Palle Ellemann Consulting

Does it make sense?
November 2010, by Palle Ellemann.

That question should make business leaders lie awake during the night. What is the value for society that the company creates? If the business leader cannot come up with a meaningful answer to this question, he or she has a problem. People are now taking this question into consideration and it has an increasing importance for what companies people apply to and how long they are staying in the job.

Studies of students and graduates’ job search show that companies’ reputation and ethical standing are very important for what companies people apply to. About 3 out of 4 students and graduates look first and foremost at a company’s values, mission and vision before sending an application. In the bestseller “Drive”, Daniel Pink also emphasizes that the purpose of what we do is one of the strongest motivational factors for people today. It has a huge importance for an employee that the company where he or she works contributes positively to society. As the CEO of the Danish supermarket chain Irma, Alfred Josefsen, says, it is a huge difference for motivation and the joy of work whether the worker in the stone quarry is cutting stone or he is building a cathedral!

At Irma, that has been recognized consistently during the past ten years as one of the best workplaces in Denmark and Europe, the employees are not just selling groceries to customers, but they believe strongly that they are fighting for Danish food culture as a counterweight to the wave of discount food products dominating the food habits of the Danes. The Irma employees speak with pride and enthusiasm about how the company is taking the lead in the industry, when it comes to organic and environmentally friendly products, and that management was willing to accept a considerable loss in sales when it was decided to remove the candy from the exit cashiers.

You will find the same pride and enthusiasm at the best workplace in Europe during the past three years, Microsoft, where employees when questioned about what’s unique about the company particularly emphasize Microsoft’s role in the development of IT and what it has meant for business and peoples work and private life. Is this a coincidence or only relevant for industries, where companies’ impact on society is obvious? The answer to both questions is no. Both Irma and Microsoft make a great effort to speak about the company’s role in society to employees and outside the company and likewise a great effort is dedicated to making sure that every single employee knows her or his own role and how the employee can contribute to the purpose of the business. In this way a connection can be created between the work and life purpose of the individual employee and the mission of the company.

It is fairly straight forward for a hospital nurse to see the positive impact that the work has on patients’ life and health. But most companies independently of industry have possibilities to put the business into a broader perspective that would make it more meaningful and motivating for employees. The industrial tools that the production company Unimerco does, will probably not save any lives, but Unimerco focuses on delivering products and support in a very high quality that will allow customers to save costs and increase productivity. Additionally, Unimerco has a very important role in the local community Sunds in the Northern part of Denmark, because it is a relatively large employer in the area with a big influence on the employment and local economy. 75 per cent of the employees have ownership in Unimerco, so the interest in the development of the company is far beyond the monthly pay. The employees are in many ways very close to the development in the company with daily updates on productions, sales and profitability and all employees – production, sales and management included – work together in one large room, which is called the “covered village”. Does it make sense? Yes, indeed. For ten years in a row, the employees have brought Unimerco into the list of the best workplaces in Denmark.

After a sleepless night thinking about purpose and mission of the company, it is important that the business leader does NOT call the PR-manager to put together a PR-campaign to solve the problem. Communication is extremely important for making mission and purpose relevant potential and existing employees, but it will hit as a boomerang, if the mission and purpose is no more than nice words on the website. For the employees at Irma the “fight for Danish food culture” would not be motivating and meaningful (in fact, it would have the opposite effect), if Irma didn’t consistently fit the product offer, marketing, service concept and management to this purpose. Likewise, the Microsoft employees would probably be frustrated by the mission of the company, if it wasn’t followed up by extensive CSR activities and the fact that Microsoft’s own employees can take advantage of the freedom and flexibility that the technology facilitates for them at work.

The question: “does it make sense?” is as much about people being able to connect with a company’s purpose and role in society as it is about people experiencing a consistency from a company’s values, mission and vision to goals, strategies and actions. It is connection, consistency and actions that make sense for people.