Purpose or profit? Why Not Both?

Daniel Goleman, author of the best seller Emotional Intelligence, and host of the podcast First Person Plural: Emotional Intelligence and Beyond, is a regular contributor to Korn Ferry. His latest book, Altered Traits: Science Reveals How Meditation Changes Your Mind, Brain, and Body, is available now. 

There’s a business case that purpose boosts profit. A Korn Ferry study found that over four years, purpose-driven consumer-products firms grew their sales at an average annual rate that was 6.5% higher than their peers.

But here’s the thing: investors aren’t the only ones benefiting from consumers supporting more purposeful brands. A 2019 study published by the National Bureau of Economic Research showed that workers who knew they were pursuing social purpose were 24% faster and had 43% less downtime, without any impact on the quality of their work. And a nationwide survey revealed that employees who place a higher value on meaningful work occupy more senior, skilled positions, and stay longer.

So, what does this mean for organizations, particularly during this strange year?

You might be surprised to learn that COVID-19 and the economic downturn has had little to no impact on the employee experience at some of the world’s best organizations. While stress and ambivalence hit a record high among the workforce last year, Great Place to Work Institute—the research consultancy behind an annual 100 Best Companies to Work For list—reported that 70% of the 2021 Fortune 100 Best Companies to Work For have seen record jumps in employee experience scores – meaning employees feel good about their working environment and the experiences afforded by their employer.

Even more surprising: the sector that showed the most improvement in employee experience was hospitality—an industry hit hard by travel bans, furloughs, and layoffs.

Hilton, the global hotel chain, has been one the that best-companies list for six years in a row, ranking number one twice in that span. This year, Hilton came in at No. 3 That ranking, at first glance, is surprisingly high, considering COVID-19 prompted the organizations to furlough or layoff thousands of employees. Such measures are a nightmare for most companies, particularly those who have built up a vibrant company culture. Leadership and morale are the first two things to be affected.

And yet, when Hilton let go of their employees last year, the company was met with heartfelt messages across their social media channels — transitioning employees thanking Hilton for being so thoughtful.

In a conversation with Great Place to Work Institute, Hilton CEO Chris Nassetta explained that the organization’s success in 2020 came down to a single thing: values-based decision-making.

Last year, Hilton partnered with businesses in thriving industries such as food services and delivery, to find placement opportunities for its displaced staff. They also launched the One Million Rooms initiative, partnering with American Express to give away one million rooms to first responders who had either traveled to areas hard-hit by the virus or who were afraid to go home and put their families at risk.

“The thing that happens a lot in a crisis is people panic and it’s every man and woman for themselves,” shared Nassetta. “You throw out your basic rules.” He said it would have been easy for Hilton, with enough problems of their own, to have turned their back. “But our value system is such that we were founded on a noble premise by Conrad Hilton…his view was travel and tourism can make the world a better place.”

According to the Great Place to Work Institute, community giving has been the top driver of employee experience over the past year. On average, employees have felt 15.6 times better about their workplace when witnessing leaders giving back during the pandemic.

Even though they have suffered a net loss, Hilton can be expected to recover. Why? Because a commitment to purpose has serious payoffs. Employees, shareholders, and guests remain loyal to an organization who seems to care more about doing good than they do about themselves or the bottom line. 

Click here to learn more about Daniel Goleman's Building Blocks of Emotional Intelligence.