The For-Purpose Enterprise E-Book

Jo Aschenbrenner

• Herausgeber: tredition
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 327

Veröffentlichungsjahr: 2020

Beschreibung

The For-Purpose Enterprise with its powershifted operating system is a complete replacement for the conventional management hierarchy as well as for conventional management approaches including predict-and-control. It is based upon three rulesets incorporating the four central principles: 1.Establish purpose as the supreme principle of order 2.Agile and transparent action 3.Differentiating and integrating work and people 4.Powershift and distributed authority.

Leseprobe

“Nothing ever becomes real, ‘til it is experienced,” John Keats

“At NRG Circles, we have gone through different Power Shift stages, that have organically evolved into a For-Purpose Enterprise, making Purpose the only “boss” of our organization. The For-Purpose Enterprise model creates a clear framework for us to live interdependence as an enterprise on all levels; work, people, as well as within the legal context. This pioneering model supports our business world by providing a clear framework during this purpose revolution.”

Tine Bieber, Partner at NRG Circles, The Netherlands

“It is time for us to leave things behind and begin to shape more meaningful futures in the world of work. In my view the author nails it, by placing purpose at the heart of all doing and providing practical insights into how we can all create collaborative organizations that matter not only for people, but for society as a whole today and in the long-term.”

Julia von Winterfeldt, Founder and CEO, SOULWORX, Germany

“To make their organizations agile as well as resilient against crises, leaders must develop and implement purpose as central guiding principle. This clever book shows how the fundamental transformation towards a “For-Purpose Enterprise” can succeed.”

Prof. Dr. Barbara E. Weißenberger, Chair of Management Control and Accounting, Heinrich Heine University Düsseldorf, Germany

"In her Book, Jo describes the new work landscape succinctly and accessibly allowing the reader to develop a comprehensive understanding of the topic. Extensive yet concise Jo covers all major content, from "purpose" as the supreme principle of order, to various forms of decision making, legal structures and remuneration. A practical introduction that urges the reader to get started rather than dwelling on the theory.

Axel Schmidt, Head of Crowdinvesting at GLS Bank, Germany"

Jo Aschenbrenner

The For-Purpose Enterprise

A Powershifted Operating System to Run Your Business

Foreword by Thomas Thomison

Translation by Jennifer Benson

Power & Purpose

Original work copyright

© 2019 Verlag Franz Vahlen GmbH, Germany

Aschenbrenner, For Purpose. Ein neues Betriebssystem für Unternehmen

© 2020 Published by Power & Purpose, revised and updated

Translation: Jennifer Benson

Line Edit: Vibeke Schmidt

Cover Layout: Carsten Abelbeck

Cover Illustration: Jessica Frische

Power & Purpose is a trademark of

tredition GmbH, Halenreie 40-44, 22359 Hamburg

ISBN

Paperback

978-3-347-13168-2

Hardcover

978-3-347-13169-9

e-Book

978-3-347-13170-5

All rights reserved. No parts of this book may be used, reproduced, stored in or introduced into a retrieval system, or transmitted, in any forms, or by any means without written permission of the publisher and the author, except in case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law.

Table of Contents

Foreword by Thomas Thomison

Introduction

The Origins of the For-Purpose Enterprise

Reinventing Organizations and Beyond

My Personal Journey

Chapter 1: The Four Principles of the For-Purpose Enterprise

Principle 1: Establish Purpose as the Supreme Principle of Order

Daring to Be Purposeful

Exploring a Company’s Purpose

Profit Follows Purpose

Principle 2: Agile and Transparent Action

Agility

Transparency

For what Reason are Agility and Transparency Important?

Why Agility and Transparency?

Principle 3: Differentiating and Integrating Work and People

Two Conventional Strategies in Addressing Work and People

The Third Principle as an Alternative Way Forward

The Differentiation of Work and People in Practice

A Safe Space for the People

Principle 4: Powershift and Distributed Authority

The Conventional Understanding of Power

Purposeful Power: Distributed Authority and Empowerment

Can the Old Order of Power Really Be Replaced?

Why You Should Shift Power in Your Company

Chapter 2: Moving Beyond Management With Self-Organization

Management: In Retrospect

A New Metaphor for Companies: The Living System

Self-Organization

Reinventing Investment

Collaboration with Clients and Partners

The Holacracy Practice: Rules in Service of Freedom

What is the Holacracy Practice?

The Origins of the Holacracy Practice

The Step Toward the Holacracy Practice in Your Own Company

The Shift in the Approach to Strategy

Strategic Management According to the Conventional Understanding

“What-You-Can-See” Strategizing: Farewell to Predict and Control

No More Conflict Between Shareholder and Stakeholder Interests

The Business Model is Not Formally Written Down

The Manager and the Leader Have Had Their Day

A Company Without Employees

Manage Work, Not People

Incentive Systems Become Obsolete

Why “Hybrid Models” Limit Purpose

Beyond Hybrid Models

The For-Purpose Enterprise and the Startup encode.org

The Origins of the For-Purpose Enterprise

A New Organizational Structure with Work, Legal and People Contexts

The Anchoring of Self-Organization

Chapter 3: Work and Remuneration - For Purpose

The Work Context

The New Organizational Structure

Roles and Circles Instead of Linear Organigrams

No More Conventional Human Resources Department

Governance, internal Coordination, Steering, and Decision-Making

The Concept of Tension

The Governance Process Changes the Internal Structure

How Organizational Structure and Company Purpose Interact

The Operational Process and the Internal Coordination of Work Tasks

A New Understanding of Strategy

Self-Leadership and Self-Responsibility

Remuneration, Working Hours, and Time Off

The Beginning and End of Role Filling

Chapter 4: People and Social Interactions – For Purpose

The People Context and Its Structure

The Application of Holacracy Practice in the People Context

The Agreement of Association

Culture

The Definition of Culture

The Impact of Culture on the Company’s Course

A Strong Culture for Purpose

Basic Assumptions and the Shared Values in the For-Purpose Enterprise

Norms and Characteristics of the People Context

The Pact with the Diversity of People

Navigating Contexts

Experimentation

Purpose Nomads

Self-Management, Time-Management

Down-Time and Self-Care

Holistic Operational Membership Processes

Attracting the Right Talent

Admitting New Members Into the Enterprise

Onboarding of New Members and Support

Termination of Membership

Personal Growth and Professional Development

Guilds and Special Interest Groups

The Exchange in Communities

Discovering Your Personal Purpose

The Meetups of encode.org

Chapter 5: Legal & Financial Governance – For Purpose

Legal Context

The Key Legal Shifts in Detail

Self-Organization Replaces Conventional Management and Control

Alignment With Company Purpose in the Charter

The Structure of the Company: Three Contexts and an Anchor Circle

The Four Classes of Membership Interests

Detachment of Ownership Influence

The Members’ Meeting of the For-Purpose Enterprise

The Anchor Circle and the Governance of the Company

No Non-Competition Clause

Fiduciary Duties

The Importance of Social Interactions and a Safe Space for the People

Termination of Membership in the Company

Dynamic Steering of Legal Bases

Legal Forms in the USA and Europe – A Work in Progress

USA

Germany

Austria, Switzerland, and the Netherlands

Building a Legal Community of Practice

Conclusion: Together We Can Make the World a Better Place

Become Who You Are and Be Powerful!

Summary of the Book

Concrete Next Steps for Individuals and Companies

Epilogue

Glossary

Index

Literature

About

Foreword by Thomas Thomison

Rules in Service of Freedom

Be forewarned dear reader, that this is not just another business book. While it deals with work, capital, legal structures, and work culture, it will not deal with these topics in the way a conventional business book might. For example, it’s not directly about becoming a better boss or leader, or a “howto” for building better teams or a “five ways” for increasing operational effectiveness. No, it’s more a book about falling in love. Really! Falling in love with rules. Rules that fundamentally transform how you work, invest, and maintain professional relationships; rules so profoundly different they might even rekindle a newfound love for the great game of business itself. A reinvented game that may inspire you, enliven you, and maybe even bring back delight in the work you do. So, in that sense dear reader, yes, this is a book about business.

It is a sign of the times, I think, learning to love new things in new ways. The very well-worn, 2500-year-old saying, “The Only Thing That Is Constant Is Change” still rings true of course. We live in a world where it seems everything is perpetually new. And, whether we realize it or not, new rules, possibly more than at any other time in recent memory will profoundly and permanently change the way we live, work and relate in the most fundamental ways. Think this too bold, too hyperbolic, too abstract? It is already happening.

Rules in the form of software code now influence almost every waking moment (and for some of us even near-waking or mid-sleep moments). There are an estimated 2.5 billion smart, mobile devices in the hands of humans today. Nearly half the world's population is connected via the Internet. Algorithms (or rules) decide for good or for bad what’s on offer for a vast majority of humans on the planet. Rules today already influence and impact everything from the relationships you maintain on social networks, to the news you consume (or the news that consumes you), to the movies you watch, and the places you travel. More sophisticated rules in the form of “bits of intelligence” are already impacting human transportation, autonomous passenger vehicles are here and freight distribution will soon follow. The world is becoming more interconnected, more autonomous yet interdependent, more networked, and complex. This is a truism, not a prediction.

“We are morphing so fast that our ability

to invent new things

outpaces the rate we can civilize them.”

— Kevin Kelly, author of The Inevitable: Understanding the 12 TechnologicalForces That Will Shape Our Future

So why all the fuss about rules? Frankly, because we rarely pay attention to the most fundamental governance structures underpinning business entities. We mostly kind of ignore them because they are perceived as “too complicated,” or “not really relevant,” or simply taken as a given, just another “box to check” so saith your lawyer. And this is exactly the problem!

Rules, rule of law for example (criminal, civil, and common), literally structure society, nations, and culture at large. Rules civilize us. Our civil agreements set boundaries, enable the creation of contracts, and coordinate business affairs at foundational, financial, and governmental levels. And yet for the last century, these basic elements governing how we run, structure, and control businesses big and small, public and private, have largely escaped any meaningful technological advance. Oh sure, there have been many noble attempts at incremental improvements. Some of the more notable ones include: agile, lean, self-directed teams, leadership development programs, and deliberately developmental organization models. I could go on, of course, and many of you probably could, too. It is a long list—the things we’ve tried. But no matter how clever or innovative these incremental improvements might be, they really haven’t materially impacted status quo power structures. The stark reality is that until very recently the underlying power systems, the fundamental organizing principles or rules have basically gone unexamined and unchallenged. The rules we use today to coordinate 21st-century work is heartbreaking. Embarrassingly, they are mostly the same as when the first automobiles rolled off the assembly line in the early nineteen hundreds. Work is basically broken, as Aaron Dignan puts it in his recent book, Brave New Work. It is indeed time for an upgrade.

So how do we make things better? Thanks to the seminal work of Frederic Laloux in Reinventing Organizations, we can see a pattern of how organizational systems evolve with time — a developmental trajectory of hope, if you will. I take comfort knowing there is an inevitable evolutionary march toward a bigger embrace of purpose, self-organization, and human wholeness. We can also now see a path forward from the work of the early pioneers in selfmanagement (Gore, Morningstar, etc). Those companies demonstrated that it was possible to structure work in radically new ways with different rules of engagement and underlying assumptions. And we have awesome inspirational movements such as Conscious Capitalism, Responsive.org, and the Teal/Reinventing communities beating the drum for change and pointing the way toward a better future. Yet as valuable and necessary as the early pioneers and movements have been (and still are!) they mostly inspire us to think differently. However, that doesn’t inform us how to act at scale. And thinking differently can only take us so far as Dan Pink puts it in To Sell is Human, “Clarity on how to think without clarity on how to act can leave people unmoved.” Rules, on the other hand, provide clarity on how to act. Rules coordinate action and gameplay. What we need now are new rules encoding the lessons and wisdom from the early pioneers and movements. The good news is we now have model rulesets emerging. There are now mature and concrete alternatives to least one power system: management hierarchy. Practices like Sociocracy and Holacracy® give us a fundamentally different approach to coordinate work with clear, concrete written rules.

So, what’s next? Yep, you guessed it—even better rules. The For-Purpose Enterprise represents a continued effort to upgrade every aspect related to expressing purposeful work into the world. The For-Purpose Enterprise is a compound structure with new rules for legal, liability and capital matters; linked to an organizational operating system to express the work itself; and at long last, a clear set of agreements for the people doing that work. The story that follows dives into the mechanics of how it all comes together and what it feels like to work and live in such a power-shifted purposeful environment.

I cannot think of a better person to compose the first book on the For-Purpose Enterprise. Jo Aschenbrenner brings heart and passion to everything she does. An attorney; educator; committed partner and mother of three; an entrepreneur and mediator, Jo is a renaissance woman of unbounded energy. She makes complex legal and business topics accessible and has a knack for focusing on the essence of what really matters.

I hope you enjoy her story. Maybe you will start by being just a bit curious and somewhere along the way become seduced into loving new rules too. Rules in service of more purpose, healthier relationships, and ultimately more freedom!

Onward!

Thomas Thomison

Co-founder HolacracyOne, LLC

Founding Member, encode.org, LLC

Houston, Texas USA

2020

Introduction

Around the globe humanity deals with the subject of the future of work. The increasingly complex, ambiguous, uncertain, and volatile environment of our time calls for new courageous answers to how we work, earn, collaborate - and live our lives as a whole. While the prevalent modern company form has brought innovation, accountability and meritocracy to us, “corporate greed, political short-termism, overleverage, overconsumption, and the reckless exploitation of the planet’s resources and ecosystems” are among their poisonous byproducts.1 To counter these effects, humanity needs a new holistic approach adding purpose, connectedness, and a new understanding of power to the way organizations function and people energize their work. This reconnection of organizations and human beings with a greater whole is what is needed for the economic success of our enterprises and the future of our planet.

I think, in this crucial moment in time, mankind is called on to radically rethink the premises, structures and rules upon which today’s organizations are built. In this book, I present one possible way forward: The For-Purpose Enterprise.

The Origins of the For-Purpose Enterprise

With its inception in 2015, the company encode.org has developed and tested a company model that reinvents work – systematically and for purpose: The For-Purpose Enterprise.2 Encode.org’s purpose in 2015 was coined as: "Going beyond employment. Liberating purposeful work". Its current purpose statement evolved and is now: "To connect power, purpose, and work".

The For-Purpose Enterprise is purpose-driven, transparent, dynamic, and based on a new understanding of power called distributed authority.3 It reorganizes the three core areas of a company from scratch:

• work,

• ownership,

• and social interactions.

The For-Purpose Enterprise is based upon three important rulesets that make up the operating system:

• the Holacracy® Constitution4,

• the foundational legal documents, and

• an Agreement of Association.

Figure 1: The Three Rulesets of the For-Purpose Enterprise making up its operating system

Together these rules redesign the above-mentioned three areas of a company: work, ownership, and social interactions (chapters 3, 4 and 5). The For-Purpose Enterprise introduces an "ownerless" company, in which the working members and investors put into effect the company's purpose. They are the Purpose Agents of the enterprise and know that fixed personal notions about the “right” business model, the “correct” purpose, and the “best” strategies are more likely to jeopardize the company’s development toward its purpose than fostering it. Purpose Agents regard companies as living systems that have their own creative potential and cannot be owned by anyone. Purpose Agents give birth to this potential without defining or limiting it.

With respect to the organization of work, the For-Purpose Enterprise is based on the Holacracy® practice of self-organization. In this book, I describe the Holacracy practice only insofar as it is necessary for the understanding of the other chapters of the book and does not go into too much detail. However, I urge you to further familiarize yourself with the practice if you decide to implement the For-Purpose Enterprise in your organization.

This company model is not about incremental improvements to the current modern organizational forms. It is not about “hybrid company models” either in which the old world and the new world are mixed. The For-Purpose Enterprise model presented in this book deliberately distinguishes itself from these ideas. It is a self-contained system whose success depends on bidding farewell to old power structures mirrored in conventional management concepts and ideas, in legal contracts, and in common corporate social interactions. As you will soon learn, the positive effects of the for-purpose operating system will only unfold if applied in its entirety (chapter 2).

“We shape our rules and the rules shape us,” Thomas Thomison

Box 1: Quote Thomas Thomison

The current paradigm shift towards purposeful powershifted corporate governance recognizes value creation as a result of the pursuit of purpose. Daniel Pink, former editor-in-chief of WIRED and speechwriter of the former US Vice President Al Gore, describes this in his book Drive: The Surprising Truth About What Motivates Us: “The aims of these Motivation 3.0 companies are not to chase profit while trying to stay ethical and law-abiding. Their goal is to pursue purpose—and to use profit as the catalyst rather than the objective.”5

A For-Purpose Enterprise should not be confused with a non-profit company. Clear for-profit enterprises also align themselves with the objective "for purpose". Such a purposeful company pursues its defined (and constantly evolving) purpose (which is distinct from the individual purposes of its members) whilst generating revenues.

Reinventing Organizations and Beyond

Around the globe, modern entrepreneurs are dealing with the subject of "Reinventing Organizations". In his book by the same name, Frederic Laloux studied the different types of organizations over the last millennia describing their paradigm, using a specific metaphor for each and assigning them a color. He analyzes their breakthroughs and the shadows they brought humanity. Through his work, we can see a pattern of how organizational systems evolve with time – “a developmental trajectory of hope, if you will” (Thomas Thomison, Introduction).

Paradigm

Achievement

Pluralistic

Evolutionary

Metaphor

Machine

Family

Living System

Color

Orange

Green

Teal

Breakthroughs

Innovation, accountability and the principle of achievement (meritocracy)

Empowerment, Values-driven culture and inspirational purpose, multiple stakeholder perspective

Selfmanagement, wholeness, evolutionary purpose

Box 2: Characteristics of Orange, Green and Teal Organizations (F. Laloux)

Most of us have a conceptual idea of the paradigm that prevails today in global corporations, which Laloux describes as the “Achievement Paradigm”. He also referred to them as Orange organizations. The company functions according to the predominant metaphor of a machine, with people as the gears. Important aspects within these companies are competition, tangible achievements, and socially recognized success. People strive to be better than their colleagues, and the primary goal of the company is to grow and increase profits. The advantages are innovation, accountability and the principle of achievement (meritocracy).6 The shadows are profit maximization, greed, overconsumption and lack of purpose and identification with the company.

Frederic Laloux then described organizations that act like a family (metaphor) - including the advantages and the dysfunctions of a family. He calls these organizations the Pluralistic – Green organizations. These companies emphasize culture and the power of collaboration, teamwork, and co-creation. The underlying worldview within these companies strongly emphasizes the feelings of the people and that everyone deserves equal. In addition, connectedness and the feeling of belonging are of utmost importance. Its shadows are the dogma of consensus and the power plays behind the scenes (that no one mentions even though they exist).

Organizations which have left this stage behind, are what Laloux calls Evolutionary-Teal Organizations. They are currently evolving around the world and get a lot of traction. Their metaphor is that of a living system. Members of such companies regard the company as similar with nature, cells of the human body and the ecosystem, which is constantly changing, without anyone giving orders and making decisions from above and without ownership in its classic meaning.7 Laloux named three breakthroughs that characterize them: self-management, wholeness, and evolutionary purpose.8

The three breakthroughs of evolutionary organizations according to Frederic Laloux (Reinventing Organizations)

• Self-management: a system with new hierarchies and distributed authority that replaces traditional management.

• Wholeness: all members of the company are invited to bring all sides of themselves into the work and not only the socially accepted ones like strength and determination. In evolutionary companies, it is no longer just the known, externally defined success indicators that count (turnover, profit, effectiveness, or productivity). Instead people use their inner compass to determine what is right.

• Evolutionary purpose: companies are living systems that have their own purpose in the world. The task of all members of the company is to recognize and implement this company purpose. Their own individual purpose has to be in alignment with the company purpose (and not the other way around).

Box 3: The Three Breakthroughs of Evolutionary Organizations

A For-Purpose Enterprise is an evolutionary organization. Yet it goes beyond anything known in the global movement around the new world of work with respect to the concreteness of its rules securing the implementation of purpose, transparency, dynamic steering, and a new understanding of power (see chapter 1). At the same time, the For-Purpose Enterprise is one possible way to realize purpose-drive, powershift and self-organization in your company.9 There are others around to answer the question of “what is next and what is needed in the world of work?” However, the For-Purpose Enterprise is the purest answer I have come to know. "It sounds to me like you are going to promise a form of salvation in your book," Konrad Bechler, a friend and lawyer in Berlin, said to me when we talked about my ambition for writing the book. "I am skeptical about this. As a lawyer I often have to reverse new forms of cooperation, when clients afterwards conclude that they had a different point of view of the cooperation, that once seemed the perfect outcome." Here, he addressed a truly important issue, something that has been a difficult balancing act for me. In this book, I would like to present this new approach to you, in as neutral, structured, and informative a way as possible. At the same time, this new way of working has most definitely inspired me as a person and changed the way I work, earn, and live. This book is therefore both a management and personal book and my goal is to strike a good balance between the two.

The PowerShift Network

“The evolutionary wind is blowing in a new direction. All over the world the forces of complexity and continual disruption force societies, organizations, and individuals to rethink their approaches to power and decision making - away from “power over” towards “power with”. Decentralization, autonomy, and transparency are at the core of this PowerShift. Power increases by sharing - we’re more powerful together.” (https://encode.org/powershift, as of June 2020).

“Unite: with 100+ leaders around the world advancing the PowerShift. Share: your greatest challenges or tensions.

Give Generously: Exchange strategies and resources to help each other.” (https://powershiftnetwork.carii.pro/Login, as of June 2020).

Box 4: PowerShift Network

Through its PowerShift Network, encode.org invites you to join this movement.

Overall, I would like to emphasize the following: the implementation of the four principles of the new operating system and the introduction of the organizational model of the For-Purpose Enterprise are important milestones on the journey of changing the world of work and saving our planet. However, there is still much to learn, to change, and to improve. At encode.org we sometimes use the image of the first automobiles that had to be cranked until the engine started.

My Personal Journey

My journey to find purpose in my work began in the fall of 2016. On a sunny October day in Amsterdam after an intensive discussion with Thomas Thomison about my personal purpose as a lawyer I signed the Membership Grant Agreement and became a member of encode.org. With this signature I committed myself to working in the living laboratory of a For-Purpose Enterprise. As a member I contributed to the development of the rules of the For-Purpose Enterprise (legal, social, and financial) and to spreading its message to the world. In addition, I signed up for a personal adventure trip to discover my core self, my purpose, and a greater connectedness with myself, with others, and with nature.

On this trip, overcoming my ego-driven fears were key. Moreover, working in a power-shifted, purposeful, evolutionary organization entailed leaving my comfort zone of what I knew and how I usually behaved in the corporate domain (and in my personal life). The For-Purpose Enterprise and the community of encode.org’s members offered a safe space for me to grow and to stay “in tune” with my purpose. I started to become truly honest with myself, to explore my individual purpose, to let go of control, to invest in selfcare, to question my need for power over others and to assume my own power.10 It was hard inner work! I also implemented Mindfulness-Based Stress Reduction (MBSR) to keep paddling. On this journey I felt a sense of freedom and positive energy like I had never experienced before in my life. It is exactly this energy, that is the fuel for the success of a For-Purpose Enterprise.

In a nutshell, the For-Purpose Enterprise is a safe space full of creativity and entrepreneurial energy. It is an expression of an explicit openness for everything human, emotional, and spiritual, and it was designed to provide a warm home for all members and their personal growth – along with efficiency at work and profit in pursuit of purpose.

In this book, the flow is as follows and I hope you are inspired to join the journey!

Chapter 1

In this chapter, I describe the four principles of the For-Purpose Enterprise. They are the basis for the new way of working. They include:

1. Establish purpose as the supreme principle of order

2. Agile and transparent action

3. Differentiating and integrating work and people

4. Powershift and distributed authority.

Chapter 2

In this chapter, you will read about management and its familiar concepts which you must go beyond, so that the new way of working can emerge and flourish. The For-Purpose Enterprise with its powershifted operating system is a complete replacement for the conventional management hierarchy as well as for conventional management approaches including predict-and-control.

Chapters 3-5

Here, you will discover the specific rules of the For-Purpose Enterprise and learn how these are applied in your company – in terms of work and remuneration (chapter 3), people, culture, and social interactions (chapter 4), and legal and financial governance (chapter 5).

At the end of the book in the section titled “Become Who You Are,” I explain how much this new way of working has shaped me as a person and opened up the path to my individual purpose. I am convinced that our world of business needs people acting from their core selves, searching for connectedness and bringing courage and love into the corporate domain while making money.

Box 5: Chapter Overview

1 Laloux, Frederic, Reinventing Organizations. A Guide to Creating Organizations Inspired by the Next Stage in Human Consciousness, p. 24s.

2 Encode.org owns the IP rights of the PowerShift Brand, especially, not exclusively: For-Purpose Enterprise, PowerShift, PowerShift Network, PowerShift People, Purpose Agent, as well as the IP rights of the code base of the For-Purpose Enterprise.

3 Encode.org speaks about the five markers (purposeful, holarchic, autonomous, dynamic, transparent), Wittrock, Dennis, Five Markers of the New World of Work, https://medium.com/encode-org/five-markers-of-the-new-world-of-work-d54b625e8f58; as of August 2020 coined as: purpose, structure, awareness, agency, transparency).

4 Holacracy is a brand of HolacracyOne, LLC.

5 Pink, Daniel H., Drive. Was Sie wirklich motiviert, p. 163 (Pink, Drive. The surprising truth about what motivates us, p. 44).

6 Laloux, Frederic, Reinventing Organizations (German), p. 25 ss (Laloux, Reinventing Organizations)

7 Laloux, Frederic, Reinventing Organizations (German), p. 53 f. (Laloux, Reinventing Organizations)

8 Laloux, Frederic, Reinventing Organziations. A Guide to Creating Organizations Inspired by the Next Stage in Human Consciousness, p. 56.

9 Aaron Dignan also speaks of a new operating system in his book “Brave New Work”.

10 See Christiane Seuhs-Schoeller, Leadership and Power Shift. The Unconscious Dichotomy that is Holding Us Back, https: //medium.com/@christiane_95048/leadership-and-power-shift-b2d7ef9db29c.

Chapter 1: The Four Principles of the For-Purpose Enterprise

At the 2018 conference of the European Women’s Management Development International Network (EWMD), a board member asked me "what does new work actually mean to you?" when we discussed my upcoming keynote address. My response was: "for me, the term ‘new work’ is associated with companies that set themselves new, clear rules to pursue purpose and to shift power, and align all actions accordingly.”

In this chapter, I present to you the four principles that form the foundation of the For-Purpose Enterprise with its powershifted operating system. These enable all members of the company to work together differently.

In chapter 1, I demonstrate:

1. the implication of setting a purpose to be the supreme principle of order for all actions within the company,

2. the crucial role of agility and transparency,

3. the importance of differentiating between work and people,

4. how authority can be distributed so that power is no longer held personally (also referred to as the “powershift”).

Box 6: Overview of Chapter 1

Fully enabling the reign of purpose and self-organization inside a company can only be successful when all four principles are applied collectively. Those who follow these four principles have not just taken the path to purposeful self-organization, they also fundamentally address the redistribution of power and the cultivation of self-efficacy in our world of business.

Principle 1: Establish Purpose as the Supreme Principle of Order

Figure 2: Establishing Purpose as the Supreme Principle of Order

Essentials of this section:

The meaning of purpose: Purpose refers to the deepest creative potential that the company is best suited to sustainably express in the world.

For what reason should a company pursue purpose (retrospect): Many people go to work without knowing the purpose of their tasks and accountabilities. Some perform routine jobs lacking an understanding of the “big picture”. Surveys on employee engagement reveal low morale in many companies.

Why should a company pursue purpose (prospective): Company purpose provides orientation. Individual purpose ignites intrinsic motivation and empowers us from the inside.

Box 7: Principle 1: Establish Purpose as the Supreme Principle of Order

Rebel without a Cause is an extremely successful American movie from 1955 starring James Dean. The movie tells the story of how young people test each other’s courage and the fatal consequences that follow. These decisions were made out of pure disorientation and boredom reflective of the American youth at the time. James Dean, who himself had a fatal accident before the release of the movie, seemed to embody this generation perfectly. In Germany, the film title even used the words of apostle Luke, who quoted Jesus "Father, forgive them, for they do not know what they are doing," to highlight this lack of purpose. About two thousand years ago, at around the same time as that line was written, the Roman philosopher Seneca summed up mankind’s question of purpose: "He who does not know the port in which he wants to sail, there is no wind favorable for him”. As such, we can assume that us humans have always had a difficult time deciding on our purpose and truly following it.

Daring to Be Purposeful

Millions of people go to work every day without knowing why, apart from needing to make a living. Many perform routine tasks of which most lack an understanding of the big picture of it all, and surveys on employee engagement reveal low morale in many companies.1 The industrialization of the 19th century and the battle for the highest production efficiency, decomposing manufacturing processes into monotonous and repetitive tasks, have played a big part in the loss of sense of purpose for a large part of the working population.

I expect that the essential characteristics that make up today’s work will fade more and more in the future, including the eight-hour workday, authoritarian structures, physical work, the daily commute to and from the office, the usual “higher-faster-further” mentality, and with that, hopefully also the accompanying burn-out and the bore-out. The working world is changing, as the digital natives of generations Y and Z articulate their desire for new forms of work and hierarchies. They do not aspire to be tomorrow’s bosses, but actually have an aspiration for higher engagement.

In addition, many professionals do not associate the question of following their personal purpose with organizations or companies but leave them to find purpose. Or they secure their autonomy and freedom through not entering an employment relationship with an organization at all. Since the turn of the millennium, an average of one million Germans per year have become self-employed. More and more so-called ‘smart’ individual entrepreneurs are developing their business ideas independently (this is also referred to as the “Solopreneur” approach2).

What Does Purpose Mean?

If we want company purpose to be the new baseline for all actions, we have to define it. A seemingly inconspicuous linguistic subtlety, it is important to grasp the term “purpose” in its entirety as Torsten Scheller accurately describes in his German book “Moving Toward an Agile Organization” („Auf dem Weg zur agilen Organisation“):

• The question “for what reason does the company exist?” is retrospective and provides a causal explanation. It does not provide an answer to the company’s purpose.

• The question “Why does the company exist?” is prospective and is the key to defining company purpose. The “why” generates answers to further questions: “what does the company stand for?”, “what impact does the company have in the world?”, “what task should the company fulfil in the world?” Now we are at the heart of purpose.

Box 8: For What Reason and Why?

When companies cope with the question of purpose, they actually create a point of reference and identification for their employees. This is the reason (retrospective) why a company should concern itself with purpose. Moreover, if an organization actually manages to pursue purpose and devote itself to it, a space for potential unfolds. As a result, the organization is successful and purpose-driven at the same time. For the people involved they will feel powerful and empowered, which strengthens both the company and the individuals. This is why companies should invest in pursuing purpose (prospective).

The Holacracy® Constitution defines the evolutionary purpose of an organization in Article 5.2.3. as follows:

“The purpose of the organization is the deepest creative potential that a company can sustainably express in the world, given all of the constraints acting upon it and everything available to it. This includes an organization’s history, current capacities, available resources, partners, character, culture, business structure, brand, market awareness, and all other relevant resources or factors.”

Box 9: Definition of Company Purpose

In his book, Scheller emphasizes that purpose is generally “only conceivable in relation to other human beings” (with this he refers explicitly to the company’s clients)3. Purpose is not an end in itself. Furthermore, purpose is the prerequisite for self-organization. Systems, such as organizations, revolve around purpose. Without it, the self-organization will become inefficient.

The For-Purpose Enterprise does not dictate any direction as to what the purpose should look like. In applying the four principles of the For-Purpose Enterprise, any company has full freedom to develop and define its purpose. The purpose does not have to be creative or beautiful. The reliable cleaning of the streets in Florence can be just as much a purpose as a group of scientists working on collecting plastics from our ocean. The most important thing is that purpose is actually lived and not just described on the company’s website. While we generally consider “purpose” as something positive, theoretically, the purpose of a For-Purpose Enterprise could also be a morally “bad” one, such as equipping young people with weapons or carrying out assaults. However, I assume it to be very unlikely that people who pursue such a “purpose,” would at the same time become enthusiastic about progressive forms of business like the For-Purpose Enterprise.

If you can describe the purpose of the company with a core message of one or two sentences, this is what is known as a purpose statement. For example:

Examples of purpose statements:

• “We train leaders who make a difference in the world” (Harvard Business School)

• “Soulbottles makes sustainable behavior easy!” (Soulbottles)

• “To improve lives with better water” (mitte®).

• “Connect power, purpose, and work” (encode.org)

• “Rewriting the Future of the Organization” (dwarfs and Giants)

• “Unlock power for purpose” (energized.org)

• “For a healthy, clean and livable earth” (Odin Supermarkets)

• “Creating a paradigm shift from traditional oversupply to a more sustainable on-demand model in the world of apparel” (ZIELwear)

Box 10: Examples of Purpose Statements

As you can imagine, this book advocates doing things differently, working differently, and allowing companies to align themselves with their purpose every day. I would encourage you to take time to explore what your company purpose is, or could be, and to think outside of the box when doing so.

Differentiating Between Individual and Company Purpose

The company’s purpose is not synonymous with the purpose of its individuals (or their sum). It is something of its own. The company is a living system with its own purpose, just like human beings are individuals as well. The evolutionary company encourages you to explore and develop your individual purpose, the only limitation is that individual purpose cannot push the purpose of the company into a specific direction. The concept of self-organization requires the acknowledgment of the autonomy of the company as a whole. You as a member of the company can only review whether your personal purpose is in alignment with the purpose of the company. If one day you discover that your personal purpose is no longer beneficial to the company, you may ultimately decide to pursue a different job. However, this does not have to be as tough as it may sound. More and more people nowadays work on several projects or for several companies in parallel – and reserve additional time for their private lives. In chapter 4 you will learn more about individual purpose and how you can explore and develop it for yourself.

Exploring a Company’s Purpose