Pursuing a Renewed Sense of Corporate Purpose

In a recent meeting with our Board of Directors, we were talking about a certain metric and how we use that data. A couple of our directors suggested a different, and more powerful way to use the data point in management. When asked why we didn’t do it the way some of our sister companies do, I had to answer with the dreaded, “because we’ve always done it that way.”  

Complacency. Accepting the status quo. Not looking deep enough to improve.

Curious, I went back and reread Brandon Davis’ blog on Maintaining a 140-Year-Old Start-Up Culture. In it, he describes values and traits embedded in Austin that are similar to a start-up company. And I had to consider where we are not in alignment with the culture he describes in his blog. Or at least, where we have room for improvement. Certainly, a start-up company will not use the “we’ve always done it that way” explanation.

140-year-old companies have layers upon layers of practices, policies, methods and legacies. In many ways, they are the very foundation on which the company is built. It is the mesh that makes up a company.

Principles - A Shared Set of Values and Goals

Ray Dalio, in his book Principles, defines an organization as “a community with a set of shared values and goals.” As organizations grow and become more diverse, subcultures are created, and offices develop their own personalities. The challenge is to maintain the right elements of the foundation while adapting to the constant change that is a natural part of the lifecycle of the organization.

Organizations have values and goals that form a common baseline and bond for the people who comprise that organization. How well they demonstrate and adhere to those values; how well they aspire to those goals as a unit is a measure of where they are in their lifecycle.

Understanding Corporate Lifecycles

Ichak Adizes, the founder of the Adizes Institute, has studied organizational lifecycles and has developed a diagnostic and therapeutic methodology for organizational and cultural change in an organization. In his book Corporate Lifecycles, he defines a corporate lifecycle into two basic phases: growing and aging. Growing starts from the initial concept of the purpose and continues until it is a stable, sustainable organization. Once stable, the aging process begins as the organization starts to lose flexibility, adaptability and the energy it put into its purpose.

Adizes cites the first step in the aging process as Aristocracy, where the emphasis migrates more to “how things are done rather than what and why its done.” Or to put it another way, “because we’ve always done it that way!” Adizes’ Aging Model has Bureaucracy following Aristocracy on the lifecycle toward death. In a sense, it is an overemphasis on the what rather than the why.

In a bureaucracy, accountability wanes because the focus is the organization itself, not the purpose of the organization.

It is much like the human body. Up until our mid-20s, we are growing and developing, mentally, physically and emotionally. We are active, we take risks, try new things and are less protective of what we have. We then reach a point where we are stable and secure, take less risk, become more sedentary. In some cases, we develop habits that are bad for us. Eventually, we succumb to the inevitable.

But for organizations, what can be done to avoid the inevitable?

Reversing the Aging Process

Adizes cites numerous examples of organizations that reverse the aging process, and find new energy and purpose while maintaining the foundational culture and values that are necessary to get to the renewed cycle. Along with values and goals, I think purpose has an equal place. Aging can be reversed with a renewed sense of purpose and an assessment and commitment to refocus the organization onto the purpose. Purpose comes first – the organization exists for the purpose; the purpose is not the excuse for the organization. 

It is a subtle difference, but an important one.  

Dr. David Viscott, author of Risking, said “If you cannot risk, you cannot grow. If you cannot grow, you cannot become your best. If you cannot become your best, you cannot be happy. If you cannot be happy, what else is there?”

Be willing to take risks. Try new ideas, processes, tools. Refocus on purpose. Recommit to values. Establish clear goals and commit to them. Dedicate to the why before stressing on the how. Question the why – why do we do it this way? Can we do it better? Get lean.

Organizational life, like human life, is a journey with its peaks and valleys. But the challenge is understanding the destiny. The destiny of an organization is not a final place, but achieving a purpose and then continuing to the next purpose. If done right, with the right values, culture, purpose and leadership, it is a continuing cycle with no end in sight, but an excitement of what the succeeding purpose might be.

“Nature is a machine. The family is a machine. The life cycle is like a machine.”

Ray Dalio

“When you're surrounded by people who share a passionate commitment around a common purpose, anything is possible.”

Howard Schultz

“The purpose of a business is to create a customer.”

Peter Drucker