Why Effective Leaders Embrace The Identity Paradox

When it comes to creating value over the long-term, the identity of the organization is sacred.

Change, and the need to keep pace with it, has been a dominant leadership challenge for at least three decades. Maxims such as change or die and change is the only constant permeate organizations, globally, keeping executives up at night as they consider how best to move forward.

There is a counterpoint to these popular sayings, which leaders should also consider: the more things change, the more they stay the same.

In short, change is an insidious beast. It calls out to leaders to focus on what’s happening outside of their companies as the way to know what to do on the inside. And, in doing so, many executives – especially, those who run large, longstanding concerns – fail to take stock of what’s going on beneath the surface of their organizations, where vital, foundational factors reside, which explain how the company creates proprietary value – in spite of how the world around it is changing.

A sterling example of a company that takes both of these realities into account – the outside world and the inside world – is Apple. Apple was founded in 1976, powered by its drive to humanize the computer. That was its core identity; a statement that clarified the proprietary contribution the company was capable of making. The company has stayed true to its identity ever since. Forty-plus years later, Apple is still humanizing the computer in ways no one could have imagined back then. From the earliest Macs to the newest iPhones, Apple has constantly changed – by not changing at all. The company simply continues to re-interpret its formative identity in new and meaningful ways. To borrow the title of a famous movie, Apple has succeeded by going back to the future.

“Today, wholesale change is often seen as the path to salvation, where nothing is sacred and everything is up for grabs. That isn’t just wrong; it’s dangerous.”

Call it the identity paradox: an organization’s ability to change from a changeless foundation. Taking this approach to leadership is the secret to staying relevant, no matter how much change is going on in the outside world. In this way, the identity paradox provides a platform for innovation that fully embraces the world as it changes, while holding fast to what the company is at its core.

Along with Apple, there are other companies whose histories and track records suggest that they too operate in accordance with the identity paradox, even if they do so, unwittingly.

Caterpillar, one of the world’s leading heavy equipment companies, continues, after more than 90 years, to find new ways to create a world in which all people’s basic needs – such as shelter, clean water, sanitation, food and reliable power – are fulfilled. Coca-Cola is still figuring out how to do the same thing it has done successfully for 125 years: Refresh the world in body, mind, and spirit.

Boeing connects, protects, explores and inspires the world through aerospace innovation. Korn Ferry, the major, global talent management firm, continues to uncover and implement novel approaches to helping leaders, organizations, and societies succeed, by releasing the full power and potential of people. It has done so since it was founded in 1969. Fidelity Investments relentlessly celebrates the individual in its myriad, personalized investment plans and offerings, and the services that support them.

In many ways, these companies are larger than life. Often, they are among the world’s “most admired” organizations. They are special. They are leaders in their fields, and all of them, consciously or not, embrace the identity paradox. All of them continue to change from a changeless foundation.

Limitations and Benefits

Leading by the identity paradox is not a silver bullet. It doesn’t guarantee success, but it does increase the odds of success, over time. The power of the identity paradox cannot prevent companies from becoming acquisition targets. It cannot assure that every new product – even if they are inspired by the identity of the company – will gain sustainable traction among customers. Nor can it certify that all forays into new markets will turn out well.

The benefits that flow from the identity paradox are many, however. One overarching benefit is how the organization’s identity constitutes a stabilizing force against  the volatility, uncertainty, complexity and ambiguity (VUCA), which shape today’s world. Consider the company’s identity the keel that keeps the ship ‘steady as she goes,’ no matter what the weather brings.

On a practical level, the identity paradox can have a positive impact on a company’s relationships with key stakeholders:

Customers can expect – as in the case of Apple – a steady flow of products and services, which while new, reflect certain enduring attributes, which have been the basis for winning customers’ trust over time and, in turn, gaining their loyalty

Suppliers who understand the identities of their customers can align their design and production strategies to deliver parts and assemblies, which are deliberately aimed at deepening the value-creating power of those identities.

Investors gain the reassurance that, even as external forces influence the company’s strategic agenda, the pattern of value creation that has produced wealth over time will remain intact, as a guidepost for management decision-making and action.

Employees can take comfort in, minimize anxiety and, thus, more effectively navigate corporate course corrections, knowing that they have an inviolable touchstone, because the company has remained true to who it is, at its core.

Three defining qualities

The identity paradox draws its strength from three interdependent qualities: uniqueness, potential and constancy. First, every company, like every individual, is unique, demonstrating its own particular way of seeing, approaching and operating in the world. Second, identity illuminates an organization’s potential by revealing how it creates proprietary value over time. Third, the identity paradox is anchored by the notion of constancy – the fact that a company’s identity transcends time and place, while its expressions are constantly changing.

The leadership imperative

Despite its power to help ensure that companies succeed, few executives lead their organizations according to the identity paradox. Why? Because, they simply don’t know it exists. But it does, just as gravity existed long before Isaac Newton formally established the laws of gravity in 1687.

The identity paradox imposes an unspoken discipline on all leaders: To not lose sight of the immutable characteristics, which allow each organization to create value in its own special way, even as it responds to the irrepressible, often convulsive, changes occurring around it.

Today, wholesale change is often seen as the path to salvation, where nothing is sacred and everything is up for grabs. That isn’t just wrong; it’s dangerous. When it comes to creating value over the long-term, the identity of the organization is sacred.

Of course, to not keep pace with the torrent of changes going on in the outside world is a recipe for irrelevance and, ultimately, failure. Yet, to attempt change without embracing the value-creating core of the enterprise is a recipe for self-destruction, much like trying to steer that proverbial ship, which has no keel.

For leaders, embracing the identity paradox as a management discipline is the most logical way to ensure that the enterprise will thrive, no matter how much change the outside world imposes on it.


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