The Company: Living Entity - or Machine?
How You Treat It Determines Its Performance
by Tom FitzGerald

People have always known instinctively that a human enterprise is a living, breathing entity, that grows and ages, sickens and heals, flourishes and fails. Something that is organic in nature, that has personality and the ability to learn and to reproduce. That has personhood. Something that is much greater than the sum of its functions; much different than the sum of its people.

This personhood is most easily recognized at both ends of the spectrum of corporate success. World class companies exhibit a character of focus, power and oneness that is palpable even to a casual visitor. Those in deep distress show a personality that is equally vivid but fragmented, fearful and impotent. 

All companies have this personhood, whether it is strong or weak, potent or ineffective, motivating or destructive. And these corporate personae have inner lives at least as complex and as richly tapestried as those of people. And not only do these inner lives coexist with the external results of corporate success and failure, they actually precede and cause them. In our work, we find some 150 attributes of corporate personality that can cause, effect or predict bottom-line performance. 

Entrepreneurial and charismatic leaders have always known this quite intuitively and use it to lead, motivate and transform their companies. They use their organizations' living energies to magnify their leadership and their drives. They alter elements of their companies' inner lives to force changes in the externals. They may not talk about it, many would be too embarrassed, but they think about their companies as persons. 

However, over the last eighty years or so, and especially since the coming of "scientific management", the company-as-machine paradigm has become the model most used, especially when trying to grow or change or improve organizations. 

Unquestionably, such a model has its uses. Certainly it is easy to teach and understand. Undoubtedly it lends itself to ready analysis. But it has profound limitations; as limited as the model of a human body without its life, without its spirit. 

Changing the inert, spiritless human body can only be done mechanically. And the results can be no more than was done to it. The body without its life can offer no response, no help, no ability to further what has been done to it. Decay is the only possible development. 

Trying to change a company in any significant way using the company-as-machine model is like that. Business Process Reengineering is a prime example. It is successful only about 30% of the time, a percentage disturbingly close to that of the placebo effect. And trying to change it by coaching one person at a time is even less successful.

However, so pervasive has the company-as-machine model become, that many managers and consultants act as if it is the only one available. When asked, they may speak about the company as a living entity but even then they are thinking of it as its culture or the sum of its people. 

This machine approach to corporate change is most often seen in the more established more bureaucratic companies. In entrepreneurial organizations it appears much less. And when it does, they cease to be entrepreneurial. 

But the alternative exists. The company can be dealt with as a person, with life and body and soul. And treating it this way allows it (actually, forces it) to respond to its leadership, its people and its marketplace as a thinking, competing organism. Treating the company as a person evokes its personhood and simultaneously evokes attributes only living creatures have. Like the ability to adapt and heal, to grow and flourish, change and even transform. 

But it takes a leader, as opposed to an administrator, to evoke this living response. While it would be nice for all companies to have leaders who have this instinct and charisma, it is not needed. A body of knowledge and practice exists that allows any CEO to address the organization as an entity and mobilize it, cause it to change. And because this approach draws upon the company's innate instinct to succeed, the process works quickly and almost without effort. 

As with all fundamental techniques of leadership, the process is profoundly simple, like walking or riding a bicycle. And like walking and cycling, almost impossible to analyze. It is difficult to explain in words; but easy to learn, with the knowledge that it can be done and with a little help and practice. 

As a CEO there are just three major steps, constantly repeated, that you need to take. Perfection is not needed and they become more effective with practice.

The first step makes the others easy and natural: Visualize the company as a person. See it, hear it, feel it as an entity. Personify it, give it form and shape and color within your mind. Identify its personality, as it is and as it should be. The better you do this the more effective the other steps will be. 

The second step is to evoke the company. The most successful technique to do this is to call the management team together. Whenever the management team is making decisions for the business, the company is there too. As you talk with them, remain aware that you talk with it too. As you decide with them for the company's sake, you decide with it too. Saying to the group (and the company), in this matter, we are the company is a powerful, empowering evocation. Also, whenever you talk to your workers about the company - and it should be often - speak to the company through them, listen to the company through them. 

The third step is to increase its power, its potency, its authority; enough for it to make known its needs and its potential, if necessary over the prejudices and preferences of individuals on the management team, even yours. 

Simplifying the politics of the company is the way to do this. The simpler the politics and the clearer the focus, the more powerful becomes the spirit of the company. As the company grows in potency and in clarity, workers at all levels begin to respond to it as a separate entity. Creativity grows. Morale improves. The organization becomes more responsive to leadership. The key factors of the inner life of the company come into balance. And the externals follow.

Time after time, over the last twenty years we have watched managing officers intuitively use these steps to  turnaround companies, to transform their performance. Time after time (without telling anyone) we have used them ourselves to enable companies to sharply increase their profits and renew themselves.

The steps may seem a little mystical. But they are as real as riding a bicycle. It will take you just a little time and effort to begin them properly. With practice they will become innate and the results will come faster. Once started, they take no time from your day and they magnify the results of the normal course of business. 

They happen within your heart and mind. And no one need ever know ...

Tom FitzGerald is a bottom-line oriented, consulting management engineer, who specializes in effecting major improvements in profitability, performance and growth. He
has worked with CEOs and COOs of more than 200 organizations in the US, Canada and Europe, ranging in size from start-up to Fortune Five Hundred.  By education, a physicist.  By birth, Irish.  By instinct and experience, a business catalyst.  Contact FitzGerald Associates here:

(The Company: Living Entity - or Machine? was originally published in American Banker - ed.)

Many more articles on Leading Change, Creative Leadership, Executive Performance and Performance Improvement in The CEO Refresher Archives


Copyright 1999 - 2002 by Tom FitzGerald. All rights reserved.

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