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Former Member

In my meetings with business leaders from around the world, I’m always fascinated to see different leadership styles. Traditional militaristic, hierarchical structures with direct reporting relationships are still very common. Yet, as the world changes, workplaces are evolving too.

Think of the different types of people you must lead. It’s no secret that Millennials – who tend to be motivated less by titles or salaries than older generations – prefer to work in collaborative environments, with good teams on exciting projects. Progress is defined less by “corporate ladder climbing” and more by mastering increasingly challenging business topics. Virtual workers enjoy producing without direct supervision, collaborating with people they may never see. And accommodating the unique perspectives of people of different genders, ages, sexual orientations, and abilities can challenge enterprises.

So what’s the best way to lead effectively in a world that’s constantly changing? It’s not enough to rely on old methods to find and coach talent, create clear direction, set goals and boundaries, and manage using results-oriented metrics. That’s why I encourage leaders to embrace new working styles and management methods that allow workers to define themselves by purpose.

Addressing new workplace realities

To meet this goal, many companies are adapting innovative work models. Zappos, an online shoe retailer known for delivering great service, recently launched a new self-governing management method. This approach eliminates job titles and traditional hierarchies, replacing managers and supervisors with a network of self-managed teams.

Zappos CEO Tony Hsieh believes that the new management style is best for both employees and the bottom line. “Research has shown that companies that have a higher purpose and have strong cultures outperform their peer group financially in the long run,” he says.

Leading companies such as Google, Apple, and Cisco are also deploying new work models that replace traditional leaders with self-directed work teams. In these groups, members work together to achieve an agreed-upon purpose, such as problem solving, increasing sales, or improving products.

Defining ourselves by purpose

At SAP, we are also changing our work model to address these realities. In my group, the Industry Cloud organization, we implemented an integrated operating model that brings together development and sales with the sole purpose of serving our customers. The development lead and customer lead collaborate on decisions related to go-to-market strategy, solution investment, roadmap decisions, and new solution adoption – all to address the end-to-end needs of customers in an integrated, global, and holistic fashion. Combining field and development into a single operating model, without changing reporting lines, allows us the speed and flexibility necessary to communicate holistically and consistently across a variety of topics. We like to think of this as a “two-in-a-box…with the customer in the center” model.

This change has required a new mindset for many people. By shifting the focus from teams and reporting lines to creating the most successful outcome for customers, we’ve made it easier to see our shared dependencies. We no longer define ourselves by company size or title, but by what we do to help customers, what we learn from our efforts, and how well we meet our mission. We are less interested in what organization we report into and more interested in who we need to work with. In other words, our people are defining themselves by their purpose, not their organization. And you know what? Our customers are really noticing the difference!

Stepping up to change

We take the same purpose-driven approach to career development at SAP. Enabled by SAP SuccessFactors solutions, our continuous performance management model encourages management and peer-to-peer feedback, as well as recognition of employee contributions. We have realized significant improvement in employee productivity and engagement with this approach.

We also encourage development of individual purpose through programs such as the SAP Social Sabbatical program. This four-week assignment places employees in international, cross-functional teams, where they solve business challenges for education and social entrepreneurs in emerging markets. Participants, many of whom are Millennials, have the opportunity to strengthen their leadership competencies, gain cross-industry sector know-how, and enhance intercultural sensitivity.

Workplace and cultural change requires new leadership methods. Does your work model encourage employees to explore and develop their purpose? Are you leading with purpose? If not, what’s stopping you from becoming a purpose-driven leader?

Pat Bakey is President, Industry Cloud, at SAP. Connect with Pat on Twitter @pbakey