The Core

Columns From: 12/1/2003 Automotive Design & Production, , Editor-in-Chief from Gardner Business Media, Inc.

 Art Kleiner knows a lot about organizations.

 Art Kleiner knows a lot about organizations. About how they’re formed. About how they operate. About what makes them work—or make that about who makes them work.1 Recently, Kleiner sent me a copy of his new book. It’s titled Who Really Matters: The Core Group Theory of Power, Privilege, and Success (Currency /Doubleday; $29.95). It’s more than the fact that this is the last issue of 2003 that I make this claim: Who Really Matters is the business book of the year. It is the first business book that has made my flesh crawl, not because of some macabre metaphor, but because of the Core Group Theory. And you don’t have to wait for the proverbial “other shoe to drop” in the book to get to the point of where he lays it out in all of its awesome simplicity. On the first page of Chapter One Kleiner writes:

“‘The customer comes first’ is one of the three great lies of the modern corporation. The other two are: ‘We make the decisions on behalf of our shareholders’ and ‘Employees are our most important asset.’”

If those are the lies, then what does Kleiner purport is the truth? This:

“In every company, agency, institution, and enterprise there is some Core Group of key people—the ‘people who really matter.’ Every organization is continually acting to fulfill the perceived needs and priorities of its Core Group.”

It’s not for the customers. Not the shareholders. Not the employees. It’s for the Core Group that things get done—or don’t get done. Although Kleiner argues that this is not necessarily a bad thing—assuming, of course, that said group provides “energy, drive, and direction”—he admits that one of the problems within many organizations is that the Core Group isn’t always interested in accomplishing what would be better for other parties, and because the Core Group isn’t disposed toward it, it doesn’t happen: “The organization goes wherever its people perceive that the Core Group needs and wants to go. The organization becomes whatever its people perceive that the Core Group needs and wants it to become. If a goal is perceived as irrelevant to the Core Group, then it will not be reached, no matter how worthy it is, how ardently it is advocated, or even how stringently it is mandated by law or regulation.” Notice how Kleiner repeatedly uses the word “perceive.” People within organizations don’t even need to be directly told what’s expected: It is part of the fabric of the organization. It is something that isn’t necessarily obvious to outsiders. But from the perspective within the organization, the Core Group’s wishes are written in lights.2 The fact that you’re working to fulfill those desires, however, is something that isn’t at all obvious. Those who don’t work toward that fulfillment probably don’t work there anymore.

For the individual who is not a member of a Core Group, the person who is what he describes as “an employee of mutual consent,” Kleiner suggests that you be mindful of what your interests are and how and whether they are congruent with those of the Core Group that leads your organization. “It’s relatively easy to accept this reality intellectually. But it’s often hard to accept it emotionally—especially if you’re the kind of person who wants to invest yourself wholeheartedly in anything you do and be rewarded commensurate with that investment.”

Remember: I claim it is the best book, not the most comforting.

1. Kleiner has worked with such innovative thinkers as Stewart Brand, who established the Whole Earth Catalog, and Peter Senge, who popularized (relatively speaking, of course) “learning organizations” in The Fifth Discipline. A few years ago he came out with The Age of Heretics: Heroes, Outlaws and the Foundations of Corporate Change, that provides profiles of people of past generations who had a signal effect on some of the change methodologies that were once considered to be, well, heretical, but which have now become part of the status quo.

2. One of the examples in the book that’s specifically germane to this industry is that of Ford and Toyota. Kleiner maintains that just as Ford will never achieve Toyota’s ability to mass produce high-quality cars quickly and efficiently, “Toyota will probably never match Ford’s ability, honed through the years, of pulling an archetypally mythic new model out from seemingly nowhere.” He notes “each has its own form of innovation and savoir faire” that the other will never have “Because of the preoccupations of both company’s Core Groups.”