The Four Essential Attributes of any Organization
In order to survive and thrive, any organization must possess the following four characteristics.
- Identity - The organization must know who they are.
- Integrity - The organization must act in accordance with its identity.
- Differentiation - The organization must differ from its competition in some important ways.
- Profitability - The organization must make more money than it spends.
All organizations focus a great deal of attention on the fourth attribute, but often pay far too little to the first three. Without all four, an organization is headed for disaster.
Let me elaborate on these four essential attributes.
An organization must know who they are. This is critical in all of the following areas:
- Internal alignment within the existing organization;
- Growth and sustainment of the organization through employee acquisition and retention;
- Trust and credibility with customers;
- Selection and teaming with suppliers and business partners.
Note that an organization may have an unconscious identity as well as a conscious identity. The conscious identity is frequently based on official pronouncements and intentional efforts by leadership to establish organizational direction. On the other hand, the unconscious identity – which may be much more powerful – consists of all the things that employees tell each other around the water cooler, and the messages they communicate to new employees in subtle and not-so-subtle ways, through their words and actions.
By integrity, I mean conformity with your conscious identity through words and deeds. The organization must walk its talk. After saying “this is who we are,” it must henceforth act in conformity with that sense of organizational self. Another way of saying this is that the organizational identity must truly be a guiding force in the organization.
If an organization lacks integrity, then it will be difficult to maintain a sense of identity, and the value of that identity will be diluted.
Of course, moral integrity is one piece of this broader, more encompassing integrity – always assuming that ethical and upright behavior is one element of the organization’s identity.
In order to succeed, an organization must be different from its competition in one or more ways. This starts with the organizational identity. If you try to define a vague identity on being the best, or the most agile, or the most efficient, then even though all of the words may sound nice, they may not create enough differentiation from your competition to allow you to survive and thrive in the marketplace.
Finally, of course, your organization has to balance its books. If you’re a non-profit, you just need to bring in as much money as you spend. If you’re a for-profit organization, then you must generate sufficient profit to attract and retain investors.
Note that all four of the attributes listed above are absolutely essential for any organization. And keep in mind also that profitability is only one of the four. It’s important for an organization to generate income in sufficient quantities to justify its existence, but an organization must not confuse profitability with identity, and certainly shouldn’t confuse it with differentiation.
Your organization probably has a Chief Financial Officer. But does it have a Chief Identity Officer? A VP of Integrity? A Director of Differentiation? The responsibility for these other attributes is generally more diffuse, and may legitimately rest on the shoulders of the senior leadership team as a whole. Nonetheless, the importance of all four attributes must not be forgotten, and sufficient attention should be paid to the health and development of all four of these critical characteristics in order for an organization to be successful.
Originally published at PaganTuna.com on 1 Aug, 2014.
February 8, 2023