Jeff Smith on the Importance of Communicating

At the heart of many successful organizations is its purpose, a clear statement of why it exists beyond generating profits. Research in organizational behavior has consistently shown that when employees resonate with their company’s purpose, it can lead to higher levels of engagement, job satisfaction, and loyalty. A 2023 study by the World Economic Forum found that 59% of workers would never work for a company that didn’t share their values, with 55% saying that not even a pay raise would change their mind. These numbers, and others like them, come as no surprise to Jeff Smith, BlackRock’s former head of human resources, who has spent decades hiring and leading talent.

“It’s so important to have a purpose and value proposition that makes people want to be at your company instead of every other company in the world when there are so many options,” he says. “You have to create and communicate a meaningful purpose beyond just making money.”

How HR Can Cultivate a Purpose-Driven Culture

Jeff Smith thinks HR is critical in embedding an organization’s purpose into the fabric of its day-to-day operations and hiring practices. This involves active communication across internal and external messaging, as well as a purpose-informed approach to recruitment, onboarding, training, and development.

“Companies should be aware of trying to communicate their purpose everywhere, all the time: in a mission statement, website, internal company materials, marketing and ads, executive speeches,” says Smith. “What you do as a company should match your purpose, and you should tie the two together in a genuine way as often as possible.”

HR teams should ensure job candidates not only understand the company’s purpose, but also see how their potential roles contribute to that larger mission. Ultimately, this leads to higher employee retention rates and a stronger employer brand.

“Everyone will be looking to see if what you are saying is real, so help them see it,” says Smith.

The recruitment and onboarding phases are pivotal opportunities for human resources teams to establish a strong connection between employees and the company’s purpose. Incorporating mission-driven messaging into job postings and interview processes helps a firm attract candidates who share its values and vision. Onboarding programs that emphasize the enterprise’s purpose can help new hires feel connected and committed from day one.

For existing employees, continuous training and development initiatives can reinforce the company’s purpose and values. These programs should focus on skill enhancement, while nurturing a deeper understanding of how employees’ work contributes to the broader mission.

Jeff Smith’s Past Experience at BlackRock: The Human Capital Committee

At BlackRock, ​​Jeff Smith helped with the Human Capital Committee, composed of senior leaders from across the firm’s businesses and locations, and tasked with guiding and implementing its talent management policies and practices to uphold its “one BlackRock” culture.

A cornerstone of the HCC’s strategy was to align leadership behaviors with the company’s values. The committee developed programs to enhance the effectiveness of executives as coaches and mentors with the goal of fostering a culture of continuous learning and improvement.

“The creation of the HCC was a truly unique and impactful accomplishment,” says Smith. “The point was to make the talent agenda led by respected leaders from every single business and have these leaders help to shape, drive, and promote all talent practices across the company,” he adds.

In other words, the committee’s cross-organizational composition was key. It actively drew on perspectives from across a very large company to engage in employer branding and ensure that BlackRock’s appeal to new talent fit with the company’s broader mission and values.

This approach was particularly tailored to resonate with the aspirations of a new generation of employees. It emphasized career mobility and social responsibility — elements that are increasingly vital to young professionals today.

“I think there is an evolving theme that there is more phasing out of traditional linear career paths, static job descriptions, and inflexible structures, and more moving toward flexible and iterative career journeys that allow people to use their skills and build new things,” says Smith.

The Tangible Benefits of a Purpose-Driven Approach

Evidence strongly supports the efficacy of purpose-driven business models, finding that in addition to employee satisfaction and retention, there can be significant advantages in revenue, stock performance, and customer loyalty.

Unpacking this evidence reveals the essential connection between establishing a purpose and communicating it clearly.

A 2020 Harvard study published in the journal Organization Science explored the concept of corporate purpose within American companies by analyzing the feedback of approximately half a million employees. The researchers sought to understand if a company’s sense of purpose — defined as its mission and the extent to which employees feel aligned with it — affects its financial success. Surprisingly, they found that simply having a sense of purpose doesn’t directly improve a company’s financial results.

However, the research revealed something more nuanced. Companies with a strong sense of purpose fall into two categories: those where employees feel a strong sense of camaraderie and those where management provides clear guidance. Among these, companies that combine a clear sense of purpose with management clarity are the ones that actually see better financial outcomes in the future in terms of revenue and stock price.

In essence, the study suggests that companies benefit more from having engaged employees who not only believe in the company’s mission but also clearly understand how to contribute to achieving it. This is a message that Jeff Smith has emphasized throughout his career.

“Culture is everything. It is what you stand for, how you work, what you are held accountable for, and how it feels to be somewhere,” he says. “Companies are not the same, and culture is a big differentiator. Even if you don’t try, you will have a culture, so you might as well work hard to foster, nurture, and create a solid culture.

“Talk about it. Say it out loud. Then try to implement practices that create the culture you want.”

Meet Waleed Tariq, a skilled entrepreneur and the creative mind behind this blog. Here, you’ll find helpful business advice, useful tips, and new ideas that everyone can understand, whether you’re just starting out or have lots of experience. Waleed loves helping others and writes in a way that’s easy to follow. His real-life experiences make complicated business ideas simple and clear.

Originally published at https://www.mindmybusinessnyc.com on June 25, 2024.