Wednesday, November 4, 2015

Why do we need a core ideology?

Deciding an organization's core ideology is a challenging exercise that requires a great deal of introspection and recognition of the company's reason of being as well as its values. From the article "Building Your Company's Vision" by James C. Collins and Jerry I. Porras, we can see how critical the core ideology is from phrases such as:

  • "The core values embodied in our credo might be a competitive advantage, but that is not why we have them... we would hold them even if they became a competitive disadvantage in certain situations".
  • A company should not change  its core values in response to market changes; rather, it should change markets, if necessary, to remain true to its core values.
  • ... you might achieve a goal or complete a strategy, you cannot fulfill a purpose... purpose itself does not change, it does inspire change.

An organization's core ideology, comprised of its core values and core purpose, helps an organization stay focused and determine what strategies to implement and which activities to perform in that direction. It answers two very important question: "Why does this organization exist, besides making money?" and "which values will be present on every activity we perform?". Answering these questions help an organization clearly understand how it must act towards the future and guide its day-to-day activities. A well-defined purpose and explicit values inspire and encourage desired actions. As an example, Google is a company with a clearly defined core purpose: "Organize the world's information and make it universally accessible"; it also defines 10 values as part of its culture.

The core ideology must also stand the test of time and must be maintained regardless of the circumstances. It then becomes a challenge when an organization has to take hard decisions that might conflict with its core ideology. At some point, a company might have to make a choice between increasing immediate profits or following its purpose and values. For example, given the opportunity to form a profitable partnership with an organization whose actions conflict with one's core values, it requires a strong commitment to reject it in the name of the company's ideology; doing otherwise would severely undermine the organization's credibility, not only towards its customers and the general public but also towards its employees. As this example shows, staying true to the core values is not only important to maintain an organization focused on determining its direction and prioritizing activities, but also from a reputation standpoint.

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