We all want our lives to have meaning and engage in activities that make sense. Love, courage and accomplishment, are Viktor Frankl's proposal for a meaningful life, while values such as, standing up for what you believe in and protecting others makes sense and are considered to be worthwhile.
Most of the time we plug along, incrementally improving our life. When progress seems to elude us, our goals can also lose meaning; then we randomly set new goals and take an educated leap of faith in a new direction. Since businesses are composed of people, it should come as no surprise that organizations behave in much the same way. So, how do these companies know when to plug along and when and how to leap forward instead?
Top tier corporations have strong sense of themselves, manifested by deeply imbedded meaning and sense making. Who they are guides the business's beliefs and values, setting the vision, mission and strategies necessary to achieve stated goals and objectives. This alignment of meaning and sense making facilitates effective decision-making and thus progress. Of course, this approach only works as long as the meaning and sense making fits the context in which the company lives, enabling them to identify and supply a market demand supporting the business's progress. Much like the individuals that compose them, a business is not an island.
Innovative firms, moreover, understand that balancing continued exploration and exploitation is essential for true sustainable progress and that along the way they have to build new skills. However, like people, few challenge their underlying meaning and sense making and this is especially true when it comes to their business model, the mechanism with which the businesses create and capture value. Corporations habitually milk their business model till it slowly become unprofitable and eventually fails completely, before they begin exploring new models. By then, it is often too late and the business becomes extinct.
When experimenting with new business models, businesses often attempt to adopt models from more successful firms failing to understand the unique fit these models have with their competitors' culture, organizational architecture, routines and incentive systems. Therefore, to successfully adopt these new models, nothing short of organizational renewal is required.
Leaders first have to create a new business model that uniquely fits the business's meaning and sense making, while providing a new and superior competitive advantage. Revisiting what is meaningful and how to make sense of the world requires that the business be "thinking for itself," while building internal support. Having a good process in place, such as the "Design & Business Model Experimentation" method can facilitate these efforts.
Second, the new model has to be implemented and it is here that businesses often miss their shot. A new infant business model initially stands no chance against the old and proven model that fit perfectly with the old meaning and sense making and without a comprehensive top-down change, it never will. People who are successful leaders are driven by intrinsic, not extrinsic, incentives. Therefore, by advocating the new meaning and sense making, through words and especially through behavior, intrinsic motivation is built for the adoption of the new model and its chance of success increases exponentially.
Just as individuals must grow and evolve to thrive, continually examining meaning and sense-making and making course corrections is also the best way for a business to stay relevant and on target. To quote Socrates; "The unexamined life is not worth living."