The answer according to Sam Palmisano, the Chairman, President and Chief Executive Officer of IBM, lies in the organization’s identity. He credits it for IBM’s one hundred years of success.

“We have spent 100 years seeking to remain faithful to what makes us… us,” he says.

Palmisano recently gave a lecture at Johns Hopkins University, one of a series celebrating IBM’s centennial. In it, he cites the following quote from Tom Watson Jnr, son of IBM’s founder:

“I firmly believe that any organization, in order to survive and achieve success, must have a sound set of beliefs on which it premises all its policies and actions. Next, I believe that the most important single factor in corporate success is faithful adherence to those beliefs. And finally, I believe that if an organization is to meet the challenges of a changing world, it must be prepared to change everything about itself... except those beliefs… as it moves through corporate life.”

Watson was not talking about ethical principles, but about identity – the core beliefs and worldview that make an organization unique, authentic and resilient.

“For him, a company’s beliefs were about its identity - what makes it distinct… what shapes its decisions and behaviors. If you could codify and sustain that core, it would ensure that the company remained unique and differentiated… decade after decade,” says Palmisano.

One of our basic beliefs at Authentic Identity is that who you are determines how you create value. In our work with clients, we see that organizations with a clear identity are much better able to navigate through tumultuous change and still remain true to themselves.

IBM is a case in point. Over its 100-year history, the company has variously been a manufacturer of clocks, scales, cheese slicers, punched-card tabulators, typewriters, ATMs, mainframes, mini-computers, personal computers, supercomputers and software. It has gone from operating in one country to more than 170.  On the way, it has become one of the world’s biggest providers of consulting services. Through all of that change, the company’s core identity provided a compass that kept the organization true to itself.

“It is a constant reminder never to define ourselves by the things we make, no matter how successful they are today,” says Palmisano. “Time has taught us how essential this balance is - between what changes and what endures… how it can go awry… and how we have to continually revisit it for new generations.”

You can read the complete text of Sam Palmisano’s lecture here.

How clear is your organization’s identity?  Do you use it as a tool to shape how you develop people, ideas and customers? How do you manifest that identity in your behavior as a leader? 

As one frustrated business leader told me recently “It feels as if there are no cables attached to the levers I’m pulling.”

So what’s going on here? Is this a failure of leadership? An inevitable consequence of the complexity that comes with scale? The invincible power of inertia in our organizations?

Or could it be that the scientism promoted by Frederick Taylor's 1911 work The Principles of Scientific Management and later adopted and developed by the business schools, has distorted both our mental model of business and our approach to leadership?

We have come to think of business as a machine, and to define value solely as money. You can hear it in the language we use: our colleagues and collaborators have become “human capital” or “human resources” – assets to be deployed rather than human beings to be led and inspired to greatness.

As a consequence, we have come to view the challenge of change as essentially a problem of logic and argumentation. “If we can just make the logical case bullet-proof, the numerical analysis solid, the empirical evidence overwhelming then our people will be motivated to make the necessary change”, so the thinking goes.

So we refine the recursion analysis, revisit the ROI, nail down the numbers and power-up the PowerPoint presentation. We do it repeatedly. We’ve been doing it for decades. And we watch in frustration as 70% of our change initiatives continue to fail.

The tools we are using are wrong for the job. Belief and desire, even in the absence of proof, can move people to make change. But proof, in the absence of belief and desire, cannot. We need another way – and that’s where the Elephant comes in.

The Rider and the Elephant is a metaphor used by psychologist Jonathan Haidt in his seminal book The Happiness Hypothesis to explain the relationship between our conscious, rational self (the rider) and our unconscious, feeling self (the elephant). The metaphor has been adopted and used to great effect by Chip Heath and Dan Heath in their recent book Switch - How to Change Things When Change is Hard (they previously wrote Made to Stick).

We like to think that our rational executive function is in charge of our decisions and actions, but our automatic feeling self has a ten-ton advantage and it doesn’t need logical explanations. The rider may make the case for moving in a certain direction, but unless the elephant also wants to follow that path, no-one is going anywhere.

Our insistence on viewing business as an undertaking based overwhelmingly on science, logic and reason has rendered us monolingual. Business speaks almost exclusively in the language of the Rider. The trouble is, Elephants are not impressed by recursion analysis, they’re not swayed by business cases and they don’t care much what the metrics say.

Elephants Don’t Read PowerPoint

So how do we persuade the elephant to take the rider’s directions, and the rider to respect the elephant’s instincts?  To do so, we need to talk about the role of identity and meaning in the organizations that we construct and lead.

The work and the organizations to which we give so much of our lives should reward us with meaning as well as money. Leaders worth following can articulate and embody that meaning. To do that authentically, you need to know who you are. Moving the elephant means entering the world of meaning, identity, symbolism and story. 

Leaders who can connect that human world with the traditional business imperatives of profitability and shareholder return, and who honor the value of each equally, will attract followers willing to move mountains and build organizations that both generate wealth and move our human community forward.