16 September, 2014

Do Corporate Dinosaurs understand the new rules?


Corporations only exists to create profit to shareholders. Their operations should be limited by the law only. 
These rules laid out by the economist, Milton Friedman are still the guidelines for most large corporations in our time.
Communications experts has changed the term profit to value and shareholders to stakeholders. Corporations has even added CSR departments prove they care about other things than money. Yet most corporate messages has a single eyed focus on delivering the quarterly profit results to shareholders. There is a distinct lack of inspirational goals and visions that could engage employees and customers. Reinvestment of the profits back into the equity of the firm and to acquire competitors does not reveal a belief into a wonderful future. 
These companies resemble like large corporate dinosaurs happily grassing on the fat fields of loyal or locked customers. The dino's are feeling secure in their sheer size and power. But something has been changing in the dinosaurs world. New agile creatures has appeared; creatures that does not have to wait for the meteor strike to challenge the status quo.
The Dino's are from an age where size has been an asset and used to crush or take over their competitors within a well defined set of rules. Surprisingly these new agile companies are not following the old rule book, they are changing the game. Agile companies like Netflix, Tesla, AirBnB, Uber and others are seriously disrupting existing industries that has been stable for decades. Size is not an asset anymore - it has become a liability.
Most of the Dinosaur corporations are behaving like nothing has happened. They do not accept that the rules have changed and assume that the disruptions are limited to niches of certain industries. Or they think it is about technology, internet or mobile and that they will be able to compete.
What they might fail to understand is these companies are founded on very different understandings of human behavior. Humans are not seen as resources predominantly motivated by monetary punishment and reward. They are not called “Our greatest strength” and then forced into confined boxes, grades and rankings. The agile companies have a different relationship with their employees, based on common emotional goals and social identity. They actively let employees explore the social network context of the company, irrespective if the network is internal or external to the company. They do not use the dinosaurs command and control structure and strict rules for crossing the corporate boundary. Their roles, responsibilities and teams change according to the task at hand and is based on self-organisation.

The behavior of their people is not dictated by HR policies, described in legal documents, designed to defend the corporation against the employee.  The agile companies Terms and Conditions are not designed to protect the corporation against customers.
But the most important difference between the dinosaurs and the agile organisations are in their purpose; why they exist. The agile organisations know why they exist, what they want to achieve and they are able to communicate it.
They know that profits is not a goal in itself - it is an outcome of reaching a goal. If this goal has noble and emotional elements it can engage customers, employees and other stakeholders above and beyond profits. 

Engagement is the meteor that will destroy the dinosaurs world by changing the rules. Stakeholder engagement creates true shareholder value. 

“There can be no strategy without noble cause” Clausewitz

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