Innovations at the Things-Noun and Development-Verb Levels

A huge shift in the abundance experienced in groups can come from working with structures and processes on multiple levels.  To help make this innovation visible, I will remind you that at the things-noun level, one only thinks about what one has.  At this level, groups perceive that they either have resources or they do not, and this perspective makes the resources seem scarce.  People then organize their interactions around the work with those scarce resources.  They find value in having the resources and exchanging them for other resources they also value, but there are “costs of scarcity” associated with operating only at the things-noun level.  For example, by not thinking about the development of resources, organization, and value over time, people operating only at the things level pay higher prices for last-minute purchases, are not prepared for new opportunities, have lots of redundant processes, and feel underappreciated, leading to higher rates of burnout.  Yet that is all that is available when the things-noun perspective is all there is.

In contrast, at the development-verb level, people approach resources, organizing, and value in a very different way.  They think about both how much resource they have and how they can grow or enhance that resource  over time.  In organizing their interactions, groups holding this perspective think about how group members can build their capacities and strengthen their relationships over time.  They also think about the value the development of those capacities and relationships will have, both for those within the group and for those who interact with it.  The “costs of scarcity” experienced when groups operate only at the noun-things level do not occur at the resource-development level, because the benefits of abundance created through resource development have been included.  We can see this dynamic clearly in the innovations I will now describe.

 

Firms of Endearment

In 2007 the authors of Firms of Endearment selected 30 companies that met the criteria for a high level of humanistic performance.[1]  Their success criteria included healthy relationships with employees, customers, investors, partners, and society.  The authors defined a “great” group as “one that makes the world a better place because it exists, not simply a company that outperforms the market by a certain percentage over a certain period of time.”[2]

The authors organize the descriptors of great groups by stakeholders:

  • Employees.  A happy and productive work environment motivates, values, and rewards employees.
  • Customers.  Honoring the legal and unspoken emotional contract with the consumer strengthens the relationship.
  • Investors.  Investors value the financial and emotional relationship with the group.
  • Partners.  A mutually beneficial, symbiotic relationship with business partners brings synergies to both.
  • Society.  Communities appreciate the group’s values and outcomes, welcoming them where they operate.  Creating value with government leverages the strengths of both.

I placed these descriptors on a heat map in the figure below.  A glance at the heat map shows groups that live deeply in the verb-to-noun levels.[3]  This is where everything on the heat map is in green, the areas of a high index of success.  The area in yellow needs lots of attention, and the low-index area in red is critical.  This correlates with the experience of living in the inner-to-middle circle of harmonic vibrancy, as captured in the first figure. These firms have found greater, more sustainable success by being healthy at both the noun and verb levels.

The authors discovered that these groups working at the verb and noun levels outperformed the companies in the classic Good to Great study by a ratio of 3.1 to 1 over ten years, a 1.7-to-1 ratio over five years, and were on par in financial performance over three years.[4]  None of these companies overlap with the eleven companies in the Good to Great study, because the two studies defined success at different levels.  The Firms of Endearment have shown success at the verb-noun level, while the Good to Great groups have shown success at the things-noun level.

Before anyone begins to judge the companies in both of these studies, let us be clear that we do not know what practices the companies actually have.  They might be working at a higher level than depicted in the studies.  All we know is what the authors saw through the lenses they used, which focused on verb-noun levels.  Other well known surveys find similar verb-noun-level results, such as the “Great Places to Work” survey highlighted annually in Fortune magazine.  “Great Places” assesses trust in management (the group), pride in the job (the self), and camaraderie with other employees (the other), all noun-verb level characteristics.  And, noun-verb level groups outperform noun-level groups, with the “Great Places” study finding that their “100 Best” outperformed the S&P 500, a barometer of stock market performance, by two-fold between 1998 and 2009.[5]


 [1] For more on the Firms of Endearment study, see (Sisodia, Wolfe, & Seth, 2007).

[2] For a complete description of the companies selected, see (Sisodia, et al., 2007).

[3] The descriptions in the two figures are directly from the book Firms of Endearment (Sisodia, et al., 2007, p. 21).

[4] These data from the authors’ study are provided in (Sisodia, et al., 2007, p. 17).  For the Good to Great study, see (Collins, 2001).

[5] For more detail on the “Great Places to Work” survey and the financial performance of the 100 Best, see (Burchell & Robin, 2011; Edmans, 2011).

 


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2 thoughts on “Innovations at the Things-Noun and Development-Verb Levels

  1. Pingback: Innovations at All Three Levels of Perceived Reality | Institute for Strategic Clarity

  2. Pingback: Seeing “What Is” — The Economics of Abundance « Jim Ritchie-Dunham

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