Neither. (A trick question). Organizational Purpose should come first.1
What is the significance of purpose? Common to all human beings, across all cultures, is a part of the midbrain that drives people towards this thing called meaning. While different cultures attach meaning to different things, the human brain is pulled in the direction of what has inherent meaning, significance or value to a person.
When it comes to organizations, the creation of this thing called value lies at the core. (See the work of Institute Fellow John Thorpe in this area.2)
Value in whose eyes? Three groups: customers, investors and employees. All else flows from this or else an organisation will not:
- Attract investment
- Attract and retain customers
- Attract and retain high caliber staff
These three groups have to perceive value in what you create or deliver or you will simply not perform to potential. Few organizations create value in the eyes of all three. Some satisfy one or two of the three and suffer constant tension from this inequity.
As an organisation is a system of interrelated parts, failure to create value from any one perspective will eventually weaken the whole system. There are many examples where organizations have embarked on digital transformation journeys that annoy customers, alienate staff3 and alarm shareholders.
Only last week an executive mentioned to me that the organization is so busy mapping the customer journey, they have lost sight of the employee journey. It is certainly not new that keeping staff happy is part of the formula for success if you consider the costs of disengagement, internal disruption and misalignment.4
A few years back, Institute President Charles Araujo described the scale of change required along organizational, structural and cultural dimensions to achieve customer-centricity and to enact new business models.5 His warning reminded me of the Pascale quote: “A butterfly is not more caterpillar or a better or improved caterpillar; a butterfly is a different creature.”
Digital today and tomorrow will be increasingly different. Few organizations are getting this right, if the research is to be believed.6
Leading From the Front
Some executives ‘get it’. They see that they not only have to transform their customer’s experience of their product, but also create a significantly different employee experience and different organizational response. Digital Head at Bank of New Zealand, Stephen Bowe, relates success to his staff doing their best work in their current role.7
Dawie Olivier, CIO at Westpac NZ said: “I am much more excited by cultures and methods than in flavors of the month.” Every week, there is a new top of mind technology, because that is how disruption works in the digital era, he says.
For Olivier, the killer app for today’s CIOs and their teams has nothing to do with technology. “It is the ability to transform the organisation – ICT and beyond – to be able to adapt to anything coming down the track” and “Unless we build organisations that are able to adapt to and to use whatever technology comes along we are actually wasting our time.”
Having started his career in the navy, he says that contrary to popular belief, military leadership is not command and control, but to do with trust, delegation and collaboration. “You leave the decision making to the people closest to the fight”.8
Business Paradigms for Achieving Purpose and Creating Value
If you have the right people in the organization, those nearest the customer – the front line – can, with the right information and resources, create value in the best way and simultaneously enjoy job satisfaction and career success.
These are the people who know how best to achieve organizational purpose with their hands on knowledge of how things work (and what doesn’t). They know what is going wrong for customers and what will prevent redoing things that should have been done ’right’ in the first place.
As the digitization of people’s lives continue, expectations will be higher and organizations will simply have to stop outdated management ‘controls’..
The Role of Teamwork in Success
“The CIO’s mission is to build a team that can adapt to these changes, and more importantly, can test and learn with the market all the time. That is where our future lies.”
Dawie Olivier, CIO, Westpac New Zealand
Teamwork is at the core of delivering value to all stakeholders. As John Sullivan put it in his Agile talk Guerilla Re–Transformation, “You do not need a group of superstars – you need a group of people who can work together.”
He described how their entire accountability process changed – decision-making was simplified, communication was opened, customers were engaged and things simply worked, and worked simply. This was a classic example of doing the right things right.9
The good news is that while (some) people are the problem, people are also the solution.
Transformation Essentials
Here’s some advice from the above-mentioned article about the price organisations pay for disengagement4:
- Inform employees about every business practice – better still, let them be part of it for a healthy business culture
- Define the goals and communicate expectations
- Share the company’s core values and mission and cooperate with everyone to reach its vision
- Keep people up-to-date with all new achievements and information
- Encourage interdependency
As long as everyone makes the Customer Number 1, and works together to deliver value to customers and investors alike, people will exercise their natural talent and ingenuity and will work stuff out.
Sources:
1The Purpose of a Business is to Create a Customer. August 13, 2012 by Whitney Hess. https://whitneyhess.com/blog/2012/08/13/the-purpose-of-a-business-is-to-create-a-customer/
2John Thorp. The question of value. http://www.thorpnet.com/the-question-of-value/
3“Seeing someone cry at work is becoming normal” ‘: Employees say Whole Foods is using ‘scorecards’ to punish them. Hayley Peterson. 1 Feb 2018
https://www.businessinsider.com.au/how-whole-foods-uses-scorecards-to-punish-employees-2018-1
4“Disengaged employees are estimated to cost between $450 and $500 Billion.” Laura Watson. 23 Dec 2017
https://medium.com/@watsonlaura450/disengaged-employees-are-estimated-to-cost-between-450-billion-to-550-billion-according-to-a-1ff7e290ea39
5Three Digital Transformation truths and one great myth. Charles Araujo. November 21, 2017 www.institutefordigitaltransformation.org/three-digital-transformation-truths-and-one-great-myth/
6“Why 84% of companies fail at Digital Transformation” by Brian Rogers. 7 Jan 2016
https://www.forbes.com/sites/brucerogers/2016/01/07/why-84-of-companies-fail-at-digital-transformation/#70571ef0397b
7Digital Engagement. Cherri Holland. November 2016 www.institutefordigitaltransformation.org/digital-engagement/
8Westpac CIO Dawie Olivier on ‘The killer app for today’s ICT teams’. Divina Paredes (CIO New Zealand), 26 January, 2016
https://www.cio.co.nz/article/592097/westpac-cio-culture-killer-app-today-ict-teams/
9Guerilla Re-transformation. John Sullivan. Agile NZ 2015
https://www.youtube.com/watch?v=NgXZkWtpng8
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