1. Micah Solomon, “5 Wow Customer Service Stories from 5-Star Hotels: Examples Any Business Can Learn From,” Forbes, July 29, 2017.
2. Joan Magretta, “Growth Through Global Sustainability: An Interview with Monsanto’s CEO, Robert B. Shapiro,” Harvard Business Review, January/February 1997.
3. P. A. David, “Path Dependence, a Foundational Concept for Historical Social Science,” Cliometrica 1, no. 2 (2007): 91–114.
4. This account is adapted from R. E. Quinn and G. T. Quinn, Letters to Garrett: Stories of Change, Power and Possibility (San Francisco: Jossey Bass, 2002), chapter 2.
5. B. Fredrickson, Positivity (New York: Crown Publishers, 2009), chapter 9.
6. R. W. Quinn and R. E. Quinn, Lift: The Fundamental State of Leadership (Oakland, CA: Berrett-Koehler, 2015), chapters 3 and 4.
7. V. J. Strecher, Life on Purpose: How Living for What Matters Most Changes Everything (New York: Harper One, 2016), chapter 1.
8. On adding years, see P. L. Hill and N. A. Turiano, “Purpose in Life as a Predictor of Mortality Across Adulthood,” Psychological Science 25, no 7 (2014): 1482–86; on heart attack and stroke, see E. S. Kim et al., “Purpose in Life and Reduced Risk of Myocardial Infarction Among Older US Adults with Coronary Heart Disease: A Two-Year Follow-Up,” Journal of Behavioral Medicine, February 2012; on Alzheimer’s disease, see P. A. Boyle et al., “Effect of a Purpose in Life on Risk of Incident Alzheimer Disease and Mild Cognitive Impairment in Community Dwelling Older Persons,” Archives of General Psychiatry 67, no. 3 (2010): 304–10; on sexual enjoyment, see B. A. Prairie et al., “A Higher Sense of Purpose in Life Is Associated with Sexual Enjoyment in Midlife Women,” Menopause 18, no. 8 (2011): 839–44; on sleep, see E. S. Kim, S. D. Hershner, and V. J. Strecher, “Purpose in Life and Incidence of Sleep Disturbances,” Journal of Behavior Medicine 38, no. 3 (2015): 590–97; on depression, see A. M. Wood and S. Joseph, “The Absence of Positive Psychological (Eudemonic) Well-Being as a Risk Factor for Depression: A Ten-Year Cohort Study,” Journal of Affective Disorders 122 (2010): 213–17; on drugs and alcohol, see R. A. Martin et al., “Purpose in Life Predicts Treatment Outcomes Among Adult Cocaine Abusers in Treatment,” Journal of Substance Abuse Treatment 40, no 2 (2011): 183–188; on killer cells, see B. L. Fredrickson et al., “A Functional Genomic Perspective on Human Well-Being,” Proceeding of the National Academy of Science 110 (2013): 13684–89; on cholesterol, see C. D. Ryff, B. Singer, and G. D. Love, “Positive Health: Connection Well-Being with Biology,” Philosophical Transactions of the Royal Society of London: Biological Sciences 359 (2004): 1383–94; on performance, see A. M. Grant and J. M. Berg, “Prosocial Motivation at Work: When, Why, and How Making a Difference Makes a Difference,” in The Oxford Handbook of Positive Organizational Scholarship, eds. K. S. Cameron and G. M. Spreitzer (New York: Oxford University Press, 2012), 28–44.
9. See Manju Puri and David Robinson, “Optimism and Economic Choice,” Journal of Financial Economics, 2007.
10. The Human Era @ Work: Findings from the Energy Project and Harvard Business Review, 2014, https://uli.org/wp-content/uploads/ULI-Documents/The-Human-Era-at-Work.pdf.
11. Irrigation Association, “Shark Tank Success Story to Appear at 2017 Irrigation Show and Education Conference,” press release, September 11, 2017, https://www.irrigation.org/IA/News/Press-Releases-Folder/SharkTanksuccessstorytoappearat2017IrrigationShowEducationConference.aspx.
12. This account is adapted from R. E. Quinn, The Positive Organization: Breaking Free from Conventional Cultures, Constraints, and Beliefs (Oakland, CA: Berrett-Koehler, 2015), chapter 2.
13. A. L. Molinsky, A. M. Grant, and J. D. Margolis, “The Bedside Manner of Homo Economicus: How and Why Priming an Economic Schema Reduces Compassion,” Organizational Behavior and Human Decision Processes 119, no. 1: 27–37.
14. Some economists have recognized the weaknesses of high-powered incentives in “multitasking environments” to explain why some organizations choose not to use high-powered incentives that focus on easily identified economic outcomes. See, for example, Bengt Holmstrom and Paul Milgrom, “Multitask Principal–Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design,” Journal of Law, Economics, & Organization in special issue: Papers from the Conference on the New Science of Organization 7 (1991): 24–52.
15. Indeed, recent research in economics has focused on economic theories of corporate culture and trust. See, for example, Song Fenghua and Anjan Thakor, “Bank Culture,” Journal of Financial Intermediation (forthcoming, 2019). For an economic theory of trust, see Richard Thakor and Robert Merton, “Trust in Lending,” MIT Sloan Working Paper, March 2019.
16. See James Mirrlees, “The Optimal Structure of Authority and Incentives Within the Organization,” Bell Journal of Economics 7, no. 1 (February 1976): 105–31; and Bengt Holmstrom, “Moral Hazard and Observability,” Bell Journal of Economics 10, no. 1: 74–91.
17. See Candice Prendergrast, “The Tenuous Tradeoff Between Risk and Incentives,” Journal of Political Economy 110, no. 5 (October 2002): 1071–1102.
18. See National Academy of Sciences, Health and Medicine Division, “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America,” news release, September 6, 2012.
19. See Eva A. Kerr and John Z. Avanian, “How to Stop the Overconsumption of Health Care,” Harvard Business Review, October 1, 2014.
20. See Edward Lazear, “Performance Pay and Productivity” (NBER Working Paper No. 5672, National Bureau of Economic Research, Cambridge, MA). About half of this productivity increase came from a “selection effect,” wherein the most able workers were attracted to piece rates and the less able workers left.
21. H. Paarsch and B. Paarsch, “Fixed Wages, Piece Rates, and Incentive Effects” (mimeograph, University of Laval, Quebec, 1996).
22. See S. Fernie and D. Metcalf, “It’s Not What You Pay, It’s the Way You Pay It and That’s What Gets Results: Jockeys’ Pay for Performance” (mimeograph, London School of Economics, 1996). For a review of this literature, see Canice Prendergast, “What Happens Within Firms? A Survey of Empirical Evidence on Compensation Policies,” in Labor Statistics Measurement Issues, eds. John Haltiwanger, Marilyn Manser, and Robert Topel (Chicago: University of Chicago Press, 1998).
23. See George Baker, Michael Jensen, and Kevin Murphy, “Compensation and Incentives: Practice Versus Theory,” Journal of Finance 43, no. 3 (July 1988): 593–616.
24. See Anjan V. Thakor, “Corporate Culture in Banking,” Federal Reserve Bank of New York Policy Review, August 2016, 1–16 .
25. See Oege Dijk and Martin Holmen, “Charity, Incentives and Performance” (working paper, University of Gothenburg, November 2012).
26. On society, integrity, honesty, social identity, and reputation, see George Akerlof and Rachel Kranton, “Identity Economics: How Our Identities Shape Our Work, Wages and Well Being,” Public Choice 145 no. 1/2 (October 2010): 325–28; on corporate social responsibility, see Roland Benabou and Jean Tirole, “Individual and Corporate Social Responsibility,” Economica 77, no. 305 (January 2010): 1–19; on moral behavior, see Roland Benabou and Jean Tirole, “Identity, Morals, and Taboos: Beliefs as Assets,” The Quarterly Journal of Economics 126, no. 2 (May 2011): 805–55; on intrinsic motivation, see Roland Benabou and Jean Tirole, “Intrinsic and Extrinsic Motivation,” The Review of Economic Studies 70, no. 3 (July 2003): 489–520.
27. See John Sculley, “John Sculley on Steve Jobs,” Bloomberg Businessweek, October 10, 2011.
28. In other words, we are not studying charitable foundations like the Bill and Melinda Gates Foundation.
29. This quotation was part of Walt Disney’s pitch to Wall Street while seeking funding to build Disneyland.
30. Richard J. Leider, The Power of Purpose (San Francisco: Berrett-Koehler, 1997).
31. See Kenneth E. Boulding, “Economics as a Moral Science,” American Economic Review 59, no. 1, 1969: 1–12.
32. See A. M. Grant and J. M. Berg, “Prosocial Motivation at Work: When, Why, and How Making a Difference Makes a Difference,” in The Oxford Handbook of Positive Organizational Scholarship, eds. K. S. Cameron and G. M. Spreitzer (New York: Oxford University Press, 2012), 28–44.
33. Walt Disney, quoted in Bob Thomas, Walt Disney: An American Original (New York: Simon and Schuster, 1976), 246–47.
34. See Benjamin E. Hermalin, “Toward an Economic Theory of Leadership: Leading by Example,” American Economic Review 88, no. 5 (December 1998): 1088–1120. This paper proposes that effective leadership involves a personal sacrifice for the common good.
35. K. S. Cameron, Practicing Positive Leadership (Oakland, CA: Berrett-Koehler, 2013), 11–13.
36. Cameron, Practicing Positive Leadership, 11–13.
37. Conor Shine, “Southwest’s Heavy Heart: How the LUV Airline Is Responding to the Worst Accident in Its History,” Dallas News, April 22, 2018.
38. Oege Dijk and Martin Holmen, “Charity, Incentives and Performance” (working paper, University of Gothenburg, November 2012). The authors refer to the donation of earnings to the Swedish Red Cross in their experiment not as pursuing higher purpose but rather as “charity.” However, the decision of participants to give to the Red Cross from earnings generates effects on agents (employees) that are similar to those of our economic theory of higher purpose.
39. Claudine Gartenberg, Andrea Prat, and George Serafeim, “Corporate Purpose and Financial Performance,” Organization Science 30 (1), January–February 2019, 1–18.
40. H. Dai and D. Zhang, “Prosocial Goal Pursuit Outweighs Herding in Crowdfunding: Evidence from Kickstarter.com,” Journal of Marketing Research (forthcoming), https://papers.ssrn.com/s013/papers.cfm?abstract_id=2954217.
41. Rui Abuquerque, Yjro Koskinen, and Chendi Zhang, “Corporate Social Responsibility and Firm Risk: Theory and Empirical Evidence,” Management Science (forthcoming).
42. See the discussion of this issue in Robert Kaplan, George Serafeim, and Eduardo Tugendhat, “Inclusive Growth: Profitable Strategies for Tackling Poverty and Inequality,” Harvard Business Review, January–February 2018, 128–33.
43. See Frank Newport, “Democrats More Positive About Socialism than Capitalism,” Gallup, August 13, 2018.
44. Indeed, the more people believe that companies are adopting higher purpose to bow to pressures from regulators or politicians, the less authentic those adoptions will appear and the less effective they will be in changing behavior.
45. Kaplan, Serafeim, and Tugendhat, “Inclusive Growth.”
46. Economists refer to these as “private benefit projects.” See, for example, Bengt Holmstrom and Jean Tirole, “Financial Intermediation, Loanable Funds, and the Real Sector,” Quarterly Journal of Economics 112–13 (August 1997), 663–91.
47. V. J. Strecher, Life on Purpose: How Living for What Matters Most Changes Everything (New York: Harper One, 2016).
48. This example is taken from R. E. Quinn and A. J. Thakor, “Creating a Purpose-Driven Organization: How to Get Employees to Bring Their Smarts and Their Energy to Work,” Harvard Business Review, July–August, 2018: 78–85.
49. E. Easwaran, Timeless Wisdom: Passages for Meditation from the World’s Saints and Sages (Tomales, CA: Blue Mountain Center for Meditation, 2008), 20.
50. N. Craig, Leading from Purpose: Clarity and Confidence to Act When It Matters Most (New York: Hachette Books, 2018).
51. R. W. Quinn and R. E. Quinn, Lift: The Fundamental State of Leadership (Oakland, CA: Berrett-Koehler, 2015), chapters 3 and 4.
52. Craig, Leading from Purpose, chapter 15.
53. Recall our discussion of pet projects in chapter 6. The manipulator does not maximize the value of the firm and sees the organization as a collection of manipulators rather than authentic leaders. Given this assumption, the manipulator behaves in a way that elicits behavior from others that validates his assumption about them!
54. A. M. Grant and J. M. Berg, “Prosocial Motivation at Work: When, Why, and How Making a Difference Makes a Difference,” in The Oxford Handbook of Positive Organizational Scholarship, eds. K. S. Cameron and G. M. Spreitzer (New York: Oxford University Press, 2012), 28–44.
55. C. Dweck, Mindset: The New Psychology of Success (New York: Ballantine, 2016).
56. J. K. Harter and N. Blacksmith, “Employee Engagement and the Psychology of Joining, Staying In, and Leaving Organizations,” in Oxford Handbook of Positive Psychology and Work (New York: Oxford University Press, 2010), 121–30.
57. Harter and Blacksmith, “Employee Engagement and the Psychology of Joining, Staying In, and Leaving Organizations.”
58. A. Weinzweig, A Lapsed Anarchist’s Approach to Building a Great Business (Ann Arbor, MI: Zingerman’s Press, 2010), 316–24.
59. A. J. Thakor and R. E. Quinn, “The Economics of Higher Purpose,” Harvard Business Review, July–August 2018.
60. N. Fernandez, “In the First Person—Ray Anderson, Chairman and CEO of Interface Inc.,” in Earth Care: An Anthology in Environmental Ethics, eds. D. Clowney and P. Mosto (New York: Bowman and Littlefield Publishers, 2009), 704.
61. A. J. Thakor and R. E. Quinn, “The Economics of Higher Purpose,” Harvard Business Review, July–August 2018.
62. K. S. Cameron, J. E. Dutton, and R. E. Quinn, Positive Organizational Scholarship: Foundations of a New Discipline (San Francisco: Berrett-Koehler Publishers, 2003).
63. R. W. Quinn and R. E. Quinn, Lift: How to Live in a Fundamental State of Leadership (Oakland, CA: Berrett-Koehler, 2015).
64. See Frank Newport, “Democrats More Favorable About Socialism Than Capitalism,” Gallup, August 13, 2018.