Who Really Matters--great new book

In the currency of business books, new ideas are rare. There are so many experts touting innovation and radical business models that most good ideas are quickly packaged and marketed and essentially commoditized in the marketplace. One of the few folks speaking with an original and intelligent voice is Art Kleiner (who keeps a lively webpage.) I’ve often cited his The Age of Heretics: Heros, Outlaws, and the Forerunnersof Corporate Change as one of my favorite business books. Now he has a new work, Who Really Matters: The Core Group Theory of Power, Privilege, and Success, which is another standout.

I reviewed his book in this past Sunday’s Boston Globe. Here is a slightly expanded version of that review:

In his new, important book, business thinker Art Kleiner gets to the heart of what makes organizations tick with one simple question: who is in?

Such a query—and its accompanying query of ‘who is out?’—identifies one of the most powerful yet rarely addressed dynamics of corporate life. According to Kleiner, "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."

Set aside the nobility of mission statements and momentum of big hairy audacious goals. Companies exist to serve the financial and psychological needs of the chosen few. Kleiner argues that power resides not in the formal structures and flow charts of an organization but in this rarely identified Core Group. These members receive lavish salaries, comfortable perks and recognition, and a security from such complications as having to book travel arrangements or deal with personal details.

All other organization men and women are what Kleiner calls "employees of mutual consent"—people who act on the perceived needs of the Core Group, whether they do so directly or down the chain of command. While these individuals can achieve financial security and even personal fulfillment, they never enjoy the perks and privileges of the insiders. Kleiner shows how organizations move and act based on the collective decisions of its members, and demonstrates how the Core Group needs, both real and perceived, cascade through the organization as a series of decisions.

Core Groups are neither inherently good nor bad, Kleiner argues; they simple are. Their members shape the values and direction of the company, and their needs direct the company. "The Core Group is like the Sun King—wherever it puts its attention, things shine," he writes. The shape and structure of Core Groups differs from organization to organization. At some companies the Core Groups are not necessarily the highest paid; at other organizations they are not necessarily those people with the highest formal positions of power. Most universities, for instance, are dominated by tenured faculty as opposed to individual deans. Some companies have Expanded-Core-Groups, in which "it is easy for everyone, from the CEO on down, to take the needs and priorities of everyone into account when they make a decision."

Above all, Kleiner argues, Core Group dynamics must be reckoned with in order to point powerful companies toward nobler behavior and to prevent abuses of power. He recommends several mechanisms for guiding the Core Group to benefit the maximum number of the people in the organization. One such practice is that individuals learn to conduct better conversations as a way of identifying Core Group members and opening up their actions to the company as a whole.

As a means of shaping the impact of the Core Group, Kleiner suggests that non-members tap their collective equity (which goes beyond financial equity to include reputation and relationships and capabilities) to form a Shadow Core Group. This alternative to the ruling party serves to raise organizational consciousness, to "build a new awareness of the purpose and potential of the organization among Core Group members, decision-makers throughout the organization, and (most important of all) yourselves."

Kleiner acts more like a corporate anthropologist than a consultant, taking a deeper look at the dynamics of organizational behavior, questioning a few basic assumptions about how corporations actually behave. He refuses to capitulate to business book template 101 by creating a simple recipe for success leveraging the power of the Core Group. This integrity leaves some questions unanswered. He isn’t completely clear on how one becomes a member of the Core Group, for example, and there are numerous places where more specific examples would help. He also allows certain looseness to the argument in places, discussing certain topics as Core Group issues without making the connection completely clear.

But overall, this book provides an important new theory about how organizations really work. Clear, provocative, and useful at a deeper level than any handbook on the fad du jour, Who Really Matters challenges all readers to take a fresh look at how their company truly operates. Kleiner’s call to action deserves a wide audience.