The Purpose of Organizations

20151104_145251In the last post I noted what I think is a really big and ugly problem that has come from anthropomorphizing organizations. That big and ugly problem being that we consider the purpose of organizations and people to be the same.  If you push people to explain what that same purpose is they will most often say ‘survival’ is the core or fundamental purpose of both people and organizations.  Ask where this idea comes from and you often will get some comment on Darwin and/or the idea of survival of the fittest.  Ask what is meant by survival, especially in terms of organizations and things can go almost anywhere.  And when things go almost anywhere you really are almost nowhere. What this means then is that there are actually very few meaningful conversations in organizations about the fundamental purpose of an organization, let alone people. The term ‘survival’ is mentioned and it is assumed everyone is in agreement and understanding is shared.

In that post I also noted that I think the fundamental purpose of organizations and people is very different; there is a big gap in meaning and behavior and this gap needs to be recognized. I defined purpose as a fundamental driver of meaning and behavior. It was stated that:

  1. The purpose of an organization is to be a viable economic entity.
  2. The purpose of a person is to express identity.

Let’s start with organizations.  By viable economic entity I am being very, very basic.  I mean the ability of the organization to meet payroll. I think it is accurate to say that no matter what kind of organization it is, if it can’t pay people those people go somewhere else. No matter how amazing that organization is or what it actually does. And as mentioned in the last post, without people nothing else matters, nothing else even exists in an organization.

If an organization can meet payroll then there is the possibility of profit, the possibility of delivering on its mission, the possibility of social responsibility, the possibility of shareholder value and all the ‘other things’ organizations can do. It is these ‘other things’ that are the anywhere  that discussion about the fundamental purpose of organizations goes to.  And it is right here that we get lost and where OD in particular is disturbingly lost.

Ask the OD world what the purpose of an organization is and there is a really good chance you will get a psychologically oriented response, probably even a depth psychology perspective. Something to do with meaning, individual purpose, alignment with a higher purpose. While this response may have a well-intentioned, even noble origin, it is simply not what the left loop, the fundamental left loop, the driver of meaning and behavior IS in organizations.

If you took up the challenge from the last post and reflected on the interactions you experience regularly within your organization, my guess is that the pattern of interactions has far more to do with the organization being economically viable, than anything else. Of course if you did take up that challenge it is highly probable that you are in an organization that has met the basic definition of economically viable noted above (meeting payroll) so some additional purpose(s) of your organization will be at play as well. These may be things like vision, mission, strategy, maximizing profit and so on.

Nevertheless, whatever those purposes are they are sitting on a foundation of economic viability. That foundation is the purpose of organizations. Your organization likely has a complicated and convoluted definition of economic viability since it has exceeded the basic threshold. As soon as that viability is challenged or threatened in any way, the response will be an economic one, and any and all those psychologically based definitions of purpose espoused by the OD world are first constrained, then compromised and finally abandoned

This is not a moral criticism of organizations. It is the left loop of every organization in existence. For companies with shareholders this left loop even has legal precedent in the Dodge vs Ford ruling in 1919. It is simply what the purpose of organizations is.

The problems emerge when we think and act like this purpose is the same for people; for you and for me. The next post will look at the purpose of people.

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