I had a good fortune this past week to moderate a strategic planning session with the CEOs of seven of the largest and most well respected highway construction firms in the country.
These thoughtful executives meet on a regular basis to share strategies and best practices, to compare notes on equipment and technology systems, on asset and equipment management and perhaps more than anything else on leadership, management, and the “people” development within their organizations.
Above all else, it was the conversations around this last point that struck me as to why these executives led companies that, on average, had been in business for more than 60 years– pivoting and weathering various and multiple storms in their notoriously cyclical industry where the overwhelming majority of their competitors had not.
The discussion brought to mind one of the greatest and most under-rated business books of all time – Arie de Geus’ The Living Company, where the author shares a lifetime of research and study as to why some companies and organizations “live…through the upheaval of change and competition over the long haul.”
As de Geus’ so eloquently writes:
The idea of a living company isn't just a semantic or academic issue. It has enormous practical, day-to-day implications for managers. It means that, in a world that changes massively, many times…you need to involve people in the continued development of the company. The amount that people care, trust, and engage themselves at work has not only a direct effect on the bottom line, but the most direct effect, of any factor, on your company's expected lifespan. The fact that many managers ignore this imperative is one of the great tragedies of our times.
This inspirational and almost idealistic point may seem contestable in our age so dominated by tech high-flyers that seem to have gained their prominence through such a powerful combination of IP prowess, network effect, and first-mover advantage that really any company culture and any collection of reasonably talented individuals could run them well.
For a short time, maybe yes.
But to sustain themselves over periods measured in decades, to transition leadership and management through a generation (at the meeting I moderated, there were two third generation businesses, and one fourth generation one) requires a robust, flexible, and truly “living” culture.
And that in turn requires something we don't talk nearly enough about in business anymore – leadership.
The kind of leadership that once was the obvious expectation for persons granted the blessing and privilege of being at the head of an organization of any size.
The type of leadership that does not sacrifice the long-term for the sake of the short-term.
The type leadership whose goal is not “an exit,” but rather a contribution - to shareholders, to employees, to customers, to community.
Leadership that knows that a handshake and one's word is a far better and more appropriate form of agreement between gentlemen and gentlewomen than a contract can ever be.
And leadership that recognizes that to survive and prosper through four generations is both an amazing accomplishment, and a charge to keep.
The charge to not only match the good and hard work of those that have gone before us.
But given the opportunities afforded by our technological and global age, to far exceed them.
In growth and profits, absolutely.
But, in character, principle, and doing the right thing too.
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The Living Company
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