From Boom to Bust: On Organization Identity, Sustainability and Transformation

The Context

The WeWorks fiasco is not a new story … it is yet another blip reminiscent of similar fiascos in new age capitalism, each fiasco that has been shaped through orgiastic rituals involving tyrannical entrepreneurs, pipe-dreaming and perhaps delusional angel investors, and narcissistic but powerful venture capitalists. It is just that the scale of mismanagement and waste that has reached gigantic proportions of money and human energy today.

Hindsight makes us wonder, how core management principles, governance ethics, and sheer pragmatics of business are thrown aside to such delusional narratives, that are at best — stale, prurient, and sad. Very often the narrative is founded on setting up the founder-entrepreneur as a magician cum maverick — creative and insightful, capable of the Midas touch, and then reduced to a toxic trickster and a pervert, as performance goes downhill. Of course there are also side-plots of corruption, nepotism, madness, and sometimes even raunchy sex thrown in as such companies crash in this tragicomic journey.

However it would be incorrect to pin these increasing misadventures on just the entrepreneur’s role and persona or on the myopia and greed of the investor — there seems to be more to this narrative.

It is as if each organization had evolved its own identity and persona, and had walked the razor’s edge towards greatness only to keel over into the abyss of death and anonymity. I write this blog on the notion of Organization Identity — it has been an area of both consulting over the past few years, and now academic research. It is my belief that working with Identity is the only way forward for sustainability and viability of not just start-ups, but for all organizations.

In this blog, I would draw your attention to three Identity processes that are important to reflect upon.

Part 1

Organization Identity: Leveraging Lacanian Lens

I was first introduced to the work of Lacan when I was invited as a consultant for IFSI conferences in France. Jacques Lacan was a French psychoanalyst and psychiatrist, who perhaps never got his due recognition and centrality as compared to Freud and Jung. He was indeed controversial, linked to the post-structuralists, and did a fair amount of work with the unconscious having been influenced by Bion, (hence the GRC connection). In 1949, Lacan offered his insights through a concept known as the Mirror stage which I would be using to define organizational identity, though originally Lacan was talking about human beings.

Inspired by the work of Henri Wallon, Lacan discovered and proposed the following at the risk of simplification:

• Wallon in the 1930s had done research on how chimpanzees and infants respond to their reflections in mirrors. Wallon had noted that while both the chimpanzee and the infant would recognize themselves in the mirror, the chimpanzee would soon lose interest in this discovery, whereas the infant would spend a lot more time and effort with the mirror. Wallon argued that infants and children use the mirror to develop a sense of identity.

• Lacan used these findings to develop the notion of ‘Subjectivity’, where he states is that subjectivity is essentially comparative in nature. Lacan stated that when a child looks at ‘self’ in the mirror — this experience unleashes two
• The first process is of identification or identity — the child states to self — “This is me”.
• Simultaneously, there is a second process, which is known as ‘alienation’, where the child is caught between mixed feelings — for example hatred (I hate this version of myself because it is better than me) or love (I want to be like this image). The second process may also lead to what Lacan terms as ‘meconnaissance’ or where the Ego is a product of misunderstanding, and the child gets introduced into the Imaginary order.
• Thus when the infant looks into the mirror, it may see its image as a whole, as independent and as an omnipotent subject, and experiences ‘a moment of jubilation’ and mastery. But this image does not last long, for unlike the image, the child re-discovers its own impotency and its dependence on the mother for example.
• If the child is able to co-hold the two processes (of identification and of alienation / meconnaissance) well — it leads the building a strong Ego — getting increasingly self-aware.

If I was to bring the Lacanian lens into working with Organizations, there is a close fit especially when the organization is a start-up or is involved in a merger or acquisition — where there is considerable energies on evaluating it, valuing it and working with it.

Most entrepreneurs look at their own creation — the very organization they found from the first lens — they identify with their organization, their business model, their idea of value, their technology etc.. They become possessive about these aspects, and they love their creation as they see it evolve from a small clan into a fledgling.

But if they are not mindful or aware of the second process — they become captives of the first process, and therein lies the sense of illusion and delusion. So caught up they become of the ‘perfection’ of their creation, that all imperfection and all dissatisfaction is repressed into the dark shadows.

It is here the collusion begins — it is an unconscious process that first seduces the ‘faithfuls’ to the entrepreneur. Loyalty, dependency, and faith are words that lure the first rung of employees into this perfect picture — it energizes the founder and it brings a kinship to the followers. Believe me — I have experienced it personally

This frenzied celebration of the huge potential of the organization seeded or of the idea is affective indeed — very often the angel investors get tainted and hooked. The organization, in Lacanian terms, evolves a fragile Ego and not a strong Ego, and with this sickness, it encourages rituals of affirmation and celebration that lead it on the dangerous path of destruction. The more magnificent the potential is made out to be — the more bizarre are the rituals and conversations within that seek to sustain this picture of the potential.

Part 2

How does the Organization build a ‘relevant identity’?

I am a part of two start-ups today. There was a start-up that I was a part of in the late 1990s that went bust in a few months. I consult with organizations that are wishing big dreams for themselves. I am initiating research on Organization Identity in my doctoral pursuit. If I was to put forth my experience across the last two decades, I would like to introduce three ‘Identity Processes’ that are critical.

Regardless of your ecology, technology, industry, and markets, you may discover that these three processes of Identity are important to examine and work with.

Process 1: How Unidimensional is your Identity?

If the answer to the question — ‘Who is Us?’ is exceedingly one-dimensional or over-crystallized across the organization, then you are headed for trouble. Most organizations begin with a singular notion of their identity — but the more unidimensional it becomes, greater the impetus to ignore alternate identities, and greater the temptation to discard these into the bottom of the sea.

Very often, the founder or the entrepreneur is to blame for Identity becoming a monolith. And while this initial picture is very sexy, identity soon becomes an adjective or worse as a noun as opposed to what it truly is — ‘A Process’. The organization starts getting afraid of letting go of this picture of itself for it is comforting to its stakeholders.

Take for example the Identity process of a Captive.

Many a captive in the IT and ITES may have been founded by someone who has come from the mother organization into India, and seeking to leverage initial cost arbitrage while setting it up. Most Captives begin as cost centers, with the founder claiming that he and his team can do it cheaper, often begging for opportunities to demonstrate this.

There are numerous organizations that begin as a ‘captive’ and then seem to hold on this identity, unconsciously, but forever, reluctant to accept newer identities emerging within. They are unable to negotiate and seek newer ways to relating, even if they are sitting on new capabilities and resources. Often the same captive entity becomes resentful and defensive when the global organization wishes it to be a partner or co-creator.

Thus it is critical that stakeholders including board members keep asking themselves — “Are we becoming unidimensional and in doing so, discouraging the voicing out of new identities?”

Townhalls and dialogue forums in communities are not about perpetuating one Identity but need to be designed to listen — listen to new stories and narratives that may lead to discovering newer forms of Identity, that otherwise get restricted to ‘careless whispers’ in coffee corners..

It is critical that the Organization invests into the rituals of reflexivity with all its stakeholders including its customers and its employees — of self-questioning and listening to other strands of identity.

Process 2: How do you co-hold the present form and the future potential of the firm?

Most leaders would tell you that when they look at an organization — they look at both what the organization IS today and what it can BECOME tomorrow. Both these questions and insights need to be co-held and played with — splitting one form from the other is disruptive.

However, Angel Investors would tell you how very often they find entrepreneurs splitting the two when it comes to Organization Identity. In the pursuit of megabucks — very often the focus of the lens is on the ‘becoming potential’ as opposed to ‘who we are today?’. This is not an easy ride for most stakeholders — looking at ‘Is’ also makes us look at the imperfection of the image — the frailties, the weaknesses, the earthiness and ordinariness, and of course the limitations of the system. Looking at immense potential of becoming can be equally disruptive — one sits on frustrations, opportunities getting lost by the minute, and delusions of grandeur.

This process cannot be owned up only by the entrepreneur or the CEO or the leader — it is a challenge for all stakeholders. Thus Envisioning has to be a collective process and so is the Diagnosis of who we are today.

This is where I would like to state that transformation or change is not a top-down process to be unleashed in the organization. If employees and key stakeholders can engage in a dialogue to emerge with both a picture of now and an envisioned picture that is enlivening and not intimidating, Identity gets institutionalized as a process.

Process 3: How Special and Different are you? What Othering processes get unleashed?

The third tenet of Identity has to do with how the organization differentiates itself from competition — which are the areas, where it is truly different — whether such uniqueness can be translated into competencies or entry barriers; and perhaps more importantly, where the Organization is the same as competition.

Excessive differentiation leads to arrogance and trouble! Denial of differentiation builds inertia to change. It is important for the organization to ground itself in its ecology and seek to build an Identity for what it truly is, without compulsively wishing to make itself ‘so special’ or ‘unique’.

One of the consequences of excessive differentiation is Othering. The Other is disowned and projected on to competition and this process can be very dangerous. I have had clients who for example claim to be excessively ethical or creative, and in the same breath, calling their competitors as ‘unethical’, ‘opportunistic’ and ‘dumb’.

Othering leads to poor understanding of one’s ecology, dismal sensing of competition, and reluctance to own up one’s shadows and limitations. I was once an employee of group of companies that saw itself as extremely ethical, and yet one of my senior leaders’ corruption was never seen or challenged.

Conclusion

Identity — Viability and Sustainability

I believe that if leadership and investors can work with these three processes of Identity, through dialogue, through confronting selves and others, and through listening to Others, the Organization becomes viable and sustainable. It takes the form of a living system, that adapts and evolves with the changing context. Working with these processes allows the system to look at its own shadow — a shadow that may be hiding new perspectives and creative ideas. It is difficult to work with shadows — for it also exposes conflicts that are swept under the carpet in the name of alignment and loyalty. Identity cannot get created and vitalized only by the leader of the firm — it gets co-created and hence the need to look at all stakeholders. I lay special emphasis on customers — for very often the customers’ price for the value created by the organization impacts the firm’s identity.

If these identity processes are not worked with, the organization garners an ‘invisible’ waste that permeates across — rendering it as farcical and tragicomic as referred to in the beginning of the blog.

If you liked this blog — please do write back or share it across your network. I would invite you to reflect not just on the Identity of your organization, but more importantly, how these three processes impact it.

Those of you, who are familiar with the EUM Framework by Ashok Malhotra, would notice many an influences on this blog.

For example the DTM as a lens of looking at the organization becomes the first step in discerning differentiation. While the DTM offers words, a trained EUM-O practitioner can interpret the lens and work out the stories on how employees see the competition. The other resonance with EUM-O framework is gap between what IS and what is IDEAL — again the data allows for the consultant to go deeper into how these realities are co-held within the firm.

For more information do check www.eumlens.in for more information on the EUM framework and Organization Identity