Team Effectiveness: Purpose, Power, and Profit—How to Thread the Needle

Against a backdrop of a looming recession, a cost-of-living crisis, and mass layoffs, business leaders are asking themselves how they can balance purpose and profit. Is it possible to focus on profitable growth yet have people be inspired by the purpose of the company and engaged in what they are doing? RHR International’s Cristina Jimenez and Orla Leonard hosted an online session on this topic to discuss the relationship between purpose, power, and profit, using new research based on RHR’s data. Here are the key highlights.

Purpose is essential, but it’s not all we need.

Purpose is an anchor that drives an organization toward meaning, intention, and focus. Individuals with a sense of purpose experience better health outcomes, a better career trajectory, and a higher level of contentment and overall life fulfillment. Teams that share a purpose create an anchor point for intention, decision-making, and strategy, which leads to higher levels of connection to the business and work fulfillment. For organizations, a clear purpose enables trust and connection among employees, accelerates decision-making, and creates meaning in day-to-day work.

RHR’s latest research finds that a greater sense of purpose is related to higher:

• Employee engagement
• New product development and innovation
• Quality of services
• Profitability

Our research includes data on 88 top teams between 2019 and 2023, plus data from our inclusive leadership 360 assessment on 188 individual senior leaders gathered during 2023—providing a rounded view of leadership behavior and impact.

Although a clear purpose is essential, the research shows that purpose alone is not enough to drive success. The use of power within a team and by its leader also dramatically impacts safety, trust, and belonging—all critical for delivering profits.

What is power, and why does it matter?

RHR’s research shows that power is highly related to purpose, which suggests a strong interconnection between the two. Power is often experienced as force or energy. It can be:

• Power Over: hierarchical and focused on control over others and/or resources
• Power With: collaborative and focused on shared influence and decision-making, empowerment of others, and safety and trust
• Power To: about action, potential, and the ability to shape and influence the world around us
• Power Within: the sense of self-worth and confidence that brings energy to Power With and Power To

The leadership behavior of the executive team is critical to establishing and maintaining a healthy culture, and our research concludes that leaders need to move from Power Over to Power With to maximize purpose and drive the organization forward.

Executive teams are critical for healthy cultures.

Creating a culture where employees can maximize their performance and potential requires establishing psychological safety and creating a sense of belonging. Belonging is the connective tissue that enables employees to feel linked and engaged with one another and the business.

Psychological safety allows for candor; honesty; transparency; productive disagreements and conflict; a climate where individuals can think about organizational goals before interpersonal risk; a space for risk-taking, innovation, and the free exchange of ideas; and uncomfortable and courageous conversations.

How do we move to ‘Power With’?

To create a high-performing senior team, organizations need to develop leaders who can create a culture where employees can maximize their performance and potential and use power effectively to drive engagement, trust, and belonging.

Moving to Power With is hard—it takes intentional leadership. Leaders need to work through their biases and blind spots, call out others when they engage in behaviors that harm belonging, understand who influences them, and not engage in favoritism.

To close, Cristina shared some advice on moving to Power With:

1. Evaluate how decisions are currently made and work is distributed.
2. Assess ingroups and outgroups within the teams who influence, who have trust and safety, and who are most visible.
3. Start sharing space; give team members opportunities to be visible.
4. Create a problem–and–decision-making framework that is more inclusive and allows everyone to leverage their experience and insights.
5. Spend time building trust with each team member and ask everyone to do the same.
6. Create a safe place for feedback (to and from), development, and connection.
7. Lean in to curiosity, collaboration, and compassion.

To complete the series on the Who, What, Why, and How of senior teams, Orla and Cristina will be hosting a final session on The Future of Teams on Tuesday, July 25. You can register here.