[Author, entrepreneur and strategist, Miguel Reynolds Brandão shares some insights from his new book, “The Sustainable Oganisation – A Paradigm for a Fairer Society”.]
Over the last decades, information technology has revolutionised the way people communicate and interact, creating a New Economy. The Internet has made information widely available and accessible to everyone, empowering curiosity and influence. Now, curious minds can be limitless and free, regardless of their origin, age or gender. However, organisational models have largely stayed the same.
This New Economy has brought the need to tap people’s curiosity, quest for knowledge and understanding in order to develop a sustainable society. Knowing that organisations are at the core of our society, the creation of a transparent, accessible, dynamic and meritocratic organisation model can generate sustainable organisations and, as a result, a sustainable society.
The Sustainable Organisation Model
The following diagram illustrates the Sustainable Organisation Model. On the left, the four pillars that characterise the model from the Old Economy; in the middle, the 16 drivers of change towards sustainability; on the right, the four pillars that characterise the Sustainable Organisation – deeply enrooted in cooperation, recognition, meritocracy and fair rewards to attain full sustainability.
To instill evolution – or revolution, depending on the organisation – from a typical to a sustainable organisation, these 16 drivers are the essential tools of change. All of them can, and must, be monitored through specific Key Performance Indicators (KPI).
Trust is an essential driver in the creation of a sustainable organisation.
First of all, Trust. This is an essential driver in the creation of a sustainable organisation, as SAS Institute and Google has demonstrated so well. When associated with merit, transparency and accountability, trust creates fairness and develops meritocratic cultures further. Similarly to what happens in any human relation, trust comes first as a driver for engagement, commitment, belief and vision. We have found the SAS Institute to come as a recognised beacon when it comes to demonstrating the power of trust and people in the development of the organisation.
When Trust is associated with Empowerment and Mentoring, then it becomes natural to all the members of the organisation to feel part of a whole where there is a clear relationship between their involvement, contribution and reward. In a meritocratic culture, Versatility in the roles of the organisation members and Flexibility in how they get involved are major drivers towards full cooperation with Passion and Optimism. We all know that humankind can do much better, especially in the long-term, through cooperation.
The Sustainable Organisation is a meritocracy based on full cooperation.
Since the Sustainable Organisation is a meritocracy based on full cooperation, its leadership paradigm is built on Recognition and driven by knowledge that naturally generates Influence, Commitment and Respect by all and from all the members of the organisation. Merit is a product of Knowledge and Transparency and thus, a recognised and respected leader can be empowered by the energy of all the members of an organisation. A universal example of such a recognised leader is obviously, Gandhi.
Then, we have the Fair Reward system, which is one of the main tools of the Sustainable Organisation model to ensure and demonstrate fairness and harmony. Fairness in a meritocratic organisation, together with a recognised leadership, creates a sense of Harmony among all the members, which in turn empowers Mobilisation. Through clear metrics based on the contributions by each individual and team, the organisation can ensure recognition at all levels. Undoubtedly, an organisation where all the members receive direct feedback as individuals and as members of a team naturally becomes united and fully mobilised.
Fairness in a meritocratic organisation, together with a recognised leadership, creates a sense of Harmony among all the members, which in turn empowers Mobilisation.
The following diagram illustrates the relationship between the key attributes of a Sustainable Organisation.
The Sustainable Organisation Index
The Sustainable Organisation Index (SORG) is a corollary of this new model. It is a simple and transparent tool that enables anyone to understand the real outcome of any organisation from the perspective of sustainability, free from speculation and free from manipulation.
In our hypothesis, an organisation is simply a group of people gathered around a common purpose to serve the community. Furthermore, an organisation can be sustainable if there is a balanced distribution of the economic flow generated among the Owners, the Team (the employees) and the Community. The direct value of the organisation’s activity is measured by its revenue and the positive or negative impact it may generate over time.
The SORG is defined by:
C = is the economic benefit of the community as a result of the organisation’s activity
O = is the economic benefit of the owners of the organisation
M = is median salary of the employees of the organisation
A = is the average salary of the employees of the organisation
E = the highest salary in the organisation
TEQUITY = the proportion of net income owned by the team.
In a sustainable organisation, SORG is greater or equal to one.
Through the use of the SORG, we believe that anyone – inside or outside an organisation – can easily and freely understand the real outcome and usefulness of any given organisation, regardless of its size, location and purpose, anywhere at any point in time. This is still unique today! In fact, in a Sustainable Organisation, the SORG offers a much wider and comprehensive perspective of organisational value when compared to market capitalisation, as it focuses solely on sustainability.
The Sustainable Organisation model is our attempt to change the way that organisations are built and perceived by society.
The Sustainable Organisation model hereby proposed originates from our curiosity to understand the world we live in as well as an attempt to improve this world. We simply want people to understand, think, compare and make wise decisions, based on the premise that wisdom is the foundation of security and development. Founded on new values, relationships, metrics and purposes, this Sustainable Organisation model is our attempt to change the way that organisations are built and perceived by society.
As a transparent society is our major guarantee to security and development, we hope this will represent a decisive contribution to a fair and sustainable society built on sustainable organisations. We see the SAS Institute, Google and many others as great examples of how an organisation can prove to be useful and become profitable in a sustainable manner that shows balance at all the levels of the organisation.