[slightly modified from a discussion board post I made for a class assignment]
Management thinking great Peter Drucker states that you have to start out with “what is right rather than what is acceptable” before you compromise, so that you don’t make the wrong compromise (from The Daily Drucker, p. 304).
As an aside, I would argue that part of the reason is that the compromise itself is what is “acceptable” - it’s what you settle for when you can’t get what’s ideal. If you’ve compromised the ideal before you even reach the point where you have to compromise, you haven’t left yourself many good options.
But I digress. I think in corporations, compromises are most often made over money - how much to budget, and for what. Where to strike the balance between profitability and the sustainability of the organization.
And this is where successful companies have realized that having a purpose can help guide those determinations and compromises. Some part of any corporation’s purpose is, of course, to make money, to be profitable. But that can’t be the sole driving force in a company. It doesn’t motivate workers, or create or increase morale, and it often doesn’t even drive profitable behaviors, because the decision-makers ignore sustainability and future success in favor of profits now, and by failing to invest and plan ahead, can (eventually) completely eliminate the business’s ability to be profitable.
So, “what is right” is what aligns with the company’s purpose. To use our first class presentation subject, Procter & Gamble, as an example, the company’s purpose is “touching and improving more consumers’ lives in more parts of the world more completely.” And this sense of purpose is infused throughout the company. We had the good fortune to interview a P&G employee who said that he is guided only a daily basis in his work by the company’s purpose. With that sense of “what is right,” people at any level of the company can make the right decisions, the right compromises, and still achieve the company's goal without "cutting the baby in half." The company can decide to invest in an audacious goal like digitizing the entire company, because they see that doing so, and using technology to be as efficient and informed as they can possibly be, will help enable them to touch and improve consumers' lives all over the world, including growing markets like China and India, where they can’t necessarily just sell to a few giant Wal-marts, but need to reach many smaller stores in order to deliver their products to their consumers.
A blind pursuit of nothing but profit can lead organizations to make bad compromises and bad decisions. “Undisciplined pursuit of more” is what Jim Collins, in “How the Mighty Fall,” labels as the second of five stages of corporate decline. If you cut costs and expand markets or grow company size without investing in technology, training, and process improvement, you can end up with a company that is analogous to a tree that has rotted on the inside, where it may still look fine on the outside, but it’s only a matter of time before a storm comes that tears the whole thing down.
And the expert interview [part of our class materials] with Jim Igel touched on this, as well, when he and Guy St. Clair addressed the importance of corporate social responsibility. The interesting fact is that social responsibility and even altruism in corporations is not only *not* anathema to profitability, but there’s also a substantial body of research demonstrating that the two things actually go hand in hand - a company that benefits society ultimately improves its own bottom line (cf. “Built To Last” by Jim Collins).
Coincidentally, I posted this homework assignment on Friday, October 7, and the very next day, October 8, @TEDNews tweeted this TED Talk by Simon Sinek, discussing how inspired and inspirational leaders and organizations "Start With Why" - "people don't buy what you do, they buy why you do it."
No comments:
Post a Comment