What makes for a good Institution Design? Is there a definitive Success Template for business?
Often we have wondered how there are certain institutions that are designed for greatness and deliver enduring value to stakeholders. Such great institutions across markets reflect certain unifying factors that define their purpose of existence, which goes beyond just making profits. So are there common threads that define such institutions? What is their design construct that delivers outstanding results consistently and are timeless in value?
But before we come to that, quick recap of the present business environment – since the last decade, we are finding increasing instances of corporate frauds, companies going bust, leadership vacuum, and fracture in governance practices across global businesses. A lot of this has to do with the limited worldview that we carry on why businesses exist. We have reduced every aspect of corporate engagement to a Balance Sheet item where our only concern seems to be whether it appears “above the line” or “below the line“.
Enterprises have their own larger purpose of existence. In the absence of a well defined purpose, institutions tend to degenerate at a rapid pace, especially in the pursuit of mindless growth. This happens when individuals with strong biases tend to supplicant their personal desires and ambitions through the Balance Sheet of the enterprise.
It is important to understand that while there are obvious business objectives for an enterprise to exist, these will always be secondary to the larger impact they carry across the social ecosystem.
END OF PART 1
I will present the rationale and design attributes for building Enduring Institutions in PART 2 of this post.