People over Profit: the Route to Business Agility
By Pamela Ashby | 24 May 2017
Sometimes it’s important to hear obvious truths spoken out loud.
At the May Member Training Day, Consortium director Katie Taylor introduced a workshop on Agile Leadership and Business Agility with the words:
“Business Agility challenges the fundamental fabric of organisational structure.”
This one statement communicates a spirit of revolution, as well as pointing to the cultural change and new style of leadership that can be seen in some of the world’s most innovative organisations. She talked about the book Firms of Endearment*, which points out that companies focusing on passion, purpose and the interests of all their stakeholders have outperformed the S&P 500 by 14 times and Good to Great Companies by 6 times over a period of 15 years.
In the People v. Profit debate, it seems that a focus on people ‘wins hands down’. Fortune’s ‘100 Best Companies to Work For’ (judged on criteria of trust, pride and camaraderie) showed three times higher stock market returns between 1997 and 2011. Kotter confirms that companies with strong and flexible business cultures outperform traditional organisations with revenue growth 683% vs 166%, share prices increasing 901% vs 74%, and net income increasing 756% vs 1%.
Hard data proves that if you prioritise people and culture, then business value and profit will follow. This is a significant challenge to the fundamental fabric of organisational structure. The forces of power and control are entrenched in layers of management structure and hierarchical thinking. Managers worry about delegating when they are still going to be held accountable for results. “It’s difficult to delegate when your head’s on the block,” Katie acknowledges. Organisations need to operate in a very different way, moving from a focus on profit generation to people satisfaction.
The Consortium’s new Framework for Business Agility offers guidance for organisations making this shift. “We’re a not-for-profit organisation,” Katie reminds members at the training day, “Our resources and network of experienced partners offer valuable support to any business.”
The Framework for Business Agility is a people-centric approach that can give organisations a route map to tackle complex cultural change. It offers leaders a way forward within a world where detailed up front strategic planning is no longer sustainable, and clear vision needs to be balanced by space for emergent goals.
Continual change is now the norm, but organisations struggle when they try to implement change within a culture and structure that constrains autonomy, collaboration and inspiring leadership.
Agile Businesses put people before profit. The Culture and Leadership Community at the Consortium is working together to help organisations take a people-centric approach to business success.
The truth is, there is no dilemma in People v. Profit – the research shows that a focus on the first results in the second, making the pursuit of people satisfaction and profitability two parts of a single whole.
Members of the Agile Business Consortium have free access to Member Training Days, including a range of learning opportunities and workshops. You can find out more about membership here
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