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umair-haque's picture

It's Time for Some New Habits--the Year of the Meaning Organization

This time of year we tend to subject ourselves to tough review. We zero in on our practices and tendencies and resolve to take up new, positive habits--and, more importantly, to break the bad. It can be a productive exercise if approached with a clear eye and dedicated follow-through. My question: why don't we subject our institutions to the same ritualistic rigor?

As I've argued in my new book, instead of creating enduring, authentic value for people, our institutions--corporations, banks, governments--consistently, systematically, one might say, habitually, extract wealth from them. The result is the game of musical chairs that is the crisis, writ large.

What, then, are the habits of this set of industrial age institutions? They're the stuff we live and breathe, practice and do: strategy, marketing, finance, and the rest of the drear, dismal, passionless stuff that makes most of us snooze through meetings, dread Monday mornings, and that embezzles joy, plenitude, and significance from our days. When you think about it, those habits were deliberately designed to reduce our emotional, creative, and ethical intelligence, our sense of bigger purpose and our shared, enduring ideals.

Argue with me if you like, but I'd suggest the economic historians of the 23rd century are going to look back on the economies, markets, and organizations of the 20th the way we look back on those of the 18th  (remember debtors' prisons, indentured servitude, and mercantile colonialism?)--with a mixture of fascination and horror. "How," I bet they'll ask themselves, "could they spend their time, energy, and resources--their very lives--in pursuit of the trivial and the inconsequential, the pedestrian and the pointless, the predatory and the predictable? Especially when confronted by a Great Stagnation, why didn't they rethink their self-destructive habits?"

The fact is, it's well past time to begin imagining an organization of a radically different kind--one that doesn't just "do" banal strategy, marketing, and finance--but takes a quantum leap way, way beyond them, into a novel galaxy of unexplored, untapped economic possibilities.

Here's what I think that organization might look like.

Its brain wouldn't be the office, department, or strategy team--but something I call the "wisdom group." The strategy group's job is to ensure that the organization is maximizing its payoffs, thus creating value for shareholders. The reason most organizations can't create thick, authentic, shared value is because...well, they're not really interested in it. You can't argue that you're taking it seriously when the only person thinking about it is shunted off to some "CSR" ghetto, and reports to the baby-faced junior associate intern of the strategy group--whose only job is to put near-term profit first. 

Hence, the wisdom group. The wisdom group's job would be, first and foremost, to ensure that the organization is creating authentic, thick, shared value that's enjoyed by all its key stakeholders--people, nature, the future, society. Its responsibilities would begin with measuring, monitoring, and managing that value creation--but end up shepherding, guiding, and nurturing it. Wisdom, as in: doing stuff that matters to our great-great-great-grandkids, that ennobles us, that develops our better selves, and that honors our bigger purpose.

Because it's concerned with thick, value, shared among and between all of an organization's stakeholders, the next-generation organization must to think bigger--and better--than purely debt and equity, and what they're worth to today's investors. 

Instead, it's going to have to get lethally serious about creating an enduring, meaningful, resonant, positive, proliferating set of impacts--whether social, human, intellectual, spiritual, creative, or relational. "Profit" is defunct as an internal combustion engine: it's an industrial age construct that's built to trivialize everything but what a firm owes its "owners." 

In the 21st century, we're discovering the hard way just how barren a prosperity that  stale idea led to. Hence, the wisdom team, concerned foremost with creating and delivering benefits that matter in human terms. Outcomes, not income--that's the difference between industrial age "finance", and the nascent art of significance. 

Its nerve center wouldn't be marketing--but what you might call humanizing.  Today, marketing is the equivalent of the corporate ghetto--with good reason. In too many boardrooms, marketers are minions, flunkies, and sidekicks who refuse to stand up to the CEO, CFO, or board, and say "No! In the long-run, it's really not a good idea for us to push a lowest-common-denominator that sucks--and sucks health, wealth, and character out of our society." 

Marketing's role has become to find slightly cleverer ways to convince "consumers" to buy more--more rapidly-depreciating, mass-produced, joyless, drab stuff. Humanizing's role? Just about the opposite in every way. It's about helping people to stop mindlessly (over)consuming and to start enjoying, improving, bettering; to help people maximize the authentic, long-run value of a product or service; and to stop organizations from hard-selling the overconsumption of toxic, socially- and personally-destructive junk. 

Marketing's about making markets--humanizing's about helping people blossom, flourish, and grow.

Hopelessly naive, thoroughly idealistic, offensively simple-minded? Sure--I'll be the first to admit that the habits I've discussed with you here are far from the only ones, or even the "best" ones. 

They're just a starting point--like every resolution. To take us just a step further in to the new year (and the new age or organizations) here's the first draft of what I call the Meaning Organization. It's built not just to learn--and then to do business--but, more deeply, to redraw the boundaries of prosperity by doing meaningful stuff that matters the most. If you're thinking about changing your habits this year, perhaps that's not a bad place to begin.

This time of year we tend to subject ourselves to tough review. We zero in on our practices and tendencies and resolve to take up new, positive habits--and, more importantly, to break the bad. It can be a productive exercise if approached with a clear eye and dedicated follow-through. My question: why don't we subject our institutions to the same ritualistic rigor?

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richard-melrose's picture

We can get to where we want to go from where we are.  We already know what needs to be done.  All it takes is leadership and enduring commitment.  Consider these words of timeless wisdom:

"What you have to do and the way you have to do it is incredibly simple.  Whether you are willing to do it, that's another matter." -- Peter Drucker

“Profit is not the explanation, cause, or rationale of business behavior and business decisions, but rather the test of their validity.  If archangels instead of businessmen sat in directors' chairs, they would still have to be concerned with profitability, despite their total lack of personal interest in making profits.  -- Peter Drucker

“The best way for business and its leaders is to make the satisfaction of a social need an opportunity for a profitable new business.  … institutions and their leaders would best discharge their 'social responsibility' if we never had to use that term.”  -- Peter Drucker

Boards of Directors must concern themselves with:
    > the legitimacy of the "enterprise purpose" -- i.e. What does this company stand for?
    > the authenticity of leadership -- being relentlessly true to everything from self to planet;
    > the existence of  pervasive trust, throughout the organization;
    > the presence of deep caring for employees' wellbeing -- e.g. job (opportunity) creation;
    > the level and trend of employee engagement -- i.e. the result of and the reward for leading
       and managing well; and
    > the stability and security of the business platform.

Six fundamentals.  Performing well on all six, serves stakeholder interests, superbly.  Failing to perform on any one imperils the enterprise and its stakeholders.  Enlightened self interest can carry the day.

Attending to the six fundamentals makes The Goal of  "creating more value (making more money), now and in the future" much easier to achieve and sustain.

If enough capital providers align with an enterprise's purpose and believe that the company's Directors, C-suite and management team command all six fundamentals, "quarterly earnings per share growth" might yield to the "CAGR of knowledge worker productivity"  -- a much more telling measure of long-term enterprise health and value. Companies do not need to appeal to capital markets in the aggregate, just to enough capital providers to assure the availability of a surplus of capital at attractive rates.

With the six fundamentals well in hand, organizations will have a much easier time attending to the other universal value creating disciplines that include: talent management, operational excellence, value innovation, organizational thinking and strategic execution.

Richard Melrose
r.melrose@vision21.us

rehana-wolfe's picture
Hi Umair - thanks for sharing these thoughts of change as it is what we all think of at this time of the year.  For organizations to truly bring about any change it must be sincerely wanted from the top and be encouraged at all times and at all levels.  You pose an interesting thought on outcome versus income and sadly the habit of greed and pumping the value in wall street is often what drives many organization away from the humanizing component.  That is what also makes marketing a good and bad area as well when companies want more income versus beneficial outcomes for all - employees, stakeholders and consumers.
 
How do we truly reach the CEO openly to bring about change?  Could your idea of the "wisdom group" with representation from all segments of the organization be the strongest voice to drive change that focuses on outcomes?
 
Rehana
ellen-weber's picture
Excellent point here, Umair, and thanks for the reminder that it's time to take another look at what we practice. In my work with the brain - I see the defaults back to modeling ruts more than renewal, (which many of us remain unaware happen daily:-)

In contrast, I delight in your challenges to take risks for the new. I have launched a newly designed MBA  leadership course, that will run against tides in 5 ways: 1). We'll question and wonder rather than tell and deliver; we'll target improvements together rather than critique for mistakes; we'll expect quality differences, rather than foster similarity; we'll move resources throughout, rather than guard talents at the top only; and we'll reflect together in an Innovation of Celebration, rather than end with a test where some win, some lose, and most find few helps to keep growing.

It takes risk, and no shortage of personal sacrifice to change directions, and yet I am grateful for the kind of work promoted by you and this MIX community toward a very different end, where enough people take the steps toward changed approaches, that the instituite may see new benefits to follow:-)

mike-richardson's picture
Thanks for sharing Umair - I love the idea of a "wisdom group" and "humanizing", as that resonates very strongly with the Story I just posted about peer groups ("The Power of a Peer Group: How come something so proven is not more pervasive, and what are we willing to do about it?" at: http://www.managementexchange.com/story/power-peer-group-how-come-something-so-proven-not-more-pervasive-and-what-are-we-willing-do-ab).  In many ways, these peer groups are exactly that - a "wisdom group" (or sounding board/master-mind group) and "humanizing" (leaving the ego at the door/a circle of trust/inviting the soul to show up).  So my question in my Story is, "how come something so proven is not more pervasive" in larger businesses and public corporations in particular?  And, 'what are we willinbg to do about it?"  I realize there are challenges, barriers and obstacles, but I am with you 100% - we must breakthrough those and figure out how to overcome the insidious dysfunctionalities we often encounter in larger businesses and public corporations (no matter what story their marketing machine tells the outside world!).  Thanks again for sharing.  Best.
maureen-kelsey's picture
Dear Umair,

There are plenty of folks who already have this habit and/or are in the process of developing new habits in the context you mention above.

Now that you have seen, the next step is to take action.  Hope you will be moving to that next step as surely you have much to offer this community that already exists.

My best and warmest regards,

Maureen Kelsey