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 / Summer 2003 / Issue 31(originally published by Booz & Company)


Build Your Organizational Equity

There’s more to wealth creation than financial value. Think what rainmaking, reputation, and relationships can do for you and your company.

Illustration by Lars Leetaru
Several years ago, at a medium-sized manufacturing firm, a young electronics engineer named Frederick was assigned to lead a team to develop and launch a new piece of high-tech equipment. Idealistic and thoughtful, Frederick saw his assignment as an opportunity to set an example for the whole company. Most projects came in after deadline and over budget, in a manic, round-the-clock final stretch accompanied by browbeating from senior management and desperate pleading from customers. This time, they would use state-of-the-art “team management” methods to change all that. Team members would “own” their project, organizing their own work processes, setting and tracking their goals and targets collaboratively. Frederick’s bosses agreed, and the young team leader went to work.

A few months after the project began, Frederick took a week’s vacation. While he was gone, his boss stepped in and tinkered with the process, changing the schedule and undoing a deal the team had made with a supplier. When Frederick returned, he felt his legitimacy had been eroded. What was the point of team management if a higher authority could override it at any moment? Discouraged, Frederick quit his management role and became an engineer again. Within a year, he dropped out of the company entirely, leaving his profession to become a sculptor.

“I wasn’t treated like a person,” he said. “They treated me like a commodity.”

People like Frederick are everywhere, of course, in large organizations — in both good times and bad. They always seem to follow the same type of story. Smart and committed, they know a better way to operate. And then, smash! They come up against the organization’s internal defense system. They go from being the organization’s best hope for making positive changes to being seen as a kind of alien invader. And they never seem to recover from the experience.

But when we look more closely at this story, we see it’s not really about change or resistance. It’s about the hidden factors behind job satisfaction: the reason some people thrive in an organization and others seethe with resentment and ultimately leave. The critical factor (as most managers know) is not the money or other tangible matters, but whether people feel they are treated as a person with a unique contribution to offer and not as an easily replaced commodity.

Think about your own aspirations in that context: What do you want out of your job, your organization, and your career? Maybe you have plans to leave your company. Or maybe you have no plan at all, and you’re coasting along, waiting to see what happens. Whatever your circumstances, you’ve probably come to realize the limits of the organization’s concern for you. Where, then, does that leave you? And what choices can you make if you are dissatisfied? Frederick solved his problem by quitting his job and profession. I’m convinced there’s another solution. It all depends on the kind of equity you build up — that is, the value you create not just for your company but also for yourself.

Core Group Envy
It’s not the bosses at the top of the hierarchy, per se, who penalize people like Frederick. After all, the “tinkering” boss who drove Frederick out was a well-intentioned middle manager, who sincerely regretted that Frederick left (and didn’t really understand his own role in Frederick’s decision to quit the company).

The real force that kept Frederick “invisible” as a person was the organizational culture. Organizations tend to classify their members into two groups of people. First is the Core Group — those executives (and others) who come first because they are seen as central to the enterprise. Their needs and priorities, even if unarticulated, define the mission of the enterprise. They usually include the people at the top of the hierarchy, but they can also include gatekeepers (for instance, the head of a critical production plant or union), or people whose personality or integrity has catapulted them to a position of influence throughout the organization. The organization acts first and foremost to meet the needs of the Core Group. (See “Core Group Therapy,” by Art Kleiner, s+b, Second Quarter 2002.)

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