An Interview with Nikos Mourkogiannis

Originally published in Management First, January 2007 

Nikos Mourkogiannis is a leading consultant who advises  chairmen and CEOs on leadership. His first lesson in leadership was a tragic one that came at the age of six, when Communists came to his family’s farm in Greece and shot almost every woman in the village because they refused to denounce his father. He never forgot how these women sacrificed their lives for the freedom of his country and this shaped a lifelong fascination with leadership and a dedication to his country.

At age 12, he memorized the inspiring speech that Pericles gave for the Athenian dead in 490 B.C. He graduated as the valedictorian from Athens Law School with anger and sorrow because he was “invited” by two members of his graduating class to be questioned by the police during the Turkish invasion of Greece. That autumn, he enrolled in Harvard, where he worked with Professor Roger Fisher, author of the bestseller Getting to Yes, on developing Harvard’s first course on negotiation. At the same time he risked deportation and joined the campaign to get the US Congress to impose an arms embargo on Turkey.

In his late 30s, Nikos asked General Dynamics to send him to Harvard Business School for two years in order to make the world better by making companies better.  After graduation in 1992, he joined Monitor Company, a strategic consulting firm founded by Harvard Business School Professors Michael Porter and Mark Fuller. He moved to London and was elected to the Board of Directors of the firm, and, in 1998, he was promoted to Chairman and CEO of Europe, Africa, Middle East and Eurasia.

In 2004, he resigned from Monitor to begin the reading and thinking that led to the book Purpose. In 2005 he became a senior partner at Panthea (Greek for “many gods”), a global firm based in London that consults with companies on strategic leadership issues, working only with CEOs on large issues. A senior partner at Panthea Consulting, Nikos Mourkogiannis talks to Alistair Craven about his new book Purpose: The Starting Point of Great Companies.

Alistair Craven: Hello, and welcome to Management First. Your new book claims that “Purpose” is the starting point of great companies. Can you introduce us to your definition of Purpose?

Nikos Mourkogiannis: Purpose is a reason for doing something that appeals to a person’s sense of what is right and what is worthwhile. So it creates a sense of obligation.

Alistair: What is the difference between Purpose and established terms such as ‘values’ or ‘vision’?

Nikos:  Values are normally about the way people do something, not what they do. ‘Integrity’ for example is a value – but it is not a reason for doing something.  A vision is of some desirable future state of the world. If your organization is devoted to eliminating HIV, say, then achieving your vision – a world without HIV – will be your purpose.
However the visions of most commercial corporations are things like ‘we will become the biggest and best player in the xxx industry’ and I don’t think they appeal to many people’s sense of what is right or worthwhile.

In any case, you don’t need a vision to have a purpose. Let me use Sam Walton as an example. He had no vision for what Wal-Mart might become. In fact he was rather afraid that it would become too big. But he had a purpose: to give the customer a good deal, whatever that took.

Alistair: You describe JetBlue as an organization in which the employees “actually seem to enjoy their jobs.” What are some of the ways in which leaders can encourage “buy-in” to a company’s Purpose?

Nikos: The only way is to tap in to the employees’ own purpose. That means leaders should try and link what the company does to what matters to the employees. For example, wanting to help other people is a pretty common human desire – and one many people feel is right and worthwhile. So companies such as JetBlue – for which customer service is important – can tap into that. Other companies may need to find out more about what matters to employees. Promoting the purpose once it has been identified may be a matter of what managers say and how they behave, or it may involve special workshops.

Alistair: What is the nature of the relationship between Purpose and organizational change?

Nikos: Purpose is the best way of driving change. This is for three reasons. First, it helps overcome one of the main obstacles to change, namely the insecurity it brings, the disorientation and uncertainty which makes people cling on to the past. A clear, shared purpose is a kind of compass and as such provides psychological safety. You may not know what lies ahead, but you do know the direction you are going in, and you think going there is worth the effort.

Second, a lot of change is really about being responsive to the business environment. Managers with a strong sense of purpose tend to be more responsive – because what they do matters to them, they are more alert to what is going on, more alive to opportunity. Managers without a sense of purpose tend just to do what has always been expected of them.

Third, when major transformation is called for – when the whole organization is being recast – purpose can provide a guiding principle, ensuring that everyone pulls in the same direction at a time when there is likely to be great confusion.

Alistair: What can an organization do if it finds its Purpose is out of tune with the times?

Nikos: That is precisely when transformation may be needed. The first step is to establish a new purpose that is in tune with the times. This has to be shared by the people who are critical to the company’s success: i.e. tap into what they consider right and worthwhile. It also has to fit the company’s strategy: the same actions must advance purpose and strategy at the same time. Now, the people in the company constrain the purpose, but the assets and capabilities of the company constrain the strategy. So it follows that if the leadership team cannot make purpose and strategy fit – and they need to be honest about this – they may have to change some of the assets or change some of the people.

Alistair: You say that over the medium to long term, morale in a large company is more influenced by the strength of its Purpose than the strength of its leader. However, you also state that when a good leader departs, there is a good chance that because of an established dependency the organization may not know what to do next. Are these two statements perhaps at odds with each other?

Nikos: Where there is a strong purpose, it builds morale in a way that survives the departure of any individual leader. The morale is more robust, more enduring, and stronger than anything generated by one individual’s personality.  However where purpose is not so strong, morale may come to depend on the leader’s charisma.  The leader may then be effective in the short term, but in the long term the dependency is damaging, both because it tends to reduce initiative lower down the hierarchy and because the organization is ill equipped to deal with succession.

Alistair: Your book uses many case study examples. In his interview with Management First, leadership writer Dr. James B. Rieley argues that case studies may often show how things worked well in a particular organization, but the lessons probably will not work – or at least not work as well – in other organizations. How would you react to this?

Nikos: I agree with Dr. Rieley up to a point, and no doubt case studies are misused sometimes. The case studies in my book are illustrations, stories, designed to make the idea of purpose come alive. They are not an attempt to ‘prove’ that purpose delivers results, and certainly not potted guides on how to become as rich as Henry Ford or Warren Buffett – two of my examples!

Alistair: You say that businesses are “as much caught up in the war of ideas as politics, the arts and science.” Can you elaborate?

Nikos: In the 1920s General Motors successfully won market share from Ford, which had been dominant with more than 50 per cent of the market. You can think of this battle for share as between competing products – GM’s new Chevrolet for example versus Ford’s old Model T.  But this does not explain why GM had a winning set of products. Perhaps more fundamentally it was a battle between people – Sloan and his team versus Ford and his team. But why did Sloan have the better team – why was he able to recruit many of Ford’s best people? I think the battle is best seen as part of a war of ideas – Sloan’s belief in listening and adapting to the customer, and developing a collegiate management style versus Ford’s autocratic belief in giving the customer what he knew they wanted. Ford’s idea had been fantastically successful before the First World War. Now the world had changed and Sloan was more successful. He was more in tune with the times, which means he could attract good people and attract good customers. What is more these were not just rival strategies, they were rival purposes, based on different moral ideas.

A lot of change is really about being responsive to the business environment. Managers with a strong sense of purpose tend to be more responsive – because what they do matters to them, they are more alert to what is going on, more alive to opportunity.

You can look at many modern business rivalries in these terms. For example the competition between Apple and Microsoft is not simply between two sets of products or between Steve Jobs and Bill Gates. I would argue it is between two sets of ideas about what is worthwhile – two purposes – which attract different kinds of people, who go on to create different kinds of product.

Alistair: What is your take on the various corporate scandals that have damaged the reputation of big business over the last few years?

Nikos: There have always been crooks, but recently the idea got about that it was a good thing to be a crook. I think this was because there was a kind of vacuum. In my view, when people say ‘greed is good’ it is primarily because they can’t think of anything else to propose as good. It is moral emptiness. And this emptiness arose because traditional ideas about business’s place in society – stable institutions, almost estates of the realm – were in decline, and nothing had replaced them. Purpose, as I have described it, helps to fill that vacuum.

Alistair: Finally, what interests you outside of your professional life, and why?

Nikos: My main interest these days is to explore new of life with the help of my 15 year old daughter. She has inspired in me a new interest in horsemanship, theatre and music that I never had before. It gives me a great pleasure that we help each other grow?