By David Coffaro, Principal of the Strategic Advisory Consulting Group
Accepted for publication by the Society of Actuaries’ Innovators and Entrepreneurs
Twenty years from now, some of the most recognized companies in the world today will not exist as many current household name brands become footnotes in history. To corroborate this statement, consider businesses that have disappeared in your community or nationally over the past twenty years – Toys-R-Us, Blockbuster, Plymouth, or Palm for starters. Some series of factors unfolded, or perhaps company leaders missed or misread their environment, but one way or another such companies consequently failed to address diminishing relevance.
What is organizational relevance and why should it matter to actuarial professionals? In a business setting, relevance refers to an organization’s pertinence, meaningfulness, and importance to employees, customers, and all stakeholders. Because organizational relevance tends to have a finite shelf life, it must continually be re-earned. Though many factors contribute to a business’s success and longevity, perhaps none are more significant than sustaining relevance with stakeholders.
An Innosite study on corporate longevity noted the 33-year average tenure of companies on the S&P 500 in 1964 fell to 24 years by 2016 and is forecast to shrink to just 12 years by 2027.
Losing relevance is unintentional and that’s part of the problem – lack of intention to sustaining relevance. Out of sight, out of mind. Leaders often keep long lists of important priorities yet overlook the essential elements of earning and sustaining relevance with their stakeholders.
How do organizations earn and sustain relevance?
Earning relevance starts with vision. One of the greatest responsibilities of leadership is driving continual evolution of the organization toward a well-defined future state. Without clear vision, activities, processes, leaders and businesses inevitably drift. When organizations begin with a clear picture of their contribution to the world and why it matters, they establish a destination. Everything else follows vision – priorities, initiatives, processes, activities, and results.
An actionable future state vision provides AIM, meaning it is:
• Aspirational – Future-focused picture of how your organization will contribute to the world
• Inspirational – Team members feel motivated to play a role in bringing the vision to life
• Meaningful – Each day, team members can determine how to align their decisions and actions toward vision fulfilment
Absent a clear future state picture, organizations can be busy, engaged in urgent activities. Where will those activities lead? In the words of the Cheshire Cat in Alice in Wonderland, if you don’t know where you want to go, it doesn’t matter which path you take.
Organizational vision answers the question: What do we want our company to be? Vision guides priorities, activities and inspires engagement. What a company does (mission), why they do it (purpose), and how they fulfill the mission (strategy) are informed by the vision. Strategy defines the organization’s path from the current environment to a future state, from today’s reality to aspirations for tomorrow, with vision as the target.
It is said management is about finding answers; leadership is about asking questions. Perhaps the most important question for leaders today is: All things considered, how do we earn and sustain relevance with our stakeholders and fulfill our organization’s vision?
Dave Coffaro is author of the new book, Leading from Zero: Seven Essential Elements to Earning Relevance, available through Amazon. A strategic leadership advisor, executive coach and author, Dave is principal of the Strategic Advisory Consulting Group, which works with financial services businesses and nonprofits to define, design and deliver their vision through operating models that create results. Dave speaks and writes about strategic leadership, leading change, organization transformation and innovation. https://www.davecoffaro.com/