What potential does any one organization have? The answer lies in understanding the organization as a system, which is code for understanding the organization as a purposeful web of (interdependent) relationships.
In hard (mechanical) systems the purpose becomes an achievable objective (e.g. profit) and in soft (living) systems the purpose is something that is never (once and for all) achieved (e.g. viability).
In regard to potential within soft systems, the critical characteristic of this web of relationships is its emergent properties. That is to say, the potential of an organization lies within its relationships and the manifestation (or actualization) of its potentialities emerge from the productivity of these relationships.
For soft systems, saying it another way the answer to the question lies in the interaction of the potentialities of the people of the organization. Each person presents a range of possibilities, some wider than others but a range nonetheless. The range presented by the collective is even far wider.
Any one potential is actualized through the interaction (between minds) with at least one other person. The synergy between two yields more than two. Hence, the need for the collaboration of minds, not competition between minds, being essential to the emergence of more of the people’s, and in turn the organization’s, potential.
Every organization self-actualizes: But not every organization self-actualizes its greatest potential. Many organizations are limited, not in potential but in what’s probable to emerge.
There is a difference between what is possible (in potential) and what is probable. While the range in potentiality presents a multitude of possibilities, those in positions of authority—a.k.a. the leadership/management—have the greatest influence on what will probably or likely emerge. Another way of saying this is, the people in the organization present what is possible and the management affects what will be probable.
Those in authority actualize potential by the psychological and physical space they create, through their choice of organizational design and management practice—they enable actuality. In other words, both management methods and measures prefigure what will probably manifest in experience; in short, what will likely happen. The operative principle being, whatever one focuses their attention on has a greater likelihood of manifesting in reality.
If management manages as if the organization is a hard mechanical system—relating to people as objects—then what gets actualized will be far less than the potential that is possible. For example, simply creating an environment wherein people are not allowed to be free and critical thinkers but expected to only do what the one in authority thinks, will significantly limit the emergence of (greatest) potential. The use of numerical goals as the means and measure of value and contribution to the organization, will also limit potential. Creating an environment wherein all decisions are determined by near-term profitability gains will limit what is possible. As Deming often said some have to reach down and others can’t possibly reach high enough to make their numbers.
What can the management of your organization change so that the potentialities within people are enabled to actualize?