Beyond the Profit Motive: Creating Self-Led Organizations

Looks like health care reform MAY finally pass and that prompted an interesting conversation with one of my more liberal friends.

He explained that a key concern among liberals is that corporations have been granted the privileges of personhood and that this has allowed them to run amok, creating havoc in industry after industry from health care, to energy, to finance.

In other words, corporations are treated by law like people but aren't being held to the same standard of accountability that you and I are held to. They can be sued, but they can't go to prison. They can cause direct or indirect damage to people and communities but are often allowed to externalize the costs to others.

I argue, however, that the era of irresponsible corporations is just about over. People around the globe are demanding more. WAY MORE.

The internet and the information explosion of the last couple of decades has made it close to IMPOSSIBLE for corporations to hide. The capitalists may still be in charge but they wield much less power than they did, even 50 years ago. And its only going to get worse for them.

To thrive in this new century, corporations will have to stand for more than just making money.  They will have to create value and meaning for their shareholders, employees, and the communities of which they are a part. If not, they will eventually cease to matter, or to exist altogether.

The surest way to do this is to extricate corporations from the old military, top-down, chain of command model to what Zaffron and Logan have dubbed the self-led organization model.

In this new leadership paradigm, smart bosses allow everyone to have a say in the affairs of the organization. They don't relinquish power but they choose to share it in order achieve alignment. They understand that they're NOT in total control anymore and that team-members have valuable contributions to make.

There's a beautiful illustration of what this looks like in real life in The Three Laws of Performance: Rewriting the Future of Your Organization and Your Life. In the book the authors recount how South African platinum producer Lonmin transformed their organization by giving EVERYONE (internal and external stakeholders) a say in how the company would move forward amidst seemingly insurmountable challenges.

This concept of the self-led organization has the wisdom of crowds built right in and will lessen the tendency of corporations to be hi-jacked by the pathological desires of a few bad actors.

The recent woes of companies like Toyota and Google are illustrations that people are watching and are holding corporations to a much higher standard.

What do you think? I'd like to hear your thoughts on this.