We serve, therefore we are

This article is about understanding the core purpose of organizations and how this can be articulated as a three-level cascade of states of being, doing and having. The state of being is what the organization is perceived to be, the state of doing is how the organization performs in order to be what it wants to be, and the state of having is the set of parts of the operating model that, in interaction with each other, enable the desired performance.

Serving stakeholders

The 17th century philosopher René Descartes coined the dictum “I think, there I am” (cogito, ergo sum) to anchor his exploration of knowledge and existence. It got me thinking about the essence of organizations, and I concluded that “we serve, therefore we are” comes pretty close to the mark. My thinking is that an organization’s right to exist is validated by its ability to serve its stakeholders effectively, hence my dictum "servimus, ergo sumus".

This is based on some assumptions:

• Service is interpreted broadly to include all forms of value creation and support provided to stakeholders. This encompasses direct services in primary economic exchange with customers, suppliers, employees, and investors, as well as indirect contributions for secondary stakeholders (e.g., community engagement, sustainability efforts).
• The organization acknowledges that its success and legitimacy depend on the well-being and satisfaction of its stakeholders. Serving stakeholders effectively is at the heart of the organization’s purpose. This, in turn, leads to mutual benefits, where stakeholders receive value, and the organization gains loyalty, trust, and long-term sustainability.
• Service implies ethical behavior and a commitment to doing what is right for stakeholders, thereby reinforcing the organization’s integrity and ethical standing.
• The concept of service is dynamic and adaptable to changing stakeholder needs and societal expectations. This flexibility ensures the organization remains relevant and responsive.
• Serving stakeholders is central to the organization’s identity and mission. It reflects the fundamental reason for the organization’s existence.

Creating and keeping stakeholders

The central positioning of stakeholders aligns neatly with another article Rethinking business purpose, where I extend Peter Drucker’s famous statement “the purpose of a business is to create and keep customers” to “the purpose of a business is to create and keep stakeholders”. I believe this shift from customers to stakeholders reflects the interconnected nature of today's business environment and the importance of sustainable, mutually beneficial relationships. In the article, I assert that influencing stakeholder decisions is at the heart of business success. However, it's far from a simple task. People make decisions based on a complex mix of factors that can be broadly categorized into five areas:

• Cognitive: Rational thinking, risk assessment, and logical evaluation
• Emotional: Feelings, intuitions, and subjective experiences
• Social: Peer influence, cultural norms, and social proof
• Environmental: Contextual cues and situational factors
• Personal: Individual goals, habits, and unconscious processes.

State of being

Given that effective service is central to an organization’s identity and legitimacy, and that stakeholders’ decisions are influenced by a complex interplay of factors, it follows that a deep understanding of stakeholders’ current states and aspirations enables the organization to tailor its efforts more effectively. This understanding helps the organization define what it should be and do in order to better meet stakeholder needs and achieve its own goals. The organization’s own state of being is part of its strategic positioning. In other words, what makes it successfully different from its competitors. The stakeholders’ states of being are the strategic focus while formulating more concrete objectives.

Here are some examples (from chapter 3 of my book In Are you digitally “done”?) of what might make an organization successfully different from its competitors:

• Organizations desire – and it is desired of them – to be responsible and perceived as such, and therefore act in a way that is ethical, sustainable, equitable and transparent.
• In order to cope with, and benefit from, change in their environment, they endeavour to be resilient to disruption, including financial resilience, and adaptable to take advantage of new challenges and opportunities. They also desire to be innovative – constantly looking for new ways to improve products, services, and processes – and stakeholder-focused on improving the experience of the encounters and interactions with their organization.
• Depending on their degree of self-sufficiency, they desire to be collaborative, not only with customers but also to work with other stakeholders to achieve common goals.
• Finally, in daily operations, organizations strive to be effective (achieving the desired outcome), productive (producing a large amount of output with the available resources), and efficient (minimizing cost of resources).

State of doing

Once you have an idea of who the stakeholders want to be and what they (and you) want your organization to be, you can start thinking about what your organization needs to do in order to achieve these states of being. This performance can often be measured with KPIs.

Examples of this performance related to the nine examples above:

• Responsible: Consistently meets or exceeds industry sustainability standards
• Resilient: Sustains operations without significant disruption during unexpected events
• Innovative: Maintains a portfolio of active research projects or collaborations
• Stakeholder-focused: Maintains high customer satisfaction and loyalty scores
• Collaborative: Regularly incorporates customer input into product/service development
• Effective: Consistently meets or exceeds established KPI targets
• Productive: Demonstrates reduced cycle times for key processes
• Efficient: Consistently reduces costs while not compromizing quality.

State of having

The final and most practical level of formulating objectives is deciding what you need to have in place in order to do what you want to do. This equates with the parts of the operating model (processes, people, resources, suppliers, organization). There are tangible parts that can be deployed, changed and retired, for example, an employee, a tool or a new policy, while other parts are intangible and only change as a result of the interactions between the tangible and other intangible parts, such as an employee’s motivation that is affected – for better or for worse – by the introduction of a new policy in combination, for example, with how their coworkers react to the policy.

Summary

"We serve, therefore we are" expresses the core purpose of organizations through the lens of serving stakeholders. An organization’s existence is validated by its ability to serve stakeholders effectively, grounding its success and legitimacy in stakeholder well-being and satisfaction. It extends Peter Drucker's idea of creating and keeping customers to a broader focus on stakeholders, emphasizing the complex factors influencing their decisions. A three-level framework of organizational states – being, doing, and having – describes how organizations can strategically position themselves, perform to meet stakeholder needs, and refine their operating model effectively.