What is the identity of an organization?
What is the identity of an organization? Well, there is no such thing as an identity card for organizations. A tax number allows for explicit attribution but will not reveal anything about the organization. Identity has a lot to do with perception. It comprises hard and soft ingredients.
Imagine being asked by your neighbor’s child: “What is your job?”. You answer contains the name of the organization and what role you play in the organization. You will tell something about the products and services. You may also explain where or who needs the products and services and what they are useful for. An interested neighbor may also ask where the products are made. So you tell briefly something about the factories.
You’ve already communicated three key points of the organization’s identity: customer segment, customer value and distinct capabilities. The three points explain how the organization generates value for whom and what distinct capabilities it has, operates or requires.
Three other aspects of identity are purpose, culture and heritage.
The purpose is the reason for the existence of the organization. That is the underlying motivation to engage with the topic at all. The purpose often goes back to the founders of the company. In addition to the opportunity to build a business, they have another – often inspirational or personal – motivation. The purpose is not linked to concrete products and services. If the purpose is known, it’s a great source for ideas and stories. With a purpose, you can ask how you deliver on the purpose better or in what other ways you can also fulfill the purpose. A good purpose will attract and retain talents. Identifying purpose has many advantages to mobilize the organization.
For example, DTE Energy, a major energy provider with 10,000 employees, has made several unsuccessful attempts to free itself from the clutches of the 2008-2009 crisis. It was successful with the consequent introduction of a higher goal, the purpose of the organization: “We serve with our energy, the lifeblood of the community and the engine of progress” *. The employees recognized the purpose of their work and identified themself with the purpose. With that, a turnaround began and the business results also recovered. The share price has gone up continuously and has quintupled since 2009.
The culture describes how the company is. It describes how the collaboration between colleagues, suppliers and investors is, how decisions are made, how employees are promoted or what is required of them, and what their standards to the products and services are. It manifests itself in the expression of trust, authenticity, care, transparency, integrity, learning and empowerment. The culture can keep an organization healthy and successful, or as in the case of Lehmann Brothers lead to destruction.
The heritage of the organization shapes the image in the minds of the people. What has the organization done so far? What were the (emotional) highlights? What do you remember? People love continuity and consistency. If you deviate from the consistent continuation of the story, then it requires some communication.
Why is identity so important in renewing?
For the evaluation of ideas for the renewal of organizations a check with these six points will not hurt. If the idea is consistent with the points, it strengthens the identity and fits. This is the safest case that minimizes risks.
However, if there are slight deviations, an explanation is necessary. The stakeholder expect an explanation for their understanding and their acceptance. Strong deviations require more than an explanation. One possibility is to start a new organization to give the idea the opportunity to develop its own identity.
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*) Harvard Business Manager November 2018