Organizational relevance: Why is it so difficult?

What is organizational relevance, and why does it matter?

In a business setting, relevance refers to an organization’s pertinence, its meaningfulness, its importance to employees, customers and all stakeholders. Organizational relevance tends to have a finite shelf life, and, as a result, must continually be re-earned. There are many factors that contribute to a business’s success and longevity, perhaps none more than sustaining relevance with stakeholders.

Twenty years from now, some of the most recognized companies in the world today will not exist. Household name brands will become footnotes in history. To corroborate this statement, consider businesses and brands that have disappeared in your community or nationally over the past 20 years – Toys R Us, Blockbuster, Plymouth or Palm, for starters. Some series of factors unfolded, company leaders missed or misread the environment, and consequently failed to address diminishing relevance.

An Innosite study on corporate longevity noted the 33-year average tenure of companies on the S&P 500 in 1964 fell to 24 years by 2016 and is forecast to shrink to just 12 years by 2027.

Losing relevance is unintentional, and that’s part of the problem — lack of intention to sustain relevance. Out of sight, out of mind. Leaders often keep long lists of important priorities yet overlook the essential elements of earning and sustaining relevance with their stakeholders.

How do organizations earn and sustain relevance?

Earning relevance starts with vision. One of the greatest responsibilities of leadership is driving continual evolution of the organization toward a well-defined future state. Without clear vision, activities and processes, leaders and businesses inevitably drift. When organizations begin with a clear picture of their contribution to the world and why it matters, they establish a destination. Everything else follows vision — priorities, initiatives, processes, activities and results.

An actionable future-state vision provides AIM, meaning it is:

  • Aspirational: Future-focused picture of how your organization will contribute to the world
  • Inspirational: Team members feel motivated to play a role in bringing the vision to life
  • Meaningful: Each day, team members can determine how to align their decisions and actions toward vision fulfilment

Absent a clear future-state picture, organizations can be busy and engaged in urgent activities. Where will those activities lead? To paraphrase the Cheshire Cat in “Alice in Wonderland,” if you don’t know where you want to go, it doesn’t matter which path you take.

Organizational vision answers the question: What do we want our company to be?

Vision guides priorities, activities and inspires engagement. What a company does (mission), why they do it (purpose), and how they fulfill the mission (strategy) are informed by the vision. Strategy defines the organization’s path from the current environment to a future state, from today’s reality to aspirations for tomorrow, with vision as the target.

It is said management is about finding answers; leadership is about asking questions. Perhaps the most important question for leaders today is: All things considered, how do we earn and sustain relevance with our stakeholders and fulfill our organization’s vision?

* Originally published in SmartBrief on Leadership March 2, 2021

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