This is the third in a series of blogs about virtuous organizations — businesses where employees model the highest aspirations of human kind. In this series, authors Graham Williams and Gerald Wagner draw on examples and insights from around the world — Brazil, USA, India, Netherlands, New Zealand, Pakistan, Thailand, and Turkey. Readers may be pleasantly surprised by how many virtuous companies already exist! The series addresses what makes these virtuous organizations tick and what practices they have in common, telling compelling stories about the power of positivity. While everyone is likely to enjoy these case studies, organizational leaders in a position to affect culture change are likely to benefit most.
Our Need to Measure
We are measuring beings. We measure the temperature of our bath water, the time of our next meeting, the speed at which we’re traveling, how angry we’re feeling, how long we’ve been kept waiting, how old someone might be … we’re seeing the introduction of smart tennis rackets and golf clubs … and the advent of ‘big data’ will see measurement design and practice go to new heights (or lows).
A focus on measures creates for many an illusion of orderliness, precision, certainty, predictability, objectivity and control.
However, quantitative data can be shallow and misleading, especially when applied to people, and if we measure in the wrong way, measure the wrong things, and fail to recognise that there are some things we cannot measure. (Quality management guru W. Edwards Deming is reputed to have stated that 97% of what matters in business cannot be counted. And often attributed to Einstein: “Not everything that counts can be counted, and not everything that can be counted counts”).
Measuring the Virtuous Organization
Different measurement conventions usually result when a new approach is taken. An extreme example (not simply an urban legend) that illustrates the point: Zappos’ attention to the virtue of building customer relationships and outstanding service focus allows them to discard typical contact centre measures based on quantitative ‘efficiency’. Instead, one of their customer service representatives had a ten and a half hour call. David Hutchens reports, “The customer called to order a pair of Ugg boots, but in the conversation the service rep discovered that the customer was about to relocate to the Las Vegas area, where Zappos is located. They spent 10 hours exploring neighborhoods and other details of life in Vegas. At the end of the call, the customer purchased the pair of Ugg boots”).1
In 1998, Thai Professor Prawase Wasi advocated that countries take a more balanced approach to measurement, and instead of michadhitti (an inappropriate, narrow view – such as GDP) used a different paradigm, sammadhitti (a wiser approach taking account of the community, the environment, individual well-being).2
Here is a framework for measuring the virtuous organization. A suggested new Balanced Scorecard founded on a sammadhitti view:
Workplaces are free of all fear and dysfunction, within departments and between silos. Desired behaviour is spontaneous with no need for heavy compliance mechanisms. Business systems, processes and technology take account of the human factor (whole person) as well as of wider society and the environment.
Leader and employee behaviour is positively modified, and satisfaction, meaning and social connection (intrinsic motivation) thrives. Diversity of talent is fully harnessed. Upsizing takes place when needed – allowing more to work (albeit shorter hours), and from home. Fears (of disapproval, vulnerability, isolation, criticism, career blocks and a host of other associated protective mechanisms) are replaced by love. Authenticity and engagement is high. Ethical behaviours result, not from rules, but from spiritual maturity.
The public measures not only their own level of ‘customer satisfaction’ but also how they view the organisation’s impacts in terms of alleviating poverty, caring for the environment, making constructive investments, and standing up against abuses and corruption.
The organisation drastically improves its job-creation/concrete assets to financial assets ratio; puts money to better use. Adopts a sustainable profit-feathering rather than profit-maximisation paradigm. Aligns executive pay more equitably with worker pay. Are measured on their triple-bottom-line achievements.
Where it all starts, at the heart of the business. The business is purpose-driven and consistently lives the virtues that support its purpose.
Sounds True is one of the first organisations in the world to work with four bottom-lines: Purpose, People, Planet and Profit.3
Virtuous Organizations in Practice
Judge for yourself how these organisations would score on our suggested balanced scorecard:
Around the world, health care is moving from cost-based to patient-based or values-based. A forerunner, Buurtzorg (meaning neighborhood care) have achieved this in a novel way. Their model is:
- Distributed authority (self-managing ‘networks’ suitable for complex systems, and engaging with the emerging future) which is akin to holacracy5 and to positive deviance (a localised innovate and spread methodology)6
- Wholeness (a non-ego, soulful organisation for the whole person)
- Evolutionary Purpose (values-driven, transcendent purpose)
In the 1980s in the Netherlands, a bureaucratic system was introduced to control the activities of home care nurses, using a centralised contact centre, using standardised times for the procedures applied for the elderly patients, tight controls and scheduling. The focus was totally on process efficiency. Jos de Block, a former nurse, established Buurtzorg in 2007 with 10 nurses. It grew to 8000 by 2014 (a Head Office of 25) and the nurses do not have supervisors. They self-manage … and they have 80% of the market! The focus is on caring, helping people to live independent, meaningful lives (patients and nurses), not being time-constrained nor scheduled and monitored, but free to build quality relationships. “A financial study showed that Buurtzorg uses only 40% of care hours prescribed by doctors, so they save money for the Dutch state that finances health care with public money.” Buurtzorg Plus, organised by the nurses, was a natural extension – nurses work with physiotherapists teaching the elderly how to move around safely, and change that physical environment to improve safety. This too represents huge savings for the health system.
Way back in the 1980s, Ricardo Semler inherited an ailing family business. He said: “One of my first acts at SEMCO was to throw out all the rules” and policies – instead they changed to a place of absolute trust. Democracy is the watchword. There are no receptionists, far fewer managers (he took out 9 hierarchical layers), no dress code, workers set their own salaries, vacation time is mandatory, distributed authority applies. Factory workers set their working times, help drive product design, help design marketing plans, look after their own quality control. EVERYONE learns about balance sheets and cash flows and has a vote in all big decisions – such as acquisitions, relocations, how profit-sharing happens. EVERYONE is in an open plan environment and may work from home.
Semler’s approach had clear similarities to a self-governing, holacracy system – distributed authority in peer circles, where workers set the rules. And to the positive deviance approach – local is good, solution focused, finding and leveraging the home-grown positive deviance by spreading the solution via the community (again, a self-governing, distributed authority.
SEMCO revenues grew from $35 million to $160 million in a six year period (1994 to 2001). They continue to grow. And with virtually no staff turnover.
Chapter 1 of Semler’s The Seven-Day Weekend begins with an exhortation to8:
- “Ask why,
- Give up control,
- Change the way work works,”
and to leave behind what he refers to as a boarding school mentality. Employees are actively encouraged to find balance in their lives, to work to flexible schedules that suit them. There are no permanent offices. If they wish to answer emails on a Sunday and go to movies with the family on Monday afternoon, that’s fine.
Employees generate the ideas, execute them, look after the business, and protect their personal lives in the process. Semler: “I’m not required to pen some lofty set of values that any idiot can write. Shared values are those that evolve naturally over the years until one day you realize you’re living by them.” Trust, transparency, honesty, and a culture of sharing allowed for the giving up of traditional control.
NAMASTE SOLAR, Denver
Ten year old Namasté Solar is an employee owned cooperative based in Colorado. Namasté Solar designs, installs, and maintains solar electric systems. Their mission is to propagate the responsible use of solar energy, pioneer conscientious business practices, and create “holistic wealth” for the company’s team and the community at large. Their unique model has attracted an amazing team of over 120 employees.
“Holistic wealth” means emphasizing the importance of the whole and the interdependence of its parts. This concept benefits all stakeholders equitably – customers, employees, investors, communities and the environment. This multi-stakeholder approach is one of the characteristics that allowed Namasté Solar to become a certified B-Corp, a prestigious certification given to companies with a deeper purpose that includes benefiting society and the environment, not just maximizing financial returns.9
Namasté Solar has grown very rapidly while still making a healthy profit every year for the past 10 years (except its start-up year) while also giving 10% of those annual profits back to the community including the Namasté Solar Foundation.10
As a democratic workplace, Namasté Solar practices “extreme transparency” whereby all company information (including salaries) and meetings are open to all Candidates and Co-Owners. Ultimately, with an employee-owned cooperative culture, extreme transparency, and democratic workplace practices, Namasté Solar creates higher retention, better quality work, better customer service, and a track record of tapping into a collective brain trust to find better solutions to inevitable small business challenges.11
If more organizations embodied virtuous elements, what impact would it have on communities as a whole? We welcome your thoughts on social media. Thank you.
- Hutchens, David Circle of the 9 Muses: a storytelling field guide for inovators and meaning makers Wiley 2015
- Wasi, Prawase Prof Bangkok Post 14th January, 1998
- Laloux, Frederic Reinventing Organisations: a guide to creating organizations inspired by the next stage of human consciousness Nelson Parker 2014
- Pascale, Richard; Sternin, Jerry & Sternin, Monique The Power of Positive Deviance Harvard Business Press Boston2010
- Semler, Ricardo Maverick: the success story behind the world’s most unusual workplace Warner Books, Inc. 1995
- Semler, Ricardo The Seven-day Weekend: changing the way work works Penguin Books 2004
- B-Corp http://bcorporation.net/
- Namaste Solar Foundation http://namastesolarfoundation.org/
- Institute for Inspired Organizational Cultures http://inspiredorganizationalcultures.org/