Henry Mintzberg Rebuilding Companies as Communities

Executive Summary Harvard Business Review

Beneath the current economic crisis lies another crisis of far greater proportions: the depreciation in companies of community—people’s sense of belonging to and caring for something larger than themselves. Decades of short-term management, in the United States especially, have inflated the importance of CEOs and reduced others in the corporation to fungible commodities—human resources to be “downsized” at the drop of a share price. The result: mindless, reckless behavior that has brought the global economy to its knees.

Government stimulus programs and the rescue of the biggest and sickest corporations will not alone resolve the problem. Companies need to reengage their people. The practice of both management and leadership needs to be rethought.

The subprime mortgage problem is a glaring case in point. How could it have come about in the first place, and how could it have spread to so many blue-chip financial institutions? The answers seem readily apparent. Those who promoted these mortgages were intent on driving up sales as quickly as possible to maximize their own bonuses, the ultimate consequences be damned. And the financial institutions that bought these mortgages were not being managed. Many of their executives adopted what has become a pervasive style of “leadership” in America: They sat in their offices and announced the goals they wanted others to attain, instead of getting on the ground and helping improve performance. Executives didn’t know what was going on, and employees didn’t care what went on. What a monumental failure of management.

To varying degrees, the same failure has occurred throughout the private and public sectors. A belief has grown up that leadership is somehow separate from, and superior to, management. This view only isolates the people in leadership positions, thereby undermining a sense of community in organizations.

Communities at Work

Individualism is a fine idea. It provides incentive, promotes leadership, and encourages development—but not on its own. We are social animals who cannot function effectively without a social system that is larger than ourselves. This is what is meant by “community”—the social glue that binds us together for the greater good. Think no further than the energy unleashed by the strong sense of community in Barack Obama’s campaign.

Community means caring about our work, our colleagues, and our place in the world, geographic and otherwise, and in turn being inspired by this caring. Tellingly, some of the companies we admire most—Toyota, Semco (Brazil), Mondragon (a Basque federation of cooperatives), Pixar, and so on—typically have this strong sense of community. That came through loud and clear in “How Pixar Fosters Collective Creativity,” a September 2008 article in HBR by Ed Catmull, the president of Pixar, in which he attributed the studio’s success in creating a string of highly popular animated films to its “vibrant community where talented people are loyal to one another and their collective work, everyone feels that they are part of something extraordinary, and their passion and accomplishments make the community a magnet for talented people coming out of schools or working at other places.”

Young, successful companies usually have this sense of community. They are growing, energized, committed to their people, almost a family. But sustaining it with the onset of maturity can be another matter: Things slow down, politics builds up, the world is no longer their oyster. Community is sometimes easier to preserve in the social sector—with NGOs, not-for-profits, and cooperatives. The mission may be more engaging, and the people more engaged.

But somehow, in our hectic, individualist world, the sense of community has been lost in too many companies and other organizations. In the United States in particular, many great enterprises, along with the country’s legendary sense of enterprise, have been collapsing as a consequence.

Mintzberg H. (2009). “Rebuilding Companies as Communities. ”  Harvard Business Review , july-august 2009