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This article is a call to leaders and consultants who believe that meeting the bottom line is necessary, but not sufficient. It is an invitation to those who want to make more balanced and wiser choices in the present so that the future reflects back on us kindly: it reflects that we considered our hopes and dreams for the future in our daily actions. We hope that those who celebrate the start of the 22nd century do not need to wonder about what our hopes and dreams were. They will be able to see them in the world they inherit. Purpose Periodically throughout an organization's life, leaders refine the purpose and direction of their organization. In considering their organization's mission and vision, managers usually use information about the organization's performance and trends in the business environment (market shifts, changes in customer needs, advances in technology, demographic patterns, new government regulations) to guide their thinking. In the mission and the vision they may try to capture their strategy as well as their aspirations for the future in relation to the market. Some include their hopes regarding the organization itself, its values, and its people. Too often, defining an organization's mission and vision is where the war between "either/or" thinking and "both/and" thinking is fought. It is in these statements that the false dichotomies between people and profits, environment and profits, long-term investments and short-term profits get captured. But, what if organizations take a longer-range view and consider organizational longevity and societal sustainability in addition to trends in the business environment and the needs of their customers? How would their deliberations differ if they asked themselves whether their organization makes a profit so that it can continue to exist versus thinking that it exists only to make a profit? What if we all believed that the purpose of organizations is to sustain life on the planet? To take this longer-range view of an organization's purpose, leaders would need to define what they want to create for organizational generations to come as well as what opportunities they want to respond to in the market place today. In Competing for the Future (1994), Hamel and Prahalad invite organizations to define strategy as more than simply positioning themselves in the market place. They believe strategy includes influencing the evolution of the industry. We suggest broadening the concept of strategy even further to include how the organization wants to influence its long-term future as well as that of the whole planet. Is this too large a stretch? Why is it necessary? Why can't corporations simply continue on in the path of increasing rewards for senior leaders and profits for investors? The truth is they can, and they probably will be able to for awhile. However, this direction is not sustainable. Although we may be recovering ecologically in the developed world, the planet as a whole is on an unsustainable path. The depletion of our so-called renewable resources is one of the greatest threats to sustainability. As Dee Hock, the visionary founder of Visa summarizes it, "Corporations… have gradually freed themselves of all restraint and have become mechanisms for the capitalization of gain, and the socialization of loss. For example, all gain increasingly goes to shareholders, those with power and wealth, and not to the community or employees or customers. At the same time, the corporations demand the right to exploit irreplaceable natural resources with minimal payment, and to use the biosphere as a free sink for product waste. If a corporation fails, cuts twenty thousand jobs, or moves a plant overseas, the people and communities that supported them don't disappear, they become a social cost." (Scott, 1996, p. 40). And, we would add, the cost is paid not only by tax dollars; it is paid in the loss of human faith in the future and therefore, commitment to acting responsibly in the present. We believe that for organizations to live out their potential and meet their obligation to the people and planet on which they depend, they need to consider their role in providing jobs, giving back to the communities in which they reside, and contributing to the sustainability of life. An organization's purpose - when balanced - would be defined in terms of itself, its shareholders, customers, employees, the community, and the planet. "Sustainability" is most often associated with a
sustainable economy. Stuart Hart (1997) says it well, "The challenge
is to develop a sustainable global economy: an economy that the planet is
capable of supporting indefinitely." However, the title of his
article, "Beyond Greening: Strategies for a Sustainable World,"
is more on target (Harvard Business Review, p. 67). Sustainability is not
just about the economy. It is also about our world. Willis Harman's (1994
and 1992) definition captures what is required for a sustainable world.
According to Harman, sustainability includes:
Such considerations may seem overwhelming when organization leaders are focused on surviving in a relentlessly quicksilver market place. The dichotomy between growth and a healthy environment appears fixed and the problem seems intractable. The social and political consequences of stopping or reducing economic growth are so terrifying that reasonable discourse seems impossible. Thus, the first challenge is to discuss what seems indiscussible: that is, tackling the apparent dilemma that profits depend upon economic growth and economic growth goes hand-in-hand with environmental deterioration. Defining sustainability this broadly is necessarily ambitious. However, several large corporations are already doing so. For example, Monsanto is seeking growth through sustainability (Magretta, 1997). They have seven "Sustainability Teams" which are pursuing laudable goals such as measuring the ecological efficiency of Monsanto's processes; developing a methodology to account for the total cost of their products' life cycle, including environmental costs associated with producing, using, recycling and disposing of it; developing criteria to measure whether or not they're moving towards sustainability; exploring areas of stress in natural systems and how Monsanto's competencies could meet human needs with new products which don't aggravate and could possibly repair ecological damage; learning how to develop and deliver technologies to alleviate world hunger; and finally, educating all 29,000 employees about what sustain- ability means and what they can do about it, including carrying the message to other organizations. They are also marketing and developing "restorative products" - ones which have a positive impact socially, ecologically, and economically. We are apparently not the only ones who think organizations have a purpose beyond profit. According to a poll conducted by Business Week/Harris in early 1996, 95% of adults reject the view that a corporation's only role is to make money. However, in a study of executives at Fortune 1000 companies conducted by Cornell's Johnson Graduate School of Management, only 58% of the executives strongly agree that corporations have a responsibility to address social issues like work-family, diversity, equal rights, and the environment. Only 14% agree that corporate leaders are doing a good job at addressing those issues. This survey also showed that 52% of executives strongly agree that a corporate leader's responsibility is to the greatest good for the greatest number of stakeholders, which includes shareholders, employees, customers, and local communities ("Does It Pay To Be Ethical?", March/April, 1997, p. 16). We are not taking a crack here at capitalism or at wealth. We're talking about balance. For example, the increase in earnings for stockholders far exceeds the increase in wages. This continues to be true despite the recent and substantial dip in earnings. We have great empathy for the organizations and leaders who challenge the usually unquestioned maxim of capitalism that you pay your workers less so you can pay your shareholders more. Companies who try to pay their employees higher wages face fierce competition and pressure from investment advisors and pension fund managers. The price organizations pay for these inequities is hard to see, but it is there. Disgruntled and embittered employees certainly do not bring the best they have to the table and leave the organization at the first opportunity. They leave with all of their knowledge, experience, and potential commitment. In all our years of working with organizations, we have yet to meet an individual who does not want to do a good job, who does not long to have impact, to contribute to the overall success of the organization and/or their immediate team of workers. Albeit that desire may be buried underneath layers of cynicism and anger, it is there. As captured by Tom Patrick, the Brooklyn fireman whose words end Stud's Terkel's classic Working, "I worked in a bank. You know, it's just paper. It's not real. Nine to five and it's shit. You're lookin' at numbers. But I can look back and say, 'I helped put out a fire. I helped save somebody.' It shows something I did on this earth" (1974, p. 479). We have considered an organization's purpose regarding shareholders, employees, and the planet. How does an individual's purpose fit into this? Because so many of us spend so much time in organizations, they can be an important venue in which we live out our life's dream. Thus, an organization's purpose and direction also needs to be built, at much as possible, on the mission and vision of the people in the organization. It is possible to blend individual purpose with organizational purpose by including opportunities to clarify and share individual visions. This adds a power to the collective vision that would not otherwise exist. This involves two steps. One is to clarify one's own vision for one's life and the other is to work collaboratively with others to build a shared vision for the organization. By starting with people's personal vision for their own lives, they can then ask themselves how the organization's vision can reflect and amplify their own (Senge, Roberts, Ross, Smith and Kleiner, 1994, p. 82). Leadership and Inclusion Most of us, remembering the words of our parents, consider paying "undivided attention" to one task a worthy goal. We act on the belief that singular focus is the handmaiden of success. Leaders of organizations no longer have this luxury. They need to divide their attention across a number of internal and external fronts. Internally, the fronts include producing environmentally respectful products, running effective and efficient operations, developing competent and committed employees, and creating a nurturing and enabling organizational environment. Externally, the fronts include satisfying customers and shareholders, increasing the confidence of investment advisors, and supporting the health and well-being of communities and the planet as a whole. Up until now most managers have paid disproportionate attention to performance and profit. Frequently they see performance/profit and people/planet as mutually exclusive. Given the broader and more ambitious organizational purpose described earlier, leaders will have to think more broadly about their role and about who they need to include to carry it out. Similar to asking an organization's leaders to expand their view of their organization's purpose, we also need to ask leaders to expand their view of their role. We need to ask them to look at who they are, what they truly care about, what they want to help create in this world, and how they can become more intentional with the influence they wield. A powerful way to leverage their influence more intentionally is by creating a more inclusive environment so that people can work with leaders to face the various fronts. Leaders can create more inclusive environments by entrusting people with information, taking a firm stand about people working together, and providing vehicles through which people can meaningfully influence or be involved in decision making. For organizations to tackle the purposes related to employees, community, and global sustainability as well as customers and shareholders, leaders will need to mobilize all the knowledge, wisdom, and commitment that are resident in the people in their organizations. One key to accessing these resources is inclusion. It is axiomatic that inclusion engenders understanding, a sense of belonging, and commitment; and that exclusion engenders misunderstanding, isolation, and self-protection. Creating a more inclusive organization increases the likelihood that people will apply themselves completely to accomplishing these more ambitious, multi-faceted purposes. Inclusion in organizations means that in addition to being fairly compensated for their work, people have the opportunity to learn, develop their potential, and influence what the organization does and how it does it. This means, among other things, that they have more of a role in making decisions. One's definition of power is instrumental in one's openness to including others in decision making. Leaders have traditionally defined power as control over resources and the means to reward, dominate, coerce, or punish people. A more recent and useful way to define power is the ability to influence others to get things done. Defining power as control implies that sharing power or giving any of it away means having less. Thus, power is a limited resource. It is like a pie: if you give any slices away, you have less pie. If a leader gives away power, she is less powerful. Defining power as the ability to get things done opens up more possibilities. If a leader gives power away, it increases her ability to get things done. So, power is an unlimited resource. Thus, to get more done, one shares power and creates more inclusive decision-making processes. It is difficult to imagine how organizations will meet all the challenges facing them without sharing power and increasing involvement in decision making. Through their positions, leaders get to decide who will influence or make decisions. They can balance their use of power and increase its impact by involving stakeholders in decisions previously considered theirs. By involving stakeholders in making decisions, especially the ones which have impact on the long-term direction and success of the organization, leaders will achieve four striking results. First, they will have more confidence in the decisions that are made because they reflect the knowledge and experience of a broad range of players. Second, involving stakeholders significantly increases the likelihood that the decisions will be supported and carried out in the manner intended-there will be a group of people committed to turning the decisions into reality. Third, the organization will have more knowledgeable and skilled workers, board members, customers, suppliers, community members, and shareholders. Fourth, if the organization's purpose is used as the context for decision-making, the decisions are more likely to reflect more balanced views of the organization, its purpose, its role in the community, and how it contributes to the health of the planet. In other words, the decisions will reflect people's hopes for their family, community, and planet as well as for the business. But if managers believed these benefits would accrue from more inclusive decision-making processes, they would be doing it now. They don't for several reasons. First, the pressure today to make decisions based on more and more complex sets of information and in a shorter time frame can lead them to think that stakeholders do not have enough information and that there is not enough time to include them. This may be true for some decisions, but not for all. Decision-making processes can be used to educate stakeholders. Also, the use of technology and large group conferences have decreased the unwieldliness of involving large numbers of people in decision-making. Finally, technology has also made obsolete the notion that leaders should make decisions because they have the most information. Information systems make information available to more people in organizations and allow (and in some cases make it necessary) for decisions to be made as close as possible to the customer and where the work is being done. Second, leaders get caught in a false dichotomy when they think that they have to make a choice between "a few decide" or "everyone decides." This does not take into account the different levels of involvement in decision making: providing input, providing feedback, developing recommendations, or participating in making the actual decision. (See Figure #1.) The challenge is to find the right balance of when the decision-making process involves only a few and when it can and should involve many. If there is too little involvement, decisions may not be understood or supported, but resisted or merely complied with. Or the decisions may simply be bad ones because they lack the benefit of consideration by a variety of stakeholders. On the other hand, involvement can slow the organization down and make decision-making unwieldy. Involvement in decisions does not mean that everyone gets to participate in making the decision. The key is the opportunity for meaningful involvement (i.e., an opportunity to influence the decision). Criteria to decide whether and when to include stakeholders include the time available to make the decision, the understanding and support which will be required to carry it out, the knowledge or expertise required to make the decision, whether the decision-making process would help develop the strategic thinking capabilities of stakeholders, and, of course, whether the leaders have already made their decision. The third reason that leaders do not implement more inclusive decision-making processes is that they do not believe that anyone other than the top few people in the organization have the right or the savvy to make the decisions. "If they were smart enough, they would be where I am and then they would get to make the decisions." That kind of thinking is, of course, a self-fulfilling prophecy. Only by involving stakeholders in the decision-making process can you increase their capability and the organization's intellectual capital. All of the benefits of more inclusive decision-making processes can be realized only if leaders believe as we do that the findings of the survey of national public opinion commissioned by the Merck Family Fund in 1995 are on target, not just in the United States, but in the majority of developed nations. This survey found that (1) people believe that our priorities are out of whack-that materialism, greed and selfishness are crowding out more meaningful values regarding family, responsibility, and community; and (2) people are alarmed about the future and concerned about the implications of the skewed priorities for future generations if we continue on this course (The New Leaders, 1996, p. 1). These results suggest that people might be willing and able to give more balanced attention to themselves, their family, their communities, AND the rest of the world than they currently do. But organizations have to create the container in which this can happen. Such inclusion seems to be good for business. Kotter and Heskett (1992) found that over an eleven year period companies which emphasized the involvement of various constituencies (i.e., customers, stockholders, and employees) increased their revenues by 682 percent, increased their net incomes by 756 percent, and expanded their work force by 282 percent. This compared to an increase of only 166 percent in revenues, 1 percent in net income, and 36 percent in the work force of organizations which did not do so (p. 11). Decision making during change initiatives presents a great opportunity to change an organization's habit of how decisions get made. By involving as many stakeholders as possible in the process, leaders increase the likelihood of achieving the outcomes of the initiative and improving the organization's decision-making processes. Mutual Accountability It seems harder these days to find individuals or organizations who are willing to be held accountable for their actions. We seem to be having an epidemic of finger-pointing. "It's all his (or her) fault" is the current leitmotif. Organizations blame their customers, suppliers, competitors, or the government. Functional leaders blame other functional leaders. Individuals blame other individuals. This collective chorus may be understandable. It is also lethal. It gives permission, to those who want to take it, to do whatever they want regardless of the negative consequences for others. They will not be held accountable for their actions. This lack of accountability can feed our sense of helplessness and hopelessness. "Why try to make a difference? It's impossible." Such feelings can lead us to pretend that what anyone does will not matter. The numbers of us, the size of our organizations, the number of people with whom we deal every day-all of this can feed a sense of ennui. To achieve the organizational purposes related to employees, community, longevity, sustainability, customers, and shareholders and to develop the more inclusive organizations we believe are critical to creating a desirable future, we will need to develop more mutual and balanced accountability. To achieve global sustainability, organizations must accept the entire planet as the context within which they are doing business. They need to ask themselves: "Are we part of the solution to social and environmental problems or part of the problem? For what do we want to hold ourselves accountable?" People will need to hold themselves and their organizations accountable for their actions. This will mean changing mind sets so that we expect to be held accountable for our actions and building vehicles so that we can more easily hold one another accountable. This lack-of-accountability epidemic is exacerbated by organizations which seem to be trapped in a detrimental cycle of parent/child relationships in which leaders complain about the lack of responsibility of workers and workers gripe about the greed, arrogance, and ignorance of their managers. Neither side appears very enthusiastic about creating relationships in which people, regardless of their positions, build agreements about responsibilities and hold each other accountable for those agreements. The well-worn path we see is that leaders, via job descriptions and performance expectations, define the responsibilities of their direct reports who in turn get the job done to a lesser or greater degree, often with little or no recognition or reprimand. In other words, employees are rarely held accountable. Conversely, workers do the best they can with the minimal resources and guidance provided, often under very frustrating, disabling conditions. Lack of accountability also occurs in more entrepreneurial and collegial organizations, but for different reasons. Here, it stems from each person seeing herself as an independent agent, responsible primarily for her own work or subset of the organization. Job descriptions are rare and organization charts are eschewed. Anyone outside of one's function does not have the "right" to interfere in what she does or how she does it. She can choose to play by the rules or not. Rarely are there any consequences. People prize their independence and see it as a right. The cost of this lack of individual and cross-functional collaboration or accountability can be extremely high, especially when the development and delivery of products and services to customers requires significant cross-functional problem-solving and decision-making. In some ways, managers are even less accountable than the people who work under their supervision. Employees usually have no means (other than perhaps the occasional employee survey or a formal union grievance procedure) to even express their concerns, let alone hold their managers accountable. It is always surprising and frustrating to hear someone rejoin, "I knew it was the wrong thing to do…but my boss told me to do it. So, I did." It is demoralizing to hear grown people speak in such a way, but it is also understandable. It is a special individual who will do what's right simply because it is the right thing to do. We have been well-schooled in obeying authority. Experiences with humiliation, punishment, and removal of privileges and rewards remain embedded in our memories and continue to affect us like a damaged piece of DNA. If our goal is to make an organization's employees, officers, and financial backers (e.g., shareholders, taxpayers, philanthropists) accountable to one another, then we must expand the use of current vehicles and develop new vehicles through which this balancing can occur. We believe the following six approaches hold great promise for developing and sustaining more balanced and mutual accountability in organizations. First, tie a percentage of executives' pay to achieving performance objectives related to stakeholders and social responsibility. Objectives related to stakeholders should include satisfaction measures for customers, employees, shareholders, and community. Social responsibility should include objectives related to global sustainability. Eastman Kodak was in the forefront of this when they developed their Management Performance Commitment Process (MPCP). They decided, in response to a shareholder resolution, to measure 50 percent of the CEO's performance based on shareholder satisfaction, 30 percent on customer satisfaction, and 20 percent on employee satisfaction and public responsibility. In addition, nine hundred of their top managers were asked to develop performance objectives in these same categories (Tying Executive Pay to Social Responsibility, 1995, p. 47). Although we could easily argue about the weighting of the categories, we believe the decision was directionally on target. Second, increase shareholder influence in corporate decision making. For example, a recent ruling by the Securities and Exchange Commission now gives shareholders a voice in corporate employment practices. Prior to this time such matters were the purview of corporate directors and officers. We hope the SEC will continue in this direction and allow shareholders a say in other decisions, including the quality, safety and environmental friendliness of products; hiring policies; political and social contributions; whether advertising campaigns are socially acceptable; and whether employees' salaries should keep pace with corporate profits. Third, redefine the role of the board of directors to include more than protecting shareholders' financial interests. The board should be responsible for making sure the shareholders' views are considered on a number of issues, not just the financial ones. If the purpose of the organization has expanded and the role of shareholders has expanded, so should the role of the board. This would make following the guidelines established by the Council of Institutional Investors for directors even more important. For example, they suggest that directors should have no connections to the companies they govern other than their board seat. This alone would prevent directors from profiting from board decisions and therefore being in a conflict of interest. Fourth, employee stock incentive programs (ESOPs) not only create greater balance in who benefits from a corporation's performance, they also create real ownership. As Home Depot's Chief Executive Officer states, employee stock has been "one of the cornerstones of our success...associates feel that they own the stores, that they own the merchandise, that they have total responsibility for the customers in their aisles, and that they create value" (San Francisco Chronicle, July 23, 1998). Fifth, 360 degree performance management processes can be used to engage all leaders and employees at every level in building agreements with one another about responsibilities. They can hold one another account able for those agreements through feedback, recognition and rewards, and employment contracts. Sixth, mutual accountability can also be built around agreed-upon core values and a long-term vision for the organization. When all members of an organization feel ownership for a balanced set of core values and a compelling vision of the desired future, it is less likely that aspirations beyond financial well-being will take a second seat to earning profits when times get tough. In concert, these approaches (i.e., tie between executives' pay and their performance related to stakeholders and social responsibility, increase in shareholder influence, expansion of the role of directors, ESOP's, 360 degree performance management processes, and adherence to agreed-upon core values and vision) can increase the mutual accountability of corporations to their employees, employees to their corporations, and corporations to their shareholders. Not-for-profit and governmental organizations can use the same approaches to increasing internal accountability but would not have the added benefit of the external push for greater accountability from directors and shareholders. Although we as consultants may not be in a position to influence decisions regarding the role of shareholders and directors, we can advocate for performance measures related to stakeholders and social responsibility, 360 degree performance management processes, and approaches to developing mutual accountability around the organization's core values and long-term vision. We can also plant seeds of these ideas with the senior executives with whom we work. Interdependence and Relationships The Y2K "problem" - especially the fears that surround it - are a tacit acknowledgment of how interdependent the world's economies, societies, institutions, and individuals have become. The downturn in the Japanese economy and the ensuing and ongoing adjustments in markets around the world because of it are painful reminders that any beliefs we have left about national or institutional independence are illusory. The truth is that the underpinnings of our parochial loyalties are eroded daily by changing technologies, new organizational consolidations, and ever-more complex global alliances. The membership and location of our favorite professional athletic teams change with regional economic tides. The names of our local banks change over night. Cars that we think of as foreign imports are often more American-made than those we think of as domestic. Interdependence is the warp and weft of our world. Our global economy is a current fact of life. It is comprised of three different overlapping economies, each of which spans countries and continents (Hart, 1997). These three are the market economy, the survival economy, and nature's economy. The market economy is the one in which most of us work. It is the world of commerce in the developed nations. The survival economy is found in rural parts of developing countries. This is the world of the traditional, the world of village life in which people meet their needs at a subsistence level directly from nature. Nature's economy is the foundation for these two. It consists of the natural resources which support the market and survival economies. The interdependence of these three economies is increasing. In fact, they seem to be on a collision course and in combination "are creating the major social and environmental challenges facing the planet: climate change, pollution, resource depletion, poverty, and inequality" (Hart, 1997, p. 69). Coping with these global interdependencies or trying to positively influence them will require major growth for us as individuals and consultants. It will require us to see these economies as integral parts of our lives. We will have to see ourselves literally as citizens of the world. Only then will we be able to help the leaders with whom we consult to balance their attention among their families, organizations, communities, and world. In consulting to organizational redesign initiatives, we, in the past few years, have asked our clients to take a "whole systems" view of their organizations. What we have seen in doing this is that leaders and organizational members can stretch themselves beyond their functional loyalties to embrace a whole organization, a complete system -including its customers, suppliers, and local communities. However, the "whole system" that till now was the organization can no longer be defined or bounded in the ways it has been in the past. For most corporations the "whole system" is now the planet. For example, even the smallest lumber company in northern California touches at least two continents and three cultures. They ship trees across the Pacific to Asia where they are turned into plywood to be sold in Canada. It is a simple process, but it is one which covers thousands of miles and involves at least three countries and four languages. Where does this "tiny" organization's boundaries begin and end? In the past, local or regional dynamics had primary impact on our lives. Today we're experiencing a much greater impact from global dynamics and patterns. The price we pay for gasoline in California or Texas or Maine is affected by decisions made by the leaders in Kuwait, Libya, and Iran. The cleanliness of our air depends on whether the rainforest fires in Malaysia are contained. The U.S. Government's policy regarding immigration affects political unrest in Mexico. Current designs of automobiles and transportation systems in Sweden or the UK affect our consumption of petroleum, and this in turn affects the political tensions in the Middle East. Obviously, the list of global connections and interdependencies is endless. Currently, corporations and nations try to ride the impact waves these interdependencies produce by seeking the greatest good for themselves. They do this all too frequently at the expense of the larger global community. Our question is whether there is a way for these corporations to begin shaping the impact of these interdependencies so that they contribute to the greatest good for the greatest number of people world-wide. This, we think, would in turn increase the likelihood of their own long-term survival. Defining an organization's purpose in relation to its goals regarding global sustainability, using more inclusive decision-making processes, and using more potent vehicles to hold people accountable for their decisions and actions, could begin to provide some means to influence these impacts. Of course, this is a huge question, one with which people world-wide are grappling. Here, we hope only to open the door to more answers by asking these questions of our clients and colleagues. For any of us to feel a part of something as large as the world, and to be concerned about these global interdependencies, we first need to feel related to those close to us-families, friends, and co-workers. Feeling these relationships is a first step toward providing a sense of belonging and connection that, once established, would help us more effectively recognize the world's interdependencies and thereby begin handling the larger challenge of being responsible world citizens. Organizational philosopher Charles Handy believes that "A sense of belonging is something humans need if they are to commit themselves to more than simple selfishness" (Handy, 1995, p. 49). Many cultures in the world understand and appreciate this connection between good relationships and a more expansive consciousness. They understand the importance of good relationships in accomplishing tasks in both business and community. For example, South Africa's establishment of the Truth and Reconciliation Commission seems to be an acknowledgment of the necessity of moving both task and relationship forward at the same time. We believe that the Parliament's passage of the Promotion of NationalUnity and Reconciliation Act three years ago was a powerful recognition that the task of rebuilding South Africa would be impossible unless the horror of the almost unthinkable damage to individual and collective relationships was healed. There's no question that this healing is a primary step towards South Africa's full participation in the world community. In contrast, most of the organizations we work with, particularly in the United States, are out of balance in this dynamic. Getting the job done, accomplishing the task, nearly always takes precedence over everything else, including building and maintaining relationships. It is as if we all believe that somehow one can happen without the other. As a result, much damage is done to people, their relationships, and their organizations. More deliberate attention to relationships is necessary to create more balanced organizations. Relationships are the building blocks of expanding an organization's purpose, making them more inclusive, and increasing our mutual accountability. "We are all struggling to get to the future, and no one can get there alone. All work emerges through relationships" (Webber, 1994, p. 91). However, simply creating these relationships will not be sufficient. There are many other aspects of an organization which can undermine the most collegial of relationships. These include the organization's purpose, core goals and values, strategy, business processes, structure, systems, skills, and culture. To create and maintain better relationships, all elements of the organization need to be examined and brought into alignment so that they support the accomplishment of the organization's task while nurturing the community of relationships. For example, is the performance management system designed to engender collaboration among people? Do the agreed-upon values of the organization include collegiality, learning, and collaboration? Is information shared globally, or is it conservatively doled out to the chosen few? Are the business processes designed in such a way that cross-organizational collaboration is discouraged? Balancing attention between accomplishing tasks on one hand and developing good local as well as global relationships on the other is important for two reasons. First, it reflects what is needed on a global level. Second, it is increasingly key to an organization's survival. As technology disappears as the primary source of competitive advantage and information becomes more important than raw materials to produce goods and services, the keys to an organization's success are inside people's heads. It is their knowledge, abilities, and commitment which make the difference. One of the keys to people using and developing their knowledge and abilities is their relationship with the organization and with their colleagues. Organizations provide the venue and resources so they can use their knowledge. They also provide opportunities for interactions with colleagues through which workers learn, expand, and refine their knowledge and abilities. It is through these interactions or conversations that they build their relationships. It is through their relationships that they get work done, learn, understand their interdependence with others, and develop a sense of belonging and inclusion. Through conversations people deepen their understanding of what is really going on in the organization, with customers, and with their colleagues. They are key to an organization's survival. In order for an organization to adapt to its ever-changing environment, people in it have to learn. One of the prime ways knowledge workers learn is through interactions with one another. Perhaps "the most important work in the new economy is creating conversations" (Webber, 1993, p. 28). There is an analogue in the natural world. Birds that flock together (e.g., titmice) learn faster than birds which do not (e.g., robins). It is through their interactions that birds learn new survival skills from one another (Wyles, Kunkel,and Wilson, 1983). This turns the old assumptions around. People do not need to mold themselves to fit into the organization, rather the organization needs to fit the people. Organizations need to change themselves to draw and retain people. They need to appeal to more than people's desire to earn a living. They need to meet people's desire to be in relationship, to learn, and to be included. Thus, organizations need to encourage conversations. There is some indication that the market is starting to value these intangible assets more than the tangible ones. Will this lead to organization's treating people more honorably and less as commodities than they have in the past? According to Charles Handy (1995), "The market value of the top 200 businesses on the London Stock exchange is on average three times the worth of the visible fixed assets. In the case of the high-tech high fliers, it can be up to 20 times. If that means anything, it means that the market is valuing the intangible assets many times higher than the tangible ones. Whether those intangible assets are the research in the pipeline, the brands, the know-how, or the networks of experience, they amount in the end to one thing: people." (p. 48) Perspectives of Time and Space When we were children time and space seemed so much bigger than they are now. Hours seemed like days, days like months, and months like years. Waiting for school breaks, birthdays, and holidays was a test of our patience. The trip to grandmother's house seemed interminable. It was accompanied by plaintiff questions about "when are we going to get there" as distances loomed before us. Aging, information and telecommunications systems, and jet travel have shrunk our sense of time and space into dimensions of which we are barely aware. Still, no matter how quickly we can move or communicate through time and space, we find it very difficult to believe that, as Woody Allen noted, "the future is in 15 minutes." We also can't believe that we have a vital connection to people who live thousands of miles away. Although we are told we live on a tiny planet and are part of a global village, it is mostly beyond our ken. Thus, when we make decisions we make them within the limits of our perceptions of time and space. We are not able or do not think it is important to consider very long-range or distant consequences. Even our perspective on what constitutes "long-range" is quite short. We are able to think ahead three to five years, perhaps ten if we push ourselves. Our perspective on time and organizational longevity, at least in the United States, is limited by our history. In a country that is not even 300 years old, in a hemisphere in which most firms have a life expectancy of 20 years, it is a stretch to think beyond the next decade. We suspect our views would differ if we were considering the purpose and direction of, for example, the Swedish company Stora which has existed for 700 years and provided work for twenty-one generations. However, our increasing interdependence and our continuing destruction of the ability of future generations to meet their needs demand that we dramatically lengthen and broaden our perspectives of time and space. This means that we need to follow the admonition of the Lakota Sioux who believe that in every decision we must consider the next seven generations. This means making decisions today in light of their impact on children who will be born in 2175 and on the world they will inhabit. What if every organization made decisions every day in light of long-range and far-reaching consequences? What if they considered the impact of their decisions on the physical, spiritual, and emotional health of people, their organizations, and on the habitats on which people and organizations depend? They would then see time and space through a telescope of values. They would see families of sentient beings living, working, playing, and loving in the lands and organizations we have left behind. If we want our organizations to be in it for the long haul and our organizational descendants to inherit an organization in which they can thrive, then investing in the future makes sense. Investing in the future means being ready to diversify and innovate. It means conducting sustainable interactions with nature's economy. Finally, it means nurturing the humanity and goodness of people in the organization. The heritage we will leave is not just physical. It is mental, emotional, and spiritual. Organizations today are shaping the ideas, principles, values, and beliefs that will be passed on to future generations. For example, the Nippon Steel Corporation of Japan began in 1857 in the isolated town of Kamaishi. Nippon made sure that Kamaishi did not become a ghost town when it had to close down its blast furnaces in the 1980's. It continued to honor its policy of providing workers with jobs for life. The company did everything it could do to create other successful businesses. Now, former steel workers build truck bodies and office furniture, grow miniature orchids, and make meat substitutes from soy protein. Nippon worked with the city to invite other businesses to locate in its old factory and converted the pier to a grain center. The combination of their investments and economy subsidies has allowed a community of people to survive and continue to contribute to Nippon, to the economy, and to themselves. Although employment did drop and some wholesalers and retailers have gone out of business or reduced their business, the town in northern Japan survives. The mountains which surround it on three sides look down on its still bustling community next to the Pacific Ocean. (New York Times, April, 1993). It is likely that the great-grandchildren of these workers will be able to continue to thrive in Kamaishi and honor Nippon as a good ancestor. Such a radical change of portfolio on the part of Nippon in Kamaishi is unusual, but not unique. DuPont, which is approximately 200 years old, started out as a gunpowder company. Mitsui is about 300 years old. It began as a drapery shop, then became a bank, went into mining, and then into manufacturing. The point is that these companies see assets as a means to exist, to earn a living. They do not exist to be in, for example, the drapery business. As Arie DeGeus describes it in his study of long-lived organizations "companies die because their managers focus exclusively on producing goods and services and forget that the organization is a community of human beings that is in business-any business-to stay alive" (1997, p. 52). This leads us back to an organization's purpose. Defining an organization's purpose in terms of employees, community, longevity, and global sustainability in addition to customers and shareholders requires that leaders and members have a longer and broader view of time and space. If organizations have a short time horizon they will tend to define their purpose primarily as profits. If they have a longer time frame they will define their purpose in terms of longevity and people. Or, perhaps if organizations value people over assets, they will automatically have a longer-term perspective. They will do anything they can to continue to earn their keep, even if they have to start over again with how they do so. One of the roles of organization leaders, then, is to keep the long-term view in mind, and to hand over the organization to their successors in at least the same or better health than it was when they were in charge. "The manager, therefore, must place commitments to people before assets, respect for innovation before devotion to policy, the messiness of learning before orderly procedures, and the perpetuation of the community before all other concerns" (DeGeus, 1997, p. 54). Our perspective of space is human. But what if we take a bird's eye view of the world? For example, people in New England think of the scarlet tanager, the magnolia warbler, and the rose-breasted grosbeak as"theirs." However,these birds spend only four months in spring and su mmer in the meadows of the northeastern United States and eight months in the tropical forests of Central America. From a bird's-eye view, their home stretches across thousands of miles. Anything which changes the air, water, and land in their habitat affects their lives and their future. They cross many clear political borders and invisible ecological ones in their flight within their habitat. One of the reasons we have been able to control or decrease pollution in developed countries is that many of the most polluting activities have been relocated to developing countries. This allows companies to survive financially in the short term. The price is the long-term costs for the planet upon which the company depends for its own long-term survival. Would such decisions be conscionable if we took a bird's-eye view of our habitat? Dealing with the drain on the world's natural resources and the political unrest resulting from imbalances of wealth between nations depends on our being able to take a broader geographical perspective for our decisions and actions. An organization's definition of purpose, if it is defined in terms of its employees, communities, longevity, global sustainability, customers, and shareholders, can be translated into criteria and used to guide an organization's choices regarding product design, processes, technologies, resources, and suppliers. This means taking a longer-term and broader view of the context within which the organization is functioning than we have in the past. Value and Use of Natural Resources The use of our natural resources and the wealth of various nations are the arena in which the world and its institutions are most shockingly out of balance. Although we will only deal with the former here, they are linked. One sixth of the 5.8 billion people on the planet account for more than 75% of the world's energy and resource consumption. They also create the bulk of industrial, toxic, and consumer waste. Three billion people, or nearly half of the world's population, live their lives at a subsistence level or in abject poverty. The total environmental burden of human activity (i.e., population, consumption, and technology) "exceeds sustainability on a global scale" (Hart, 1997, p. 69). Perhaps we have all been seduced by the pace of our lives-fast food, fast cars, and volatile markets in which fortunes can be made and lost in a matter of days-into thinking that we can somehow keep taking without giving anything back. It might help us to think of our natural resources as a kind of bank account. We must put money in and wait for the interest to grow before we can start making withdrawals. No one we know of has a bank account where you can only withdraw and not make a deposit. This is one difference between acting to protect the environment versus contributing to global sustainability. In environmental protection, companies try to protect or repair damage to the environment. It is as though they were paying back a loan, but they are not making deposits or earning interest. Some of the ways organizations can begin to achieve global sustain-ability include (1) eliminating or preventing the creation of waste or pollution entirely; (2) designing products so that they are easier to recover, reuse, or recycle; (3) developing "clean technologies"; (4) transferring technology to others so they can address their environmental problems; (5) working with other corporations so that one company's waste is another's raw material; (6) considering the rather radical ideas of "frugality" and "production restraints" (Frankel, 1998, p. 14) as part of the corporation's sustainability strategy; and (7) seeing sustainable development goals as a business opportunity. In these ways, in addition to protecting the bank and its assets, corporations are depositing money into their bank account and earning interest. The goal is to create a global economy that the planet is capable of supporting indefinitely (Hart, 1997, p. 67). The battles over the environment are being fought on global, regional, and local levels. The challenge is for people to agree on the longer-range and broader view of the situation and their deeper purposes. For example, economy of the northern coast of California has been largely dependent on the cutting of what are called "old growth" or "virgin" redwood trees for three generations. The loggers are frustrated and angry that they are no longer allowed to cut these ancient trees in the numbers they once did. They blame the governments and "tree huggers" for their loss of jobs and the depression of the economy. They are dumbfounded that people would stop them from cutting these trees because they are, after all, a renewable resource. They are right, trees do grow again. Their upset is understandable. However, depletion of the world's renewable resources is now the greatest threat to a sustainable world. And, to those trying to protect them, these 1,000 to 1,500 year-old trees represent something more than a resource to be used for profit. Certainly, they are a critical component of the region's ecological system. They are the home for thousands of species. But, they are also the source of great awe-inspiring beauty and solace. Just the fact of their existence is of paramount importance for some. As Edward O. Wilson of Harvard University wrote in 1993, "We sense but do not fully understand what the highly diverse natural world means to our esthetic pleasure and mental well-being" (p.27). Five people were recently arrested after scaling a 200-foot crane at the headquarters of Home Depot, Inc. in Atlanta to protest the sale of products made from trees cut in old-growth forests. Home Depot's director of environmental programs seemed to take a rather narrow view of her firm's environmental responsibilities: "We don't cut down any trees. The products that we carry, we buy from manufacturers. It's difficult for us to know, difficult for anyone to know the content of products in our stores" (San Francisco Chronicle, October 29, 1998). Perhaps it's time for them, like for so many other companies, to know the content of the products in their stores and to set standards by which their suppliers have to live. They can also play a role in shaping consumer demands. Such long-range and broad thinking is an example of how corporations can start to make the shift from environmental protection to contributing to a sustainable world. The Natural Step is a federation of professional associations dedicated
to developing a sustainable society. It also provides a framework for
creating sustainable business. They work with businesses to help them
identify the
environmental consequences of their actions. They have the organization's
leaders ask themselves questions such as: Corporations need a framework or vision to guide their decisions and actions so that they can more effectively contribute to global sustainability. So, we return to an organization's definition of its purpose and direction. As we noted in the beginning, an organization's purpose and vision needs to include goals regarding global sustainability. Hart (1997) calls this a "vision of sustainability" (p. 73). Karl-Henrik Rob rt, the Swedish physician and founder of the Natural Step, calls this "back casting" (Rob rt, 1997, p. 10). This means defining the organization's future goals regarding sustainability and using these goals to help determine the short-term decisions and investments which must be made to achieve those goals. For example, these decisions would include how products and services must evolve and what new competencies will be needed. Regardless of the name, the purpose or vision should move an organization away from being at the mercy of its business environment and towards molding the company's relationships with all of its stakeholders in the service of global sustainability. These stakeholders include customers, suppliers, other companies, and policy makers, as well as employees, community members, board members, and shareholders. We stand a much better chance of correcting the imbalances that have led us to this precarious crossroads in time and creating a desirable future for our descendants by including a broader range of stakeholders in defining the purpose of our organizations; considering the purpose from a very long-term and geographically broad perspective; defining an organization's purpose in relation to employees, community members, organizational longevity, organizational descendants, and global sustainability, in addition to customers and shareholders; building relationships in which we can learn and work together; and holding one another accountable for achieving our purpose. The Consultant's Role What is our role in helping our client systems attain a more balanced view of their responsibilities? What are our responsibilities in helping them create global sustainability? Of course, there are no definitive answers to these questions. However, the purpose of this article is to explore what we think is needed right now and how we, as consultants, might contribute. Thus far, we have been adept at advocating for improvements in the human side of organizations (e.g., healthier working environments, inclusion in decision-making). We have been able to advocate from the basis of human values and added value to the organization. Healthier working environments and more participatory decision-making processes made good business sense. They are also good for people and build employee performance and commitment. As we approach the Third Millennium, however, we think we need to take on a larger role in advocating for an organization's purpose, its direction, and its relation to its employees and the communities and world on which it depends for its existence. We think our job as consultants is to raise more controversial questions than we have asked in the past. Our role in helping our clients identify options and assess the consequences of their decisions can continue. However, now our questions need to be more challenging. The two of us have often been in the position of asking our clients to have conversations they might not have had had we not raised the questions. Raising the "higher-stakes" questions discussed in this article is yet another step on the same continuum, albeit much further along. We need to ask our clients questions from a much longer-term and broader perspective and focus on the issues of balance and sustainability in relation to the legacy they wish to leave behind for many generations. Given this, the challenge for each of us is how to advocate for considering these questions without alienating our clients and undermining the value we bring to them. We can't lose our outside, objective, experienced view which helps them define where they want to go, how to get there, and the values that will guide them along the way. But we also need to add the longer, deeper, and more expansive view. This will require something of a dance between process and content. We will need to advocate our clients' asking themselves questions that we believe they need to consider, provide support and processes through which they and their stakeholders can consider the questions, and yet be willing to let go if it is not the right time for our clients to take them on. Initially, our job as consultants is helping our clients reframe how they think about purpose. We need to help them enlarge their view. It is not a question of people or profits, jobs or the environment. The question is how organizations can generate profits in a way which both sustains and nurtures the humanity and goodness of people in the organization and considers the health and survival of communities and the planet as a whole. Nothing else makes sense for the long haul. We also need to challenge our clients to define their
purposes in relation to serving customers, employees, the community, and
the planet in addition to serving shareholders. Organizations and their
members will only survive and thrive in the long run if they do this. One
way this can be done is to define questions which invite organization
leaders to deeply consider their individual and organizational purposes.
Imagine an executive retreat or a large stakeholder conference in which the
conversation focused on the following questions:
Although they may shy away from delving into these deep waters, it is our job to make organization leaders aware that the waters are there. It is also our job to make sure they understand that their choices - the ones they make every day, and the ones they make about the long-term futures of their organizations - make a difference. They affect the quality of their life, that of their families, each of their employees, the community surrounding the organization, and the health of the earth. | | |||||||||||||||||||||||||||||||||||||||||||||
James, Inc., Trinidad, CA