Welcome to the CHT Blog!

In this blog, I will post my notes on corporate happiness and aggregate value maximization technologies that will later be included into my upcoming book "Building a Happy Company" that I am currently working on. I will try to daily post something that will help you make your life and your company more efficient, comfortable and happy.

Wednesday, February 20, 2008

Declaration of Corporate Identity

There are two reasons – internal and external - why a business entity has to have a strong and attractive corporate identity. Internal reason stems from the most fundamental need of its founder – to be happy in a happy environment. In order to be happy, an entrepreneur needs to know beyond a reasonable doubt that the corporate identity of his or her company matches his or her most fundamental beliefs, values, principles and priorities – professional (‘functional’), emotional and spiritual.

External reason stems from the answer to the most fundamental question of stakeholders relationships management (SRM) – why does a particular stakeholder (client/customer), supplier, partner, etc. chooses to enter into a relationship with this particular company (and not the other one)?

The answer is very simple – because this particular company creates the highest amount of aggregate value – financial, functional, emotional and spiritual – for this particular stakeholder (individual or an organization). It means that the unique aggregate value proposition – UAVP (I will discuss this concept in detail in one of my next postings) is the most attractive for this particular stakeholder.

UAVP, in turn is largely defined by the unique corporate personality of a company which must have both fixed and variable attributes. Variable attributes are needed because the company needs to be able to adapt to the ever-changing external environment. However, the company also needs fixed attributes to be able to build and maintain stable long-term relationships with its stakeholders (a must for the survival and prosperity of an organization) and to be able to weather severe ‘corporate storms’ (alas, inevitable in this ever more chaotic environment). Needless to say, fixed and variable attributes in a corporate personality need to be finely balanced (which is one of the key objectives of corporate strategic planning).

This system of fixed corporate attributes and their values can be rightfully called a unique corporate identity because it does not change over time and provides a solid foundation for both long-term SRM and for survival in adverse situations. In other words, there can be no survival (let alone prosperity) without solid corporate integrity and there can be no corporate integrity without a strong corporate identity.

Naturally, there must be a proper ‘match’ between internal and external requirements for a corporate identity. In other words, there must be a proper ‘match’ between beliefs, values, principles and priorities of an entrepreneur, on one side, and the needs and wants of corporate stakeholders, on the other.

To arrive at such a proper match, it is necessary to develop a formal document - declaration of corporate identity – based on these internal and external requirements. This document then becomes a firm foundation not only for strategic corporate planning, but also for the whole project of business engineering (building a company ‘from scratch’) or re-engineering (transforming the not-so-happy organization into a happy one).

As this post introduced several new important concepts, my next posts will be devoted to stakeholders relationships management, unique aggregate value proposition, business engineering and re-engineering (not necessarily in that order).

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