Institutional logic

This post is my own reflection after reading  Harvard Business Review article of Nov. 2011 here.  This article focuses on six perspectives or convoluted means which great organizations must have in-order to succeed in today’s globalized economy, which are:

1. Common purpose
2. Long-term focus
3. Emotional engagement
4. Partnering with the public
5. Innovation
6. Self-organization

“How Great Companies Think Differently”, Harvard Business Review- Nov, 11


Organizations need to concentrate on institutional (social) logic in same weight they focus on financial logic by having:

1. Common purpose: To create an identity which is greater than transactions. The organization identity should encompass the needs of many  societies. The organization is viewed as a societal fixture affirming its values and purpose.

2. Long-term focus: The organization willingly sacrifices quick financial benefits for initiatives which strengthen its values and purpose.

3. Emotional engagement: This perspective particularly resonated with me because values and purpose become engrained in the DNA of people. This creates meaning for people and enrich the communication to be in multi directions  allowing people to come with ideas. These ideas can never originate from people who are just engaged instead of being “emotionally” engaged. Those ideas are the essence of how organizations grow. These ideas are unknown and could take long time before they struck a chord with whoever going to sponsor. Tasks, goals and performance standards are fully aligned with values and purpose and are the means to realize the people ideas.

4. Partnering with the public: Organizations need to infuse deep awareness of the locale of each country or community in which they operate. They need to understand public interest of each locale and align with their strategy. Organizations need to demonstrate commitment to country development which far exceeds the short term gains from establishing connections with locales. The partnering stirs the organization compound to become more capable for facing globalization. It leverages the culture of the organization to become capable in addressing its values and purpose.

5. Innovation: For me is the fruit of implementing ideas which originate from motivated people who are self-organized. Individuals use organizational resources to serve the society. This service is enabler to arrive at credible ideas which their implementation lead to innovations and therefore breakthroughs. Business model innovation is the result of creating partners working within the organization Eco-system. Self-organized people who are treated as entrepreneurs instead of being assigned work within structures is at the heart of generating ideas leading to innovation. If people operate within the functional unit expectations this leads to complacency and therefore people lost meaning in what they do, because they lost alignment with organization’s values and purpose. Organizations need to embrace change, otherwise whatever structures we have can not the stand the test of the first shock.

6. Self-organization: This means that the organization can trust people and rely on relationships instead of rules and structures. People have moving space away from structures which allows them to understand social structures and informal networks which help them to really understand the organization.  Because, they are trusted, people will come with ideas which reflect their understanding of the organization and are aligned with its values and purpose. People are trusted to form informal networks which allow them not only do their work but arriving at ideas leading to innovations. Instead of using processes, organizations create frameworks employing self-organized people who have multi-dimensions of accountability far exceeding their functional unit expectations.

Producing valuable software products and services require in the first place that organizations embrace the  six perspectives described in this article.

Idea: The six perspectives serve to create product ideas leading to innovations. The self-organized motivated people who generated those ideas, and secured sponsorship for their implementation, are excellent candidates for product-owners. Those product-owners understand partners’ relationship and informal networks. Also, they are aligned with organization’s purpose and values. They have value-based thinking which far exceeds traditional project management constraints.

Idea implementation: An Agile/Lean framework is the most suitable non-process driven structure for implementing ideas. We should not assume that there would be no changes during implementation, however the organization, which employs Institutional Logic,  will be more capable to embrace them.

Focusing on trusting people means valuing relationships and informal networking over imposed processes and performance standards. Organizations organize for frameworks that allow people to collaborate.

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