Navigating the terminology jungle – A glossary on Organizational Identity

Strategy! Mission! Culture! These terms – and others – are being thrown around all the time, often without ever defining them in the context they are being used. This causes all kinds of issues in organizations, from (mis-)using them so that they become jargon to having an unclear, unaligned understanding and use within an organization. In my upcoming book, I provide a cohesive framework of these terms, which I call “The Nine Elements of Organizational Identity”.

Organizational identity encapsulates what it takes to build a high-performing organization that is fully aligned on all key aspects of their existence. This alignment brings clarity and synchronizes your organization in a way that enables everyone to pull into the same direction. Imagine the speed and impact your organization could have if you reached this level of clarity! But why would an organization need an identity in the first place?

Firstly, I believe that in today’s world we need to know where we belong more than ever before. Some would say the world has gone bananas, crazy beyond recognition. What seemed to be eternal some time ago has vanished. What seemed to be an unshakable truth a generation ago, today is vague and undefined. I suggest the number of people searching for meaning, purpose, and belonging has never been higher than today.

Secondly, I have witnessed that organizations can become more than mere transactional partners providing money and status. Organizations have the power to provide meaning, purpose, and belonging to their employees – yet many are simply not leveraging this opportunity. Those who do become truly great places to work, where individuals understand and are valued for their meaningful contributions. The terms legacy and corporate citizenship come to mind, referring to the role an organization should play in the wider community, acting responsibly and furthering society as a whole rather than just increasing shareholder value.

Now, let me introduce you to the Nine Elements of Organizational Identity and how you can understand and use these elements in the process of developing and implementing organizational identity. I have assigned a certain label to each element, such as Vision or Purpose. You can call it something else if you like, but for each element, there are key characteristics and a specific function. If you want to build a legacy and create a high-performing organization – which I believe should be an aspiration of a great leader, to create an environment in which people can thrive and reach their dreams – there is no way around getting the elements of organizational identity straight. Only then will leaders unite and concentrate the forces within their organization and start pulling in one aligned direction.

Purpose is your reason to exist.
Function: It provides meaning and orientation.
Characteristics: It addresses a good cause, is grand, and idealistic.

The first element of identity is purpose. Purpose is your reason to exist. It provides meaning and fuels your fire. Purpose motivates employees and other stakeholders to perform at their best, every day. It is the higher reason why an organization exists. Some would say it is the timeless North Star of an organization. Purpose goes way beyond money, status, or other transactional factors. It should be more than increasing the wealth of shareholders or paying salaries to employees. It is often about a contribution to society, to preserve nature, or to grow something worth growing. Purpose addresses a good cause and is grand and idealistic; it is a need in the world that an organization is particularly positioned to address.

Principles are underlying values and behavioral guidelines.
Function: They provide a framework for decision-making, collaboration and desired behavior.
Characteristics: They are non-negotiable and universally valid within an organization.

With a clear purpose in place, organizations are able to inform their principles, the second element of identity. I understand principles as underlying values and behavioral guidelines that are universally valid for every individual in an organization. Principles include a defined set of (ideally) non-negotiable values, which inform behaviors in every aspect of an organization’s business, large and small, from hiring and developing employees, to the selection of suppliers, and fundamental investment decisions. If purpose captures the ‘why’, the reason an organization exists, then principles capture what’s important or valuable, hence the term values.
Values are often an assortment of positively attributed terms which organizations would publish on their websites, use in marketing campaigns, and ideally base broader business decisions on. Although many organizations nowadays have a set of values in place, and even promote them publicly, it can sometimes be difficult to observe whether organizations are living up to their values, or whether these are just nice sounding words. In any case, values should be informed by companionate love, and go beyond a set of moral values, that every respected organization needs to able to claim anyway.

Besides values, behavioral guidelines are part of principles. Behavioral guidelines outline the desired comportment of an organization’s population. For example, they capture how leadership teams should behave and collaborate. These rules could be as basic as “be on time” or more elaborate such as “be responsive to your team members: send a same-day quality response to requests”. Another well-established example of behavioral guidelines are so-called leadership principles; they typically combine a set of guidelines constituting the favoured comportment of leaders towards associates and other stakeholder groups.

Mission is what an organization does, and for whom.
Function: It defines an organization’s field of activity or business.
Characteristics: No frills.

Let’s talk about the third element of identity: mission. I very much enjoyed it when author Patrick Lencioni unleashed a rant against the term mission in his 2012 business book The Advantage. He argues that instead of calling it a mission statement, it should be referred to as an organization’s business definition. Opposite to the fully idealistic purpose, a business definition should be a sober explanation of what an organization does, and for whom; a plain and simple phrase that everyone can understand. The rationale behind his argument is that no fancy mission statement has ever helped align a leadership team, let alone an entire organization.

Fair enough, but let’s cut the term mission some slack. If we understood it solely as a business definition, we wouldn’t do justice to all the non-business organizations. There, in the world outside business, we actually find some very good missions. One of the best I have come across describes the mission of the voluntary fire brigade in Germany. They use just four verbs, depicted in their logo: “save, extinguish, rescue, protect” – people, animals, and material assets, in this order. I have a hard time imagining a more clear-cut explanation of what they do and for whom.

Vision can best be defined as an organization’s state some years in the future.
Function: It paints a desirable picture that engages and motivates people.
Characteristics: It addresses hearts and minds of key stakeholder groups.

The fourth element of identity is vision. Along with the term strategy, vision is potentially one of the more widely used terms in the corporate world. When it comes to a commonly agreed definition of what a vision is we are back at square one. There is no agreed definition in place; this is documented by an interesting body of research and a myriad of business books approaching it from various angles.

I came to the conclusion that a vision can best be defined as an organization’s desired state some years in the future. A picture you would like to see when you take a snapshot of an organization, some years from now. A great vision comes together where three balanced pairs meet: detail and aspiration, purpose and measurability, heart and brain.
The challenge is to formulate a vision that contains both the details of an organization’s picture of the future, and is still memorable. A pitfall I often observe is that leadership teams look for a quick win; a statement sounding aspiring and bold. As a result, those vision statements trend towards sounding like a marketing slogan, appearing vague, e.g. without a time horizon or relevant quantifiable elements, with little magic to it.

A Strategy Map visually depicts an organization’s strategic priorities.
Function: It helps to steer towards the vision.
Characteristics: It addresses different stakeholder perspectives along the value chain.

Let’s talk about the fifth element of identity, a tool called strategy maps. Using a strategy map, an organization visually depicts their strategic plan in order to manoeuvre the organization towards the vision. Just like an explorer would use a geographic map to navigate in unknown territory towards a destination. In short, a strategy map captures what an organization aims to accomplish. In the process of designing a strategy, using a strategy map compels those involved to formulate clear-cut priorities. This is the groundwork which enables organizations to later communicate their strategy in compelling ways and successfully implement strategic projects.

The combination of vision and strategy map is what I often find leadership teams refer to as ‘our strategy’. Even if this might not be fully in line with every text-book definition of strategy, I feel this hands-on use of the term makes perfect sense. Besides an inspiring vision and an elaborate strategy map, usually one more element of identity belongs to strategy: goals.

Goals are the operational breakdown of strategy.
Function: They help move strategy into action.
Characteristics: They are SMART and the basis for individual targets.

‘Ok, now that we have populated our strategy map, how do we bring it to life?’ This inevitable question came up in almost every strategy process I was involved in: It is the question that connects strategy to operations. At some point in the process, organizations need to make their strategy graspable. Here, organizations fill their strategic priorities with concrete programs and projects. These, in turn, are loaded with goals, the sixth element of identity.

Depending on the scope of a strategy and the size of an organization, work streams consist of programs and projects, large and small. These are closely linked to an organization’s operational business. And exactly here would we find goals.

Targets describe an individual’s contribution to implementing organizational identity.
Function: They create transparency, motivate, and make contribution matter.
Characteristics: They are role specific, addressing several elements of identity.

After filling work streams with projects and loading those projects with goals, one final step must be taken to ensure that organizations bring their strategic priorities to life. This is the seventh element of identity: Individual targets. Breaking down goals into targets is crucial because only through individual targets can an organization translate strategy into work packages for each contributor. Targets make strategy relevant to everyone’s day-to-day job. In addition, targets create transparency about individual performance and an understanding how everyone contributes to implementing strategy. Actually, targets need to reflect more than only strategic goals. They need to create role-specific transparency about an individual’s contribution to implementing all elements of identity, from purpose and values to strategy. It’s pretty simple: no targets, no implementation. Because in the end, organizations don’t bring organizational identity to life – people do, by doing their share.

Capabilities are mission-critical skills for implementing organizational identity.
Function: They enable leaders and individual contributors to cope with change and live up to expectations.
Characteristics: They include occupational skills and a specific set of interpersonal skills.

Capabilities are the eighth element of identity. Making organizational identity relevant to everyone in an organization is for sure one of the trickiest pieces in the course of implementation. To master this challenge, organizations must invest in building the related capabilities in their leaders as a part of any identity or strategy process; it is extremely important to prevent a strategy failing to deliver the expected results, or an identity remains wishful thinking. Unfortunately, too often I have seen leaders struggle to translate strategy into action and to load day-to-day activities with purpose and relevance. What this means is they fail to help individuals understand how their jobs contribute to success.

If leaders are unable to create this connection between day-to-day activities and an organization’s identity, then individual contributors and leaders alike may experience a lack of connection to the topic. This is true especially for those sitting at a distance from senior leadership, leaving them unengaged about identity and unclear about their role in implementing it. Consequently, entire groups of an organization’s population may remain disconnected from the strategy and other elements, making them feel that these things are ‘for those up there’ (meaning senior leaders and others involved in the design process) not them.

Management Systems are frameworks to steer an organization.
Function: They help achieve strategic and operational objectives.
Characteristics: They support the status quo, not the change, and need to be adjusted.

New strategies invariably push an organization towards the unknown, at least to a certain degree. Now if that’s not the case, what’s the point of a new strategy in the first place? Let’s assume an organization has done a great job defining their strategy, enabling their population to execute it, and the implementation is well under way. When does an organization know that it has mastered all aspects of change and strategy execution? To answer this question, so-called management systems are an important indicator and a useful tool; they are the ninth element of organizational identity.

To anchor identity and change within an organization, additional management systems are helpful indicators. Organizations need to adjust all kinds of internal processes, policies, and procedures in order to support the execution of a new strategy. An example would be a company’s remuneration and incentive structure. Needless to say, that it should reward desired behaviors, performance, and practices which are in line with an organization’s identity. Also, how rigorously leadership translates strategy into action is part of an organization’s management systems. This implies adjusting management systems so that they support strategy execution rather than hindering it. In this sense, management systems help anchor strategy within an organization and make it stick.

Author: Alex Brueckmann

Main Photo by Markus Spiske on Pexel

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