Belonging and Differentiation

How these fundamental forces of human nature manifest in companies

Welcome back to all readers after the Diwali break!

Most likely you’d have gone through a situation where you’ve a been a part of a group and then slowly grown apart.

Here's how the group dynamics usually works:

At first, we covet being a part of a group. We look up to the group for its different characteristics and think that we want to become like that. And hence, we make efforts to converge there.

This happens at multiple junctures, be it in school when you looked up to cool or topper kids depending on your inclination, or looking upto people from specific coveted institutions or more.

Let’s take an example

Suppose a student is aspiring to be in IIT (cliched? I know). Now based on all the gyaan out there on Youtube, LinkedIn, coaching classes etc, the student starts doing everything just because he has been told that that's how 'IITians' as a group do it. Extend this analogy to any group, be it Olympic athletes or your group of friends or cults.

Let's say the student does all the hard work of fitting in and changing and become a part of a group. Now what?

Now you actually want to differentiate within the group. You dont want to be just an IITian, you want to be a smart IITian, or someone who also aces at sports, or takes up different leadership positions. That's true not just here, it's true even in something as small as your friend circle. Once you have chosen and made the friends you wanted, you know want to differentiate yourself by being the funny one or the cool one or the caring one etc.

For a deeper understanding into Girard, this article is a good start.

These two forces - belonging and differentiation - are fundamental to human nature and manifest a lot in companies as well.

Specifically in two ways -

• within companies

• between companies

Within companies

Think of companies who have created an aura around them, luring people to belong to them - Google, Apple, McKinsey, BCG etc. I'm not going deep into what resulted into this aura - success, culture, elitism etc in this article.

But the net outcome is that a lot of people aspire to be in these companies and make efforts to get into them. What happens after that? Once the dust of novelty settles down, you now have a new label in your identity (e.g. Googler). This label makes you a part of a coveted group externally, but now that your daily environment is this group, it doesn't solve for your identity within the group. Hence you need new labels - be it in terms of designations, roles or functions. I'm not denying that nomenclature within companies doesn't have its utility. It does, it would be inefficient for people to understand what the other person is doing without allocating such labels. However, much more is its identity and status value - the fact that you associate it as a way to qualify yourself and as a way to differentiate yourself within the group.

Between companies

Just like people want to belong to a group of people, companies also want to belong to groups - can be of iconic companies in general, winners in a market, cultural winners in a market etc. If people covet Forbes 30 under 30, companies covet Fortune 500 or Best places to work for.

However, once they have 'made it', companies of the same group try to differentiate themselves. For companies, differentiation serves a tangible value of appealing to different motivations of a customer. Some of the differentiation would be a natural outcome of different strategies, policies or in some cases, just good storytelling. E.g. Linux as an open source alternative vs Windows.

So what does this mean?

Understanding these forces has sweeping effects on organisation design. A few general takeaways:

• Initially you have to solve for the belonging force, and get people to covet you. When people start coming, solve for the differentiation force as well.

• Ironically, one way to engineer this belonging force (of people to company) is to index on differentiating force between companies. E.g. Linux getting traction because it's open source vs other for-profit endeavours.

• These forces are the reason why startups and corporates are very different from the inside. In early stages, belonging force is high, and there is very high adhesion between people. In late stages, as the company becomes an environment or large group in itself, the differentiation forces increase.

• The burden on early stages is to generate enough forces. The burden on late stages is to balance these well.

• You have to design the organisation in such a way that the differentiation force doesn't exceed the belonging force. If people want to differentiate themselves from the group more than they want to be in the group, your structure will fall apart. It's like Jenga - if the force pulling the structure down is greater than the one keeping it together, it will break.
  

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Eager to hear your thoughts on this :) If you liked this article, you may also like this one.

P.S. Photo credits to TIME magazine