What would you do to discover whether an applicant for a job in your company had leadership potential before hiring that person?
Discussion Questions 1. What would you do to discover whether an applicant for a job in your company had leadership
potential before hiring that person? 2. If you were asked to develop a score sheet for interviewing managerial candidates to assess lead-
ership potential, what would it look like? 3. Why do many companies persist in hiring senior and executive positions from outside despite
research findings that people promoted from within do better and are less costly? 4. Are formal leadership-development programs a cost or an investment? If the latter, how might
you calculate a return on that investment? 5. When obtaining feedback on an individual already in a leadership-development program, whose feed-
back is more important—that of the person’s supervisor, teammates, direct report, or customers? 6. Design a feedback form to capture information you would find useful in assessing and developing
someone’s leadership potential. 7. What principal elements of a potential leader’s performance in a developmental assignment
should the company really look for?
CHAPTER 2Section 2.4 Purposes of Organizations
2.4 Purposes of Organizations Section 1.5 discussed a number of measures of “success” for a corporation. This section examines how it is important for an organization to have an overarching purpose, something that goes beyond the “bottom line,” shareholder value, and other traditional measures of success. While companies can certainly function without one, the publicly stated underlying purpose motivates employees, attracts people to work at such companies, and generates positive public relations.
Consider the following examples of companies’ purpose statements. Notice that they are brief, catchy, and to the point.
Theme Park: Our purpose is to bring people joy.
Consumer Products Company: Our purpose is to find creative solutions.
Electronics Company: Our purpose is to improve others’ lives through technology.
Pet Products Company: Our purpose is to better the lives of both pets and those who love them.
Some purpose statements are included in companies’ mission statements, while other organiza- tions’ statements of purpose are their vision statements.
Notice that these overarching purposes don’t mention profit, shareholder value, market share, or even the products the companies produce. They are bigger than that. They motivate employees because they express values with which employees identify. Statements of purpose differ from vision statements in that they convey core values of the company now and in the future, whereas vision statements describe a future state that companies are trying to achieve 5–10 years into the future.
Purposeful Behavior Organizations that have a clear, overarching purpose are more likely to appeal to all their stake- holders and not just a subset. Purposeful behavior is performed by an organization consistent or aligned with a common purpose that is meaningful and important to that organization’s stake- holder groups. For example, to specify “increasing shareholder value” as the company’s purpose aligns primarily with the interests of management and investors and not with those of employees (unless they happen to participate in an Employee Stock Ownership Plan). According to Paul Ratoff (2007), four conditions must be present for an organization to demonstrate purposeful behavior:
• The larger purpose must be clearly stated. • Stakeholder interests must be aligned with that purpose. • The company’s strategies must be aligned with its purpose. • The results achieved must be measured and stakeholders informed of progress.
Not only is having a larger purpose good for any company but also if more companies would consciously choose to achieve something larger than their mission statements would suggest, businesses might then be better corporate citizens. More people would be passionate about their work, and organizations could become more productive as a result and make contributions to the betterment of society.