Leading with Purpose

This book explores corporate purpose—a company's expressed overriding reason for existing—and its effect upon strategy, executive leadership, employees, and, ultimately, on competitive performance. Sharply challenging the conventional wisdom that corporations should be dedicated to shareholder wealth creation, the author presents a compelling argument that the path to competitive advantage and outstanding long-term financial performance lies instead in a customer-focused corporate purpose.

The book is in four parts. Part I shows how corporate purpose exerts a powerful effect on strategy, management, and the meaning employees derive from their work. A customer-focused purpose harmonizes these critical factors and enables leaders to push strategic thinking deeper into the organization and at the same time to grant employees a greater degree of autonomy. In contrast, a goal of maximizing shareholder wealth sows the seeds of conflict among the market-oriented purpose, product-focused strategies, and the individual values of employees.

Part II critiques the logic of "value-based management" and the relationship of the firm to the equity markets. It explores the validity of extending traditional concepts of property rights to share ownership, concluding that the separation of stock ownership from the responsibility for, and managerial control over, corporate actions makes traditional property rights arguments inapplicable to the underlying assets of a corporation.

Part III examines the functioning of corporate purpose in a global economy. When a firm operates globally, purpose needs to retain its motivational power across national boundaries, which a shareholder-focused purpose does not do.

Part IV explores the implications of corporate purpose for leaders, arguing that infusing an organization with a worthy purpose is an essential responsibility of leadership. Purpose is the foundation for the shared values that define organizational character, raise moral aspirations, and enhance performance. Drawing upon a wide range of thought from the world of business as well as from historical studies, cultural anthropology, philosophy, theology, and psychology, Leading with Purpose is sure to be an essential text as businesses move into the twenty-first century.

"Vivid and encyclopaedic in his description of organizational purpose, Ellsworth helps leaders truly understand the tremendous impact that knowing who you are has on where you go and how you get there. In these globally turbulent times, any thoughtful leader will benefit greatly from this book."—Jerry I. Porras, Lane Professor of Organizational Behavior and Change, Stanford Business School, and co-author of Built to Last: Successful Habits of Visionary Companies

"A truly unique effort. I know of no other book that takes for its centerpiece the concept of purpose and then refracts it so meaningfully through the prism of the modern corporation. Ellsworth argues forcibly for a strong point of view and moral imperative in the corporation, brilliantly presenting a book of immense importance."—Warren Bennis, University of Southern California, Graduate School of Business Administration

"The unique strength of Richard Ellsworth's book is that it presents the business enterprise in all its dimensions—as an economic institution; as a human organization; and as an embodiment of values—and carries all three dimensions in both clear theory and practical application."—Peter F. Drucker, The Peter F. Drucker Graduate School of Management

"Reexamining the view that the overriding purpose of a corporation is to increase shareholder wealth, this book challenges corporations to integrate product development, customer satisfaction, employee productivity, and shareholder satisfaction to both remain competitive in the world economy and contribute to the betterment of the community. Leading with Purpose exemplifies Ellsworth's ability to identify and analyze abstract philosophical conceptions in a way that is useful to practicing managers."—George C. Lodge, Harvard Business School

"Ellsworth links the literature of current management practice to the findings of economists and political scientists who study the global environment, making the argument that purpose is at the core of a company's global competitiveness and managers have a moral as well as a fiduciary responsibility in the corporation. The strong, clear voice that comes through in this work is one that should be heard more often in business schools. Leading with Purpose is a major contribution on an issue of immense importance and provides an effective counterweight to the rational and analytic frameworks that often drive our MBA programs and executive classrooms."—Christopher A. Bartlett, Harvard Business School

"This thoughtful and incredibly ambitious work tackles head-on the enormously important issue of why the corporation exists. Ellsworth creates the kind of provocative framework and well-articulated set of concepts that would drive an intense and powerful classroom learning experience in courses of general management, strategic management, and business policy in business schools everywhere."—Christopher A. Bartlett, Harvard Business School

"In order to prosper, businesses need to switch their primary focus from shareholders to customers, says Claremont Graduate University['s] Ellsworth. He finds that shareholder-focused purpose disenfranchises other stakeholders and customers . . . .while a customer-focused purpose enhances strategy and management, supports global operations, and provides a worthy motivation for employees."—Richmond Times

"No serious student of management or practicing manager can afford to miss the lessons contained in this book—lessons that help address perhaps the most fundamental of all business questions: What is the ultimate purpose of your corporation?"—Academy of Management Review