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Superorganisations

Updated: Jan 17, 2023

New model for social investment blog series - part 1 of 3


When did it become uncool to represent a corporation?

Go back just a couple of decades, and people were proud to declare that they were a corporate executive - to the point where large US corporations would appoint frankly silly numbers of Vice-Presidents. Back in the 1990s, I remember how many enthusiastic young people saw the title of VP as an entirely acceptable substitute for decent pay and anything resembling work-life balance.


It didn't seem to matter that the sheer number of VPs in their company, many with low level roles and only recently finished at university, meant the title was essentially meaningless. They proudly handed out their business card to anyone who showed the slightest interest.


Now, young people seem to have different aspirations. Research in 2017 revealed that "Jobs are increasingly perceived as core to one’s self-identity … For many employees, a job is not only a paycheck: employees put considerable thought and effort into deciding where to work and why … many employees seek meaning as much as, or even more than money." Meaning rather than money is especially important to millennials and to Generation Z, who care more than older workers about intangibles such as social connections and company purpose. They “strive to work where they feel that their input makes a difference to customers, colleagues, peers, and supervisors".


Are corporations living up to the ask? Legal Scholar and Professor of Law at the University of British Columbia Joel Bakan doesn't think so. His acclaimed 2003 documentary "The Corporation" showed how corporations, when considered as natural living persons, exhibit the traits of antisocial personality disorder. Bakan described the modern corporate entity as "an institutional psychopath".


Bakan may have hoped that work such as his would lead to change. Instead, it seems to have led to resignation. When Bakan released a follow-up movie in 2020, a typical review stated "while the nefarious actions of the corporate world remain as devious as ever, knowledge of their conduct has become more mainstream, and so it is not so much that what this sequel is presenting is not important, but rather that it hardly gives viewers any new insight. Indeed, the question does arise; is this sequel really as necessary as its title claims?"


Social media metrics bear out such dismissive, fatalistic analyses. Few people like corporations these days:

It doesn't have to be this way. The psychopathic traits uncovered by Bakan are exacerbated, and may ultimately derive, from the emphasis on maximising shareholder value first popularised by economist Milton Friedman. In his 1970 essay for The New York Times, "A Friedman Doctrine: The Social Responsibility of Business Is to Increase Its Profits", he argued that a company has no social responsibility to the public or society. Its only responsibility is to its shareholders.


The "Friedman Doctrine" is now more commonly known as Value-Based Management (VBM) or Managing For Value (MFV). According to VBM principles, management decisions should prioritise the interests of shareholders above all else. Performance can thus be measured in simple numerical terms, via stock price and dividends payments. It's not hard to see how this drives behaviours that are damaging to society at large.


By contrast, other management theorists have long argued for a concept of stakeholder (rather than shareholder) value, Stakeholder theory proposes that corporations should take account of parties including employees, customers, suppliers, financiers, communities, governmental bodies, political groups, trade associations, trade unions, and even competitors. Managing an organisation from this perspective means taking morals and values into account. Performance targets widen to include corporate social responsibility and playing your part in upholding the social contract (whatever that is taken to imply).


A leading current voice in the stakeholder value approach is Mariana Mazzucato, who claims in a recent article that "we need to bring together all economic actors to work together in a different way from the current one that can be characterised as—at best—governments fixing market failures and firms fixated on maximising shareholder value. A multi-stakeholder approach can provide that lens, with concepts like collective intelligence at the centre. We must find ways for all stakeholders—from CEOs to communities across the value chain—to truly create value together and share the rewards."


However, Mazzucato, like other economists, tends to present proposals focused on fiscal measures by government, such as investment into technology innovation and adjustment of taxation to redress inequality. Are top-down interventions of this kind sufficient? Or even necessary?


In my keynote to Enterprise Architecture Europe 2021, I argued that any organisation can reinvent itself as a platform that provides services to communities, and by doing so, support stakeholders of all types. We live in a time of unpredictable and far-reaching disruption to climate, technology, economics, politics, and society. Organisations can and must learn to be antifragile - embrace change as an opportunity to do things differently, so as to thrive on disruption. By reinventing themselves as platforms, they can help their stakeholders to do so too.


Becoming what I call a Superorganisation means adopting a new operating model, organisation-as-a-platform. This operating model is underpinned by but goes further than the principles for community-based antifragility set out in my 2021 book "Supercommunities":



A Superorganisation replaces traditional command-and-control management with connect-and-collaborate, enabled and directed via practices that emerged in the technology world - Agile management, data governance, loose coupling, DevSecOps, and more. Using this approach, smart cities can be about more than technology introduction - they can be about enabling neighbourhoods that use new technologies to maintain high local wellness. Universities can be about more than education - they can be about joining an alumni network whose members support and trade with each other throughout their lives. Non-governmental organisations (NGOs) can do more than rebuild and regenerate - they can empower new, sustainable economic models based on equal opportunity and environmental awareness.


My forthcoming book "Superorganisations" will explain how to evolve your own operating model towards organisation-as-a-platform. Watch this space - and in the meantime, feel free to watch the recording of the keynote mentioned above.


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