DO WE STILL HAVE A CORE?

The Few, the Proud, the In Crowd: It's likely your org chart doesn't tell you where the real power lies in your company. A small number of people make the big decisions. Are you in with the in crowd? (Art Kleiner, Aug 4, 2003, HBSWK)

No matter how large a core group may be, it always consists of a minority of the people in an organization. Indeed, in most
organizations, it's unlikely that more than 5 percent of the people ever become members of a core group. Such groups vary dramatically from organization to organization. At the Body Shop, the core group is almost entirely composed of women; at Patagonia, it consists largely of mountain climbers. At most magazines I've known, either the production staff has core group status (in which case deadlines are sacrosanct and unchangeable) or the editorial staff does (in which case the magazine is exceptionally tolerant of last-minute changes).

In the best organizations, the core group members represent the unique values and knowledge that distinguish their companies from the rest. For example, only a few Coca-Cola executives have access to the vault where the secret syrup formula is kept. Of course, no one is worried that anyone will actually steal and use it. But the Coke formula has tremendous value as a talisman that separates Coca-Cola's core group from other members of the organization?and from the core groups of other companies. To have seen the Coke formula is truly to be part of a powerful and envied secret society.

Whatever the oil of anointment--whether it's seeing the Coke formula or getting invited to the CEO's house--the inner circle derives its power from the fact that life is too complicated without some such group to act as a symbolic lodestar. Think about it for a minute. The basic building block of organizations isn't the job, the team, the process, or even the share--it's the decision. People in organizations collectively make hundreds of thousands of decisions each day, usually without knowing exactly what the results will be. These decisions are made amid a maelstrom of competing
jurisdictions, commitments, desires, and needs, including each decision maker's own self-interest. We make sense of a particular decision by asking ourselves, consciously or not: "What would so-and-so think of this?" The organizational core group consists of the aggregate of all these individual so-and-sos. [...]

The core group can use its enormous power to shape the creativity, efficiency, and accountability of an organization for good as well as ill. There are many examples of organizations where the leaders make decisions better because they can draw on a well-functioning core group as a resource. This is not because the core group sets policy but simply because of the group's potential to establish an example for the rest of the organization. If the core group is going to be the means to move the organization forward, we need to know how to clarify its priorities.

A first step toward improving any core group involves reducing the level of distortion in the signals that are amplified. Politicians, diplomats, and psychiatrists have long been aware that they have to be exceedingly careful with even their most offhand remarks, because these can have huge effects on their listeners. Every U.S. president and treasury secretary quickly learns, for example, not to make casual remarks about currency exchange rates. And aristocrats have long practiced elaborate protocols for reducing misunderstandings when they interact with people of lesser status. A friend of mine once had dinner with England's Princess Margaret and a group of visiting Americans. A professional ambassador, Princess Margaret arrived at the gathering and quickly asked for a drink. She then lit a cigarette and immediately stubbed it out. She knew that her hosts would not feel free to drink or smoke until she had done so first.

Few business leaders have that instinct of noblesse oblige.

Which raises some interesting questions--that we for the most part (witrh the notable exception of the Founders themselves) have sought to ignore throughout our history--about the ultimate capacity of democracy to adhere to its core ideas unless they are either well understood up and down the "organization"--which would require us to refocus on the Republic's first principles and on public education as an exercise in civics, rather than a form of trade schooling--or else a reduction in the suffrage and a cultivation of a more noble class that feels some oblige to the nation rather than just to itself or both. Posted by Orrin Judd at August 7, 2003 1:22 PM