Navigating Beyond Profit to Achieve Growth

Almost unknowingly, business sits on the cusp of an awakening. No, it’s not a spiritual awakening; although it might feel like that to employees oppressed by management control. Rather, it’s an awakening of dormant creativity not reachable using traditional management methods. Fuelled by a compelling sense of purpose that accelerates profitability, it is a bridge connecting to a future with greater hope. It is a fundamental shift in the purpose of business, its leadership role and value to society.

In Decision Making for Dummies, I shared the story of a colleague who had worked with over a thousand companies. Based on observable patterns, he could accurately predict what the company would do next fifteen minutes after walking through the door. When questioned, the classic response was: ‘We know what we’re doing’ or ‘this is the way things are done around here’. Today executives are aware of the risk of being slow or unable to respond to surprises, including technological, social disruptions. Now is a good time to explore thinking flexibly. Use a wider lens to take in the bigger picture.

Widen the Frame

Unsplash

Unsplash

 

Chip and Dan Heath noted in Decisive: How to Make Better Choices in Life and Work, decision makers can get trapped into a narrow frame. The hazard of a narrow frame is that foresight and alternatives are blocked from view. The decision making context can change without giving notice. To illustrate, traditional companies restrict their ‘Why’ (sense of purpose) to making money (profit). It is proving to be not compelling enough to fully engage employee creativity — necessary in uncertainty. Yet, for the hard-core capitalist, it’s been enough.

That is changing. For society as a whole, for the communities where companies operate and for the ecological systems underwriting the economy — it is not enough. Nor is a narrow focus on profit enough to tackle the size of economic and social disruption. In fact, focusing 100% on profit increases risk exposure to dealing with the obscure effects of climate change for instance. The tables have turned 180 degrees.

Move to Purpose Driving Profit

Business Leading Life Affirming Action

Business Leading Life Affirming Action

 

Geoff MacDonald, former Global VP of HR for global giant Unilever put it this way.

“It’s a switch from profit being the purpose for a company’s existence, to purpose driving profit.”

The switch expands focus from short-term to achieve better balance with a longer view, beyond global domination. The switch in world-view expands ‘me’ to ‘we’, attracting shareholders who see the merit of being of service to society and the world we all live in.

An inspiring purpose isn’t limited to serving as the economic engine for society. It extends beyond financial security and survival. Employees can co-create solutions in teams and participate in challenges like the one issued by ThinkDif. Awakening the power of the human spirit to make radical jumps in dealing with complex challenges needs a beacon. A beacon needs to be strong enough to serve as a compelling focus to lift above the murky chaotic zones characteristic of culture change. Nothing about the past predicts what lies ahead.

Denial that the future is uncertain is no longer a viable strategy. Moving from denial and complacency to growth will take leadership that is divorced from authority. Sourced from within, this kind of leadership values growth, learning, autonomy, and meaningful interpersonal connections.

Everything is connected. Absolutely everything. Without capacity to see the inter-relationships, it has been easier to adopt a narrow frame just to remain within the comfort zone. The side effect? Controlling complexity represses creative talent.

Explore Alternatives Ways to Organize Work

Julian Wilson and Andrew Holm — Matt Black Systems

Julian Wilson and Andrew Holm — Matt Black Systems

 

Meet Julian Wilson and Andrew Holm from Matt Black Systems, a manufacturer of digital electronic components for the aerospace industry. After learning from a series of failed attempts at finding a better way of operating, they looked to Nature. Inspired by a leaf, they designed a way of working they call ‘Fractalism’. Each employee became a business, giving them the initiative and responsibility. Provided with the autonomy, skills and knowledge to run their own operation, employees share in the cost and contribute to research and development. Custom software supports operations, individual and strategic decisions. Think of individual cells each contributing to the vitality of the whole organism.

From thirty employees the company shrank down to twelve. Productivity rose over 300%. Profit and personal salaries doubled, a continuing trend. The key? Andrew and Julian realized the clue was embedded in the social system. Data helped unearth the insights in their case. Giving employees the freedom to be financially secure, enabled greater contribution. Walmart take note.

While Matt Black Systems created Fractalism, other companies are exploring alternative governance models. Self-management, Holacracy, Sociocracy 3.0, and LiquidO offer alternatives. Working with alternatives without insight into the internal social values in your company is risky. Data combined with observation, insight, experimentation, reflection and dialogue will result in an approach that fits.

Stop Throwing Away Money

 

Decision makers have assumed resources are in infinite supply. Landfills now hold more rare earth minerals than in all known global reserves, representing waste valued at $70 billion dollars. Telecom Sprint avoided $1 billion in costs by repurposing cell phones that still had all their functionality but weren’t ‘cool’ anymore. A tilt in perspective means companies can see opportunities currently being overlooked.

Expand Awareness and Skills

Engaging employees and customers in the achievement of business goals demands:

  • Making decisions as if you know nothing. No matter how much experience you have, the only way to navigate uncertainty is to keep asking questions — stay curious. Open the mind! Disrupt habits.
  • Looking back on your decisions. Identify one core value that consistently affirms the core values and sense of higher purpose in your company. Use it to align your strategic decisions. Novo Nordisk’s is ‘systemic health’.
  • Reflecting on the character and underlying beliefs in your company. What drives behavior? Is the focus still on profit and cutting costs? Or on serving a higher, wider, beneficial purpose?

In the end, the choice is to grow or to attempt to protect exposure to change. Where is your company in the arc of transforming from limited to exponential growth?

The source for this article was originally published in the Huffington Post October 30, 2015.

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