Forgetting about the revenue to grow the revenue? - What makes a HHIPO

The way we do business is a direct reflection of where we are as a society. What we value. What we perceive to be meaningful, and what is worth striving for. It steers the direction in which we go as a society.

In the last few decades, businesses made massive shifts in the ways they operate. Organisations put now a greater focus on customer needs and satisfaction. Employees are being treated better and leadership has become much less of "command + control" with more room for autonomy. Businesses are also taking greater social and environmental responsibility.

A lot of things changed for the better. Yet we might have been treating the symptom without addressing the root cause.

Following "best practices” without understanding the underlying principle

When you read articles, blog posts, or other sources about operating an organisation, it seems that the trump-it-all argument is "because it drives business performance". At first glance it makes sense. After all, if a company doesn't make money, it won't be alive for a very long time.

But.

There's a big difference between making money to be able to keep doing the thing that's worth doing, and making money, just for the sake of it.

In the first one, business is used as a vehicle to do something of meaning. Pursue a goal that's worth pursuing. Make positive change, and leave a legacy. In the latter, it's only about the money.

Business Yo-yo effect

The Yo-yo effect happens to people who dieted and lost a lot of weight, but once they stopped dieting, they regained all that weight back. That's because they retracted to previous eating patterns, without incorporating new sets of mindsets and attitudes and habits to sustain their lower weight.

Sometimes employers or leaders, introduce progressive practices, but at the first sign of trouble, they retract from it because they might not drive business performance.

James Clear in "Atomic Habits", mentions that to change your behaviour in a lasting way, you need to change your identity.

If organisations will only chase the practices that will drive their business growth, they most likely won't be able to sustain the „right things to do" when times are difficult.

Why purpose matters for business

In their book "Firms of Endearment”, Raj Sisodia, Jag Sheth and David Wolfe, showed how purpose-driven companies are outperforming revenue-driven companies, that were "Good to Great" companies. So the companies that Jim Collins (business/management researcher and consultant) picked as a role model for thriving companies.

How is this possible?

Purpose:

• Leverages motivation; It's easier to sustain the high-performance when people find what they do meaningful. Meaning is one of the 3 core builders of motivation (together with autonomy and mastery)
• Sets the direction; when you're being explicit and regularly articulate what's the vision, and what are you trying to achieve as a business, it's much easier to keep everyone aligned
• Creates focus; having a clear "why" for the existence of a company, creates more space to focus on "what" and "how".
• Creates allies: When you work towards something meaningful, it's larger than building a single business. You join or create a movement. And if you communicate what you stand for, you find allies and collaborators who will help you in your journey, and you find a community of supporters, who genuinely want you to succeed. All because collaborators and supporters care about the same things as you.
• Compounds; well chosen purpose will remain for years/decades. When you work towards the same goal over a long period of time, your expertise and effort compounds. You create results that couldn't be achieved in a single year, no matter the effort.

More importantly, because purpose-driven businesses are clear on their reasons for existence and values, they do the right things because they are the right things. Not because, it's a clever business tactic or performance gimmick.

That gives purpose-driven businesses another edge. Most businesses do "the right things" when they have case studies and proof, that it worked for other companies. And which companies are a source of this proof?

Yup. Purpose-driven businesses. They've adopted them just because they were the right things and realised that it also happens to drive business performance.

Making the revenue by forgetting about the revenue

So...should organisations just focus on doing the right things, because they are the right things and trust that the financials will take care of themselves???

At first, it might sound ridiculous. 

But imagine that Executives would spend less time on: 

• ❌ Complex analysis of what will bring the company the most revenue  
• ❌ "What is competition doing, and how can we outperform them?"
• ❌ "Should the employees who are not software engineers and designers receive MacBook Pro as well"

And more time on questions like:

• "What can we do, to pursue our company mission?"
• "How would we love to see the world evolve in the future, and what can we do, to contribute to this change?"
• "How can we maximise the win for our customers? How can we increase the value they're getting from us?"
• "How can we level up our customer experience?"
• "How can we better enable and inspire our employees to deliver their best work possible?"

Focusing and acting on these questions can bring you a lot of revenue. Have you noticed a pattern? They are all about service;

to the world

to the customers

to the employees

When you focus on serving others, or some greater cause, there is a good chance, that you'll create something of an amazing value.

However, to act this way, the right mindset is the necessary start. The mindset is that business is a vehicle for moving the world forward and is of service to others.

And this is the cornerstone of HHIPOs.

H - Healthy

H - High

I - Impact

&

P - Performance

O - Organisations

It's not any specific tactic. HHIPOs are all about the mindset. A crucial one, because it shapes the "why", "how", and "what" of the organisation.

HHIPOs: Business approach of the future?

Customers and employees start to care more about the societal & environmental responsibilities of the organisations. "How", business ethics, and what the company stand for are becoming more and more important. 

You can’t fake purpose 

If you claim to stand for something, that you don’t believe in, your actions will reveal it. And when your actions don’t match your claims, you create incongruency, which is very easy to spot. This is one of the fastest ways, to lose trust and credibility. And when you’re an organisation, the fastest way to lose customers, especially the loyal ones. 

Difficult situations always reveal our true priorities, and they always come at some point. You can’t fake a purpose in the long run. 

Also, consider the fact, that at the moment, Gen Z is entering the workforce. Soon they'll make up the majority of the workforce. Several studies are confirming, that they treat things like company mission, much more seriously than the previous generations. They care much more, about being valued, seen and cared for by their manager, and have consistent development opportunities.

It's not an entitlement. It's change, a shift in priorities and a working paradigm.

Elements of an HHIPO

Healthy

Health is here a very broad term. In this context, I'd like to define it as:

"Sustainable and beneficial for everyone in the long-term."

That means: aiming for carbon-neutral operations, creating products that don't create direct risk to the consumer, having a sustainable company culture that is based on trust, collaboration, autonomy rather than competition, winning at all costs, and control. It's about choosing the right things to do, that we know are good for the organisation and all of its stakeholders in the long-term, even if it will hinder the financial performance of the upcoming quarter/6-months/year. Making those choices ESPECIALLY when it's difficult.

High Impact

Making an impact is at the very core of HHIPOs. Their vision is their north star and guides their decisions. HHIPOs strive to make a positive difference in the world and make it a better place to live in. Even if just by a little bit. 

They stay focused on the impact they want to make. Their vision tells them what is the right thing to do. They stick with the right things, even if hit the financial results for the quarter, or everyone else seems to be doing otherwise and get away with it. They know that staying true to their mission is of utmost importance.

High Performance

Vision without an execution is nothing. HHIPOs know that, and they know, that to make an impact they want, they need to get damn good at executing things.

It's not: "high revenue" or "high profit”. They know that if you'll make an incredible contribution to the lives of others, the money will follow. So HHIPOs are not overly fixated on the financial aspect of the business*. 

The company enables people to work at their very best. 

Leaders genuinely care about individuals they lead, and want to help them grow and leverage their natural strengths. They create an environment where everyone feels safe, and free to express their authentic self. They enable their teams, to deliver their best work. Leaders help their teams navigate through hardships and rise when they fall.

Organisations and leaders that are capable of this, will unlock incredible performance. In this type of environment, people don't work "hard". They work intensely and joyfully. Sense of meaning, autonomy and pursuing mastery in a safe environment are fuelling their performance. They genuinely want to work at their very best. 

People who work in such a setup will always outperform folks, who are struggling to "work hard" and rely solely on grit, ambition and willpower for that. 

Not a Pipers dream, it's already happening

All of the above might sound very idealistic, even hippie and woo-woo… but it’s already happening. Think about:

• Iwata Satoru (ex-CEO of Nintendo), decreased his salary by 50% and the rest of the executive team cut their salary by 20%, after a commercial bust Wii U. They did it, to avoid laying off anyone, keep the morale high, and make sure, that people are not worrying about the stability of their job. 
• Think about Whole Foods, which from day one was paying their cashiers way above the "market average" salary for this role. Reasoning: Everyone deserves to have a paycheck that allows them to live a dignified life, which wouldn't be possible with a "market average” salary.
• Yvon Chouinard (Founder of Patagonia). After donating more than 200 million dollars to fight the climate crisis (in total over the years), he decided to donate an entire brand worth over 3 billion to a trust dedicated towards the tackling climate crisis.

A few organisations that paved the way. They might not get a lot of limelight, but they are there. And they proved that it’s worth doing the "right things" just because it’s in alignment with their mission and values.

Customers are becoming more conscious, and care more about what the brand stands for. Employees care more about working on something meaningful. Employees want to be seen, valued and cared for. Not be treated like a disposable resource.

Businesses of the future, won't NEED to be HHIPO to survive, but only HHIPOs will thrive.