The Living Company
by Arie de Geus, Peter M. Senge
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Book Summary Information
Author: Arie de Geus, Peter M. SengeEdition: Hardcover
Audio: English (Unknown); English (Original Language); English (Published)
Published: 1997-01
ISBN: 087584782X
Number of pages: 215
Publisher: Harvard Business School Press
Book Reviews of The Living Company
Book Review: Why Companies Fail and What We Can Do About It
Summary: 5 Stars
Companies die all the time. The current business climate favors short term profit over long term survival, and most companies don't adapt fast enough. De Geus explains why this is, and what we can do about it, but what makes this book an essential read is that he gives us a new way of looking at organizations and the meaning of work.
The problem is that, in management, you get what you reward. This is a well-known truth and explains the dysfunction we see in most companies. As de Geus puts it, "The difficulty lies in our definition of corporate success...the dominant school of thought in business administration measures success purely in terms of quantity: the maximization of revenues, market share, share value, or proceeds."
The solution de Geus comes up with is novel and revolutionary. It is to look at companies differently -- not as machines, but as living beings. In fact, he goes even further than this, saying that companies actually are living beings. It is only because they are living that they can learn and adapt and hence sustain themselves over long periods of time.
This view seems extreme, but it is soundly based in philosophical argument and it is preferable to the alternate view that companies operate like clockwork and their employees are simply assets. The complexity of organizations can indeed be understood better by analogy with human psychology and biological ecosystems. And a company is able to survive and learn only because it has an identity that outlives any of the people working within it.
de Geus draws on the work of leaders in the fields of psychology, philosophy, evolutionary biology and immunology. He agrees with other management writers like Drucker, Collins and Buckingham on basic management truths, like the need to focus on strengths and develop people continually so as to maximize their effectiveness. However, he provides fresh and original insights on management and helps us look at our organizations in a new way.
For example, the natural consequence of thinking of organizations as living beings is that a company's primary goal becomes survival. This in turn leads to a different way of looking at the company's people. The company will survive only if there is synergy and an underlying contract between the company and its members whereby the members are helped to reach their potential in return for support of the company's goals.
Many years ago, I read Peter Senge's book, "The Fifth Discipline," and its depiction of the learning organization became an ideal for me. I didn't expect to be as profoundly affected by "The Living Company," but the ideas are, if anything, even more basic to finding meaning in work, and will likely stay with me. This book is essential reading for any leader wanting to build a sustainable company, but it's also thought-provoking for anyone who wants to make change happen in any organization.
Graham Lawes
Summary of The Living Company
In The Living Company, the man who first introduced the revolutionary concept of the learning organization turns his attention to identifying the critical characteristics of organizational longevity. The book speaks to everyone trying to adapt to a turbulent business environment.The average life span of a Fortune 500 company is less than half a century, yet there also are corporations around the world that have been in business for 200, 500, even 700 years. Arie de Geus, a retired Royal Dutch/Shell Group executive, maintains after studying both extremes that the most enduring treat their companies as "living work communities" rather than pure economic machines. The Living Company: Habits for Survival in a Turbulent Business Environment persuasively outlines his resultant prescription for organizational longevity.
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