An adapted version of this newsletter first appeared on Inc.com
Businesses leaders must have clear sense of purpose to guide them through the financial, political, societal and environmental challenges facing them today. So says Dilhan Pillay, the CEO and Executive Director of Temasek Holdings in Singapore, which is owned by the government of Singapore.
With a portfolio of $400 billion, Temasek invests in an array of industries – including real estate, financial services, airlines, telecom, media and agriculture. Alongside those investments, Temasek’s purpose is to do well, do right and do good so that every generation prospers. In a charter set up in 2012, Temasek enumerated three key roles for itself: being an investor, being a forward-looking institution, and being a steward.
How is Temasek able to attract investors while making clear that it cares about more than just shareholder returns? By proving that all stakeholders come out ahead when an organization uses purpose as a focusing lens. As Pillay told me on my podcast, “We believe that purpose helps you withstand the shorter-term shocks that you may face as you go along that journey towards your longer-term goals.”
Here are some highlights from my conversation with Pillay:
He focuses on sustainable returns – in more ways than one. In line with its stated purpose, Temasek has made environmental sustainability a core part of its long-term goals. It has signed on with other companies, groups and governments to achieve net zero greenhouse gases by the year 2050. This has involved making some major capital expenditures in the here and now. “This will be a multi-year journey and perhaps even, I would say, a multi-decade journey,”
As an example, Temasek is a majority owner of Singapore Airlines. As such, it can’t just consider how well the airline has done financially in the last three months: “You have to think about your ownership of this entity for the next seven or eight years and beyond.” Factors like carbon costs must be considered now so that the airlines can retain its value across the decades.
Still, all chief executives face demands to deliver short-term results, and they are inevitably called to account when they don’t. I asked Pillay how he deals with this pressure. It’s not easy, he acknowledged. But communicating the rationale behind the company’s purpose to all stakeholders – including investors – goes a long way toward winning respect and support, he said.
He doesn’t demand that Temasek’s investors follow the same path toward purpose. Temasek has a very large portfolio of companies, and I wondered if Pillay expects all of them to follow the same general purpose that his company does. He responded: “Each company has its own journey; far be it for us to advocate or dictate something to them.” It would not be appropriate for him to dictate another company’s purpose, because “if you are going to have a purpose, it has to be authentic.”
He eschews a command-and control mindset. Business leaders of today must shed an “imperial” mindset that has been popular in the past and share the purpose journey with their employees, he said. Purpose helps instill loyalty at a time when it is easier than ever for employees to switch serves, and it also serves as a forcing mechanism to help them work toward long-term goals, he said.
“Whatever your strategies are, whatever you think you’re going to be doing in the next 10 years, if you don’t have that solidified by the purpose of the company, you’re not going to be able to pull your employees with you on that journey, he said.
To Pillay, being a leader means acknowledging his weaknesses and trusting that his capable colleagues will make up for them. “No one individual has a suite of skills to be able to deliver in its entirety what organization needs,” he said
With the humility that characterized our interview, he added: “There’s no way I could have achieved what I achieved without the contributions of many others, the unsung heroes perhaps who did not have the role that I have and therefore did not get the credit I got.”
