Leadership Unlocked

Originally published as a shorter version on Nov. 30, 2021 on Inc.com.

To receive my newsletter right to your inbox, sign up here.

The Smell of a Place

One of my mentors, the late professor Sumantra Ghoshal, observed that you could tell a lot about a company by the “smell” of the place. He recounted how he would return to his native city of Calcutta, India each year during the height of summer to spend time with his family. The air in the city was languid—temperatures running above 100 degrees Fahrenheit, humidity over 90 percent. All he wanted to do was stay inside and rest.

Ghoshal felt very differently when experiencing springtime in Fontainebleau, France, where he lived for many years. The crisp air and the smell of the forest created an unmistakable, churning energy inside him—a soulfulness—that made him want to jump, run, and embrace life. Some companies, he said, were like summertime in Calcutta—the minute you stepped in the door, you knew they were bereft of spirit. Others were like Fontainebleau in springtime, sizzling with an energy that was infectious.

Why are some companies more soulful and energetic than others? Culture might seem a plausible answer. Some firms have vibrant, healthy cultures that nourish and inspire employees. These companies put in place various components—including leadership behaviors, incentives, policies, work processes, and so on— to generate and sustain a great culture and in turn allow a company to crackle with a special energy. But cultures are specific patterns or fields of meaning that take root inside organizations and that help shape behavior. Certainly something more fundamental is giving rise to the meanings that exist at work, giving high performing organizations a sizzling energy or “smell.”

My research into startups sheds light on this “something.” As I observed in a Harvard Business Review article, several elements to an organization that transcend culture also give it an ineffable essence—a soul or what Sumantra referred to as the smell of the place. A deep connection to serving their customers is one of them, and a second is a work environment in which employees feel that they have a voice and autonomy. But a foundational element that seems to define these organizations is a deeply felt purpose or reason for being that animates everyone on the job and generates a field of meaning inside the organization.

I came away so inspired by the startups I studied that I decided to launch a much more comprehensive investigation into other such organizations that embraced this sense of purpose.

As I found, leaders and employees galvanized by a core purpose did indeed evince a Fontainebleau-in-springtime energy. Their engagement with purpose turned the organization into a carrier of meaning and commitment, ennobling everyone connected with the enterprise, and opening up new pathways for realizing their highest ideals. Such ennoblement allowed these companies to unlock vast stores of tangible value for all stakeholders, including investors. It inspired and guided them to undertake that most challenging of leadership tasks today: walking the razor’s edge between commercial and social imperatives.

My forthcoming book distills essential lessons I gleaned about how to go deep on purpose. In the months ahead, I look forward to sharing some of these lessons with you, helping you to transform your leadership, embed purpose into your organization, and unlock enhanced performance. For now, I invite you to reflect on the environment inside your organization:

• When an outsider comes into your organization, do they smell Calcutta in the summer or Fontainebleu in the spring?

• Do you have a high performance organization that emphasizes a deep customer connection between employees and customers and that also gives employees a strong sense of voice and choice?

• Do you have a strong sense of purpose that has truly shaped your beliefs and actions and elicited a kind of soulful energy among your people?

The intangibles of a work environment really do matter, ultimately giving rise to tangible economic value and high performance. If we want to not merely revitalize our companies but also embolden capitalism once again as a force for progress, we must focus our attention on the energy or feeling inside our organizations. If your firm doesn’t quite smell like Fontainebleu in the Springtime, now is the time to start changing that.