The time has come for us to take a step back. Our businesses have worshipped a seductive narrative of materialism and individualism, where personal freedom, wealth, and possessions are pursued as ultimate goals. We risk losing our humanity in a hubristic treadmill of growth for the sake of growth. So, what do we truly believe in? What do we stand for? Who are we? These questions are both profound and existential. We establish organizations with a purpose, aiming to achieve something together that we couldn't accomplish individually. Yet, fifty years after Milton Friedman famously declared that "the business of business is business," both personal and organizational success must transcend mere financial gains and shareholder value. The question becomes: how do we define "good work"?

Yet, before delving into the realm of work, it's essential to understand what constitutes a "good life." This question falls within the domain of ethics and is far from simple. Modern liberalism often adopts a "thin" conceptualization of the good life, primarily focusing on liberty as the ultimate "omnipurpose" good, particularly in its "negative freedom" interpretation – freedom from interference. However, this can lead to an overly individualistic and materialistic view of society, where freedom becomes synonymous with the ability to freely market oneself. 

We take a different approach, drawing from Aristotelian virtue ethics. Here, a good human life is seen as a final end, and social freedom serves as a means to cultivate ourselves and flourish. Aristotle emphasizes that every individual possesses unique potential and is naturally inclined towards goodness within the right conditions. Personal development as an ongoing practice and communal living are essential components of leading a good life.

So, what implications does this have for work in organizations? To facilitate flourishing, organisations must empower individuals to cultivate their character and identity. Good work, in our view, is a social process that fosters personal growth, capability development, friendships, and a profound sense of significance through recognised contribution to a shared greater good. It involves the vocational pursuit of personal excellence and the gradual realization of our full potential - we are becoming the best people we are meant to be.

Good organizations go beyond providing good work for individual employees; they also cultivate communities that contribute to the flourishing of wider stakeholders and society. In practice, good organisations cultivate organizational excellence at three interrelated levels:

• As actors in society, businesses become "good" when they operate with honesty and care for their ecosystem, going beyond simply maximizing stakeholder utility, customer satisfaction, or shareholder profits
• Organizations function as mini-societies, creating the environment for the mutual development of their members within a broader business and social community. By nurturing participation, trust, virtues, and quality relationships, good organizations have the power to "shape" good people
• Good organizations serve as trustees for individual development, offering opportunities for individuals to deploy their talents and creativity with pride and dignity in their organizational roles while contributing collectively to a greater purpose

In summary, organizations play a crucial role in fostering a just and prosperous society. Good work taps into our collective potential for doing good and enacts our civic humanity. Profit, while important, is not an end in itself and should serve the larger goal of enabling social flourishing and justice.

In this context, we draw inspiration from the insights of Antonio Genovesi, an 18th-century Italian philosopher and economist who, a decade before Adam Smith's "Wealth of Nations," underscored the link between economic well-being and the moral fabric of society. A good economy must remain embedded between philosophy and politics. While Smith's focus was on the pursuit of individual wealth as the primary driver of economic progress within a self-regulating market, magically adjusted by an "invisible hand", Genovesi's approach prioritises ethics, community, and the common good. He empathizes the significance of civil virtues in economic activities, insisting on the importance of relationships, solidarity, and reciprocity in far from anonymous economic transactions. This stands in vivid contrast to viewing economics as a purely technical or amoral field, as proposed by neoclassical economics. In a civil economy, market participants are encouraged to contribute their personal best to the shared endeavor of building a good society. This collective effort aims to enact fairness, social justice, and sustainability through economic activities, providing an alternative to purely market-driven or state-controlled economic models. It places ethics, virtuous community, and social well-being at the heart of economic decision-making.

Want to learn more? Watch Otti's presentation at the HR World Congress 2022 - https://youtu.be/dpNZ_zoQfSQ

Max Weber highlights that organizations typically shift their focus from shared values, or morality if you want, within relatively homogenous communities to increasingly instrumental structures as they expand. Scaling goodness, therefore, presents a significant challenge. In recent decades, various novel organizational approaches like teal, rendenhayi, holacracy, or sociocracy have risen in popularity. Consequently, we've been delving into these organizations to extract understand whether any of these organizations prioritize non-instrumental values and successfully sustain them while scaling in both size and complexity.

Here, a short detour toward organisational design will be useful. When we design organisations we must carefully balance two levers using both formal and informal structures: On one side, we have differentiation, which creates local autonomy and subsidiarity, and on the other, integration, which fosters global learning, quality, and scale. On that basis, we can identify three very basic organizational archetypes (see slide):

• Community or cooperative organizations that heavily rely on shared culture and common norms.
• Bureaucracies that utilize centralized and hierarchical power structures for division and control.
• Market or platform organizations that emphasize autonomy, entrepreneurship, and transactional exchanges to maximize returns.

On top of these, there is a small and diverse set of approaches that aim to combine the best of both worlds, known as organic models. These are, however, often very challenging to maintain. 

With that in mind, we can now look at some examples from companies that are famous for their innovative organisational models: 

• ING was one of the early adopters of scaling Agile globally. They primarily focused on reorganizing their development functions to enhance flexibility in product and service development. This model drew inspiration from companies like Spotify and Zappos and later experimented with models like holacracy and sociocracy in their sales and service divisions. They established mechanisms to integrate their business using "obeya" rooms and marketplaces while maintaining a traditional matrix hierarchy.
• Buurtzorg, a well-known nonprofit Dutch home-care organization, takes decentralization even further. In this case, 15,000 nurses work in 1,000 self-organizing teams. Coordination mechanisms are a combination of formal and informal approaches, relying on strong community norms and sector-specific requirements, rather than traditional hierarchical management. Buurtzorg operates with just 50 managers mainly to support administrative functions.
• Haier, a Chinese white goods manufacturer, is the world's largest home appliance manufacturer and an exemplary story of agility. Haier dissolved its divisions into 4,000 autonomous micro-enterprises, granting them full control over recruitment, profit and loss, performance, and pay. They utilize sophisticated blockchain-based contracts to create synergies across ecosystems both within and beyond the firm and employ shared platforms to facilitate scalable services.
• Patagonia represents the poster child of the B-Corp movement. The company revolves around its mission to create the most ethical products and leverage its business to support environmental solutions. Patagonia employs a simple functional structure but relies heavily on leadership involvement, robust employee participation, and a profound sense of belonging.

When we analyzed these these and many other organizations, we noticed several trends. Firstly, there's a universal push towards greater self-organization to enhance adaptiveness across the board. Yet, most "human-centric" design innovation ultimately serves instrumental commercial purposes. Secondly, each organization is heavily shaped by its prevailing legacy mindset – for instance, ING reflects hierarchy and a traditional matrix structure, while Buurtzorg embodies community grounded in professional nursing and care ethics. Haier follows a market model focused on "customer obsession," and Patagonia prioritizes sustainability. We did not observe convergence towards a unified new model, or a substantial combination of instrumental and value-based approaches. Thirdly, there was no evident combination of differentiation and integration towards a paradigm of "inter-independence" or collaborative community. Most organisations either stress the individualistic-entrepreneurial dimension, often through formal design, or a collectivist-caring aspect, often through informal norms. Essentially, creating organizations that effortlessly blend efficiency, adaptiveness, and robust values while nurturing both individuals and communities poses a significant challenge. Our exploration continues, and you'll find additional insightful references below.

But how can we craft good organisations? Here, another short detour is needed.

1. Before we start, we need to reassess our "social ontology," or more simply put, we need to upgrade our understanding of how organizations behave and undergo change. Most of us have been taught that culture change stems simply from altering the underlying assumptions and values below an organisational surface. Hence, the prevailing idea of culture change —promoted by popular management writers— is that we can kickstart transformation by merely "starting with why," changing mindsets, or embracing concepts like consciousness, teal organizations, or psychological safety. Unfortunately, such an approach is as fashionable as it is oversimplified.

Skipping all the intricate details (you can find more references on the website), we encounter three essential entities within complex social systems: people, culture, and social structures, each wielding their unique powers. Their combined interactions (level 3 in the slide) generate intricate mechanisms that MIGHT, under specific conditions, translate into certain 'actual' constellations (level 2 in the slide) that we (level 1 in the slide) MIGHT detect above the waterline. This underscores that crafting good organizations requires more than just new mindsets, well-crafted purpose statements or 'consciousness'. To shape organizations that truly thrive, attention must be directed to all the foundational elements below the waterline: a) values and culture —such as language, symbols, metrics, and policies; b) structural frameworks, routines, systems, and c) the holistic development of individuals and communities.

2. On that basis, we can now seek to sketch some preliminary themes for a novel good organisation model, rooted in virtue ethics.

• Values: It's imperative to transition our perspective of organizations, shifting from treating life as instrumental to a human-centered view.
• Structures: We advocate for the adoption of a "deliberately vocational model" that underscores the intentional development of virtuous social practices within micro-organizations, alongside the evolution of corporate institutions and governance.
• People (Individuals): Our focus extends beyond mere competencies to encompass character, virtues, and wisdom in individuals.
• People (Shared Governance): Organizations committed to genuine human-centricity must jointly cultivate a moral environment characterized by care, integrity, and compassion, fostering shared governance and a cohesive external value proposition. Achieving this necessitates an ongoing evolution of organizational design, striking a balance between local affordances, individual growth, and collective learning.

In order to implement such a model, it will be important to overlay the prevailing financial governance with disciplines promoting collective reflection and participation, essentially creating a "living organizational constitution". The ultimate objective is to first develop and connect people, structures, and culture, thus nurturing organizational wisdom, identity, and character, and then, subsequentially, to enable a reflective equilibrium that continually actualizes the organization's potential - within its specific context - to actualise social flourishing.

Put differently, we believe that organisations must learn to care and be intentional about their moral climate exactly like they have learned to care for the environmental climate. This implies:

• even more focus on people, encompassing character-based selection and promotion, personalized development plans, and a strict adherence to the well-known 'no asshole' rule. 
• a need for a much more deliberate evolution of management structures and practices to craft a reflective holding space for mutual growth and creativity
• a revision of corporate governance structures and institutions—such as success measures, reward and recognition policies, and team affordances— in order to embed virtuous principles and actively promote and propagate positive impact. The key lies in holistic evolution, spanning people, organizational practices and values, across various levels, avoiding undue fragmentation between specializations, functions or vendors.

3. We are now in the process of integrating specific ideas and practices into a more comprehensive framework, as showcased in the 10-minute video above. This framework includes:

• Vocational Development "On the job": Embedding vocational development into everyday practices by evolving the design of jobs and roles, systematically and continuously increasing opportunities for learning, development, and meaning.
• Strengthening micro-organisations: Seeking opportunities to embed reflection and experimentation in team routines to foster collective ownership for both tasks and mutual growth. This involves creating team charters, developing peer-to-peer learning, democratizing task allocation, recruitment, or performance management, and enabling more sociocratic or spiritual decision-making processes.
• Continual and Intentional Development of the Corporation: Actively shaping both organizational identity and governance. Internally, this involves adjusting managerial affordances for micro-organizations, renegotiating goals, HR practices, or structures. Externally, it encompasses developing a coherent organizational value proposition and fostering effective stakeholder relationships.

a) On the job development (slide 9)

The first step is to look at the work people are doing day-to-day. In this context, "job crafting," as envisioned by Jane Dutton and the Positive Organizational Scholarship (POS) movement, comes into play. Job crafting involves employees,  individually and collectively, reshaping aspects of their roles, tasks, and relationships in order to better align work with personal strengths and passions, and to foster moral development, job satisfaction, and overall well-being. This intentional adjustment is not merely about skill enhancement or career development; rather, it represents a "disruptive gesture" aimed at holistically enabling a more fulfilling life at work, by cultivating personal consciousness, identity, and character. At the end of the day, the quality of an organisation depends on its ability to enable every single member to actualise their human potential - organisations are only as good as the "people they produce". Therefore, we must adjust our jobs and roles to the human condition, not the other way around.

b) Strengthening micro-organisations (slide 10)

The next phase involves empowering teams to develop mutually and collectively, forming what we term micro-organizations—self-contained units fostering daily interactions with relative autonomy. It's crucial to note that "co-elevation" is different from collectivism or any one-size-fits-all development program or DEI initiative. To construct excellent organizations, we must genuinely value each individual's uniqueness and contribution, while simultaneously striving to enable the communities' capacity to "lift each other up" for the collective benefit. Achieving this necessitates wisdom at the level of the entire team.

In order to cultivate shared wisdom, these micro-organizations need to rediscover spaces for "seeing the whole system" and integrate further action-reflection loops into daily routines, delving beyond "agile retrospectives" which focus primarily on task performance. Introducing spaces for relational reflection and identity workspaces, where teams contemplate individual and collective identity, marks a shift toward a "triple-loop" learning process—from tasks to relationships and, ultimately, identity and purpose. Further insights on this concept can be explored in Bill Torbert's CDAI (Continual Development Action Inquiry).

• Task Reflection: In many agile learning organizations, we routinely engage in retrospectives to review task performance, assess stakeholder feedback, and make necessary adjustments to priorities and development backlogs.

• Relational and Organizational Reflection: This involves examining our collaboration dynamics, uncovering any unexamined personal factors within the team, evaluating how we interact across the organization, and considering our engagement with a broader set of stakeholders. We also explore our team routines and both formal and informal structures.

• "Identity Workspaces": This dimension prompts us to delve into questions surrounding our individual and collective identity. We ponder our core beliefs and reflect on who we are evolving into through our experiences and contributions at work.

Navigating this isn't simple, and team development often benefits from coaching and facilitation. Above all, our primary investment should be in shaping a "virtuous community." This involves systematic investments in cultivating high-quality relationships, fostering consistent collaboration and co-creation, and ultimately building the capacity for what Bill Torbert terms "inter-independence." One ongoing intervention we are exploring is "virtue framing." We believe different virtues are instrumental in accelerating development and igniting energy. "Self virtues" focus on gaining agency and continuous growth, "intellectual and civic virtues" are pertinent for reasoning and democratic participation, and "social and eco-systemic virtues" aid in achieving greater sensitivity and connection. Connectedness not only enhances our emotional well-being and makes us more open to similarities over differences but also broadens our mental perspective, generating more ideas. The concept of (organizational) virtues is further developed by Birmingham University's Jubilee Centre for Character & Virtues.

Slide 10 underscores that high levels of both reciprocity and trust are crucial for creating an environment where individuals can safely develop not only qualifications and soft skills but also experiment with their own identity and being.

c) Development of the Corporation (slides 11-12)

This brings us to the final component of a good organization, what we term the "corporation." The corporation serves as the glue and framework that integrates and differentiates power, resources, and status across individuals and micro-organizations, enabling the scaling of "goodness" within the organization and across its ecosystem.

It's crucial to recognize that the corporation has two dimensions. On one hand, it is intangible, encompassing all the "cultural" ideas and concepts that shape organizational discourses and ideologies. This is evident in corporate institutions, from success measures and KPIs to narratives, leadership styles, policies, and the ways an organization values and empowers individuals and communities. On the other hand, it is concretely manifested, maintained, and evolved in governance and strategic decision-making structures that engage the entire organization. This aligns with what we earlier referred to as a "living organizational constitution." In terms of the social ontology, it relates to both CULTURE and those institutional routines that enable the organization as a whole to engage with the wider ecosystem. From a functional perspective, support functions like HR or Finance often play critical roles as contributors to the corporation as an institution.

Therefore, the corporation has three pivotal tasks: "value work," which involves creating a consistent identity; "constitutional work," which entails consciously translating that identity into structures to both empower and integrate micro-organizations; and, thirdly, "strategic differentiation work" to coherently develop the organization within the market, ecosystem, and society.

• When engaging in value work, the focus is on intentionally developing a coherent and transparent set of organizational values that embody the moral identity of the company. It's noteworthy that all organizations, whether consciously or unconsciously, must make concrete value choices concerning crucial organizational paradoxes—balancing individuals vs community, agility vs stability, or profit vs purpose. All these choices are rooted in organizational identity and ideology, making every organization inherently political.
  
• Moving on to constitutional work, it revolves around how structures shape the distribution of organizational decision-making and, consequently, power. To achieve excellence, organizational structures, policies, and governance mechanisms need to dynamically evolve with the increasing capacity of people and micro-organizations. The Corporation serves as a container to "hold" and foster organizational development. Organizations face the challenge of finding effective ways to balance local adaptiveness, global efficiency, and outer coherence—considering factors such as branding, strategic positioning, synergies, or regulatory and quality requirements. In our work, we seek mechanisms that enable a reflective equilibrium, bringing together participants from micro-organizations (bottom-up) and the corporation (top-down) to continually evolve organizational institutions. This entails developing intentional inter-independence within an "entrepreneurial community," where individuals consciously and purposefully participate in the organization to uplift each other. An analogy worth considering is the concept of "common law," where local judges set precedents for local contingency, and a holistic juridification process ensures coherence across local adaptations, aiming to maintain and evolve legal intelligence for global social justice. While the puzzle of governance structures for us still remains unsolved, concepts like leadership councils or constitutive assemblies, perhaps building on a sociocratic model, could offer potential solutions.
  
• This brings us to the third and final function of the corporation—strategic differentiation work. Here, our focus lies in re-embedding the organization into the ecosystem and society. Mads Nippers, CEO of Orsted, emphasizes that organizations must contribute to a sustainable society by innovating for good. This involves revising their footprint to ensure regenerative use of resources, being accountable for their handprint by designing products and services that truly enable customer flourishing, and contributing to a wider blueprint for societal well-being. Good organizations cannot operate in isolation; their boundaries must extend to all actors that can help contribute to a positive societal blueprint. Structures and processes should actively engage and operate with other societal stakeholders to make a unique contribution to the ecosystem with the endowments they hold.
  

Navigating these complexities is far from simple. Unsurprisingly, many transformation approaches avoid the realm of the Corporation. While numerous resources explore micro-organizational aspects—ranging from agile methodologies to psychological safety to teal paradigms—few critically assess the "political holding structures." Frequently, transformations involve altering organizational charts or systems without any rigorous examination of organizational identity and governance. Consequently, the values and power distribution at the end of a transformation often mirror exactly their starting point. Conversely, when companies earnestly seek to change ideologies and governance they might face regulatory hurdles, or provoke negative responses from the market or investors, as seen in the cases of Unilever and Danone. Hence, there is an urgent need for innovative ideas and approaches to address these challenges.