Organisation Equity

And so we come to arguably the trickiest concept in Next Generation HR – that of organisation equity.

Equity as a term has a number of distinct meanings, but for our purposes it means value, with helpful connotations of ownership and integrity. So when Lee Sears reflects in the report on “the importance of building long-term organisation equity as one of the cornerstones of sustainable performance”, his point is that the value of organisations is built by leaders and people who feel ownership of the organisation; who believe in it, because of its authenticity (both with them and with their customers); and who as a result think in the context of longer term delivery and performance. 

The diagram on page seven of the report is key to explaining HR’s investment here – placing rising organisation equity at the heart of work on a future-proof culture, HR as the organisation’s guardian, and the development of leaders who are future-fit. Here’s Lee:    

“When you build brand equity, you’re building the underlying strength of the brand. Likewise, HR has to build the underlying strength of organisations. This means generating a deep trust in the organisation, concentrating on sustainable performance and working on your organisation’s culture and construct - the very essence of the organisation - so that it’s likely to be more enduring.” The kind of cultures Lee describes as most successful are those which are “more permissive, more expressive and more creative – and so drive competitive advantage”.
 
This is in contrast to poisoned, political, self-interested cultures, where the underlying equity, and the loyalty, is low – and a consequence, doing what’s right in the medium term is unlikely: it’s all “me and now”.

The key is the underlying ability of the organisation to adapt. Organisations, notes Lee, are “not naturally dynamic – but they’re naturally good at doing what they already do. With organisations, the clue is in the name: they’re there to organise. Historically, you’re looking at an engineering and military heritage, where organisations deal with scale and complexity through command and control, and processes put in place to get things done well and quickly. But this historical legacy can lead us to engineer out the ability to adapt.”

So to build organisations that last, you have to invest in how they do business, ‘the way things are done around here’, the culture, the behaviours and the values. “HR is the expert on ways of doing business that make it more likely that the organisation will still be there in the future.”   

A future-fit culture, in other words, with employee engagement of fundamental importance. That strong connection between employee and employer can only come in organisations which are genuinely authentic – a concept we covered last time and which not only runs through the research, but also through those organisations most likely to enjoy long-term success.