Business Transformation (II/III)
This is the second of a three part articles series that originally appeared on the SOMESSO blog. It is re-published here on the 21st C/N blog with kind permission by its author. Part 1 examined how companies need to move from pushing a message to galvanizing people around an idea; part 3 looks in more detail at how organizations structured around values and relationships work in practice. This current second installment explores in more detail why companies need real values.
The visceral connection between big ideas and action
If societal, environmental and technical evolutions are forcing organizations to adapt to a new social dynamic, the tried and tested business models we’ve been using must also evolve and respond to this. The organizational development of business in the last 100 years has been dominated by an institutionalized and factory-oriented approach that’s no longer appropriate or fit for purpose.
The solution is to recognize and enable the visceral connection between big ideas, inspiration and action. For example, if you have to spend millions to get people to buy your stuff, you’re spending money on an idea that’s probably not big enough. None of us own our brands, they live in the minds of the audience the originating organization is connected with and to cultivate positive brand perceptions organizations need to work out how to create a position and purpose within their marketplace that benefits everyone, aligning investment, operations and audiences in ways that brings commercial and philanthropic elements together coherently.
When we observe organizations that learn and communicate like this there’s a sense of flow and common purpose. The challenge is to create an operational model that connects the investors, stakeholders and end users around meaningful tasks.
Organisations are complex systems, just like humans
The human body is a great metaphor for how to approach the development of social organizations. It’s the best example of a self-propelling system we have. However this is counter-intuitive to much of the conventional management thinking around organizations and how they develop.
Conventional organizations are used to being managed by a Board from the top down. In the human body management doesn’t happen this way and is variegated, diverse, highly distributed. Some of it is autonomous. Bodies are highly complex systems in which a number of activities take place outside conscious control, where intuition and intellect are both important and where consciousness resides in the body as much as it does in the mind.
If we’re taking the human body as a metaphor for business, what’s interesting is complexity drives it more than homogeneity. Bodies are made up of a number of highly differentiated, highly specialized systems that interrelate to one another, which paves the way for organizations to think of themselves as scalable collections of differentiated competencies and skill sets, each serving an indispensable purpose in service to the overall whole. The question is whether today’s management systems and diagnostics are able to reflect that.
Strong values per capita, not just per organization
If we see that organizations as corporate bodies are made up of a number of complex sub-systems that are highly interdependent with the world around them, it is time to go beyond measuring value solely in terms of shareholder ROI as we know it. In particular, to look at what organizations collectively can achieve in ways that benefit the entire ecosystem they operate within, with and for the many not just an elite management few.
The DNA of every organization, as with every human, is different. Across every industry sector, individual organizations possess their own anthropological fingerprint. Their own mix of attributes, history and culture is the foundation of an organization’s intangible asset base, and organizational management needs to work, develop and leverage these points of difference compared to a ‘one size fits all’ approach. The unique strengths of an organization come from the integrity of the whole system, a sense that values are pervasive and that they create congruence.
The point of marketing is to act as the lens that brings these values into sharp focus. Marketing is essentially vision delivered as a service, in which the activities of each member of the organization represents a vital part. Strong brands do not just look good on paper they walk the talk. They have solid brand values per capita, employee by employee.
Unequivocal value sets pay off
In a social environment where building a business is about building a following, unequivocal values sets pay off. In the political arena, the Obama campaign showed the power of this principle. The Obama campaign demonstrated all the elements of a very powerful dialogue – an audacious idea, strong communications, an evident desire to listen and respond to what supporters were saying. The Obama campaign encouraged supporters to take on and embody the vision, values and message of a central unifying thought, and in the process spread the message far beyond what a traditional marketing campaign could have achieved. It demonstrated the power of a groundswell, and groundswells tends to come when communications are open.
In the business world, Café Direct is a good example of the benefits this kind of ethos can realize. Café Direct’s mission is ‘to change lives and build communities through inspirational, sustainable business’. As a result it focuses its social and economic impact in the developing world and has a strong philanthropic emphasis baked into what it does. Over the last five years, Café Direct has invested over £3m (more than half of the company’s profits) in its grower partners; it has paid out more than £7.5 million above market prices for its raw materials. At the same time, in the past 12 months the number of Friends of Café Direct has increased from 3,188 to 14,714, a four-fold increase. A transparent organization, with a strong ethical vision, people connect with Café Direct and it’s building the power of the business in both commercial and social ways. This is evidence that what we’re seeing within the emergent world of social networking is, potentially, much more of a bias towards much more socially intelligent, values-led and ethical corporations.
If your values are strong, everyone owns the communication
When we consider that, as in humans, the neurology and pathology of organizations are relevant to their?development, then rapid seamless synaptic responses instead of slow, mechanical ones can?become a reality. Social networking platforms are demonstrating that corporate reputation much more granular. Strong values, that run very clearly throughout a corporate culture, are a glue that make this kind of granularity manageable.
Post web2.0, we want people to talk with one tongue, but we don’t want monotony. Recognizing this, companies such as IBM and Zappos are actively encouraging employees to find their own voices. They are, in effect, supplementing corporate reputation with personal reputation, and recognizing corporate reputation as the sum total of the individuals within them. When this happens, ownership of corporate communications begins to move from being the sole preserve of the marketing or PR department towards being a whole-company activity.
When a clear sense of integrity, of ‘the way we do things around here’, is in place there is far less of a need to control the voices speaking for the brand through a single department. With a strong values set established it’s also easy to see when people have crossed the line. The opposite danger, of a cabal that acts to roots out and limits diversity, can often become is the greater risk. A great part of the cultural void surrounding perceptions of ‘corporations’ stems from the fact that management culture does not tend to encourage individuals to have a voice. But when every action of an organization is part of a corporate fingerprint responsible for generating meaningful and individual brand experiences, how long can corporates continue to control this from the centre?
In a commercial and social environment that’s all about relationships as opposed to transactions, it’s individuals and their reputations who create cumulative corporate reputation. Investors benefit from knowing who is on your team, the visibility of their online track record, their digital footprint, how they fit together as more than the sum of the parts and the following they have. Arguably these attributes are best possible yardstick for judging whether an enterprise will succeed.
Anne McCrossan, Twitter: @Annemcx, is the founder of Visceral Business, a social business consultancy that specializes in helping organizations create social leverage through strategic change initiatives, brand management, leadership training, and social marketing capabilities.