The Crucibles of Leadership – Your Life Stories Define Your Purpose to Lead

By: Clifford Louis

Can businesses that are focused on their social impact flourish in this age of capitalism? As the leader of your company, you need to ask yourself what values you want driving your organization and why. Do you want to be king of the hill in size or in reputation? Do you want to excel in your service, your products, your impact– or all of the above? What do you want people to think of you when they think of your organization? Toward that end, how must you conduct yourself to lead that organization? How must you influence others, so that they opt into the vision? More importantly, how can you get them to contribute so they share in its development as well as its eventual rewards? These are tough questions that need to be asked again and again.

Difficult and, in some cases, career or life-threatening events are called leadership crucibles. They are trials, tests, and failures — points of deep self-reflection that force you to question who you are and what really matters. Characterized by a convergence of threatening intellectual, social, economic and/or political forces, crucibles test your principles, belief systems and core values. When you’re open to learning from these mistakes, problems, and failures, you become a stronger, better leader. You gain followers’ trust, and they’re eager to produce their best work. Leaders need to keep the organization aligned to their mission. They need to have strong and clear approach which is rooted in their purpose of why they are leading. One of the best examples I know is Hope Cleaning, based out of Calgary. Its mission is to provide flexible cleaning work opportunities to at risk women in order to help them on a path to becoming financially independent. Founder Rachel Ward lives that mission by encouraging her employees to move on from her company once she's helped them build up the necessary skillsets to succeed.

Acting on your purpose via vision, mission and strategies pays off in more ways than one. The McKinsey Global Institute found that value driven organizations outperformed the rest in terms of earnings, revenue, investment, and employment creation in a study that looked at 615 mid-cap US publicly traded companies from 2001 to 2015. Moreover, according to other McKinsey study, organizations with strong environmental, social, and governance principles had better performance and credit ratings due to five factors: top-line growth, reduced costs, fewer legal and regulatory interventions, higher productivity, and better investment and asset usage.

"The McKinsey Global Institute found that value driven organizations outperformed the rest in terms of earnings, revenue, investment, and employment creation.”

Despite evidence that value driven organizations fair better in the markets, not all economists agree. The debate on shareholder versus stakeholder capitalism has been ongoing for decades. Proponents of shareholder capitalism are of the view that organizations have one purpose only and that is to make profit for its shareholders. On the contrary, supporters of stakeholder capitalism state that companies ought to consider the stake of all associated people.  Stakeholder capitalists, for example, see the value in companies paying reasonable wages, ensuring security within the workplace, providing great client service, engaging in fair promoting practices and investing in communities under which they operate.  Klaus Schwab, an advocate of stakeholder capitalism and author at World Economic Forum, believes that corporate officials should consider a broader set of interfaces than shareholders only. Larry Fink, the founder and CEO of BlackRock, recognizes that focusing on purpose doesn't mean diverting from profitability— he believes that to prosper in the longterm every company must, "not only deliver financial performance, but also show how it makes a positive contribution to society.” 

A shareholder approach to business sees integration rather than separation. It understands that the purpose of a company  is not just producing profits, but to produce solutions to problems faced by people and planet. The question is, how prepared are leaders to adjust with these values?