Organizational Transformation Liberating the Corporate Soul by Richard Barrett


Ask any group of savvy CEOs to tell you the most valuable piece of information they could have, and they will say, “How to unleash innovation and creativity in my work place?”
Richard Barrett

In a world where change is growing exponentially, fortunes are increasingly being won or lost on the ability of companies to anticipate trends and create products to meet these demands. But in the 21st century, unleashing innovation and creativity will not be sufficient to guarantee success. From here on, success will also hinge on whether, in the eyes of its employees and society-at-large, the company is a trusted member of the community, and a good global citizen.

Who you are is becoming just as important as what you sell. The values that corporations stand for are increasingly affecting their ability to hire the best people and sell their products. There is an awakening awareness of the causal link between the rapidly escalating environmental and social issues and the philosophy of business. Govenments and communities are recognizing that the pursuit of self-interest is not only destroying the planet’s life support systems, but the social fabric as well. The era of corporate autocracy is coming to an end. There is too much at stake for it to be otherwise.

Successful business leaders of the 21st century will need to find a dynamic balance between the interests of the corporation, the interest of the workers and the interests of society as a whole. To achieve this goal they will need to take account of the shift in values taking place in society, and the growing demand for people to find meaning and purpose in their work.

The main reason that organizations are unable to mine the creative potential of their employees is that they fail to understand the importance of linking the well-being and survival of their employees to the well-being and survival of the company. When the link between effort and reward is severed, and employees are paid to do rather than to think, there is no incentive to achieve optimal performance. It is only when people feel a direct link between their own contribution, the success of the company, and their personal reward, that they assume responsibility for the whole. When this happens they feel encouraged to fulfill their potential. In other words, moral and economic democracy are essential components of a culture that nurtures innovation and creativity, and taps human potential.

This calls for open, more transparent forms of corporate governance where individuals are encouraged and rewarded for developing their potential and making contributions that impact on the good of the whole. Such cultures can only be based on trust.

Corporate Consciousness
Corporate cultures can be categorized into seven levels:
1 Survival Consciousness
Totally focused on profits. An autocratic, uncaring and fear-driven culture (corporate survival).
2 Relationship Consciousness
Benevolent dictatorship where loyalty between workers is stronger than company loyalty. Lacks flexibility and entrepreneurship.
3 Self-esteem Consciousness
Desire to be the biggest or the best. Hierarchical power structure. Search for efficiency, productivity, quality and excellence (corporate fitness).
4 Transformation
Self-discovery, vision, mission, and values. Balanced needs scorecard. Shift from control to trust, fear to truth, privilege to equality, and fragmentation to unity.
5 Organization Consciousness
Release of innovation and creativity. Search to create conditions for cohesion, community spirit, trust, diversity, and mutual accountability. Recognition of the importance of strategic alliances with suppliers and customers. (corporate well-being).
6 Community Consciousness
Voluntary environmental and social audits. Support to local community. Seach for long-term sustainability. Relationships with local suppliers.
7 Global/Society Consciousness
Contribution to resolving social, human rights, and environmental issues beyond local community. Focus on ethics. Search for truth and wisdom (global/society contribution).

Transformation
Successful organizations in the 21st century will be those that complete their transformation and live out values that support the common good (three higher states of consciousness). Corporations that cannot move beyond self-interest (three lower states of consciousness) will find themselves struggling to survive. The transformation from the lower to the higher states of consciousness involves liberating the corporate soul. It demands enlightened leadership—CEOs and executives who have completed their own transformation.

The fundamental change that occurs during corporate transformation is a shift in attitude from “What’s in it for us (me)?” to “What’s best for the common good?”—a shift from “self-esteem consciousness” to “organizational consciousness.” This involves moving from an exclusive focus on the pursuit of profit to the broader pursuit of a group of objectives that are instrumental in meeting shareholder, worker, customer, supplier, community, and societal needs. In order to measure progress in all these areas, I have developed a balanced needs scorecard based on the seven levels of corporate consciousness:
Seven Levels of
Corporate Consciousness Balanced Needs Scorecard

Balance and Values in Practice
In Built to Last, Collins and Porras identify eighteen visionary companies that, between 1926 and 1990, achieved a growth in shareholder value 15 times greater than the general market.

Their research shows that all these companies had a strong core ideology (values + purpose), and that contrary to business school doctrine, “maximizing shareholder wealth” was not the dominant driving force of these visionary companies. They have tended to pursue a cluster of objectives, of which making money is only one—and not necessarily the primary one. Visionary companies had objectives that transcended purely economic considerations.

When I analyzed the mission statements of the eighteen visionary companies in Built to Last, I found that sixteen had three or more objectives. The majority of their objectives (44%) concerned well-being, and only 20% concerned corporate fituess. Surprisingly only 6% of the objectives mentioned corporate survival (profits or shareholder value).

What is remarkable is that all 18 companies had objectives concerning corporate well-being, whereas 13 had objectives relating to corporate fitness, and only 6 to corporate survival.

Some of the more inspiring values-driven examples of statements adopted by these companies are:

“We are in the business of preserving and improving human life.”
“People as the source of our strength.”
“Improving the quality of life through technology and innovation.”
“People are number one—treat them well, expect a lot, and the rest will follow.”
“Corporate social responsibility.”
“Honesty and integrity.”

The conclusion I reach (indeed, one of the main messages of Liberating the Corporate Soul), is that an organization’s performance is directly related to its ability to tap into its human potential. For the average person, work is one of the most important ways he or she gives expression to who they are, and find their fulfillment.

When a group of people are committed to a common purpose, are given responsibility, and at the same time feel supported and trusted, then, and only then, will they tap their deepest potential. Emotional energy, not mental energy, is the true motivator of the human spirit.

Emotional energy has its source in what people believe and value. Values give meaning to people’s lives. When there is an alignment between an organization’s values and its employees values then people respond by fulfilling their potential and tapping their deepest levels of creativity.


RICHARD BARRETT, Managing Partner, Richard Barrett & Associates, is an international consultant in the field of vision-guided, values-driven cultural transformation. He works with leaders and senior executives in North America, Europe and Australia to develop values-driven organizational cultures that build human capital, strengthen financial performance, and support sustainable development. He is a Fellow of the World Business Academy, and Former Values Coordinator at the World Bank. Mr. Barrett is the author of A Guide to Liberating Your Soul (Fulfilling Books, 1995), and Liberating the Corporate Soul: Building a Visionary Organization (Butterworth-Heinemann, 1998),lt=””

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