Do We Need a Little More Corporate Confucianism in a Digital World?

(Spoiler alert: yes, we do.)

One way of interpreting the dominance of shareholders over other stakeholders, and the slavish devotion to quarterly returns so prevalent in the private sector, and by cultural osmosis the public sector too, is that we are living in an era of "Whatever Works". In other words, whatever generates the profits, the revenues, the cost savings, is the right answer.

Of course this leads to short-termism, but perhaps even more importantly it also leads to a continual, persistent erosion of who we are as organizations. When we accept that bad client because of financial pressures, when we reduce the money we spend on innovation to support a bad quarter’s sales, when we spend less time than planned creating new products because we need more hustle in our prospecting or delivery, we are eroding who we are, what our strategy is, and how we win. An organization’s true strategy is the distillation of what it does day-to-day, not what it says in a strategy document. “Whatever Works” culture drives an ever bigger wedge between intended strategy and actual strategy.

We have this problem on steroids when we move into the world of agile innovation. What is lauded as the ability to quickly fail forward and pivot, as some experiments fail and others succeed, is also a danger, in terms of quickly moving away from our strategy. Some might believe that is desirable. Certainly for startups, with a relatively simple and small organization, who are still seeking a business model that works, pivoting is very attractive. And for sure, some big organizations get stuck, and need a shake-up.

But how do we know we are not taking our company down a blind alley? In formal terms, how do we know our search in multi-dimensional business space is not taking us to an adjacent, local maximum, which produces better results (for now), but misses a bigger ‘global maximum’, or at least a slightly better maximum, both now and in the longer term. The discipline of value engineering (which I always think is a misnomer because it is normally cost engineering) is a real danger here. I recently travelled on a British Airways flight from London to Edinburgh, and found that I suddenly had to buy my refreshments – this kind of violated my perception of the brand promise of BA, as I perceive it.

We could even imagine a very savvy competitor somehow creating a local ‘honeypot’ that tempts us in, but takes us in the wrong strategic direction, and leads to our demise. Fortunately most corporate strategy is nowhere near sophisticated enough to deploy stratagems like that!

Perhaps we need some inspiration from Confucius, the ancient Chinese philosopher, whose philosophy include a strong emphasis on strongly adhering to a set of moral principles, such as respect for ones parents. A statement made about Confucius, that neatly sums up his philosophy, is: “If The Mat Was Not Straight, The Master Would Not Sit.” The polar opposite of "Whatever Works"!

I would argue that in these times of change, we need to redouble our efforts to clarify who we are (Strategy,Brand(s)), what makes us different, what makes us win, and make sure we expose all our people, partners, decisions, behaviours and investments to this thinking.