions such as religion, extended families, and civic organizations are declining as sources of meaning and identity in many people’s lives. So can you explain how all those challenges are happening around ourselves, and explain how they tie into this bigger idea. 


RANJAY GULATI: Let me answer that at two levels. There’s a macro level and the word “purpose” has been hijacked – hijacked by the left wing and the right wing. The left wing says “the purpose of business is anything but profit.” And you’re like, really? I mean, what kind of business are we talking about here? And the right wing says, “Purpose is a waste of time. If not only that, it’s a distraction, it’s a tax on business, and it’s anti-democratic.” And the argument is, “Why should unelected business leaders be given the chance to reallocate capital away from shareholders to social projects that they care about. They’re none of their business.” But what they ignore is business has a unique…there are things businesses can do that governments and agencies cannot do. One of the companies I looked at was Bühler. Bühler is a family-owned business, 150 years old. They have brought the whole food industry together because they’re in the middle of the industry. I was there last year, they had 1100 food CEOs who together process and produce food for 4 billion people, more than half the planet. And the idea was, how can we reshape the entire food industry to reduce waste? Because food is number two contributor to greenhouse gas emissions after oil and gas. So you have industry, businesses, playing a role in leading this. So I want us to think about that. Now there’s a different level at which we can talk about this, at the individual level. I will quote your colleague and friend, Satya Nadella, who said that “I want to work at a place where people find meaning in what they do.” Or Kathleen Hogan who says, “You only work for Microsoft when Microsoft works for you.” And I think businesses have a very important role to play in allowing us to live out some of our aspirations of life through our work. 


JEAN-PHILLIPE COURTOIS: I think it’s so true, Ranjay, and I think you’re right, that so many organizations and leadership teams are confused about the signals from the employees in terms of that full sense of work-life balance, when they are not really seeking for the core, which is why do they spend all that time in their lives in that place, to make what impact in their lives? Because all of us have one life, as you rightly said, and I think that’s a choice that most people understand they can make every day, by the way, by quitting, or taking another assignment, or jumping on some other activities. And I think times are changing, hopefully, and that’s something that also gives an opportunity for an organization to rethink their approach to the work contract.


RANJAY GULATI: And you know, it’s interesting you say that, because if you look at Covid, this whole quiet quitting, or quitting the workforce, or checking out, that’s a testimony to our inability to make work have meaning. And the younger generation is even more tuned into this than baby boomers and others before that. So how can we create an environment where people are living part of their life’s purpose? Not all of it. We all have a bigger life purpose. Part of our life purpose through what we are doing at work. I mean, there’s an old cliché story about the janitor at NASA and Linden Johnson says, “What do you do here?” He said, “Mr. President, I'm here to put a man on the moon!” And I’ll tell you why that story is telling, Jean-Philippe, it taps into something bigger. I'm not a transactional machine, pay for performance. Or I'm not even engaged, I'm a learning machine, I want to learn and I want to grow. I want to be inspired at work. I want to feel that what I do is having an impact, and tapping into that sense of pride elicits a whole different person showing up to work. 


JEAN-PHILLIPE COURTOIS: Having pride in what you do is so central to our sensible being. There’s lots of research showing that employees of all ages want jobs that are not just interesting and reasonably well paid, but meaningful, and purposeful. A recent Mackenzie survey found that 89% of employees want a sense of purpose at work. So like it or not, as a company leader, you play an important part in helping your employees find their purpose and live it. And doing it right takes time and careful consideration. If you approach your people wrongly with arrogance or inconsistency, you will likely do the organization and your reputation more harm than good. 


RANJAY GULATI: I came to learn one thing: purpose is not a purpose statement. We get confused with the words. “Oh, it’s one line. I want to empower the world to make a difference.” It’s not that. The words are there because they are a distillation of an ideal. But there’s meaning behind those words. It’s how companies use those words. So it starts with what I call “discovery”. And I learned one thing interesting – at Lego and an Indian company, Mahindra – both of them said, “We had to detect our purpose.” It was there. It’s not like we had to invent it. Now, a startup will have to invent a purpose, but in an established company – or in some cases you have to revive your purpose. Johnson & Johnson had to revive their credo. Microsoft had to refresh their purpose. You already had one. But it’s more than words. Then you have to kind of disseminate it. And it’s not some change management exercise saying, “Please read our new purpose statement,” and that goes nowhere. How do you tell it as a story? How do you communicate and connect it to people’s personal ambitions. That becomes important. Then the question becomes, “Okay, how do I then really rewire my organization and put it into my strategy, structure, process, people, culture? How do I connect it in there? I'm putting my purpose to work, I’ve got to really dig into the DNA.” EY created KPIs. They said, we’re going to measure – we can’t measure people on purpose because purpose is one line, but purpose translates into four dimensions of value. We’re going to measure everybody on these four dimensions of value, and that’s what’s going to happen. I found some companies saying – including yours – how can you get somebody to buy into company purpose when they don't know their own life purpose? 


JEAN-PHILLIPE COURTOIS: That’s another big question.


RANJAY GULATI: Most of us don't think about life purpose. Who thinks about it? Very few people think about their life’s purpose. So I started to see companies saying, “No, we need to awaken personal life purpose before we can connect you to some company purpose.” And you see that Unilever has done that, Microsoft did it, KPMG, and a bunch of other companies. How do I get people to think about their own purpose? And it makes you more resonant or receptive if you get it right, to your earlier… We have another buzzword in business: alignment. We want everyone to be aligned.


JEAN-PHILLIPE COURTOIS: More than ever, alignment, yes.


RANJAY GULATI: Purpose is a wonderful tool for alignment. 


JEAN-PHILLIPE COURTOIS: So many great insights, Ranjay. I know you have so much to tell about that. What you just said about that ability that leaders, companies, can have to establish a real deep connection between every employee’s raison d'être, every employee’s inner purpose, to the company’s purpose, is amazing. And that’s something at least we try and we keep practitioning in Microsoft is the way we believe our company is a platform to empower our people’s potential. And to help them at the end of the day of course to define with clarity the way they think about their purpose. And the way they see that the company can contribute to that purpose, that self-fulfilment. And I think you can go all across the company of 220,000 people, in your own company, from people in engineering team, to support functions, to frontend people, who will have a story to tell about the way they think they can contribute to a bigger purpose with the organization. But I think it’s a lot of ongoing work and reinforcement you have to do, particularly in the toughest moments as well, because we all know that businesses have ups and downs. And this is when I think both the cultural purpose can be challenged and you want to stay on track and keep it alive. So let’s continue on that great discussion. You briefly mentioned something that’s very important, because I know as a thought leader in terms of business leadership, we’ve been challenged. We were together actually in one panel on purpose in a Peter Drucker forum a year ago. And I remember one of your colleagues, I will not name him, said, “Hey, tell me more about the way you measure purpose? What are the KPIs? Do you have any KPIs actually? Do you have some hard facts to measure that stuff?” So, you just mentioned briefly EY, but I know you’ve been studying and looking at some evidence. Can you tell us about the way you can actually measure over time the purpose, and the impact you are having with the purpose across your business and your company?


RANJAY GULATI: It depends on who is doing the measuring and for what purpose. So let’s think about companies doing it just to track their own progress. That was the EY story. So Carmine Di Sibio, the CEO of EY, said to me, “Look, we can’t measure purpose in terms of building a better working world. I mean, what am I going to measure?” And he said, “We’re accountants, we know how to measure.” So he says, “That’s why we do it.” And he said, “Look, we realize that to build a better working world we have to measure how we create value. So we create financial value. We create employee value. We create social value, customer value. How do we think about these? So we’re going to measure things that are by-products or outcomes of our purpose. If we’re living our purpose, we should be delivering on all those four dimensions of value.” So they’re indirect. So no one measures purpose directly, like how aligned is the purpose in the company today? It’s more about each employee, are we delivering on the promises that emanate from our purpose? So that’s what I’ve seen most companies doing. Academics are into this as well. We want to be able to measure company purpose and correlate to performance and say –


JEAN-PHILLIPE COURTOIS: Companies do, yeah.


RANJAY GULATI: Companies. Like ESG. The problem is ESG, purpose, these are very touchy-feelie. In fact, in ESG, “S” is the messy measure. How do you measure “S”? You can measure “E” now, you can measure “G” also more or less, but “S” is a mess. So we have the same issue with purpose. So companies start to say, “I'm going to use machine learning, natural language processing, and look at companies’ annual reports. How often do they mention purpose in their annual report, analyst call, or media coverage?” But those are self-representations. It’s telling me how often does a company…if somebody has a great PR team that says, “We’ve got to talk about purpose,” you’re going to get a very high purpose score, but people are using those. Then others are using employee surveys like Great Places to Work. And saying, “Well, if employees feel energized and motivated and inspired, it must be because they have a purpose.” But there are other reasons why company employees can be happy as well, right? “The company is doing well, they pay me well, they have good benefits and everything is great.” So I think academics, and consulting firms also, who are trying to portray and show that purpose is good or bad for business, are struggling with how do we measure that purpose index, so we can provide people some large sample evidence that doesn’t really matter. My book is called Deep Purpose for reason, because I saw a lot of superficial purpose. And so people ask me this also, “How do you know if a company is doing deep purpose or shallow purpose?” That’s the hunt I think we’re on. 


JEAN-PHILLIPE COURTOIS: Today, we’re only in the infancy stage of measuring purpose. And as the business world figures out what ESG means, in terms of direct connection between a business mission and its positive impacts, I think we’ll see some interesting findings about how to do things in the best way. One way that’s been taking up here in my home country France is to embed a legal framework within the company’s article association, including your purpose. And apply new governance arrangements to oversee the progress of its environmental, social and societal goals. Three years ago, France passed a law to modify its civil and commercial codes to enable companies to take greater consideration of social and environmental issues. Enterprise Emission, or mission led company studies, was created, and since then over a thousand companies have adopted the studies, including some pretty big ones like Danone. And of course there’s been a certain amount of scepticism about what’s being measured. But at a time when many companies are re-examining their priorities, it’s certainly a way of bringing corporate purpose into the mainstream.


I was having a discussion the other day with Pierre Dubuc who’s a CEO of a learning platform called OpenClassrooms, it’s a mission-led company. And I was really going into details in their mission report, which is what you are supposed to publish when you’re a mission company. And in this case, this company is all about make education accessible to all. So what they decided to do as a business was to explicitly make a clear choice allocating their financial resources in serving for free, or super low cost, the most underserved people across the world, not just in France actually, to have access to skills and jobs. And they are measuring that by categories across the world, and I found that interesting as a way to at least be super clear and super transparent on what you want to achieve. 


RANJAY GULATI: What you’re describing though, Jean-Philippe, is that there is an interesting intersection in businesses that are trying to reimagine the footprint of business. Asking our very purpose should have a social component to it. And the question that arises there is, is it a tax on shareholders or is it a win-win for shareholders? How do we reconcile that?


JEAN-PHILLIPE COURTOIS: I’d like to talk about the four pathways that you describe in your book that show you it was possible to leverage purpose in large companies. You talked about direction, motivation, reputational, and relational. So can you elaborate on those four pathways and maybe give us some examples of how you saw them working at companies you’ve been looking at. 


RANJAY GULATI: So I was struggling to with conviction say purpose is good for business, financial business. And I had no metrics and way. So I started asking people, “Is it really good for business?” And one gentleman, Thomas Thune Anderson, the chairman of Ørsted told me, he said, “I pity those who think of purpose coming at the expensive of performance. I pity them.” And I said, but explain to me, how is it good for business? And these four dimensions came out of a year of asking people this question. So the first one is direction. And the argument there is, in today’s time, business is chaotic. You are managing different stakeholders. You are optimizing from one to the other, as you were discussing earlier. Purpose doesn’t answer this multi-variant optimization problem. But it gives you a framework to think about it. The old Johnson & Johnson during Tylenol crisis, when the CEO had to make a decision to pull the product, he said, “Our credo gave us the answer in a minute. So we didn't have to think at all about it.” So companies reference and lean into their purpose to give them guidance in these times, directional clarity. It also creates alignment in the organization. Why are we here? The second one is motivation. In one study that came out in HBR in 2015, inspired workers are more than twice as productive as satisfied workers. Unlocking human potential. 




RANJAY GULATI: Human magic as Hubert would like to say, right, exactly. The third one is relational. I never thought of this one. But I found companies, when they have a strong purpose, attract aligned ecosystem partners, because there’s trust, there’s more clarity, more transparency. So people are resonant saying, “That company has a purpose, they really mean it, I know it’s real, I think we can trust them.” And the last one is customers, reputational. Customers also seem to care. Purpose branding is a hot ticket. And so much research showing that even at Unilever they’ve actually categorized their brands as purpose or not purpose. The purpose brands are growing much faster than the other brands. 




RANJAY GULATI: So as Alan Jope would tell you. So you know, you start to see that there is some evidence, emerging evidence, that purpose can be good. But I have to say, deep purpose. Not just a purpose statement.


JEAN-PHILLIPE COURTOIS: What Ranjay is talking about really resonates to his positive leadership philosophy. It is essential for leaders to start by finding personal purpose and inspiration, and then focus on connecting with people, helping connect others to purpose and meaning in a ripple effect. When a company’s model and the organization often describe work as being entirely transactional. But human beings are emotional creatures, and being part of an organization is a human enterprise. It’s human beings coming together towards a common cause. And being a great leader is fundamentally about unleashing human potential, creating space for people to thrive. One person who is incredibly skilled at doing that is Pete Carroll, head coach of the Seattle Seahawks, who I was lucky enough to speak to a while ago on a podcast. So what did you learn from studying Pete’s philosophy about how to create space of an individual to thrive, and how to really unleash that human potential?


RANJAY GULATI: Your own countryman, Emile Durkheim, a long time ago, a sociologist, once said – he talked about a moral community, people coming together around a shared ideal. And when people come together around a shared ideal, they unleash tremendous potential from themselves. Now, Pete Carroll’s trying to do that with a sports team, saying, “I’m going to get these players…” Because think about it. And Pete’s model is not that different from the Marine Corps. I did a case on the Marine Corps also. You see, the starting baseline is, “I'm playing for myself. I want to get famous. I want to get rich. If I play well, other teams will want me, I will do better. So I'm driven by my individual ambition.” That’s one level. Then the next level emerges where “I'm so connected to my teammates, I do it for my teammates. I am so committed to them. I am fighting for them.” Then the third level, “I am committed to my organization. Semper fidelis. The Marine Corps. I cannot let my organization down.” Another level: “I'm doing it for my coach, whom I admire and respect. He cares about me. He believes in me. He’s given me confidence. I need to show him I can do it.” Now think about it. Which one brings out the most in us? Just doing it for myself? Or doing it for my teammates? Doing it for my organization that I'm really proud of? Or doing it even for my coach? Unlocking human potential. I think this idea that we’re all just transactional human beings involved in transactions, what a shallow view. I think it’s a nexus of commitments. 


JEAN-PHILLIPE COURTOIS: And I think people in an organization feel that emotion flowing now everywhere, and I think it’s just kind of irresistible now for an organization not to deal with it but actually as to work with it, as to embed that feeling at the core of the relationship with their people and their customers every single day, every single moment.


RANJAY GULATI: And this is why companies struggle with scaling, because they feel they lose that spirit of connection and belonging and feeling. And then you have consulting firms that will sell you for a fee founder mindset, and say, “I will make everybody feel like a founder in the company. They all need to feel like owners. I'm going to infuse that.” But it’s really not so easy to just have a campaign and say, “From tomorrow we all feel like owners. I'm going to give you an employee shareholder plan ASAP, and from there on you should all feel like owners of the company.” These things don't connect. How do we relate to human beings? You look at the other person as a human being with aspirations, with ambitions, with feelings. 


JEAN-PHILLIPE COURTOIS: So, Ranjay, building on that actually, as we talk about human beings obviously, giving people autonomy and a chance to be their authentic self, could for some leaders feel like they step too far, as we discussed, into unchartered territory, giving away too much control. However, research, and I’ve been part of that, suggests that autonomy does motivate and engage employees. So can you talk to us about that key principle of providing a framework for increased autonomy and how it benefits companies and organizations at large?


RANJAY GULATI: Actually, this work of mine on autonomy came out of a study I did at Alaska Airlines in Seattle. Ben Minicucci, the CEO, was a former student of mine, and they were trying to empower their frontline workers to have more discretion to serve customers. So waiving fees or giving an upgrade or delaying the flight. And it was amazing when they began. First of all, the frontline said, “I don't want it, keep it. I want to do rules. I want by the book. This is thinking too much and then I have to explain why I chose to do this. I don't want it.” 




RANJAY GULATI: Yeah. The middle managers who said, “Don't give it, don't give it. Why are you doing that? That’s crazy.” Right? So it sounds really good in theory, but in practice it’s not so straightforward. I had to lean into the research on parenting styles actually. Diana Baumrind is a scholar who studies optimal parenting, and her idea is, freedom within a framework. You need to provide guardrails. You can’t do Zappos, which was freedom with no framework. Then it can tend to become chaotic. But then the question is, how do you define the framework. Now, I'm going to get really religious here, but if you look at the Bible, and you look at the edicts of the Bible, the Biblical edicts, they have two kinds of edicts. “Thou shalt” and “Thou shalt not”. What happens is when we think of framework, we only think of “thou shalt not.”


JEAN-PHILLIPE COURTOIS: But what about “thou shalt”?


RANJAY GULATI: “Thou shalt.” Purpose is one type of a framework. 




RANJAY GULATI: Culture is another type of framework.




RANJAY GULATI: Rules are another type of framework. So we have to think of kind of an integrated way of thinking of what are the elements of our framework that hold things together? And the frontline worker that feels trusted, how do we deal with this? 


JEAN-PHILLIPE COURTOIS: One of the ways maybe, if I may, and I think it’s something obviously you’ve been writing about Ranjay, is the way an organization can empower its people to tell the story one person at a time. The story of the mission, the story of their fulfilment in what they do. So how do you teach that very important, I found, art of storytelling, again, enterprise-wide, to all employees? Because I found it’s so…not just inspirational but actually so critical to hear from people, from the frontline, not just from the top, their own personal stories about what that mission means in their lives. And this is always something that has been touching me the most is getting notes or personal conversations across the world in, I don't know, 110 countries visiting for Microsoft, of people telling me their own stories about their missions and what it means for them. But how do you do that at scale?


RANJAY GULATI: Storytelling is a powerful way to communicate ideas, but it’s also a powerful way to connect to other people. My tendency is to be a very private person. So when I was writing this book, I did not want to include my mother in the book.


JEAN-PHILLIPE COURTOIS: Your mother’s story. 


RANJAY GULATI: But finally I thought, okay, fine, it is an important part of me so why should I be shy? I can’t tell you how many people, they said, “I didn't read your book but I read the mother story, I love those mothers.” I'm like, “Oh really? Read the rest of the book please.” People want to know you, and what is your story. And I think it’s a powerful way to communicate ideas. Indra Nooyi at Pepsi, when she talked about performance with purpose, she started by talking about growing up in a poor household in India where there was no water, and water came in the morning for 15 minutes, and they had 4 buckets of water. And that was a starting point to connect. Stories have ideas and stories have connection in it. Now how do you do it at scale? This is very hard. I know that your company is using technology, you have a platform where people can tell their story. You have storytellers who help them tell their story. But I’ll give you a simple example. At KPMG they did one thing. They made every leader on an index card write down: Why do I come to work? And they had to put it outside on the wall. 




RANJAY GULATI: And most of them said, “I come to work to support my family and myself.” But the next reason, the next two or three reasons were interesting. And they also discovered that more than half of the partners are first generation in family to go to college. Accounting was a safe profession to be able there. So you’re doing it…you support your extended family. So you learn a lot about each other, it creates human connection, it creates meaning, and it communicates ideas. Every religious tradition is communicated through storytelling. Storytelling is one of the most powerful vehicles. I think it’s hugely important. 


JEAN-PHILLIPE COURTOIS: You can move large numbers of people to action by exchanging personal stories that help build a sense of community around shared values and experiences. A good story has the power to change the world. Marshall Ganz, a community activist and a senior lecturer at the Kennedy School of Government at Harvard says that there are three elements of a great story. First is a story of self, focusing on real events in your life, and all these form your own sense of purpose and what calls you to leadership. Second is a story of us – how you seek to learn the stories of members of your community, weaving them together around the values that you share. And third is the story of now. What is the price of inaction, which helps build this real sense of strategy. 


RANJAY GULATI: There’s research actually by two professors, one at Michigan, one at Yale, on an area of work called job crafting. And they came up with this taxonomy that human beings have one of three orientations towards work. My work is a job, I do it for money. My work is a career, I do it to get ahead. And the third one is my work is a calling, I do it because it means something to me. And they tested this idea in a hospital in New York. And the expectation was, physicians would say my work is a calling, and janitors would say my work is a job. The physician number came in one-third, one-third, one-third, which is what they expected. The janitor number came in one-third, one-third, one-third. Then the question was, who are these janitors who are saying my work is a calling? So they went and interviewed the janitors. They said, “Oh, I don't come here to clean, I get to help people. People are very sick, they’re vulnerable, they’re so grateful. I get to make a difference. The smallest of things I do.” Now, only one-third are operating this way, and their job satisfaction is out of the roof, their absenteeism was low. Now this is spontaneous behaviour. 




RANJAY GULATI: The research then leads us to ask the question: Can we create an environment where people experience what they do as a calling? 


JEAN-PHILLIPE COURTOIS: I think what you said is a perfect almost conclusion before my last question, Ranjay, on again what’s at the core of positive leadership, which is about the way you extend your personal mission to embark with others to have a positive impact in the world, which is the third circle of that development you have, and that sense of calling and mission you have. And so I’d like to ask you, which is a more personal question. You started to open up, of course, with your book and your mom, and I’d like to ask you, in a way, what would you like your legacy to be? Given everything you’ve done, and you keep doing, and your researching on the soul of organizations, I know you’re getting to the core of human beings in this discussion, what’s going to be your legacy and what are you really extremely passionate about, Ranjay, transmitting or sharing or giving back to others?


RANJAY GULATI: You know, first of all, I deeply resonate with the purpose of my employer, which is we educate leaders who make a difference in the world. That is very connected to me, to how I see myself. I feel my job as an educator is not just to provide and transmit knowledge; my job is to unlock human potential. My job is to help them discover what is that difference that they can make in the world. It is through them that I feel I can help make a small difference in the world around me. And then, of course, there’s family, and community, and society, that also. But around me, I feel if I can help unlock possibility around me, I feel I will have lived my life’s purpose. 


JEAN-PHILLIPE COURTOIS: And I'm sure, Ranjay, you have so many great stories of your students from ten years ago, five years ago, who are probably giving you so much gratification in your daily life. I know this is probably the best way for all of us to get a meaning is when you get people telling you, hey, what you did a few years ago, that really helped me finding that meaning in my life, or that helped me achieving that. So I'm sure that’s something that also rings threw your two ears, Ranjay. Thank you so much, Ranjay, it’s been a wonderful dialogue, really warm thanks, and looking forward to pass your dialogue in different circles, different places in the world. 


RANJAY GULATI: Thank you so much, Jean-Philippe, that was really a pleasure. You really got me to think, and I had to think very hard. So I really appreciate the opportunity. And I love the theme of your podcasts. I think we all need to think of leadership in a different way. And so I am really grateful that you are doing this for all of us, so thank you.


JEAN-PHILLIPE COURTOIS: You’ve been listening to the Positive Leadership Podcast with me, Jean-Philippe Courtois. If you’d like more great tips to help you grow as an individual, a leader, and ultimately as a global citizen, head over to my LinkedIn page to subscribe to my newsletter, Positive Leadership and You. If you enjoyed this episode, then please do leave a comment or rating and share it with your friends. Goodbye.