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Breaking a business down to its 'core' principals

Who Really Matters:
The Core Group Theory of Power, Privilege, and Success
by Art Kleiner
Currency/Doubleday, $29.95

In his new book, business thinker Art Kleiner gets to the heart of what makes organizations tick with one simple question: Who is "in"?

Such a query -- and its follow-up question of "Who is out?" -- identifies one of the most powerful dynamics of corporate life. According to Kleiner, "In every company, agency, institution, and enterprise, there is some Core Group of key people -- the `people who really matter.' Every organization is continually acting to fulfill the perceived needs and priorities of its Core Group."

Set aside mission statements and audacious goals. Companies exist to serve the financial and psychological needs of the chosen few. Kleiner argues that power resides not in the formal structures and flow charts of an organization but in this rarely identified Core Group. These members receive lavish salaries, comfortable perks, and recognition, as well as a life free of such complications as having to book travel arrangements or deal with personal details.

All other organization men and women are what Kleiner calls "employees of mutual consent" -- people who act on the perceived needs of the Core Group, whether they do so directly or down the chain of command. While these individuals can achieve financial security and even personal fulfillment, they never enjoy the perks and privileges of the insiders.

Core Groups are neither inherently good nor bad, Kleiner argues; they simply are. Their members shape the values and direction of the company, and their needs direct the company. "The Core Group is like the Sun King -- wherever it puts its attention, things shine," he writes.

The shape and structure of Core Groups differ from organization to organization. At some companies, the Core Groups are not necessarily the highest paid; at other organizations, they are not necessarily those people with the highest formal positions of power. Most universities, for instance, are dominated by tenured faculty as opposed to individual deans.

Above all, Kleiner argues, Core Group dynamics must be reckoned with in order to point powerful companies toward better behavior and to prevent abuses of power. He recommends several mechanisms for guiding the Core Group to benefit the maximum number of the people in the organization. One such practice calls for individuals to conduct better conversations as a way of identifying Core Group members and opening up their actions to the company as a whole.

As a means of shaping the impact of the Core Group, Kleiner also suggests that nonmembers form a Shadow Core Group. This alternative serves to raise organizational consciousness, to "build a new awareness of the purpose and potential of the organization among Core Group members, decision-makers throughout the organization, and (most important of all) yourselves."

Kleiner refuses to capitulate to the basic business book template by creating a simple recipe for successfully leveraging the power of the Core Group. This integrity leaves some questions unanswered. He isn't completely clear on how one becomes a member of the Core Group. He also allows certain looseness to the argument in places, discussing certain topics as Core Group issues without making the connection completely clear.

But overall, this book provides an important theory about how organizations work. Clear, provocative, and useful, "Who Really Matters" challenges readers to take a fresh look at how their own company operates.

Tom Ehrenfeld is a Cambridge journalist and author of "The Startup Garden: How Growing A Business Grows You."

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