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Inspiring Action Organizations

Some organizations so outperform most organizations that it seems wrong to put them in the same category.

While most organizations fail in their early years, most of the survivors also fail. Among the majority that survive, generating average growth means growing at a few percentage points per year.

Only a small minority are fast-growing companies. Of the fast-growing companies, many are in fast-growing categories. No doubt, the leaders of these companies know that they are beating the odds. Likely, they feel very successful. But the fact is that most of these companies only grow fast quickly for a limited time, and then they revert to the mean — or fail. Particularly in gold rush industries, there may be many fast-growing companies, but nearly all bubbles end in pretty much the same way. They burst.

I’ve long been fascinated with the extreme exception — the company or organization that builds an iconic brand and inspires a movement.

Most businesspeople miss the most important things that make for this kind of success. Perhaps this is because they try to reduce the life of the business to just business. Working closely with the leaders of rare outperforming, high-impact organizations, I’ve always found them to be on a mission to create something very different in the world. While the people at the top of these organizations are typically extremely savvy about business, they haven’t been so much business managers as movement leaders.

Call it “purpose” or “meaning” or “an inspiring idea” that fuels these businesses. Behavior change scientists might call it “a moral frame” that attracts, inspires and encourages the identification we measure as brand affinity, customer loyalty and advocacy.

While most businesspeople seem to judge incentives by the simple measure of whether they bring about the desired action, the leaders of these companies see incentives differently. They realize that all action is not created equal, and they appreciate that the meaning behind the behavior is actually much more important for long-term success and impact. The results of behavioral economics experiments actually bear this out.

Most business managers incentivize action, but great leaders inspire action.

Part of inspiring action is actually forgoing the easy results that could come from generating action with cheap but unaligned incentives. Don’t read that wrong — they don’t forgo the results. In fact, their results are much, much better.

It’s not the results they sacrifice. It’s the ease. Cheap tricks are common, easy to explain and relatively easy to execute. Copying your competitor’s “loyalty” program, for example.

Building a distinct and meaningful brand with an entirely integrated experience is a whole other thing entirely. It just happens to work so much better.