Companies influence the world and hold more power today than ever before. As a consequence, what they really do matters more than ever - and we should start demanding more facts and less slogans. The technology is ready, but are we?
Originally published in www.annunieminen.com/startwithwhat.
“WORK HERE BE HAPPY!” screams a billboard the size of a decent basketball field to my face on a street in San Francisco. “NO SHOPPING NO COOKING NO PANTS”, proposes another bus stop poster advising how I should source my tortillas and pizza this evening. “By joining us you would be working with the most ambitious problem solvers in Europe and Asia", suggests a more subtle email from an employer candidate in my inbox.
We are obsessed with how things are done.
Today, companies define themselves increasingly by how they do what they do. “We attract the best talent, we grow faster than our peers, we offer superior tools and toys for our people, we host a vegan barbeque every Tuesday”. Or, “our product development culture is the most agile in the industry, we have the highest customer satisfaction ratings, we write the best code”.
We master every how you can imagine.
That’s great. But: to do what?
The problem with seeking competetitive advantage mainly by tweaking the way of doing is that we tend to end up doing a bunch of unnecessary things - which keep us busy but don’t really create much real value. As a result, humanity finds itself with companies that are harmless day-care centers for adults at best - and really bad ways of using the scarce (natural, human, monetary, etc) resources and hindering our development as a species at worst.
For the first time in the history of mankind, we are in a situation where almost none of us would have to work. In the past 100 years, the percentage of people working to produce and distribute things critical to survival for human beings (food, water, shelter and warmth) in Western economies has decreased dramatically from 90+ to 3-15 percent (disclaimer: very rough estimates for US and Finland). And as we all know, that percentage is going down every day, as we are learning to automate more and more processes that produce the necessary and unnecessary things for our survival.
Now, if an alien was looking at us from a cool planet, it would probably say: “Wow, way to go humanity! You must have solved all mundane problems of yours and risen to a whole new level of consciousness, wisdom, intelligence and fun!”
Unfortunately we haven’t, really.
Not only do wars and diseases still exist, but people are far from “free from work”: they are dropping out of the work force at record speed due to either exhaustion, boredom, or a wicked mix of both. Also, an interesting proxy for where humanity is going is to study what the smartest and most skilful 2 % of every generation have been doing in different evolution phases. Right now, looking around at the most talented and privileged young doers, it seems they are building dating apps for dogs or making the delivery of fast food to lazy white people two minutes faster than it used to be.
The good news is that the lure of the how is short-lived: human beings are too smart to be tricked by "the way of doing" for too long. Whether we are conscious of it or just start to develop symptoms we don’t even understand ourselves, we begin to demand common sense and an ambiguous thing called "meaning" to the impact of our hard work. After having enjoyed the perks of a wonderful way of working (whether it’s free sushi and playing complimentary arcade games at Facebook HQ, a great salary at a successful corporation, or intoxicating adrenalin in the life of a wild startup) for a couple of years, our subconscious starts to crave something more meaningful than nice perks and toys as a result of our relentless work.
Being better at something (anything!) might work when you're 23, full of testosterone and willing to do anything to prove yourself. Once that source for motivation has been depleted, the enthusiasm to tweak a random company’s operations may start to decrease. Many feel puzzled when it is unclear to them if it even matters a whole lot if their company does somewhat useless things a bit faster or slower, with slightly better or worse design/technology/culture/processes/rigour.
Some think the answer might lie in starting with WHY, as also Simon Sinek’s hit book suggests. Why does your company exist? What is the purpose behind all of this? This has sparked a welcome wave of purpose-driven business, that puts a strong emphasis on what drives a company to do what it does.
This is a great step in the right direction, as it calls management, owners, investors and employees alike to stop and ask: besides making money as a viable business, what are we pursuing? However, it can also be the quickest way out of the frying pan and into the fire: when what you de facto do is produce plastic forks, calling its mission “We bring families closer together” doesn’t really change your impact in any way. Sadly often companies use their WHY to try to cover flaws in strategy - rather than fixing them. Intention is great, but next to action it is pretty powerless.
If how and why are both either misleading or inefficient, what should we do then?
I have come to the conclusion that the only sane way to lead a company is to start with WHAT. What is it that your company de facto does and what are all the things that follow from the choices you make? It's time we go from intention to action: start to focus on what companies actually do.
The planet does not ask whether we meant to destroy it.
Humanity does not get smarter by companies willing to be smart. Humanity gets smarter when companies produce and distribute more new knowledge, instead of just deploying existing intelligence.
What does this mean concretely for management and owners?
First of all: if you are having a hard time cooking up a good purpose for your company, challenge what you do - not the slogan. A purpose statement that doesn’t affect strategy in a material way is nothing but (often poor) marketing and talent attraction/retention.
On a company level, (re-)starting with what means asking: what resources do we have and what are we currently producing with them? Is there something more relevant we could be doing with the same resources - when optimizing against our values and beliefs of the world as entrepreneurs/owners/leaders? What difference do we really make, and which relevant problem are we solving? Given the trends in preferences of top 5 % of young doers in the past decade, this is not only nice for humanity but also a prerequisite for running a successful business if you are willing to employ the smartest people or compete for the smartest customers (or anyone for that matter).
What about employees and consumers?
For all of us, it means starting to demand actual transparent facts of both positive and negative impacts of companies instead of relying on anecdotes, news headlines and sporadical data (“OMG Uber is being bad to its employees! Mean company! I'm shifting to Lyft and feeling better about myself!” or “They donate 100 dollars per month to dolphins —> they must be a nice green company, and I'm helping dolphins by buying bottled water from them!”).
This spring I am starting an adventure with a mission to gradually shift the way we measure net impact of companies to put technology in use to enable more fact-based decision-making for consumers, employees and investors.
And now. Are we ready to move from intention to action?
Originally published in www.annunieminen.com/startwithwhat.
This is a blog about creating a new way of measuring value creation and net impact of companies. I am passionate about updating capitalism to better serve the future of humanity, and this spring I'm starting a new project/company around it.
In this blog I share some thoughts about why I think it all starts with what the company de facto does. The project itself will be published later during 2017.
Our current way of measuring net impact of companies is stuck in an economy that no longer exists.
I'm currently building a new quantification model for measuring net impact of companies, to enable more fact-based decision-making for (existing and potential) employees, consumers and investors. The idea is to make proxies across impact categories comparable and trade-offs transparent ("by using XX tons of carbon footprint we produce YY and ZZ", instead of just doing sub-optimization based on one category).
The aim is to build real business incentives for companies to maximize the upsides of their "impact" - not just minimize the downsides (where the focus of majority of "sustainability talk" is at the moment).
We need carrots.
I don't believe the needed transformational change is going to happen via sticks (regulations, laws, restrictions) - but by incentivizing the best entrepreneurs of our time to start to make things that make sense via the power of the masses, i.e. consumers and employees.
Technology is ready for us to start having transparent and comparable data on how companies de facto impact the different values we as societies and individuals say we have (e.g. economic impact, environment, health of people, equality, creation of new knowledge). It’s time we utilize it to help humanity focus its time, effort and materials to things that actually take us forward.
You are welcome to think, challenge and wonder with me!
Annu. Founder of The Upright Project. Engineer and action woman who thinks it's time we update our way of measuring value creation of companies.
What is this blog?
Start with WHAT - why action eats intention for breakfast
Introducing the new entrepreneur
Spoiled young people and the myth about meaningfulness
© Upright Oy (2848353-4 Finland)