Okay, so you don’t like the suggestion that you and/or your business needs to be transformed. Nobody likes to be accused of being unreformed or untransformed, but frankly, I couldn’t think of a better phrase. Maybe you’d like something more “corporate speak” like “the emerging business model”. In any case, I am continually bombarded with literature about ways of making business more successful, and I invariably find them missing an important ingredient.
That missing ingredient some might call the “soft” side of business (and I hope you’re still with me despite my using that word) or what I see as the “inner” dimension or “human energy dimension” of business. Research shows that many companies have workforces working at a small fraction of their potential output. This suggests we ought to be figuring out how to motivate, energize and inspire people. That’s the hidden gold mine of business effectiveness.
Current efforts on the outer dimensions of business effectiveness include,
* finding lower priced sources of needed materials and services
* developing more efficient business processes
* developing more effective resource planning and management systems
* utilizing technology more powerfully, not just in the design of our product or service, but in our marketing and management systems.
Experts abound in each of these areas, and they often specialize in a piece of the area I mentioned. Improvements in these areas will certainly help most any company achieve better performance. It used to be that a company could count on being the industry leader by doing this, but now it’s no longer enough. More is needed, but where to look for further improvements?
The Growing Importance of the Inner sources of improved business performance
One of the ways business has changed over the past few decades is that:
- people have become more important to business success – hence the emergence of concepts like Human Capital (1960’s), team building (1970’s), the learning organization (1980’s), Intellectual Capital (1990’s), and other people-oriented business concepts
- and in the last few decades, people have become more concerned about
- their own purpose and thus the meaningful work
- ethics and doing what’s right
These changes have not erased an older mindset that
- Puts money above people, as Capital is viewed as not only an asset, but also the driver of the wealth creation process, whereas people are merely cogs in a machine, and treated financially as merely an expense.
- Views people as merely motivated by money.
- View management’s role as not only to set strategy and make important decisions but also to control people and their behavior.
So the changes in mindset are happening with some people in business, but not in others (at least not yet). I would argue that those who are making this change in mindset are having an easier time succeeding personally and with their businesses. A book I’m currently working on will provide examples of such leaders and their businesses. (For an advanced look at those examples, I suggest you look at past editions of our management newsletter, Leading in a New Light, earlier posts in this Notes on Noble Business blog, and the example of a dramatic corporate turnaround in the book Noble Enterprise.)
In the next blog post, I’ll share some ideas of how innovative leaders are transforming their businesses.