Viable—achieve their purposes and do so while acting according to society’s highest values.
Sustainable—remain viable over time.
Valued—all stakeholders in the organization see their association with the enterprise as being worthy, in that they benefit to a significantly greater degree than they would with competing entities.
But additionally, Exceptional Organizations are defined by four Key Elements. Here are two of those elements that comprise them:
1. Purpose: Why the organization exists, the mission it pursues.
The organizing principle for “purpose” is inspiration. The enterprise inspires its members to act for a cause greater than their own self-interests. Such inspiration gives individuals a sense of meaning in alignment with the organization’s purpose.
In the absence of this principle, the organization must assume that its members will act solely in their own self-interests. If this is the case, the organization is forced to utilize rewards and punishments as its primary source of motivation. This places a great burden on the organization to structure its reward-and-punishment systems to be in complete harmony with its purpose and with all of the expected actions required to achieve it. Furthermore, the absence of this principle reduces the level of commitment by members and inhibits their experiencing a sense of worth and well-being that comes from serving a greater cause.
2. Action: The work the organization does to achieve its purpose.
A vision-driven organization takes action to achieve an end result that, when achieved, supports the organization’s purpose. All activity is focused upon the achievement of the vision, and all decisions are made based upon the merits of whether or not a particular action supports it.
A component of this organizing principle is a business strategy (or business model), which creates a competitive advantage. When achieved, this competitive advantage will generate a significant and sustainable cash flow. Work is aligned to execute the strategy which in turn supports the overall vision. The organization gathers both external and internal feedback to adjust its actions as necessary.
Without a vision-driven organizing principle, actions are frequently independent of the organization’s purpose. This is especially true when the motivation for action shifts to meeting the needs of individuals higher up in hierarchy. When this occurs, decisions are made not on their merits but rather to please the boss, which leads to wasted or misguided efforts.
Two additional aspects of Exceptional Organizations—Culture (the organization’s guiding values, beliefs, traditions and processes) and People (those that do the work)—will be discussed in Part Two of this series.
William F. Brandt, Jr., is cofounder and former CEO of American Woodmark Corporation—the third largest producer of kitchen cabinets in America. His books include the winner of 21 Book Awards COMPASS—Creating Exceptional Organizations: A Leader’s Guide and COMPASS TOOL KIT, the teaching companion to COMPASS(www.WinterValePress.com ).