People over Profit: the Route to Business Agility
By Pamela Ashby | 24 May 2017
“Business Agility challenges the fundamental fabric of organisational structure” said Consortium director Katie Taylor at the May 2017 Member Training Day.
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*, highlighting 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 if they know they are personally 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 Framework for Business Agility offers guidance for organisations making this shift. “Our resources and network of experienced partners offer valuable support to any business” Katie reminds members at the training day. 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 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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