In this article Kate Griffiths explores Dr Robertson’s theory that corruption is almost inevitable in highly successful businesses. She goes on to show that there are new paradigm businesses emerging as a result of the level of corruption and brokenness in the current system. She looks at two examples that offer a new way of doing business.
It has always seemed strange to me…The things we admire in men, kindness and generosity, openness, honesty, understanding and feeling, are the concomitants of failure in our system. And those traits we detest, sharpness, greed, acquisitiveness, meanness, egotism and self-interest, are the traits of success. And while men admire the quality of the first they love the produce of the second. John Steinbeck in Cannery Row
This is a comment that got Dr Peter Robertson thinking some very profound thoughts. And I was one of about 30 people who were privileged to hear him expound his theories recently. I have synthesised some of the main arguments below as it sets the stage for what I want to explore.
Using the S Curve model/ growth model something I have not seen since I completed my MBA 12 years ago, one of his main propositions was that as a company matures, it loses it values. Why? He showed the S curve as a life cycle that starts with Spring and ends with Winter. He explained that new companies come into being because of ideas that people have. They tend to be full of the energy, vitality and new life symbolic of Spring. However such Tigger-like energy is not sustainable in the long term – something else is needed. For a company to grow and become established it needs systems and processes. As it starts to build those, its income grows. With growth it needs more structures to support the existing structures. This is a cost on energy, which could have been used on innovation and over time leads to an inevitable increase in bureaucracy. In other words people become slaves to the system rather than seeing it as a support to the organisation’s purpose. According to Robertson this is how the values are leeched out of an organisation’s being.
Interesting that only this week Ian Livingstone, CEO of BT, announced the company’s new values and his opening line was when was the last time you looked at our values? The number of values has gone from 12 to six. The new set represents half the number that the company had previously but is this simplification process enough to ensure BT’s future?
Looking at Robertson’s premise raises other questions like is there an optimum size for an organisation. Previous research suggested that that was 150 TO 200 (Business Evolutionist, 2004). Thinking back to BT which appears highly regimented and inflexible when one looks at its decision-making processes, there is a bigger question here. Should we start thinking about companies having a life span – people are not immortal. Why do we think that companies can go on forever?
Going back to Steinbeck’s thoughts – why is it so? Why do such loathsome traits prevail? One reason could be because the predominant world view is such that society values worldly possessions and status above all else. Or does it?
Is it that having values is not consistent with the demand for constant growth as Robertson suggests in his theory? Reading an article on Nicola Horlick’s success, she claims that it came because she accentuated her femininity in a male-dominated world and nurtured her people, which gave her loyalty and the ability to rise the top.
So with leadership is that what it takes? The servant leader model – keep serving others and you will find your own success that way? Or is there a growing desire for something radically different? By that I mean a model that is built on a new paradigm.
I would like to share examples of two movements that are responding to the growing desire for change. Look at Link4Growth (L4G), an organisation in its infancy and yet it has grown significantly since it started in Watford. It now stretches from Cardiff to Peterborough. Each group that meets tends to be quite small which enables real cross-fertilisation of ideas to happen. Link4Growth is about bringing power back to local communities through practising the grace of connection.
It is so refreshing no one is trying to sell anything. The focus is on building community, getting to know who the local businesses are in your locale and helping each other to grow through sharing experience. The most successful in the group tend to be those who have reached out and given of their time and expertise to others. In six months, people are queuing up to buy their services. Those that are chasing the money leave very quickly because the old paradigm does not work here.
Another similar movement that is showing the way through its powerful creator, Meg Montgomery, is Ideabash. Ideabash is a network of conscious entrepreneurs who support each other and enjoy wellth. Wealth is about making money whereas wellth is about creating abundance for all by adding value to the world. It is a true example of a fifth dimension business.
Here in the West the twentieth century was the century of the self and contrary to that trend, I would argue that we need membership organisations like Link4Growth and Ideabash. This is because when we have the weight of a movement/ institution behind us we have greater impact and influence on the system. Every individual craves recognition – another word for that is power. Power in itself is neutral; it’s how it’s used that determines whether it is good or bad.
In short, there is a growing recognition that propping up the current system will not lead to long-term success. We are in a period of transition as a new paradigm emerges. We need to get comfortable with uncertainty and create a new type of leader. These leaders are ones with a vision and a voice that are unpinned by values. Success then comes when they have connections that will support and build on the initial momentum. Implied in that mix is the ability to communicate clearly and with compassion. This type of leadership can be seen through the examples offered by L4G and Ideabash. These are value-based organisations. The key lies in how these organisations evolve as they grow. If we look back at the seasons as plotted on the Growth curve, let us consider the following questions: What will these networks’ values look like when they have moved from Spring through Summer into Autumn? Will they be as strong and definable at that point?
I would love to hear your thoughts in the comments.
Kate Griffiths is a qualified coach, speaker, community leader and writer, who is fascinated by the power of conversation. She teaches business owners, leaders and teams how to communicate effectively to build stronger relationships and thereby improve the possibilities for innovation and collaboration.
Kate is also the Community Relations Director of the 7 Graces Project, a thriving community and emerging social enterprise. The aim of the 7 Graces Project will be to provide an educational alternative and business incubator for a new generation of ethical, community-focused businesses.
8 thoughts on “Monday’s Musing: what is the relationship between values and profit in business?”
Also, in the US we have more and more worker-owned businesses; where the profits ARE the employees’ wages…. this inspires people to do the absolute best they can at their job. It’s similar to the concept of a coop. There are MANY vibrant alternative business models springing up from the ashes of this collapsed system; just because crony capitalism is dead doesn’t mean that the ability to earn a great income is dead. Quite the contrary! What these new systems are doing, is preventing a few people from making ridiculous profits at the expense of others. It’s for the good of all, not the good of the few.
Interesting Meg on Friday we talked a lot about John Lewis a big organisation here in which all employees have a share. The feeling was that it too represented the new and yet it has been around a long time.
Very interesting post Kate… and I whole heartedly agree with the analysis of the corporate situation.. Spring, Summer and Autumn… as companies grow so they need systems and processes to function… these then create hierarchies where ego’s and pride begin to reveal themselves… people begin to feel important and perceive they can exert power and control over others… personal agenda’s replace the original company agenda’s and then people become numbers and human capital not individuals or people…
The new paradigm treats everyone as equal… we are all here to serve a purpose and firstly to workout what that is… we are all important, we should all have a voice and we should all be able to contribute… people as Meg says who are passionate give 200%, why not? they love what they do… this is how we can make real progress…
Leaders do not create followers, they create other Leaders… we now move into an era where it is time to forget looking over our shoulders expecting someone else to do something… there is a mirror behind us now… and it is our own shoulder, our turn to step up and take the mantle… what we want to see in the world we must set about creating, and together we can… there are many many thousands of us who want and believe a better future is just around the corner… we just need to unite… not to create one big huge monster organisation, but to create devolved inter-connected inter-dependent local communities, all focused on helping each other, as a community, personally and in our business endeavours too…
We don’t need bureaucracy, we don’t need governments, outlandish rules, controls and people getting in the way because of the love of money, greed, pride or ego’s… we need good old fashioned core values, like integrity, honesty, trust, reliability, giving not taking, support, nurturance and taking responsibility for ourselves, our health, our community contribution and our income for sure… once we get to this then what a place that will be to live in!!
I agree that it is all about interdependence Chris. The interesting thing at we discussed on Friday is how immutable are people’s value. Are people constant? Look at parents – often the issues they have with their kids comes from a lack of consistency. Can we maintain a sense of unpredictable predictability? I certainly hope so.
Great post Kate! Certainly at our events those that come in with the ‘what can I get out of this’ attitude are the ones who don’t seem to fit in so well with some others and I am conscious of a few people who just don’t get it why so much business gets done in such a relaxed atmosphere… It doesn’t seem to make any logical sense to them, however it makes perfectly logical sense to so many! We have loads of fun at our free events too… Seems like a perfect recipe for success to me!
I think it is a great formula especially when I compare it to some of the networking events which are full of front and trying to be noticed rather than compassion and support for each other. So glad I found #L4G through you.
Interesting points Kate. I think this is much more about the culture and behaviour of the organisation rather than their size or length of time in business. There’s a model called Competing Values Framework that diagnoses organisations into 4 types – Clan, Adhocracy, Market, Hierarchy. It’s the Adhocracies that preserve values over time and size as their culture is based on innovation, adaptation, hope and allowing personal autonomy and power. Virgin and Apple are classic Adhocracies as was my ex-employer Capgemini .
Thanks for taking the time to comment Cindy and in such a thoughtful way. Indeed it is about the culture of the organisation but I would argue that the culture morphs over time and that when there is a relentless drive for profit that there is an adverse impact on culture. Look at Enron, it was full of Harvard graduates. It could have been a mini-Harvard except that its ultimate aim was different so we can see what happened to those values.
As for Cap Gemini, I have no personal experience of that organisation but I do know many like it that definitely fit the pattern described in the article. Also a nuance which I did not bring out in the article is that the view from the top can look very different from what experienced by middle managers and those at the chalk face. You were very senior at Cap Gemini and so perhaps were closer to the aspirations. The challenge is how to trickle down the ideas from the top so that it is felt through the organisation. It is rather like a rain forest – you know how dense the canopy is as everyone strains for the light so very few drops of water actually get through to the ground.
You mention Apple. Well let’s take look at that for a moment. Steve Jobs was definitely a creative innovator so in the example I give very much in Spring. He had Timothy Cook, the current CEO as his COO and they made a great team because Timothy is more of a systems person who can put in the structures for growth and longevity. Now that Jobs has gone, will Cook know when to pass the baton on to another innovator so Apple can move into growth again or will he hang onto the baton and we will see Apple start to stagnate and potentially go the way of Nokia?
Whether we like it or not the culture of an organisation is influenced to a huge degree by those at the top. To comment on the model you highlight, I would need to see more of your thinking but I hope my comments have clarified some things for you.
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