Liberating the Corporate Soul

Richard Barrett

• Publisher: Routledge
• Year: 2013
• Print ISBN: 9781138131088
• eBook ISBN: 9781136014093
• Topic: Business
• Subtopic: Business General
• Index: Business

The two most critical issues for business today, according to CEO's Barrett has worked with, are: "How to tap the deepest levels of creativity and the highest levels of productivity of our employees." In a world where competition has become global, successful companies are learning to build competitive advantage through their human capital. In the 21st Century, even that will not be enough. Success will also hinge on whether, in the eyes of the employees and society-at-large, the organization is a trusted member of the community and a good global citizen. Developing a values-driven approach to business is quickly becoming essential for financial success. Who you are and what you stand for are becoming just as important as what you sell.

1

Introduction

I am often asked, “How do you explain Nucor’s success?” My stock reply is that 70 percent of it has do with culture and 30 percent has to do with technology. Without a doubt, Nucor’s culture is its most important source of competitive advantage, and it always will be.

—KENNETH F. IVERSON, CHAIRMAN, NUCOR CORP.

We’re going to see companies increasingly assume that what they stand for in an enduring sense is more important than what they sell.

—JIM COLLINS, COAUTHOR, BUILT TO LAST

If you were to ask a group of enlightened CEOs to tell you the two most critical issues for business in the next century they would answer, “How to tap the deepest levels of creativity and the highest levels of productivity of our employees.” In a world where competition has become global and where knowledge and technology flow readily across international boundaries, companies are learning that the only way to build real competitive advantage is through their human capital. This is forcing companies to take a hard look at their corporate cultures and values. Enlightened leaders are learning that employee fulfillment, environmental stewardship, and social responsibility will be the keys to increased productivity and creativity in the future. The values that corporations hold are increasingly affecting their ability to hire the best people and sell their products.

This increasing emphasis on values is due to two causes—a global shift in the underlying assumptions that govern our society; and a growing awareness of the causal link between the rapidly escalating worldwide environmental and social issues and the philosophy of business. Civic leaders, community representatives, and environmental groups are demanding that businesses stop polluting the air, water, and land. At the same time, they are asking companies to take a more socially responsible attitude toward downsizing and factory closure or relocation. Growing numbers of investors are refusing to buy stocks in companies that behave irresponsibly. Growing numbers of customers are choosing products that are manufactured by socially responsible companies. And, growing numbers of employees are expressing a preference to build careers in companies that have values-based cultures where they can find meaning and make a difference through their work.

Who you are and what you stand for are becoming just as important as what you sell. The values that corporations hold are increasingly affecting their ability to hire the best people and sell their products. Governments and communities are recognizing that corporate self-interest is leading to the destruction of the planet’s life support systems and the social fabric of society. The era of corporate autocracy is coming to an end. There is too much at stake for it to be otherwise. In the words of Robert Haas, CEO of Levi Strauss, “In the next century, a company will stand or fall on its values.”

Values-Based Leadership

The world is searching for a new type of corporate leadership—one that is able to operationalize the win-win opportunities inherent in a corporate culture that supports social responsibility, environmental stewardship, and employee fulfillment. Companies are discovering that, far from being a burden, attention to these three areas is becoming a key ingredient in their recipe for success. Enlightened leaders are finding a dynamic balance between the interest of the corporation, the interest of the workers, the interest of the local community, and the interest of society. They are recognizing that the only way to increase the levels of productivity and innovation necessary to survive and prosper in the twenty-first century will be to transform their corporate values radically.

Corporate transformation begins with a shift in the values and behaviors of the leadership. Corporations don’t transform. People do. Corporate transformation is fundamentally about personal transformation. It will happen only if there is a willingness on the part of the leader and all those in authority to live according to values that are less focused on self-interest and more focused on the common good. For transformation to be successful, the espoused values and behaviors must become pervasive throughout the organization. Only when the leadership walks the talk and the espoused values and behaviors are fully integrated into the human resource systems will the culture change cascade down through the organization.

Enlightened leaders know that to attain long-lasting success they must build a values-driven corporate culture that is independent of their identity. When a leader retires or moves on, the culture must continue. When an organization has a successful culture, it promotes a new CEO from within.¹ When a company is not successful, the task of creating a successful culture is usually given to an outsider or an internal candidate with an outsider mentality. In Corporate Culture and Performance, John Kotter and James Heskett of the Harvard Business School describe the career paths of 11 leaders who have successfully led major culture changes in large organizations. They state that all these leaders brought with them an “outsider” perspective—“that broader view and greater emotional detachment that is so uncharacteristic of people that have been thoroughly acculturated in an organization.”²

For a company to find long-term success it must become a living independent entity that reflects the collective values of all employees. The task of the leader is to give birth to this entity—to give the company its own sense of purpose and vision—to liberate the corporate soul.

The company itself must become the ultimate creation.³ It must have its own identity separate from that of the leader. The strength of the identity will be directly proportional to the degree to which the organizational culture embraces the common good. The fundamental challenge facing business leaders is to create a corporate culture that supports and encourages all employees to tap into their deepest levels of productivity and creativity by finding personal fulfillment through their work. When people find meaning in their work, they naturally tap into their deepest levels of creativity and highest levels of productivity. The dichotomy between work and play disappears. This will occur only if employees share a common vision and values. People are clamoring to work for organizations that care for them as a whole person and allow them to bring their highest values to work.

Beyond Reengineering

Establishing a values-driven organizational culture goes beyond reengineering. Michael Hammer, one of the originators of the concept of reengineering, defined it as “the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance such as cost, quality, service and speed.”⁴ In other words, reengineering mainly focuses on corporate fitness—becoming lean and effective, a productive machine. The results to date have been poor.

In a survey of 99 completed reengineering initiatives undertaken in 1994, two-thirds were judged as producing mediocre, marginal, or failed results.⁵ One of the principal reasons for this failure was the lack of attention given to the human dimension.⁶ Half the companies that participated in the survey said the most difficult part of reengineering was dealing with the fear and anxiety in their organizations—not surprising when these companies were using reengineering to eliminate on average 21 percent of jobs. Thomas H. Davenport, one of the early proponents of reengineering, states that “Companies that embraced [reengineering] as the silver bullet are now looking for ways to rebuild the organization’s torn social fabric.”⁷ The majority of organizations that undertook reengineering treated people as if they were redundant parts of the corporate machine. Less than half the companies that downsized have been rewarded with either short- or long-term increases in operating profits, and less than a third made rapid gains in productivity. Morale slumped in 72 percent of the companies that downsized.

Those who survive downsizing suffer as much as those who lose their jobs. They find themselves living in a climate of fear. There is no longer any trust in the organization. As fear increases, personal productivity and creativity decline. The stress becomes intolerable and the best people—those with strong employability—leave. Reengineering turned up the volume of fear in organizations and it was heard all over America.

When used appropriately, reengineering is a useful tool for building corporate fitness. It can enliven the corporate body by making it lean, supple, and fast. It keeps the systems and processes open, smooth, and efficient. However, instead of being used locally and sparingly as a tool for preventive maintenance, reengineering has become synonymous with radical surgery. The real issue is not with reengineering, but with the mind set that allows an organization’s health to disintegrate to the point that reengineering in the form of radical surgery is seen as the only solution.

In The Living Company, Arie de Geus states that “Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organization’s true nature is that of a community of humans.”⁸ To put the argument slightly differently, companies die because they concentrate on the physical aspects of their being (profit and growth) and ignore their emotional, mental, and spiritual needs. As Stephen Covey points out, highly effective people are highly effective because they keep all aspects of their lives in balance. This is also true of highly effective organizations.

Healthy organizations avoid early death or radical surgery by constantly monitoring their total well-being—not just their financial performance. They constantly review all aspects of corporate health and take corrective action before more serious interventions become necessary. They are like finely tuned athletes who take care of their bodies, their minds, and their spirits. Reengineering in healthy companies addresses specific local issues. The numbers of people affected are small, and the reengineering is done in a caring way. Healthy companies are open and sensitive to their internal and external environments. They thrive and prosper because they grow and evolve, not just physically but emotionally, mentally, and spiritually too. As with humans, when insufficient attention is paid to the “softer” side of life, pain, suffering, and early death can easily result.

The Corporate Life Cycle

In Ichak Adizes’ description of the 10 stages of a corporate life cycle⁹ we see how the emotional aspects of company life affect the health of an organization.

Adizes suggests that the life cycle begins with courtship. Someone comes up with an exciting business idea, embraces the possibilities, views them from different angles, and then commits. The courtship ends when the entrepreneur assumes risk. The organization is born and infancy begins. The focus is no longer on ideas but on how to achieve results. The most urgent need is to create sales. There is a lot of rushing around looking for opportunities to build income. No one cares much about systems, paperwork, or procedures. Everyone is working long hours every day to make sales.

As the business takes off, the organization enters the all systems Go-Go stage. As the organization moves into a state of rapid growth, the founders believe that they can do no wrong. They want to be involved in all decisions. They spend their time running from one meeting to another. The Go-Go stage comes to an end when there is a realization that someone must bring order to the business. The organization enters the adolescence stage.

The founders hire a chief operation officer but have great difficulty handing over control. Divisions appear in the organization as the old-timers who lived through the chaos of infancy try to adjust to the new-timers who are attempting to bring systems and order to the business. Internal conflicts cause temporary distractions from the real work of the organization. Gradually, the organization takes on a more mature form and it enters into its prime. The “prime” stage is characterized by clarity of vision and purpose and a balance between flexibility and control. The organization continues to grow through satisfying customers’ needs and creating innovative new products or services. New products are decentralized into new businesses. Eventually, the organization achieves stability. The stage of stability is characterized by steady growth and an increasing focus on short-term financial results. There is a subtle shift in emphasis from innovation to control. Marketing and development become targets for cost reduction. Gradually, the organization enters its “aristocracy” stage.

Status and self-esteem in the form of titles, office size, and a reserved parking space take on more and more importance. The focus is more on form and less on content. Getting on in the organization means pleasing the boss and not making waves. The organization begins to lose its entrepreneurial edge. It starts expanding through acquisitions rather than growing new businesses. When performance begins to decline, the organization enters t...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• Foreword
• 1. Introduction
• 2. The Common Good
• 3. Motivation, Creativity, and Innovation
• 4. Seven Levels of Organizational Consciousness
• 5. Corporate Transformation Tools
• 6. Vision, Mission, and Values
• 7. Balance
• 8. Trust, Meaning, Community, and Ownership
• 9. Seven Levels of Leadership Consciousness
• 10. Leadership Development and Assessment
• 11. Building a Visionary Organization
• 12. The New Theories of Business
• Index