The People Who Really Shape Our Organizations: An Interview with Art Kleiner
by Kali Saposnick

from Leverage Points Issue 40

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What purpose are most organizations seeking to fulfill? In his forthcoming book Who Really Matters: The Core Group Theory of Power, Privilege and Success (Doubleday, October 2003), Art Kleiner asserts that the primary purpose is not—as many of us believe—meeting customers' needs, fostering innovation, or making a better world. Rather, organizations are set up, first and foremost, to fulfill the perceived desires and priorities of a "core group" of people. As such, the success or failure of the organization is determined by the behavior of this key set of individuals.

Art, who will be speaking at Authors' Night at the upcoming Pegasus Conference, asserts that core groups exist in every organization, large or small, for-profit or not-for-profit, private or public sector. Members of this elite set take their power not from their position in the hierarchy, but from the way they influence decisions at every level of the hierarchy. Every organization, at any given moment in time, has its own unique core group pattern; the most influential people might be high-profile shareholders, critical technology specialists, key suppliers, major customers, or members of the company's founding family. Core groups often include "bottlenecks," people who control or manage essential parts of operations, such as the graphic design and production staff of a publishing company, or the veteran school bus administrator of a local school system. In other words, the core group doesn't necessarily comprise just people with hierarchical authority but those who are, for whatever reason, perceived as central to the enterprise by the people who work there.

Managing Organizational Complexity
According to Kleiner, core groups are not inherently bad or good; they are simply part of the nature of organizational systems. Without them, it would be impossible for organizations to exist, simply because the complexity of most organizational environments would be too great to manage effectively. Art says that, just as a baby instinctively recognizes human faces, most of us in organizations are instinctively attuned to the people whom we have come to believe are important. Instead of making decisions based on the balance of customer and shareholder priorities, we say to ourselves, "I don't want to be the one to walk into Cheryl's office and say we can't do that." We let Cheryl, whom we probably know only slightly, represent the full range of factors affecting the decision we have to make.

For those who resist the idea of a core group, Art asks us to examine our thinking when faced with a complex decision. Do we consider how it will sit with our boss, our boss's boss, or someone else entirely? If so, then we're basing our choices on the needs of the core group. The reason that the influence of these key people "trumps all other concerns," the author explains, "is not because of some mystical resonance, but simply because of the cumulative effect of the decisions made throughout the organization. If people believe the core group needs and wants something to happen, they assume that making it happen is a part of their job." As such, those who do make it happen often get rewarded and recognized, while those who act based on other criteria usually get left behind.

Creating Great Core Groups
One of the reasons that Art developed the core group theory was his awareness of the rapid proliferation of organizations in the world. "If we are going to act effectively in a society of organizations," he says, "we need a theory that helps us see organizations clearly, as they are." Organizations in which core groups behave in self-serving and exploitative ways, such as Enron, are dismal places to work and often end in failure. Organizations in which decision-makers expand the core group by creating structures that take into account the welfare and development of everyone in the enterprise, such as Springfield Remanufacturing Corporation and Southwest Airlines, are typically high-performing work environments with deeply committed workforces. In other words, behind every great organization is a great core group.

By understanding the characteristics and principles of the core group in their organizations, people can act far more effectively. Employees, for example, can decide if they're interested in building a career in an organization even if they never get into the core group. People trying to change the organization from within can increase their chances of success by seeking sponsorship from core group members. And those at the top of the organization can consider how to galvanize spirit and effectiveness among employees by creating the conditions for the core group to expand to a larger group of people. When leaders guide core groups to work in the best interests of everyone in the organization, they can amplify the capabilities of their enterprise and create a legacy of which they can be proud.

Kali Saposnick is publications editor at Pegasus Communications.