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As a consultant, I wish I had a nickel for every time I was invited into an organization and told: “We’re going through a reorg.” (Reorg is short for reorganization of the organization.) This is too often suggested (read: mandated) by a new CEO or his team in an effort to ensure the company begins to improve performance. As a consultant, this is always huge red flag. Whether it is reorganizing the structure of the organizational chart or changing processes and/or responsibilities, reorgs too often end up being like moving chairs on an ocean liner — there is a lot of activity going on but it never changes the direction of the ship.
If you want to transform an organization, you must begin with its culture. In January 2015, Ernst & Young and the University of Oxford collaborated on a study of senior executives at the World Economic Forum in Davos, Switzerland. The study revealed how leading-edge thinkers are looking at their enterprises from the standpoint of leveraging cause to spur innovation and sustain growth.
A partial outline of the study found:
- There is an evolving view of the role of corporations. This view supports the increasing emphasis of the corporation as a partner for societal well being. This is one part of the foundation of social capitalism that I discuss in my book, Culture Trumps Everything.
- There is an expansion of the mission statement beyond the traditional focus on products. A modern mission statement now includes qualities such as trust and an articulation on a organization’s reason for being or cause. This means trust and cause are becoming an important part of an organization’s value proposition, regardless of its product, service, or industry.
- Innovative leaders are using the language of cause to engage employees and customers in terms of shared values for the benefit of all stake holders. This drives quintessence (also discussed in Culture Trumps Everything) for both employees and customers.
- There is a growing view that “cause drives profits.” Leaders are seeking to direct existing and new product and service lines in ways that achieve this broader cause for all of their constituencies or stakeholders.
- Organizations are initiating cause-driven transformations. They are learning that integrated, cause-centered decision-making creates a mandate for driving functions like strategy, business models, and talent management. Interestingly, the study also finds a significant gap between a cause-driven decision making process and the policies, procedures, and practices inside organizations. As I say in my culture presentations, “Policies limit behavior, culture drives behavior.”
More than a dozen years ago, Peter Koestenbaum, philosopher, professor and executive coach, stated:
“Unless the distant goals of meaning, greatness and destiny are addressed, we cannot make an intelligent decision about what to do tomorrow morning — much less set strategy for a company.”
As discussed in Culture Trumps Everything, Connectedness is a seed of culture made up of two components: Relationships and Cause. These are two primary human drives. When we build organizations around primary human drives, we transform them and we get culture-driven behaviors you cannot buy, sell, or trade.