Keeping Organizations Vibrant and Alive: An Interview with Daniel H. Kim
by Janice Molloy

from Leverage Points Issue 63

Copyright © 2005 Pegasus Communications, Inc. (www.pegasuscom.com). All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, without written permission from Pegasus Communications, Inc. If you wish to distribute copies of this article, please contact our Permissions Department at 781-398-9700 or permissions@pegasuscom.com.

Daniel H. Kim is a renowned organizational consultant, management thinker, facilitator, teacher, and public speaker committed to helping problem-solving organizations transform into learning organizations. We are delighted that he will be sharing his passion and expertise in a keynote presentation at the 2005 Pegasus Conference, Embracing Interdependence: Effective and Responsible Action in Our Organizations and the World (learn more). In the following interview, Daniel talks about the importance to organizations of maintaining a strong sense of purpose supported by a clear set of core values-and the dangers that await those that fail to do so.

What does it take for organizations to continually renew themselves and remain vibrant and alive? As a consultant, Daniel H. Kim has spent much of his career addressing this question. In his work with companies, governmental agencies, educators' groups, and nonprofits around the world, he has witnessed organizations that have been able to succeed and stay at the top of their game through many generations of leaders, as well as those that have atrophied and died. What accounts for the difference? According to Daniel, "Too often, organizations become driven by individual egos or greed, rather than by organizational purpose. That's always dangerous."

For many of us, purpose seems like an abstraction, an elegantly worded phrase that sounds inspiring as part of a mission statement but that has no practical effect on our day-to-day activities. Nevertheless, a true sense of purpose—supported by a clear set of core values—is vital to ensuring that everyone knows the organization's overall reason for being and the principles that guide all actions. The resulting sense of alignment leads people to work together for the good of the whole and to make wise decisions when faced with tough choices.

Organizational Parasites
When a sense of direction and guidance are missing, enterprises can quickly fall prey to what Kim refers to as "organizational parasites," a term originally coined by Arie de Geus. Daniel explains, "An organizational parasite is a person who joins an organization and holds their own agenda or purpose primary and that of the organization secondary. It's not that we can't and shouldn't have our own personal purpose, but it has to come second to the organization's. The organizational parasite enters an organization from the perspective of 'What can I get from this host?'"

Daniel cites Arthur Andersen as a dramatic case of a business that lost sight of its original purpose. "The firm went from being the benchmark, the symbol of integrity, to being all about greed. The purpose was for the partners to make more money for themselves. Period." He continues, "If you read Final Accounting: Ambition, Greed, and the Fall of Arthur Andersen by Barbara Ley Toffler with Jennifer Reingold (Broadway, 2003) and see what happened to Arthur Andersen, it was overrun by parasites at the very top level of the organization. There were a lot of good people in the lower parts of the organization doing what they were supposed to do, being coerced into doing things they weren't supposed to do, but the company collapsed quickly because the rotting began at the top."

Change "Enzymes"
Unfortunately, as evidenced by the scandals that rocked corporate America a few years ago, this kind of ethical crisis is all too common. How can an organization that has drifted get back on the right path? Daniel notes that, in extreme cases like at Tyco in the aftermath of the abuses by former CEO Dennis Kozlowski, a new leader has to come in and clean house. To his credit, the company's new CEO, Edward D. Breen, fired most of the top management and removed many of the board members who had hired him.

But changing personnel usually isn't enough. As Kim points out, "Ninety percent of parasitic infestation is management failure, not the individual. It's the host that creates an environment that is conducive to the parasite." In other words, unless the organization as a whole becomes clear about what it's about, it will inevitably foster parasitic relationships, regardless of the best intentions of the people working in the organization.

To begin focusing on who you are as a company and then performing based on that knowledge, Kim suggests using the framework found in Good to Great: Why Some Companies Make the Leap . . . and Others Don't (HarperCollins, 2001) by management consultant Jim Collins. By responding to three questions—What is it that we can be the best in the world at? What are we most passionate about? And what drives our economic engine?—groups can begin to coordinate their efforts in support of new goals and strategies.

Additionally, those who are leading the revitalization effort need to identify ways in which they themselves have to change. Daniel notes, "Everyone is trying to change everyone else. But unless the change becomes personal, starting with whoever is at the top level of that change effort, the change effort is doomed to fail. As consultant Fred Kofman notes, people need to shift from thinking of themselves as change catalysts—elements that initiate but remain unchanged by a chemical reaction—to change enzymes—elements that initiate and are in turn altered by the interaction." For many leaders, the process begins with shifting away from ruling by fear to building trust, listening, and collaborating with others. "It's an inward journey," according to Kim, who recommends books such as Presence: Human Purpose and the Field of the Future (SoL, 2004) to support the transformation.

Corporate Mortality Rate
In many cases, the alternative to change is corporate death. Kim says, "The average lifespan of a corporation is 40 to 50 years. As Arie de Geus once commented, that's a high 'infant' mortality rate, when one considers that the oldest living corporation is over 750 years old (the Swedish company Stora). This isn't about propping up companies that should not stay around, just for the sake of keeping them going. But are we as a global society standing by and just accepting a very 'infant' high mortality rate? That's a provocative way of thinking about it."

Perhaps even more provocative are Daniel's thoughts about the future of U.S. businesses. "It doesn't appear that many organizations fully grasp what the emergence of China and India is going to do. Between the two of them, they have about one-third of the world's population, around 2.2 billion people. With the rates that they're growing and the way they run things, we could become their hand servants. We could be the generation that ends up losing what was built over the last generation or two." That prospect alone might spur a rash of organizational renewal efforts.

Janice Molloy is content director at Pegasus Communications, Inc. and managing editor of The Systems Thinker newsletter.