Much of my work with organizations has been influenced by two classic theories of human behavior and motivation. Many of my clients have been familiar with Abraham Maslow’s Hierarchy of Needs, in which human needs are arranged like rungs on a ladder. According to Maslow, the most basic needs at the bottom of the ladder are physical, such as air, water, food, and sleep. Next are safety needs, followed by psychological, or social needs; for belonging, love, acceptance. Next are esteem needs; to feel achievement, status, responsibility, and reputation. At the top of it all are the self-actualizing needs; the need to fulfill oneself, to become all that one is capable of becoming. Maslow felt that unfulfilled needs lower on the ladder would inhibit the person from climbing to the next step. Published in 1943, Maslow’s Theory of Human Motivation has been a remarkably durable set of ideas, given the advances in behavioral science in the decades since.
Somewhat less familiar, but no less important and durable has been Frederick Herzberg’s Motivator-Hygiene, or Two-Factor theory, published in 1959. Herzberg elaborated Maslow’s hierarchy by classifying needs as either satisfiers or dissatisfiers. In the context of employment, salary and working conditions can only cause dissatisfaction (when not present), and only the presence of such higher-level psychological needs as achievement, recognition, responsibility, advancement, and the nature of the work itself can result in job satisfaction. The theory says that to improve job attitudes and productivity, managers must recognize and attend to both sets of characteristics and not assume that an increase in satisfaction leads to a decrease in unpleasurable dissatisfaction.
What do these theories have to do with strategy? In the same way that an employee has certain expectations of his or her job, so does a group of stakeholders have a set of expectations for an organization that can be seen through Herzberg’s two-factor lens. And the leaders of an organization are wise to understand and classify those expectations.
For example, look at the relationship between a shared service provider (such an HR or IT organization) and its internal customers inside a large enterprise. Translating Herzberg’s concept of hygiene into organizational expectations, the provider must do certain things to be seen as merely competent; such as delivering basic services on a timely basis and at reasonable cost. Satisfying these expectations does not create satisfaction with the provider, but failing will undoubtedly create dissatisfaction.
But no organization can be content to merely avoid the dissatisfaction of its customers and expect to survive. To be seen as a true contributor of value to the enterprise, the provider must identify and deliver performance that will truly satisfy the desires of its customers. While this concept of Competency and Contribution can be applied broadly to almost any organization and its stakeholders, it has worked especially well when talking to leaders of IT organizations. Unfortunately, many IT organizations are not seen as sufficiently competent by their stakeholders – but more about IT organizations in future posts.
Because the purpose of any organization is to create value (for a set of stakeholders), and an organization’s strategy describes how it will create value in the future, this value proposition should ensure that stakeholders’ two-factor expectations are met. This has important implications for the design of the organization’s strategy map, a topic we’ll also cover in much greater depth in future posts.
To put these ideas into practice, examine your own organization’s value proposition – its answer to the question, “How do we create value?” Classify each of the answers as either “competency” – one whose absence will cause stakeholder dissatisfaction), or “contribution” – one whose presence will delight your stakeholder. Your answers may surprise you. Is your organization’s aspiration to be merely competent?