In August this year, a meeting of nearly 200 CEOs under the aegis of the US Business Roundtable concluded that the age of businesses focusing only on financial performance indicators is coming to an end(i). Instead, they argued, businesses must be held to account against a wider set of measures of impact for stakeholders beyond shareholders, unified by a sense of 'purpose' for their organisations.
The message in itself is not new, but it gains new credibility in its source. If the senior-most executives of some of the largest enterprises in the US say it, surely it will be so?
Corporate messaging has a well-established record of using simple language to express grand ambition. Its clarity and economy of words is beguiling. It often masks a reality fraught with complexity, challenge and the need for deep, fundamental shifts in long-established systems. Delivering on the intention of the Business Roundtable will require all of that and more - and the difficulty exists at a very human level.
The 'always on' world of technology and social media has created the expectation that almost anything, no matter how complex, can be achieved quickly and without the hard work previously required to achieve success. Even climbing Everest, that 'pinnacle of human achievement' can now be done with less experience, training or expertise than ever before.
Similar expectations pervade in relation to organisational change - but the track record remains poor. What are we missing?
Over half a century ago, Kluckhohn and Murray(ii) observed that (paraphrased) 'every person is in certain respects like all other people, like some other people and like no other person' Accepting that organisations - even in the age of technology and artificial intelligence - are made up of people, it might be reasonable to assert, following Kluckhohn and Murray, that every organisation is in certain respects like all other organisations, like some other organisations and like no other organisation.
What makes an organisation unique is a set of characteristics I have come to call its 'human factor': conscious, unconscious and subconscious shaping forces for how people make sense of the world, others in it, and themselves. The human factor combines cognitive elements such as knowledge and experience or expertise, with more affective aspects such as the expectations people have of their leaders, the organisation and others around them, and the perceptions they have of what is 'really going on' or giving rise to what they think they see happening.
When an organisation achieves a successful way of operating, it does so by operationalising the way it works to eliminate as much variation as possible from its success formula. The process in effect creates a context in which interpersonal tensions and conflicts are held in check.
When the organisation's context changes however, the human factor characteristics are triggered in ways that organisational leaders and managers may find irrational and incomprehensible.
In fact however there is indeed a rationality to what is going on - but accessing it demands going beyond the superficial observations and understanding the human factor and how it is playing out in behavioural terms.
Anxieties, aspirations, anchors and associations or 'fantasies' are likely to influence how ready people are to take brave steps into uncertainty or cling tightly onto status quo. That influence happens outside the conscious awareness of the people involved.
Naturally, the same is true of those engaging with organisational change in roles as coaches or consultants (or a combination of the two). In my own direct experience, the anxiety projected by a CEO into her leadership team at the lack of progress on long-term goals become a source of my own anxiety at my efficacy as her coach. The more I was triggered, in response I looked more and more urgently for 'quick solutions' or magic formulae - particularly in what had worked for me with other clients or in case studies I could read and reapply - to assuage my own anxious response.
Kets de Vries(iii) calls this the 'action trap': "...react(ing) immediately to information given by the client, without being aware of this acting out (of perceived meanings)".
What this 'flight to action' does, as might be self-evident, is lessen the likelihood that the real human factor elements in play will be surfaced and worked with - in favour of 'expediency' that in ignoring what is going on at the unconscious level between the real people involved, is a short formula to failure. While change sponsors might be comforted by the illusion of 'progress' in the form of activity, the reality is likely to under-deliver in terms of creating any form of sustainable progress towards the desired change.
Reality is that no matter how clear the process looks on the slick charts and presentations, leading change requires rolling one's sleeves up and getting stuck into the messy world of human behaviour, relationships and anxiety. Approaches to delivering change work to the extent they take into account the human factor of this organisation, with these people in this context. The effectiveness of anything else is illusory.
Returning in closing to the ambition set by the Business Roundtable: If this shift to a wider conception of the 'purpose' of business is to be so - it rests with senior executives to get their hands dirty, and to take the lead in making it happen.
[ii] Kluckhohn, C., & Murray, H.A. (Eds.) (1953): Personality in Nature, Society and Culture. New York, Knopf
[iii] Kets de Vries, M.F.R. (2010): Reflections on Leadership and Career Development. San Francisco, Jossey Bass
KDVI Writer's Colony, 2019