Testing behaviour

Institution has become a dirty word in our society. So why should your company act more like one? David Ladds, Partner at Bladonmore, explains.

Fed with a diet of fake news, we are primed to disbelieve the systems around us – from politicians and businesses to our own social media timelines.

Institutions it seems are taking the brunt of our growing scepticism, with this year’s Edelman Trust Barometer finding mass media the UK’s least trusted source of information at 32%, closely followed by government officials at 33%. Coupled with the uncovering of widespread abuses of power in the church and charity sectors, the very word ‘institution’ has become a more negative – often sinister – term.

So it was refreshing to hear Reverend Dr. Sam Wells in mid-June on BBC Radio 4’s Thought For the Day reminding us of the positive ethos an institution should have at its core. An institution, he tells us, is a keeper of standards; judged not just on what it does but how it functions. This is where it differs from an organisation, which is a primarily outcome-focused operation, where being effective takes priority over behaving well.

According to Wells, it is when an institution starts behaving like an organisation that the problems begin. The revelations about Oxfam officials’ sexual misconduct in Haiti is a particularly stark example. As Helen Stephenson, Chief Executive of the Charity Commission, summarised, “Oxfam lost sight of the values it stands for.” So long as lives were saved in Haiti, the charity seemingly felt able to turn a blind eye to the actions of its aid workers. A supposed bearer of values, Oxfam forgot that how it behaves is as significant as what it achieves. And it did so with dire consequences.

If an institution is behaving as it should, it is more permanent in its nature. This is not to say it has lost the ability to grow and evolve, but that it does so from a solid base. And it reaps benefits from doing so – trust is built through constancy over time.

By contrast, nebulous identities can prevent loyalty from employees and customers alike. That is why it is so crucial for a company to develop its corporate narrative: a story that explains its strategy, values and differentiators. A story that is then successfully communicated, internally and externally, and that behaviour can be tested against.

A strong, core narrative reminds everyone of the importance of ‘how’ and ‘why’ it does what it does – not just ‘what’ it does. This, in turn, helps organisations to behave more like an institution.

In the original, unsullied sense, of course.

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