t’s time to end the era of charismatic leaders who pursue double digit growth at all costs. Corporate scandals, typified by the Enron saga, show the need for organizations to develop new models of success.
Companies need to embrace long-term viability over short-term gain. This will mean focusing on developing workforces and building trust.
We will have to wean ourselves from an addiction to constant growth. It’s already happening to investors. When did producing more sales, profits and output every quarter become the only game in town?
What if constant growth is no longer possible, at least without the kind of creative accounting that have so undermined public confidence in major corporations? What about doing as well as last quarter, despite adverse market conditions?
Addiction to impossible levels of sustained growth warps the way companies deal with people. It opens the door to charlatans and those willing to mislead others to maintain the illusion of success.
Instead of rewarding behaviour that promotes short-term cash grabs companies must support loyal employees motivated by other means. Organizations can retain these key employees with long-term rewards, such as development, security and opportunities for personal growth; not just short-term incentives like bonuses and stock options.
Where employees have learned to distrust the long-term security of their employment, they will demand large rewards now as insurance against future layoffs. If we want people to look to the long-term for their returns, we have to offer the kind of security and support that warrant their trust. The corollary of this must be that consistent, long-term performance would be seen as more valuable than quick wins (and long-term losses).
The more the demand for quick results, the more our aims become distorted to get them — even if it hurts the organization in the long run. There’s no doubt that Enron produced some very impressive quick wins.
So, what does a manifesto for new organizations in the 21st century look like?
•Organizations that will prosper will seek out the root causes of good or poor performance and work on these.
•While others are fixated on instant success, these organizations will quietly build the capability to succeed this year, next year and far into the future. They will develop strength like marathon runners and avoid sprinting. They will not sacrifice their futures to manufacture short-lived results that soon fade.
•These organizations will value sustainable performance and retain key employees with long-term rewards, offering the security and support that generate trust.
•They will avoid coercive forms of measurement, using only approaches that help people discover where they fit best, and how they can create a satisfying and successful career.
•They will never equate leanness with fitness, so they will avoid cutbacks for the sake of appearances. They will steer clear of the endless cycles of corporate anorexia and bulimia that have characterized past decades.
•These organizations will understand that genuine development of potential produces long-term, qualitative benefits that will not be reversed by the natural turbulence of events.
•They will act on the knowledge that individual learning and growth are essential insurances against the unknown risks of volatile markets, not costs to be minimized.
•Finally, organizations for the 21st century will value people for their futures, not their past. They will invest freely in helping them develop and will give them the freedom to innovate and respect people’s innate sovereignty over their lives.
Adrian Savage is president of New-Jersey-based PNA, Incorporated, which provides solutions that enable corporations to manage succession management, employee retention and talent utilization. He is also the author of “A Spark from Heaven?”, a new look at the nature and development of potential in organizations, teams and individuals. For more information contact (908) 541-1700.