NewCo Shift Forum
Jennifer Aaker on why companies must move from profit to purpose
Jennifer Aaker is an author, behavioral psychologist, and the General Atlantic Professor at Stanford Graduate School of Business. Best known for her research on time, money and happiness, Aaker also focuses on the transmission of ideas through social networks, the power of story in decision making, and how to build global brands across cultures.
Aaker’s the recipient of the Distinguished Scientific Achievement Award from the Society for Consumer Psychology and the Stanford Distinguished Teaching Award. She teaches Power of Story, Designing for VR/AR: Scaling Empathy in an Immersive World, and Rethinking Purpose at Stanford, and more recently, Humor: Serious Business. She co-authored the award-winning book The Dragonfly Effect with her husband Andy Smith, and serves on the Advisory Board of early stage startups and companies.
At the NewCo Shift Forum last month, Aaker presented on “The Purpose of Purpose.” She points out that we chase happiness as a goal, but that truly getting to “happy” involves understanding purpose, both at work and in life. Below is the video (with slides) and the transcript, edited for clarity.
Jennifer Aaker: I’m going to talk about rethinking our approach to happiness. First, some background. Most people assume happiness is stable. That it’s an endpoint to achieve or a goal to chase. But it’s not. There is a substantial amount of research to show that the meaning of happiness shifts in very systematic ways over the life course and even throughout the day.
This is a slide that illuminates how our feelings shift over the life course. The data is based on a cross-cultural data set called “We Feel Fine” — collected by Sep Kamvar and Jonathan Harris. They wrote an algorithm that combs the blogosphere for all mentions of “I feel,” and “I’m feeling.” They then correlate the feelings people express with the other things they mention in the sentences — nouns, adjectives, verbs etc. In this way, we can see the emotional narrative of our lives, and how, the meaning of happiness migrates from excitement to contentment as we age. We (with Cassie Mogilner at UCLA) find that this pattern is robust not just in blog posts, but in surveys, lab experiments and field studies.
What this data suggest is that we often pursue happiness — but that once we obtain it, it’s meaning changes. We start the pursuit again. How might we rethink our approach to happiness?
This is a challenging question, because we’re promised a lot of happiness in our world. Just look at a few of the advertisements we see everyday:
You should honk if you’re happy. You can go shop for happiness. If you buy more things, you can open some happiness. You can have happiness delivered. You can also put happiness on your body. You can find happiness in your closet.
Our thirst for happiness is hard to quench because it is embraced in our culture, documented even in our Declaration of Independence.
So how might we rethink our approach to happiness? More specifically, how might we create products, billed organizations, and live lives that cultivate happiness, if aiming for it is not in fact the key?
Research suggests it is better to aim for meaning, anchored on purpose. Because meaning involves investing in something bigger than yourself, the meaningful life is often characterized by stress, effort, and struggle. In a survey of over 2 million people in more than 500 jobs by the organization PayScale, those who reported finding the most meaning and purpose in their careers were clergy, teachers, and surgeons — difficult jobs that don’t always cultivate happiness in the moment but that contribute to society and bring those doing them a sense of purpose.
In one large scale study reported in HBR in 2015, 80% of CEOs declared that purpose is important for their organizations but fewer than 50% of those organizations leverage purpose in an impactful way. The problem is that few leaders know how to think about purpose in a clear way or how to help their companies act on it effectively. Some see purpose as an individual concern and talk about in terms of directing people toward meaningful work, others associate purpose with philanthropy.
However, the reality is that developing purpose is much more of a skill than we think. This matters, particularly at work, because purpose is associated with positive outcomes such as productivity, job satisfaction and retention.
In one Gallop-based study, researchers asked people in companies, “To what degree do you find meaning or purpose at work?” What they found was those individuals who said, “Yes,” were three times more likely to stay with their companies. They’re 1.7 times more likely to say that they like their job. They’re 1.4 times more likely to be really engaged and productive at work.
Now, “Purpose” is a lofty goal, and is often misperceived. Most assume that purpose is simply the degree to which you feel connected to something “bigger than yourself.” However, those who feel they have purpose in their life don’t always feel Purpose (with a big P), they feel purpose in small ways. Purpose, in this light, can be as simple as feeling you are making a difference in one’s person’s life.
Further, most people feel that purpose is static — something that is defined by the company, the CEO, or often times their spouse, but it can be defined by employees if you give them the right tools. A good metric of whether you find purpose at work is whether you are using unique strengths, whether you are passionate about what you do and working on a worthy challenge.
Lastly, purpose often feels like a goal or a destination, and yet research shows that by far and away this is not true. It’s much more likely to be a process, that as you feel like you’re working toward it purpose and meaning is actually cultivated. Further, it is a dynamic process experienced day to day — “the sense that one’s life is meaningful and purposeful is an ongoing, day- by-day, constantly unfolding phenomenon, not an end state that is once-and-for-all resolved” (Ryff and Singer 2008).
Right now we’re living in a world where there’s significant confusion, and many of the systems that we’ve held dear for a long time are being dismantled. In those contexts, the question becomes — what provides clarity in these times where life is confusing? Those individuals who feel connected to purpose, working on a team who are aligned on purpose. Further, many argue greater profits result when the purpose of an organization is clear — because it drives engagement, productivity, and retention — and as a result greater profits.
This isn’t a new idea. CEOs like John Mackey at Whole Foods have been making this argument for a long time. He argues the CEOs role is to be a servant leader, and an organization’s goal is not just to maximize profitability, but to maximize purpose. When an organization anchors on purpose, he argues, profits follow.
What’s exciting now, though, is that an increasing number of companies are resonating with this idea, and articulating their purpose. Look at the purpose at Lululemon — anchored on empowerment, Google and truth, Apple and beauty, AirBnB and love, Adoble and creativity, Hint Water and health, Bill & Melinda Gates and impact, and Steph Curry and believe. Steph feels that if you believe, you can do anything. You could transform yourself. You can become whatever you want. And that purpose can impact millions who follow him, and can be a filter for his partnerships, such as Nothing But Nets.
So what are the goals and metrics that are used by these leaders and companies that are built to maximize purpose? They’re looking to maximize impact, not just profit. They’re measuring how we use our time, not just how we’re using our money. They’re listening to and sharing employee and customer stories, not just data. They’re focusing on transformation, not just the achievement of goals. They’re creating a feeling of abundance, not that scarcity.
So how do you cultivate purpose? Three things. One is to design for moments. Defining moments matter more than we think. Second, design for stories. People want to be valued members of a winning team on an inspired mission. They want to feel like they’re part of a story with a purpose. Third, design for chapters. We’re more adaptable than we think. If you think about this graph, and the shifts we make in each of these chapters, it will make you understand how we might rethink our approach to happiness.
In sum, we think that we can attain happiness and often ask ourselves, “How can we be happier?” We don’t really know what makes us happy, even though we think we do. Could we rethink our approach to happiness, if happiness is not the goal? How do you anchor on meaning and purpose? Those individuals who do will become happier, and the organizations who do will have a very different metric of success. They do it by anchoring on an inspired mission, or unlocking that purpose in individuals where work and life blend fluidly together and you’re on a journey. One that’s meaningful, anchored on moments, captured in stories, shifting in chapters, and guided by purpose.
Thank you very much.