Thanks for the great dialogue! Feedback (positive and negative) should be the life blood of any creative minded folk.
I think you may enjoy Reinventing Orgs, although I believe he is still kind of describing the symptom or manifestation rather than the underlying commonality between these businesses.
Like you said, they are not all non-profits or social enterprise businesses. One of the companies makes brass forks. Brass forks! What is this thing?!?
I don’t even know what that is or what it does but i know it’s not what you would typically characterize as social enterprise.
And yet, the company that makes it, FAVI, which is based in France, is the last man standing in a race to the bottom whereby all other manufacturers are now firmly based in mainland China.
So how did they achieve this? If you ask Mr. Laloux it was because the CEO took a huge gamble and fundamentally restructured the organization of his company to reflect his values (that people are inherently good and trustworthy and not thieves, that pride in one’s work trumps punching time cards, that the relationship with a customer is worth far more than the revenue they generate) and intrinsically his employees agreed with these values (albeit these sentiments had been on life support at the time of the CEO’s changes, ground down to a pulp by popular practices).
A success story to be sure, but what I believe Mr. Laloux fails to key in on is the underlying commonality between each of these success stories. Yes they have strong values. Yes they took a chance on a new organizational paradigm. Yes they are potentially models for a “new way” of doing business.
But Why?
In my opinion, what they all got right above all else was they have a much more accurate and holistic view of what “quality” is.
If you ask a VC or PE investor what makes a quality firm, he or she will probably reply with something along the lines of “a strong growth trajectory”, “high barriers to entry” or “an attractive P/E/G ratio or revenue multiple” or some nonsense. They are completely missing the point.
What makes a quality firm is its relationships. Period. End of story.
A firm whose internal and external relationships are aligned (imagine magnetic atoms pointing all in the same direction) with a concept of high quality or connectedness will, over time, find some degree of “success”. Maybe not in purely numeric terms but perhaps along a much more important quotient, a feeling of fulfillment and of contribution (believe it or not these concepts are not mutually exclusive with the concept of profitability).
The employees are connected with the management, the customers are connected with the firm. This may sound like new age mumbo jumbo but it’s not. Any time you experience a product or service and think “wow”, it is a possible sign that you have experienced a new connection with the collection of individuals who created or provided it. This feeling of resonance is a connection that has formed between you and that group.
What investors don’t get is that numbers are trailing indicators. That is why most investments fail more often than not. They either prioritize indicators above relationships or they have simply missed the boat, misinterpreting which relationships have led to the company’s success.
