By now you have probably heard the news about WeWork. Six weeks ago, the famous real estate company was valued at $47 billion. But after a failed IPO and the resignation of CEO Adam Neumann, outsiders are now wondering whether the business will be able to avoid bankruptcy.
What the heck happened here?
From the outside looking in, it’s not hard to see how WeWork crashed so spectacularly. From reports of Neumann’s drug use to self-dealing and erratic acquisitions of everything from department stores to wave pool manufacturers, it’s not hard to see the errors in hindsight.
There’s a lot of lessons to be learned here, but one stood out to me above all else: purpose needs to be at the core of everything you do.
WeWork Lost Sight of Their Purpose
We can’t know why Neumann founded the company in the first place, but if I had to guess, I believe he had a purpose in mind. I’m not talking about money either – if you know me, you know that when I talk about purpose, I’m referring to a greater mission to make a positive impact in the world.
Purpose isn’t CSR or philanthropy either – it’s how the core of our business makes the world a better place. And I strongly believe it’s crucial to business success!
Most entrepreneurs start their company with a vision and a drive to help others, which is why I believe that Neumann started the business with the best of intentions. Unfortunately, it’s obvious that he strayed from the original mission of building a community and “redefining success measured by personal fulfillment, not just the bottom line” (as WeWork describes their mission on the website).
According to recent reports, he told people his goal was to become the world’s first trillionaire and was described by insiders as a “complete phony.” He bought a private jet, owned multiple mansions across the country, and held private parties – never mind that the company is now expected to announce layoffs to the tune of one-third of their workforce.
If upper management had kept their focus on their mission, they might be in a better situation today. Here’s why.
Purpose Provides Direction
Being a leader means making countless decisions on a daily basis. This is most pronounced at the C-suite, but it’s true for leaders at every level of the organization. And let’s face it: making all these decisions are hard. Whether we’re the type to go with our gut or carefully consider our options, no leader can make the right decisions all the time.
Purpose provides us with a northstar. Regardless of the situation, we can look to our purpose to guide our decisions. We ask ourselves, “does this align with our purpose, or pull us away from it?” Our purpose keeps us centered on what’s best for our clients and our customers. Staying focused on this goal will always pay off in the long run.
Purpose Keeps You from Making Stupid Decisions
It’s easy to criticize Adam Neumann from the sidelines. But to tell you the truth, there have been times in the past where I also let the perks of leadership get the best of me. I’ve reserved the front parking spot for myself and torn down a wall to enlarge my corner office. Early on in my career, my focus shifted from the purpose of the organization to the perks of leadership.
As you can imagine, the business suffered when our focus shifted here. Of course, we need money to run a business. Without cash flow, we can’t fulfill our purpose in the first place. However, our focus should always be on the positive impact of our business on our customers and community. When we get distracted by perks and profits, we start making choices that are not in our customer’s best interest – which always bites us in the you-know-what!
WeWork – How Not to Run a Company
It’s unfortunate that the company wasted a golden opportunity, but it provides us with a perfect example of what happens when a business’ only purpose is financial gain. Business leaders around the world should take heed and recognize that the most successful organizations are driven by a greater purpose.