What Do We Really Want?

In a sense, all the problems we've just described result from designing and operating organizations based on a narrow set of goals. For instance, many managers of today's publicly held companies believe that they are legally required to try to maximize the financial value of their current shareholders' investments, and to consider other goals only insofar as they ultimately affect this one.^[3] We should not be surprised, therefore, to see organizations that are financially successful but whose actions have undesirable consequences for their societies, their employees, and their physical environment.

The basic problem here is that today's financial measures alone are not enough to reflect all the things we really think are important. But without explicit ways of recognizing other things that matter, it is very easy to forget (or underemphasize) them. In fact, as concepts like the Balanced Business Scorecard suggest, explicitly attending to a broader range of non-financial evaluation criteria may even lead to better financial performance, too.

To have any hope of creating better organizations, therefore, we need to think clearly about what goals we want our organizations to serve: What do we really want? One way to do this is to think first about who we mean by "we": Whose interests are being served? Business philosopher Charles Handy helps answer this question with his list of six kinds of "stakeholders" of an organization: (1) customers, (2) employees, (3) investors, (4) suppliers, (5) the environment, and (6) society as a whole.^[4] By considering the interests of each of these different groups, we can identify—and make more explicit—the goals we would like our organizations to serve.

For example, how would companies operate differently if there were widely available measures of how well they created "good" jobs for people who would not otherwise have them, or of how well they prepared their workers for better jobs in the future? Or what if organizations designed work processes by considering from the beginning how employees could best integrate their work lives and their family lives instead of designing work processes first, and then trying to balance family needs afterwards?

A key need here is to find new ways of explicitly considering broader criteria of organizational success. In some cases, this will mean quantitatively measuring things not currently measured (such as the quality of jobs created). In other cases, it will mean bringing a new qualitative perspective to bear on evaluating and redesigning individual organizations (such as integrating work and family concerns in new ways).

^[3]Even in today's world, corporate directors have more latitude than they usually assume. In the U.S. for example, corporate officers are legally allowed to do what is in the best interests of their shareholders, broadly conceived, including the non-economic interests of current shareholders and the interests of potential future shareholders.

^[4]Handy 1994.