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May 27, 2008

The Soul of the Corporation

Posted by Brad Abare | Filed under: Philosophy

Soul of the CorporationIn their book, The Soul of the Corporation: How To Manage The Identity of Your Company, Hamid Bouchikhi and John R. Kimberly do a masterful job arguing why the future of your organization comes down to how well you manage its soul. Consider their opening thesis:

We are in the midst of a transition on a global scale from an era in which the vast majority of individuals and human groups lived with a sense of clarity, continuity and consistency about their identity--their notion of who they are and how others view them--to an era in which identity is increasingly problematic across all levels of human organization, from the individual person to entire nations or civilizations.

The result of this identity crisis, perhaps unintentionally, is that organizations have now become suppliers of individual and collective identity.

In traditional societies, individuals inherited much of their own identity from the social milieu (family, place of birth, tribe, religion) into which they were born. In an organizational society, individuals are defined by the organizations in which they participate. When people draw much of their sense of self from belonging to, or buying from, a particular organization, they tend to be anxious about and resist changes that may alter what, in their eyes, is the very soul of that organization.

"[Identity] is not a private matter; it is a social construction."

Ask yourself the following questions:

I-Dimension"[The] visible elements of a firm are held together by a set of shared beliefs--sometimes implicit, sometimes explicit--that define its essence." This shared set of beliefs--what the authors call the "I*Dimension--gives the visible elements of the firm coherence and puts boundaries around how much change is possible without altering its essence."

"When identity becomes problematic, leaders need to understand that they are confronting issues beyond strategy and that invariably involve struggles over the soul of their organization."

The authors point out "identity anchors" that exist in both individuals and organizations. "Just as the identity of individuals can be anchored in gender, nationality, social group, educational credentials or particular skills, an organization's identity [resides] in multiple anchors, such as core business, knowledge base, nationality, operating philosophy, a legendary founder, a governance structure or combinations of these."

Internal Benefits of Clear, Consistent and Valued Identities

  • Identification: We belong.

  • Loyalty and Commitment: We're in this together.

  • Cooperation: We're working toward the same outcomes.

  • Problem Solving and Decision Making: We have a framework that guides our decisions.

  • Legitimacy: We trust that what we're doing is what we should be doing.

External Benefits of Clear, Consistent and Socially Valued Identities

  • Recognition: We're noticed for who we are, not only what we say we are.

  • Attractiveness and Loyalty: We're a magnet for the right people.

  • Trust and Predictability: We nurture relationships that mean something.

The Dark Side, When Benefits Become Liabilities

  • Narcissism: We think we're all that matters

  • Conflict: We can't agree on what really matters

  • Drift: We forget about what really matters

  • Fragmentation: We split up and deal with smaller matters

"Leaders ignore identity at their own risk. And when identity is ignored, it almost inevitably comes back to haunt them."

"Changing the identity of an organization takes more than a new mission statement, a new name, or a new visual identity."

Finally, the authors suggest some personal application to people considering a change of employment. "No matter how attractive the job or the package, if you are at odds with the soul of the corporation, and if you are unwilling or unable to close the gap in one direction or the other, you are stacking the odds of success against yourself."

This book is an excellent read, packed with real world examples--good and bad--of organizations dealing with issues of identity and soul.

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