part I: inside the organization

you’ve built a product. here’s how to build an organization

In order to deliver a product at scale, you need to build an organization. Building an effective organization requires thinking at a systems level, which is inherently difficult for any single individual. We discuss how to harness collective intelligence to enable the organization to design itself.

you’ve built a product. here’s how to build an organization

two quick notes

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1. The “soft” stuff is the hard stuff

2. Not either/or, but ascending levels

you’ve built a product. here’s how to build an organization

a couple of people and a garage is all you need to build a product

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+ =

you’ve built a product. here’s how to build an organization

to scale the operation…

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…you need an organization.

you’ve built a product. here’s how to build an organization

these are the ingredients

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people processes resources

but what animates them?

you’ve built a product. here’s how to build an organization

a bit of philosophy: we have two perspectives

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you’ve built a product. here’s how to build an organization

1: a shared, objective perspective

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you’ve built a product. here’s how to build an organization

2: a personal, subjective experience

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you’ve built a product. here’s how to build an organization

the approach required to work in each domain is different

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interior experience exterior outcomes

Do I like it?key question What is it?

Fulfillmentresult Impact

Valueslanguage Reason

you’ve built a product. here’s how to build an organization

Enduring organizationwith happy employees

the most successful organizations are adept at working with both perspectives

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fulfillment

impact

Work sucks

Won’t last!

What’s the point?

you’ve built a product. here’s how to build an organization

as organizations develop, they integratehuman values

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bureaucratic organization

performance organization

human organization

Financial Security Seniority/Class

Conformity to a set of rules

+ Financial Success + Merit

Efficient deployment of a strategy

+ Human Values + Service

Creative manifestation of human values

animated by

to what?

you’ve built a product. here’s how to build an organization

and the customer and employee experience is palpably different

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agent’s goal

Stay on script Efficient resolution Delivering happiness“I am penalized for going off script”

“I am rewarded by the number of calls I handle in a day”

“I love helping customers and have the freedom to do what I think is right”

bureaucratic organization

performance organization

human organization

you’ve built a product. here’s how to build an organization

resulting in exponentially higher long-term performance at each level

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1.1 x

4.1 x10-year shareholder returns

S&P 500 Firms of Endearment

?

Source: R. Sisodia, et al., Firms of Endearment, Second Edition (2014)

bureaucratic performance human

you’ve built a product. here’s how to build an organization

what firms are doing this well?

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you’ve built a product. here’s how to build an organization

why do values lead to higher performance?

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bureaucratic organization

performance organization

human organization

aligned around Strategy Shared Values

innovating Tactics Strategy and Tactics

Tactics

N/A

energy system Willpower ValuesSupervision

level of trust and reliability

Low Moderate High

you’ve built a product. here’s how to build an organization

building a values-centered organization

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Clarifyvalues

Align the organization

Communicate with values

Learn continuously

human organization

you’ve built a product. here’s how to build an organization

building a values-centered organization

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Clarifyvalues

Align the organization

Communicate with values

Learn continuously

human organization

you’ve built a product. here’s how to build an organization

it’s possible to measure and map values

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for individuals and teams

you’ve built a product. here’s how to build an organization

values are uncovered through the questions we ask others and ourselves

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What should I do? What do I want?

you’ve built a product. here’s how to build an organization

building a values-centered organization

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Clarifyvalues

Align the organization

Communicate with values

Learn continuously

human organization

you’ve built a product. here’s how to build an organization

organizations align around key questions

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purpose

strategy

tactics

Why do we exist?Purpose

How will we create value for each stakeholder?What business model best enables that value?

What is most important this quarter/year?

Stakeholder Value Propositions

Business Model

Strategic Focus

What specific actions will we take?Work Planning

you’ve built a product. here’s how to build an organization

building a values-centered organization

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Clarifyvalues

Align the organization

Communicate with values

Learn continuously

human organization

you’ve built a product. here’s how to build an organization

too often we think of a boss as someone who tells others what to do

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Do This.

Values and worldview remain hidden

Only one plan is proposed

Values and worldview remain hidden

autocratic command

you’ve built a product. here’s how to build an organization

unfortunately “collaboration” is often just a competition of ideas

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Values and worldview remain hidden

Two plans compete Values and worldview remain hidden

competitive communication

My plan!

No, my plan!

you’ve built a product. here’s how to build an organization

collaboration that starts with values enables synergy between diverse perspectives

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Values and worldview are explored

An approach is co-created

Values and worldview are explored

synergistic communication

How can we best honor both our values?

Do you think this action would address your

values?

Yes and if we also…

you’ve built a product. here’s how to build an organization

values-based, synergistic collaboration leads to better ideas and robust execution

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direction Two-way

decision optimized for

Quality

autocratic command

competitivecommunication

synergistic collaboration

Speed

One-way

implementation EmbracedHalf-Hearted

you’ve built a product. here’s how to build an organization

building a values-centered organization

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Clarifyvalues

Align the organization

Communicate with values

Learn continuously

human organization

you’ve built a product. here’s how to build an organization

success!

we’re trained to seek success and avoid failure

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event

good

bad failure!

you’ve built a product. here’s how to build an organization

when in fact, the most underutilized assets in business today are problems

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event

bad understand

event

good

bad

you’ve built a product. here’s how to build an organization

thank you

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Clarifyvalues

Align the organization

Communicate with values

Learn continuously

human organization