Are large corporates rotten beyond remedy?
Brexit. Trump. VUCA. Now that we have those buzz words out the way lets discuss what is happening in organisations all around the world.
In the mid to late 1900s organisations were told that to succeed they needed to have a strategy ( Porter, Mintzberg, Sunter, etc). (In 1996, Porter wrote an academic paper What is Strategy in Harvard Business Review which became a famous precipitator for significant work in this space) Organisations were then told a Strategy was not enough and that they also needed a vision and or mission. A strategy, vision, and mission were the keys to differentiate and to succeed. Most organisations dutifully followed these conventional wisdoms.
Now organisations are being told that they need to have a purpose. (eg Sinek)
What can we deduce from this? A few things: consulting firms are quick to capitalise on these trends and make literally millions of dollars from work associated with strategy, mission, vision and now purpose; that organisations are constantly looking for ways to both boost performance and engagement with all stakeholders.
And perhaps that we are still searching for the way to align all stakeholders( shareholders, executives, employees, analysts, customers, regulators, communities etc) in such a way as to add equal value for all. For most, this is still an elusive ambition.
Low engagement, underperformance, poor advocacy from customers, and most importantly too many corporate scandals have been uncovered over the past two decades, all plague corporates. I don’t want to detract from the good the corporates have and continue to do, but it seems to me at least that existing organisations are actually increasingly ill-equipped to deal with existential threats that technology and other disruptive changes represent.
In a highly connected 24/7/365 world every bodies’ expectations are both changing and increasing whilst dynamics that are borne out of medium and large scale organisations currently seem counter-intuitive to emerging demands and expectations.
With low levels of psychological safety increasingly normal, discretionary innovation remains undesirably low, contributing to poor outcomes for all or many stakeholders. I believe it is for this reason that conscious capitalism is still receiving growing attention and debate.
According to R. Michael Anderson (1 June 2015), there are four principles of Conscious Capitalism.
“1. Conscious leadership: Organizations mirror the actions and personality of the individual at the top. This is the kind of person people want to follow. The authentic, open person. Conscious Leaders are the ones who inspire loyalty and consistent high performance in their teams.
2. Stakeholder orientation: Conscious leaders know the importance of taking into account all of their stakeholders. You’re never going to become a premium brand by only focusing on the shareholders. The really important factors for long-term business success are the employees and customers, and often the vendors and community as well. Take care of them and they will take care of you.
3. Conscious culture: A values-based culture is one that is intentional about how people act and perform. When a culture is not defined and enforced, your people aren’t all moving in the same direction.
For example, Greg Koch, the CEO of Stone Brewing Co., talked about how he would rather leave a key position unfilled than bring in someone not 100 percent aligned with his firm’s values and mission. He explained that not having that position filled hurt, but it was better than the alternative. Stone Brewing Co. is now one of the top micro-brewing houses in the U.S. — it’s even expanding into Germany.
4. Higher purpose: Finally, the company should be in business to do more than just make money. Great leaders realize that in order to become successful over the long term, you must provide true value. That comes from passionate people getting inspired about their work. How inspiring is your company’s purpose? For example, would you want to work for a company whose mission it is to “deliver maximum value to the shareholders”?”
I think that’s a decent summary with some examples – at the same time representing a challenge to organisations.
I am not saying having a purpose won’t add value, just like we cannot imagine an organisation without a stated strategy. But Leadership and Culture have to align in a way to create an organisation that does more than just doing no harm.
Remember simply doing no harm doesn’t mean good is being done. The absence of evil does not equate to good and at best neutrality- but at a time when the world needs so much perhaps the luxury of neutrality is evil none the less
This article is exclusive to The Business Transformation Network.
