This post has been inspired by the works of Umair Haque, Simon Sinek, Muhammad Yunus, Hans Rosling, and others. None of it stems from my original thought. I have merely summarized and crystallized a prevalent dichotomy in economics.
Money and meaning
Organizations may exist for two different reasons. They can be primarily self-sustaining and focus on their own growth, or they can embody a deeper purpose which leads their way. I like to call the first type of organization money organization and the second type meaning organization.
What is most important to understand about this distinction is that it does not imply anything about enonomic systems. Meaning organizations are not at odds with the principles of capitalism and money organizations may exist in the absence of competition and free markets. Most state-sponsored organizations—heavily buraucratic and bereft of purpose—behave like money organizations.
Consequently, money organizations and meaning organizations are not new terms for for-profit and non-profit companies, or businesses and NGOs. They are instead terms for the driving engines of arbitrary organizations. They help us understand whether an organization creates merely accidental value—as a by-product of making money—or meaningful, authentic, genuine, purposeful value. The former value is brittle, the latter is sustainable.
Meaning organizations and startups
Most startups are meaning organizations. In fact, the requirement of being a meaning organization would be part of the definition of a startup were I to define the term. Startup founders follow an audacious vision, they need to see purpose in what they are doing. Were they only in it for the money, they would have picked the wrong profession.
Most startup employees work for nickels. They are driven by a deeper sense of creating something bigger than themselves. They want to make people's lives better. They enjoy building something out of nothing. Their spirit and energy do not come from a paycheck. They come from a borderline insanity to make this world a better place.
When startups turn into established businesses, they may follow two distinct paths. They may either retain their core and remain a meaning organization, or they may abandon what they stood for and turn into money organizations. Some people may denote the latter path with euphemisms: "professionalization", "maturity", "optimization". But losing one's true purpose is dangerous. Money is transitory. Meaning is eternal.
The principles of meaning organizations
Money organizations are about turning a profit.
Meaning organizations are about making an impact.
Money organizations know what they are doing.
Meaning organizations know why they are doing it.
Money organizations focus on income.
Meaning organizations focus on outcomes.
Money organizations market their products.
Meaning organizations produce markets.
Money organizations exploit resources.
Meaning organizations create, renew, and share.
Money organizations strive to be great.
Meaning organizations strive to be good.
Money organizations dominate markets.
Meaning organizations level the playing field.
Money organizations monopolize.
Meaning organizations democratize.
Money organizations see purpose in growth.
Meaning organizations seek growth in purpose.
If you liked this post or if it gave you new food for thought, then please be so kind to leave a comment below (no registration required) or share it with your network. Your feedback is what keeps me going. Thanks!Saturday, April 21, 2012 at 05:15AM | David Link