In 2018, during my vacation to Japan, I learned that the Japanese love food, cleanliness, and punctuality. I also learned that the fountains in the toilets are not for drinking, and that many Japanese care about their work. Whether they were cleaning streets, maintaining parks, or preparing okonomiyaki (Japanese hearty pancakes), many people we met were fully dedicated to their jobs. And nobody seemed to be focused merely on growth or profit.
Many entrepreneurs don’t realize that growth and profit are a consequence of caring about their business. The purpose of a company is not to maximize shareholder value. Instead, a great company purpose should lead to happy shareholders. And the goal of management is not to grow the business but to maximize the goal, for which significant growth may be needed. Growing for the sake of growth is the purpose of a tumor.
Growing for the sake of growth is the purpose of a tumor.
The age of profits as a purpose is gone. Consumers and employees want to see socially and environmentally responsible behaviors of companies. In a globally connected world, consumers are faced with countless options and opportunities, leading to the question, “Why should I buy from you?” And a significant majority of workers want jobs and careers with social impact. Baby Boomers, Millennials, and Gen-Zers all want organizations and employment with meaning. Principled business practices, such as sustainability and transparency, are becoming requirements for all companies.
Many studies have shown that companies with a strong sense of purpose and values perform better than their peers. Purpose and values translate to more engagement among employees, which translates to more productivity and more innovation. And when products and services are part of a vision that is larger than the company itself, the company will be rewarded with a better reputation and more demand.
Companies with a strong sense of purpose and values perform better than their peers.
If our purpose is not growth or profit, then what is it? What should we care about first before size and money? It is my experience that most advice from friends, family, founders, and fools fits into four categories.
Do What You Can Get Paid For
Many people start their careers by doing whatever they can get paid for. Some serial entrepreneurs hustled their way from cruise ship singer to global media tycoon, building multiple businesses along the way. But most of us don’t favor the idea of just grabbing onto anything that generates money. We prefer to do things that we feel comfortable with.
Do What You Are Good At
Some say that you should focus on the things you can do well, and try to do these things better and better. With deliberate practice, you can choose to lead in whatever you do, and then success is sure to follow. The world needs skilled carpenters, amazing interior cleaners, and patient call center agents. You could be one of them.
Do What You Love
Some people aren’t happy just doing what they do well. I’m not bad at managing projects. But if you make me a project manager, I will make you a grave. People like me prefer doing the things we love. We say that, if you do what you love, you might figure out how to get paid for it. Unfortunately, some of us find it quite hard to find any buyers for their lovingly handcrafted toilet roll puppets.
Do What the World Needs
Happy jobs are not always meaningful jobs. In fact, the science of happiness suggests that you will find happiness by pursuing meaning. Remove plastic from the oceans, help people deal with climate change, fight piracy of music and video, or make it easy to send money around the world. Tackle a real problem and you will find joy along the way!
These are four different ways of looking at business and purpose. Which one is right?
The Japanese have found an answer to that question. They gave it the name ikigai, which roughly translates to “that which makes life worth living”. Iki means “life” and gai means “worth”. We can explain ikigai as discovering (or inventing) a purpose for oneself, a raison d’être, a reason for getting up in the morning. And we can visualize ikigai as a four-leaf clover that has each of the four categories intersecting and overlapping. In the center, it all comes together, and that’s where you find your ikigai.
I think the Ikigai model can be written as:
Make fun, make progress, make money, and make a difference.
Some critics from the English language police may object and say that “making fun” should actually be “having fun”. I know that. But I like having a bit of fun with the English language, and many people know me for making fun of both myself and others. Don’t take everything too seriously.
Did you know that the Japanese are the longest-living people in the world? At the time of writing, ten of the 25 oldest living people on earth are Japanese. The eldest of these centenarians are often from the island of Okinawa. Well, guess what? The ikigai concept is strongly associated with Okinawa. It’s the place where people know that finding their ikigai means a long, fulfilling, and happy life. Wouldn’t it be nice if that worked for companies too?
It seems that it does. Multiple studies have shown that purposeful companies outperform their peers on the stock market. Companies with a purpose do live longer! I titled my recent book Startup, Scaleup, Screwup because we all follow the same patterns of life. We are born, we grow up, and we die. The art of life (and leadership) is to postpone the inevitable for as long as we can. Yes, your business can live to be a centenarian too! It will help when the organization discovered its ikigai.
We are born, we grow up, and we die. The art of life (and leadership) is to postpone the inevitable for as long as we can.
Finding or creating purpose requires balancing different forces. Doing what the world needs is important, but not at the expense of your happiness. Doing what you do best makes total sense, but not when nobody is willing to pay you. Ikigai is about finding balance between all aspects surrounding your life. How very Japanese!
Sadly, executives in many organizations have a habit of talking about purpose in ways that make their employees roll their eyes and grab a sick bag. A mission statement and some motivational posters will not extend the life of an organization. Actions speak louder than words, and purpose is derived from behaviors, not from stated goals. Catchy slogans are fine when they reflect what the organization is actually doing.
So, how to proceed?
You need to find a purpose for your team or company, but it’s not enough to just write a statement on a poster. Your Product Vision doesn’t count, because it describes what you want to create, not why. And you should not focus on only one of the four categories while ignoring the others. For most humans, finding their ikigai is a long and lengthy process. A survey in 2010 found that only 31% of Japanese respondents said they had found theirs. Discovering your ikigai will likely take more than a two-day offsite with your management team in a ski resort. (Unless your purpose has something to do with skiing.)
I suggest that you print the Ikigai image, put it on a wall, and use it as part of a regular reflection exercise by repeatedly asking yourself some questions.
- What work are people complimenting you for?
- What makes you happy when you’re working?
- What problems do you see around you?
- What activity allows you to pay your bills?
Write answers to these questions on sticky notes and put them on the ikigai model. Come back to the poster every now and then to review your answers, add more insights, and draw some connections. And don’t expect a quick fix. Purpose needs time to emerge.
Many authors before me have pointed out that purpose is a key ingredient for a strong, sustainable, and scalable organization. For example, in his bestseller Good to Great, Jim Collins mentioned the “Hedgehog Concept”, which covered three of the four ikigai categories: do what you can be the best at, what generates money, and what you are passionate about. The category that Jim Collins missed, do what the world needs, was later filled in by the famous Why-How-What circles in Simon Sinek’s Start with Why and the “Massive Transformative Purpose (MTP)” in Salim Ismail’s Exponential Organizations. To be fair, Jim Collins made up for it with his “Big Hairy Audacious Goal (BHAG) in Built to Last.
My trip to Japan contributed to my own bigger picture. What I love doing is traveling the world and sharing inspiring stories. What I do well is generating ideas and organizing my businesses. What people pay me for is books, workshops, and keynote speeches. And what the world needs is more successful startups and scaleups. I’m sure there is a purpose for me to be found, right there in the middle.
By reading this article, you made progress toward your Agility & Innovation Qualification. Report your evaluation here and collect your experience points!