Tag: Bauer Leadership Center



Employees with a higher purpose have more well-being, more happiness and even lower stress from the COVID-19 pandemic, according to findings from a new survey by two WashU Olin professors.

And the effects were more substantial when they had written down their purpose statements.

Also, employees of organizations with higher-purpose statements are happier and prouder of their organizations than are employees at workplaces without such a statement, the results show. Again, the effects were stronger when the purpose statement was written—and tied to society, employees and customers, rather than shareholders.

The findings echo the August 2019 announcement by the powerful corporate lobby group of U.S. leaders called the Business Roundtable, focusing the future on purpose. Such evidence of a national shift dovetails nicely with one of Olin’s key strategic pillars: values-based, data driven decision making.

Anjan Thakor and Stuart Bunderston

“As human beings, we are wired for purpose—to know why, to seek meaning in the things we do,” said Stuart Bunderson, director of the Bauer Leadership Center and the George & Carol Bauer Professor of Organizational Ethics & Governance. “When we have clarity on what our purpose is, we are happier and more fulfilled.”

Bunderson and Anjan Thakor surveyed 1,109 people in May to learn about their commitment to and perceived worth of a personal and organizational higher purpose.

Thakor is coauthor of the book The Economics of Higher Purpose: Eight Counterintuitive Steps for Creating a Purpose-Driven Organization, director of Olin’s doctoral programs and the Center for Finance & Accounting Research, and the John E. Simon Professor of Finance.

Conference leads to curiosity

The professors’ curiosity was piqued during a fall 2019 conference they organized on WashU’s campus about personal and organizational higher purpose. Academic researchers, consultants and corporate leaders came together to share findings and experiences.

A presentation by Vic Strecher of the University of Michigan particularly struck Bunderson and Thakor, they write in their report June 2020 report “Personal and Organizational Higher Purpose: Survey Results.”

Strecher noted that workers’ stress levels and dissatisfaction were rising, even as economic conditions were improving. As for the next group entering the workforce, he also mentioned that suicidal ideation had doubled on US college campuses in the past decade. Stretcher stressed the importance of a personal higher purpose in coping with the stresses, noting that someone who does not “repurpose their life” at retirement is 2.4 times more likely to have Alzheimer’s than someone who adopts an authentic higher purpose.

Speaker Bob Chapman, CEO of Barry Wehmiller, emphasized the importance of organizational higher purpose. Some 65% of people would give up a raise if they could fire their own boss, he said. He also noted that an employee’s boss is more critical to that employee’s health than the family doctor.

“These remarks and other discussions at the conference made us curious to know more,” Bunderson and Thakor say in their report on their survey.

“What does personal higher purpose really do for people? How do individuals perceive the value of personal purpose in their lives? What is the role of an organization’s higher purpose in the lives of its employees? Are there any connections between personal and organizational higher purpose?”

Write it down

The 1,019 individuals they surveyed in May were employed and chosen as representative of the American population’s gender, racial and geographic diversity.

“I was most surprised by the fact that when companies have written statements of higher purpose,” Thakor said, “not only do the employees trust its leaders to make socially responsible decisions, but also better business decisions.”

Bunderson said he was “very surprised at how much more powerful these effects are when the purpose statement is written down. It’s like that old saying that a goal you don’t write down is just a wish.”

Additional findings included:

  • A majority of respondents had a personal higher purpose, but most had not written it down;
  • Having a written personal statement of purpose helped people in various ways, including coping with stress and finding happiness;
  • Curiously, those with a written higher purpose also reported higher levels of anxiety;
  • The incidence of written statements of higher purpose was higher among organizations than among individuals;
  • Employees at organizations with higher purpose statements were prouder of working for their organizations and happier than other employees;
  • Organizational higher purpose statements were more effective when written down and when they emphasized society, customers, employees and stakeholders other than shareholders;
  • Employees of organizations with higher purpose statements are more likely to have personal statements of higher purpose.

“We aren’t exactly sure why that is the case, but it may be that employees who work for organizations with a higher purpose statement are inspired to develop one for their lives,” Bunderson said. “This may be one way that good work practices can positively impact employees’ personal lives.”

The finding about higher levels of anxiety, he said, is “generally consistent with research suggesting that a sense of duty or stewardship toward something or someone can be both a burden and an important source of meaning.”

Using the survey findings, Bunderson and Thakor have built a personal higher purpose index and an organizational higher purpose index.

“These will enable us to examine how personal and organizational higher purpose and their perceived outcomes change over time,” Bunderson said.

Capitalizing on purpose

Businesses have risen from ruins because of their ability to recognize and capitalize on purpose, Thakor emphasizes in presentations. Those businesses have excelled and grown. But they don’t do it at the expense of making a buck.

Thakor cites a couple of examples of organizational higher purpose in his working paper “Higher Purpose, Incentives and Economic Performance.”

  • Detroit-based DTE Energy clarifies its higher purpose as being “a force for growth and prosperity.” The company names four pillars through which its social impact is to manifest: people (“improving lives and creating opportunity”), places (“partners with communities for growth”), planet (“leadership toward cleaner energy and environmental stewardship”) and progress (“powering a brighter tomorrow”).
  • Tree T-PEE, based in Arcadia, Florida, offers water-containment systems for agribusiness. It articulates its higher purpose as helping farmers conserve water and energy in farming.

Learn more

To explore more about the concept of a higher purpose, you may want to read these blog posts:




Lauren Herring is CEO of IMPACT Group, a global leader in employee career development. Under her leadership, the company now operates in more than 77 international locations in the Americas, Europe and Asia.

Herring spoke to Olin students in January in Defining Moments: Lessons in Leadership and Character from the Top, a class the Bauer Leadership Center offers.

Here, Brinda Perumal, MBA ’20, shares her thoughts on Herring’s talk:

Philosophy of leadership

Brinda Perumal

Lauren Herring believes that you should be the CEO of your own career. As CEO of your own career, you should plan intentionally and reflect annually, or ever quarterly, about what you want in life. Are you doing things today that will help you get there? As long as you feel that you are in the right place at the right time, there is no correct career path.

Ultimately, Lauren stated the importance of being true to yourself and your personality. There may be traits of other leaders that you want to emulate, but, at the end of the day, stay true to your brand and remember that gravitas comes from inside you. It is important to believe in yourself and your work so that you remember why you are doing what you are doing. Your confidence, core values and a sense of who you are will be your assets toward success as a leader.

Impact of philosophy

The idea of being the CEO of your own career has permeated her own path to leadership. Lauren’s goal was never to do what all her peers were doing but rather to follow the path that was right for her. Her decision to help the family when her mom was diagnosed with breast cancer and focus on her own career later ultimately shifted into her wanting to become more involved with IMPACT Group. This entrepreneurial spirit and willingness to take risk has guided her rise to leadership and her actions as a leader.

Lauren did express that this desire to make the business her own may have been taken too far. Looking back, she wishes that rather than feeling the need to be able to prove how much she knows and that she had all the answers, she would have focused on asking more questions, engaging others along the way and inviting others’ opinions. From her experience, she shared with us the importance of making others feel valued, smart and engaged by bringing them into decisions and asking for their advice.

What I learned and would want to emulate

Lauren advised us to be not just the CEO of our careers but also the CMO of our career. I plan to implement this advice as I work on building my brand, so that I can promote and manage my personal brand while owning who I am. I really admired Lauren’s presence in the room. She was very down-to-earth and relatable. It was easy to see that success had not changed her as a person. She was clearly very true to herself and her core values and passionate about the work she does. I hope that I can carry myself the same way she does—with poise, relatability, and compassion—as a leader.

Pictured at top: Lauren Herring, CEO of IMPACT Group




Written by Joe Dwyer for the 2019 Olin Business magazine

For Dave Peacock, being values-based and data-driven is key to the success of Schnucks Markets in achieving its higher purpose of “nourishing people’s lives.” Peacock, EMBA ’00, is president and COO of Schnucks, a St. Louis-based regional grocery chain with 15,000 employees. Communicating Schnucks’ purpose is vital to the company’s culture, he said. It’s also important in attracting new employees to the company, which hires as many as 5,000 new workers each year.

“We have regular sessions to talk about  the importance of our Midwest family values and how that fits with our purpose of nourishing people’s lives,” he said. At Schnucks, those values speak to a customer-first mentality, the willingness to try new things, a culture of tolerance and hard work and haste to help those in need.

Anjan Thakor and Stuart Bunderston

Peacock also formed a data-focused unit at the company in January, hiring Tom Henry, a member of the board of WashU Olin’s Center for Analytics and Business Insights, to serve as chief data and analytics officer. Henry now leads a 50-person business unit with the mission of “constructing and maintaining a purpose-built information management environment, governed and utilized by teammates at all levels of the enterprise, where trusted and increasingly intelligent insights are produced.”

Meeting consumer demand

Schnucks’ efforts align with growing consumer sentiment. Nearly 80% of Americans say they’re more loyal to purpose-driven brands, according to a 2018 study by public relations agency Cone/Porter Novelli. The same study said more than three-quarters aren’t satisfied with brands that only make money; they expect companies to positively affect society.

That shift is in step with WashU Olin’s brand positioning—to “champion better decision-making by preparing and coaching a new academy of leaders who will change the world, for good.”

The movement dovetails with the work of Olin professors Stuart Bunderson and Anjan Thakor, who are at the forefront of this advancement in business strategy that could help workers achieve professional success and fulfill values-based ambitions in their professional lives.

Bunderson, director of Olin’s Bauer Leadership Center and the George and Carol Bauer Professor of Organizational Ethics and Governance, has published a book about it, The Zookeeper’s Secret; Thakor, along with Robert E. Quinn from the University of Michigan, published a new book in August called The Economics of Higher Purpose and a cover story (“Turning Purpose into Performance”) in the July–August 2018 issue of Harvard Business Review.

Benefits: Dollar signs and beyond

A common theme of Thakor’s and Bunderson’s scholarship indicates that young professionals, and many others, want to work for companies that articulate a greater purpose—improving the world where they can, whether that’s in their local communities or addressing societal issues worldwide.

In addition, their work shows more than anecdotal evidence that purpose-driven organizations generate more worker and customer loyalty. Increasingly, workers are holding their employers more accountable and demanding to see more examples of executing on purpose, according to Thakor.

Those companies with the most clarity in the pursuit of their purpose frequently perform better financially, according to a 2016 study led by The Wharton School.

Thakor and Bunderson, however, also warn of pitfalls in creating a purpose-driven organization. Leaders of purpose-driven companies can’t take on every charity case and could face backlash from employees when workers’ pet projects aren’t a priority. Further, having a purpose doesn’t guarantee financial success, especially for startups.

“Creating a higher purpose is not a tool or tactic to make more money or achieve better financial performance,” said Thakor, the John E. Simon Professor of Finance and the director of doctoral programs at Olin. “Turning purpose into performance is very hard. Emotionally, it takes a lot of effort.”

He stresses that firms must meet two conditions: First, the identified purpose must be authentic, and second, it must be communicated with clarity. Thakor says being authentic is hardest, in part because it goes beyond putting posters on walls and communicating from HR to employees.

Can purpose have a downside?

“Every company now has a statement of principles that is displayed, and most of the time people in an organization understand it has virtually no meaning for the decisions the company makes,” Thakor said. “So, it doesn’t really affect the employees.”

For a purpose-driven company, that’s not the case. Managers and employees are vested in the core values and make decisions based on what they believe supports those core values. As a result, being purpose-driven will have costs and impose constraints.

“That’s especially significant when a company’s competitors are without purpose and have no restrictions,” Bunderson said. “Those competitors are not restrained in the business deals they will pursue. Purpose has to be backed by actions, mission and commitment. The purpose-driven company will say, ‘We won’t do that.’”

While there are hazards in the purpose-driven organization, Bunderson and Thakor agree that the benefits of being purpose-driven outweigh the risks.

There are a couple of ways purpose can help,” Bunderson said. “It’s not just feel-good, and it can be a competitive advantage.”

For example, millennials seek purpose as much as profit in their work, so communicating about a purpose-driven organization can be an advantage when recruiting 20-somethings or MBA students—or when fielding inquiries from recruiters.

For example, millennials seek purpose as much as profit in their work, so communicating about a purpose-driven organization can be an advantage when recruiting 20-somethings or MBA students—or when fielding inquiries from recruiters.

Sue McCollum, JD ’15, said having a values-based purpose, especially during challenging times, engages employees and keeps them moving in a positive direction. McCollum is chairman and CEO of wine and spirits distributor Major Brands Inc.

One of the ways Major Brands does that is through its Safe Home program, offering thousands of free rides home a year to bar patrons in a partnership with ride-hailing service Lyft. “It’s part of our push for social responsibility and accountability that has become really important to our people here, to our suppliers and to our customers,” McCollum said.

The challenge: Establishing purpose

Workers, customers and investors want to be part of something greater than themselves, research has shown. Having a greater purpose, however, has to be more than a mission statement and jargon about respect, teamwork and shared vision, Thakor said. It’s about creating leaders who are prepared to make, and stick with, difficult values-based, data-driven decisions.

The biggest challenge is for leaders to establish a company’s higher purpose, Thakor said.

“Giving to charity is not higher purpose; every company does that,” he said. “It’s not having a mission statement; most companies have those. It’s about going through a group of exercises to discover an authentic purpose that will guide all future business decisions.”

In his book, Thakor cites Apple and Walt Disney Co. as examples    of companies that successfully established their higher purpose. Disney’s purpose in Disneyland was to create “a place for people to find happiness and knowledge.” For Apple, he offers a Steve Jobs quote: “Great companies must have a noble cause. Then it’s the leader’s job to transform that noble cause into such an inspiring vision that it will attract the most talented people in the world to want to join it.”

Once the purpose has been discovered and established, it should carry over into all aspects of the company, from how meetings are run to the people who are hired.

The concept of business leaders making decisions based on values —as well as data—is growing, but isn’t novel. Olin’s strategic pillar focused on creating leaders who make values-based and data- driven decisions has its roots in the business school’s founding.

“We’re talking about issues at the core of what we stand for,” Bunderson said. “In 1915, when William Gephart was making the case for why the university needed a business school, he cited the need to understand complex information (that’s the data part) as well as the need to consider how our decisions affect the broader society (that’s the values part). Being values-based and data-driven is in our DNA.”

Eight Steps to Organizational Change

Anjan Thakor outlines the steps in his book, The Economics of Higher Purpose: Eight Counterintuitive Steps for Creating a Purpose-Driven Organization, co-authored with Robert Quinn, professor emeritus at the University of Michigan’s Ross School of Business and a cofounder of the school’s Center for Positive Organizations.

  1. Envision a purpose-driven organization
  2. Discover the purpose
  3. Meet the need for authenticity
  4. Turn the higher purpose into a constant arbiter
  5. Stimulate learning
  6. Turn midlevel managers into purpose-driven leaders
  7. Connect the people to the purpose
  8. Unleash the positive energizers

More support for purpose

On August 19, 2019, the powerful Business Roundtable lobby—which includes the CEOs of dozens of major US companies—issued a revised “Statement on the Purpose of a Corporation.” The one-page declaration, with 181 signatures, includes a corporate imperative to support and invest in communities and people: “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”




Olin

The Center for Analytics and Business Insights, along with the Bauer Leadership Center, hosted a seminar March 26-27 on values-based/data-driven decision-making. The seminar, which hosted nearly 50 executives from a variety of local data-centered companies—including Wells Fargo and Teradata—was a huge success.

Seethu Seetharaman led the morning session for participants in a March 26-27 workshop on values-based, data-driven decision-making.

Seethu Seetharaman, director of CABI, kicked off the event with a discussion on hypothesis testing.  Seetharaman, W. Patrick McGinnis Professor of Marketing, brought statistics to life with riddles and brain teasers. With a group filled with professionals working with statistics daily, Seetharaman’s brain teasers still expanded their knowledge and truly kept them on their toes. A quick example of a brain teaser to try at home:

“A light flashes red 75% of the time and green 25% of time. You have to predict what the next flash will be. Is it reasonable to use a biased coin weighted to flip toward red 75% of the time to predict the next flash? Or is it more reasonable to just predict red?”

Seethu Seetharaman and Stuart Bunderson teamed up on the March 26-27 workshop on values-based, data-driven decision-making.
Seethu Seetharaman and Stuart Bunderson teamed up on the March 26-27 workshop on values-based, data-driven decision-making.

The answer is actually no. The likelihood of having the coin and the light flash the same color is slim because there are two separate events. The two events will only align 62.5% of the time, so it’s safer to predict red from the get-go with its 75% probability. 

The first afternoon was followed up by Stuart Bunderson, director of the Bauer Leadership Center. Bunderson, George & Carol Bauer Professor of Organizational Ethics & Governance, discussed values-based decision-making, incorporating values and ethics in business, while backing them with statistical evidence.

Bunderson amusingly warned the data-focused audience, “We are now entering the domain of moral philosophy… we answer which outcomes we should be striving to achieve through discussion and mindful reflection, informed by theoretical frameworks.”

Bunderson continued, asking, “What are values?”

Values are beliefs about preferred “end states.” They can be explicit or implicit, but regardless, represent the fundamental building blocks of an individual’s character or organization’s culture.

Values are all about the why of a business: the how represents tactics and execution, the what are objectives and KPIs, while the core why are values and the mission. The why drives the what and the how.

At the end of the session, Seetharaman’s statistics-heavy lecture paired perfectly with Bunderson’s value-based message. The audience collectively resonated with the idea that a business is firmly, at its core, driven by values.

However values must guide decisions made and then must be secondly backed by statistics. You must be able to understand your KPIs while still keeping true to your business’s mission.




Kathy Mazzarella, chairman, president & CEO of Graybar

Kathy Mazzarella, chairman, president & CEO of Graybar, joins the Defining Moments speaker series to share how she rose through the ranks of a Fortune 500 company starting out without a college degree. Mazzarella—who completed an associate’s degree, bachelor’s degree and MBA while working at Graybar—breaks down her success story into the following two life lessons.

Always aim for No. 1

Mazzarella shared advice from her greatest inspiration, her father, “Your only failure in life is if you don’t shoot high enough. If you shoot for the No. 1 position and don’t get it, you haven’t failed, you’ve learned. If you shoot for the No. 2 position and get it, you’ve failed.”

This lesson stuck with Mazzarella throughout her many defining moments. The first was her high school class president election. She ran and lost. Instead of giving up, the following year, Mazzarella didn’t just run for class president, but school president—the No. 1 position.

Acknowledging that it was a popularity contest, she had to strategize how to win using her connections, through sisters, in order to compensate for votes among her own classmates she knew she couldn’t win.

Mazzarella won class president.

The same lesson that initially applied to her class president election carried with her when just a few years later, she dropped out of college. Mazzarella initially went to school with aspirations of becoming a doctor. Realizing this path wasn’t for her landed her back home with two devastated parents.

Mazzarella, hoping to make her own path, went out for a job interview. On her way to the interview, she stepped into a building on the way to ask for directions. The building held the Graybar offices. They were hiring. This was fate.

The interviewer asked, “What role would you like to have?” Mazzarella, recalling her father’s advice, replied, “president.”

Use setbacks to learn, grow and become stronger

This lesson was one Mazzarella had to learn the hard way. She was up for a senior vice president position. As the first female vice president in the company—with an incredible professional track record—she was up against a male candidate who was always one step behind her.

Mazzarella frankly believed she was a shoe-in. Mazzarella worked hard, stayed late every night, worked every weekend, got every award available, and yet her competition got the job.

Mazzarella’s initial reaction? “I’m done.”

However a quick call to her father changed her mind.

This is your defining moment,” he said. “How you handle this will determine your future career. Everyone’s watching.”

Mazzarella swallowed her pride and called the winning candidate to congratulate him.

This blow steered her career toward HR and strategic planning, which ultimately made her a better leader. When Mazzarella was running for the CEO position, a board member recalled that she handled the SVP loss incredibly gracefully, proving that she cared about the company over herself.

Mazzarella truly used this setback to grow and become ultimately stronger, as she now hold the positions of chairman, president & CEO.