The enlightened organization

By Ed Bernstein, IRI President, and Greg Holden, Business Writer

In general, the seventeenth and eighteenth century period known as the Enlightenment is considered a time when a new methodology was being imposed onto governments and accepted by societies across Europe and the “New World.” The parts making up this methodology included the use of reason, skepticism, and the scientific method in order to challenge long-established practices stemming from traditions, superstitions and religions that stretched back into antiquity. However, enlightenment itself is not about merely changing the way one looks at the world, as the Age of Enlightenment philosophers set out to do, it is also about destruction. Enlightenment is the dismantling and discarding of old, deep-seated beliefs in exchange for new ideas which are better supported by the available evidence.

Whenever scholars explore today’s corporate and industrial practices they tend to remind us of this era’s “New Normal:” diminishing resources, horizontal growth, globalization, increased public-private partnership, shorter cycle times, and innovation, innovation, innovation. Many brilliant individuals have come forth to help name some the practices which define today’s industrial era (e.g. Disruptive Innovation, Serial Innovation, Open Innovation) and by so defining have helped challenge some of our deep-seated beliefs, but many of the old traditions and superstitions remain and this may help explain why some organizations continue to struggle. Below are just a few of these practices.

Culture vs. Strategy

Have you heard this one, “All the strategy in the world means nothing if you don’t have an organizational culture that works?” Or how about, “An effective culture simply cannot function properly without a guiding strategy?” As Bob Frisch wrote in Fast Company last year, “Businesses are economic as well as human entities, and need to be built on a solid base of sustainable competitive advantage. Culture can reinforce strategy… But it can’t prevail if a strategy is poorly conceived or the company faces competitors with superior strategies, resources, and positioning.” In short, companies need both, not the focus of one over the other.

Organizations today which fail to grasp that culture and strategy are two different components, each requiring its own cultivation, will ultimately struggle. Pitting strategy against culture for resources or attention undermines the purpose of both. Ask any military commander whether she wants superior soldiers or superior positioning for an upcoming battle and she will likely say she prefers having both. So it goes with culture and strategy.

Talent Production

Without a doubt every organization seeking technical talent invests heavily in scouting and recruitment, as they should. But what many organizations are coming to learn the hard way is that skills learned this year may not be relevant next year. A five year strategic plan may take into consideration the overall objective of an organization, but the personnel needs required to fulfill that strategic plan are quickly made irrelevant as technologies advance. Recruiting and scouting technical talent is no longer enough. Talent cannot be solely produced like a product in a factory; it needs to be grown, cultivated, and mentored from within.

“Talent production” is becoming a term we can do without. Talent needs cultivation and growth, the acquisition of dual-ladder experience, exposure to different teams and different cultures (both organizational and ethnic); talent does not just need “production.” In other words, learn to grow your employees and recognize their accomplishments, don’t just recruit them and put them to work. Allowing your people to develop flexible talents and experiences brings the added benefit of making them think and act with more agility, producing a natural increase in the company’s innovation output.

Every Company an Island

Hopefully by now the tradition of operating alone has become antiquated in the minds of today’s business leaders. Isolating your company so that it can proudly boast “Made Only in [fill in the blank]” runs counter to today’s business ecosystem. Those organizations which do isolate themselves tend to hit a brick wall after a short run. A recent example of this comes from the MIT study mentioned in an earlier article.

A group of MIT scholars investigated the state of manufacturing in the United States. Among their conclusions, the MIT group noted that, unlike manufacturers in Germany and China—which have rich, deep, interwoven networks of various industrial businesses and service suppliers all supporting one another—American manufacturers tend to be smaller in scale and severely limited in their access to other networks of supply, service, R&D, and communications. The thing which makes German manufacturing a model for the rest of the world is the thing almost completely missing from the American manufacturing landscape: close proximity and connection to other businesses and institutes of learning.

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Don’t succumb to the superstitions of an age long past. We all need to recognize that we need to be open to the wisdom of the world; be part of associations that help us network with other innovators; be humble enough to recognize that we don’t know everything; and, be willing enough to change when faced with new challenges. It’s a tall order, we know, but one worth pursuing if you wish to call your company an enlightened organization.

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