Sonoma Investment Capital was a model organization. The partners who led the small but enormously successful firm were determined to reinvent investment banking culture. They wanted to create a place where decisions were effective but made by consensus, communications flowed up and down freely, every employee’s career potential was carefully managed, and dress codes were nonexistent. The dramatic design of its suburban headquarters office was reminiscent of a successful architectural or software development firm. It neither looked nor felt like an investment bank. Rather than requiring an MBA as the ticket for employment, the company expected that new recruits had excelled at the highest levels of academe. The young employees were full of energy, put in long hard hours, and were rewarded handsomely through a profit-sharing system.
As the organization grew from 15 to 350 people over a three-year period, problems began to surface. Turnover increased among staff as productive talent lost interest and burned out. There was an increasing number of offline discussions about the informal organizational vision: “Make gobs of money.” This refrain was becoming familiar: “Management says that the reason the company exists is to generate profit. Well, I need a more important purpose than that to justify the commitment and hard work I put into this place.”
Finally, at a companywide assembly, the senior partner acknowledged the need for defining a more... To read the complete article, login or sign-up using the form below.
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