Why are Modern Organizations Broken?
How an common and misapplied human emotion is the secret to organizational change.
A breaking of modern organizations is happening.
It has been going on for decades. I first noticed this as I began studying leadership theory and practices. The question that I wanted to understand was whether this breaking was the beginning of the end of the modern organization or a transition to the next generation of organizational structure.
I know people are yawning at this thought. People who are interested in organizational structure form a kind of niche field of study.
I didn’t come to this through academic study.
It was through my direct experience with broken organizations.
People have a hard time stepping back to see their organizations. They describe their personal experience but not from an analytical approach.
Just so we can understand each other, structure is the context of everything we do.
Some of us have just been burdened with the capacity to step outside the structure and see it as it exists in the real world.
This image of the Structural Patterns of Behavior in Organizations captures what I see happening. Once organizations were tight-knit. Now they are fragmenting at the boundaries between the three layers of the modern organizational structure.
A Broken Structure
If you work in a company large enough where you don’t know everyone by their first name, then your company has a layered look to it. There is the executive layer, a layer for middle-management, and then the worker’s layer makes up the rest of the company. When I first started working as a consultant, I saw these three levels separating. There were still connection points between the layers, but it was clear to me that a company unified by shared values and purpose was no longer a priority. There was a common assumption that all organizations are layered and siloed.
Executive leaders were becoming more responsive to their counterparts in other companies and industries. Group-think happens. They talked to each other at conferences, went to the same schools, earned the same degrees, and in some instances, their corporate offices were moved to be closer to their social cohort.
I’m not an academic, nor a scientist, and not even trained in business administration. I am an observer of people and organizations. My observations led me into consulting because I saw the breaking of organizations and the effect that it was having on people, their workplaces, and communities. The result of my reflection and study is the recognition of specific features of what constitutes this breaking apart and its impact.
I wrote about this in my twin short books,
Seeing Below The Surface of Things: The Brokenness of the Modern Organization
and
Where Did Trust Go?: Restoring Authority and Accountability in Organizations.
If you notice these things, and you are old enough, you can remember when finance took over the strategic focus of businesses. You would have heard complaints about bean counters, the lack of vision, and the absence of innovation and intrapreneurship.
What Executives did not see, and the numbers could never show, was the structure was splitting apart. In a vital industry where markets are robust, these weaknesses and this brokenness could be ignored. This breaking apart was not just structural but intellectual and social.
The Hardening of the Categories
My role as a consultant was as a problem-solving troubleshooter. When there were problems, the company did not want to address the whole context of the problem. The assumption was that the company was a collection of separate enterprises unified at the point of executive leadership. Nothing was ever approached holistically. Only once in the twenty years that I had my consulting practice did the company implement a strategy that involved the whole of the company. Their turn-around was phenomenal.
As years turned into decades, and my bookshelf of books on leadership, strategy, problem-solving, systems, and networks grew, I found that everyone was just repeating themselves. Authors were rewriting their last book. Conferences were rehashing decades-old ideas.
There was no real fresh view of leadership.
There was no change because the fundamental assumptions of the organization’s structure had not changed.
This is called The Hardening of the Categories.
Of course, there were exceptions, but that is what they actually were, exceptions to what had been practiced across the spectrum of organizations for decades.
A fundamental, guiding assumption was that leadership is a role or a title within the structure of a business. Of course, there were writers like Peter Drucker and others who told us that leadership is different than management. But few were listening because understanding leadership as something other than a glorified term for management requires us to think out of the box. And if finance was the core activity of a business, then why look beyond the box.
As a result, for all the talk, and all the books and articles written, all the conferences attended, all the consultants hired, the reality was that leadership wasn’t a priority. It was simply a symbol that was used to obscure the realities of brokenness. Leadership is the structural representation of a position on the organizational chart.
When making money becomes the sole purpose of an organization, the business is now broken.
To criticize this as inadequate does not mean that I am an anti-capitalist or a pro-socialist.
In our current context, neither gets us to see organizations as a whole.
This is not an ideological issue, but an institutional performance one.
Legitimate Measures of Leadership
In my previous essay, I made the point that the only legitimate measure of leadership is impact.
Impact is a change that makes a difference that matters.
I’d like to take it one step more.
Impact should also be aligned with the potential that resides within the organization. That potential is not just what the financial resources can do, but what the people of the organization can do? The impact that they can have.
Potential is the open-ended possibility for change.
It isn’t a quantity or a resource that has been banked to be drawn upon when needed. It is the opportunity that exists for each person to make a difference. Opportunities exist and they can be created.
I mentioned above the company that turned around because they took a holistic view of their business. The focus of change was the elevation of the leadership capacity of the worker layer of the business. They were equipped to solve problems of immediate effect on their performance. They were equipped to communicate more broadly and to innovate within the situation of their work. Within two years of the implementation of this development program, the company was recognized as one of the 100 most trustworthy companies in the nation.
The latent potential of people exists in every company, organization, and community. However, for that potential to be realized it has to be released. It cannot be controlled. This is where the breaking is having its most detrimental impact.
If Leadership is Not That, Then What is It?
Above I describe the standard approach to leadership as a function of the structure of an organization. It is a title, a role, or a position. If the topic of leadership is of interest to you, then you probably realize that it is a replacement word for management. In other words, when we separate leadership from management, we are not clear about what leadership is. We are too locked into this structural thinking. We can’t see that there are other dimensions at work. The dimensions of ideas and people in relationship with one another.
The old saying goes “what gets measured gets done.” If so, the measures of ideas and people are each related to the structure. They do not stand as equal dimensions of the business. This is the pattern of behavior that I saw throughout the 1990s that led me to create the Circle of Impact.
If we look at leadership as an alignment of the three dimensions of the Circle of Impact, we’ll discover that our perspective has been severely limited, truncated, prejudicial, and conflicted. In other words, broken.
Is it any wonder why no one knows what the impact of your company is?
Is it any wonder why respect and trust are missing from your interactions with the company?
These are signs of brokenness.
With all this as background, here is my definition of leadership.
All leadership begins with personal initiative to create impact that makes a difference that matters.
This means leadership is a function of personal performance. It is an act of choice, of intention, of commitment, and of follow-through. It means that every person can function as a leader within the context of the business. Stope thinking that leadership is a position. I am not saying everyone should be the CEO. See how prejudicial this old view of leadership is.
I am saying that everyone in your organization can function as a leader of impact.
We all know that innovators and entrepreneurs are disruptive individuals. They demand that we look at the world through different eyes. I am asking this of you right now. Of course, it is not enough for you to have a change of perspective, you need an initiative where these ideas can be practiced.
The Five Actions of Gratitude: An Change Initiative That Creates Impact
A decade and a half ago, I became concerned about how gratitude was viewed in our society. It had more to do with how we felt than what did. As a result, I came up with the Five Actions of Gratitude.
Each action expresses gratitude and also produces impact.
Say Thanks
Say it to someone every day. And mean it. Don’t settle for thanks being how you close a conversation. Be genuine and sincere. The impact for the other person is affirmation and validation of who they are and what they do.
Give Back
We are products of other people’s kindness and service. There are no self-made people in an absolute sense. We all got where we are because someone saw something in us, our potential that was worth supporting. When we give back, we strengthen a relationship that let’s collaboration become an important aspect of your leadership.
Make Welcome
This is a kind of folksy throw-away line that I’d hear in church and at concerts. “Let’s Make Welcome, Grand Ole Opry star … “ I see in this phrase something more than a welcome greeting. It is an invitation to participate, to contribute, to give us your best, to take leadership initiative, and to create impact. To Make Welcome lowers the barriers to contribution so that new people quickly feel valued and included.
Honor Others
In the past, people were honored at their retirement with a gold watch and a pension. I believe we should honor people for the impact they are having right now. Celebrating other people’s leadership impact by saying thanks, we create a culture of respect, trust, and mutual accountability.
Create Goodness
More than anything the brokenness of the modern organization has become an obstacle to the people being creative at work. As a result, goodness is a shallow concept with not much impact. The whole process of elevating the leadership potential of people opens the door to each person creating goodness in the context of their work.
The Five Actions of Gratitude as Measures of Organizational Impact
Let me assure you, that I am not looking at gratitude through the lens of wanting everyone to be nice to one another. This is not some shallow group hug practice.
To practice these actions, and to measure these actions, requires people to observe, recognize, appreciate, and express thanks for actions, comments, or decisions that were made.
Yes, in a highly competitive environment, gratitude forces the predators and the control-freaks to change. When the practice of the Five Actions of Gratitude becomes the culture of the company, it means that “the persistent, residual culture of values” has risen to a level of alignment with the structure of the company. When a company can say that “the expression of gratitude persists because it resides in the relationships of our people,” then the company has identified a qualitative difference that it can use in the marketplace.
How can a company deploy the Five Actions of Gratitude?
First, establish a values statement for the company.
With clarity about the values that define the company, it becomes easier to recognize people for their expression of those values.
Second, train people in how to look for reasons to be grateful.
Third, support them by creating opportunities for workers and managers to recognize people for the impact that they are having.
Fourth, create a measuring system for each person to catalog the number of times each month they did each of the actions.
The purpose is not to create competition, but rather to create the discipline of seeing what is worth recognizing.
Fifth, create in-house rewards and recognition for acting out the Five Actions.
Reward the impact, not the action. Over time, the importance of being thanked, given back to, or honored will grow. Over time, as people are invited to contribute, leadership initiative will grow and the fulfillment of potential in acts of goodness will transform the company from being leadership starved to being leader rich.
The Healing Of Our Brokenness
We need healing. Ideologically. Relationally. Personally. Organizationally. Socially.
To heal, we need to change.
To change, we can’t just change our ideas, or begin to be grateful.
To change, we need to see a path to restore or invent new organizational structures that are designed to align the three dimension of leadership.
It won’t be easy. Together it is possible.
Thank you in advance for the impact you will have that will make a difference that matters.