Recent and Book-Related Articles
- The Globe and Mail (2012)
- The Ivey Business Journal
- The European Financial Review (2012)
- Strategy+Business – Why Walmart is Like a Forest (2012)
- Fast Company (2012)
- Plexus Institute
- Practical Wisdom Management Research Review (2013)
- Academy of Management Learning and Education Review
- Plexus Call July 12 Slides and MP3 Audio
- Integral Leadership Review 2013
- Canadian HR Reporter – September 17, 2013
- Faith in Business – Review by Tim Harle Fall 2014
- Post-Rational Management: The Montreal Review – January 2015
- Cultivating Organizations in Leadership & Change May 2015
- The National Post – June 17 2015
- Changing Our Models of Change: The RSA October 21, 2015
- Discovering Complexity: A Story of an Organization in Crisis and Its Response May 2019 Plexus Institute
- Lead Like a Gardener: Agile and Design-thinking will become Fads Unless We Broaden Our Concept of Management (2019)
- True But Useless: Why So Much Management Advice Sucks (and what to do about it) (2020)
David Hurst delivers multimedia presentations and a range of customized experiences that will inform and inspire your people and help them learn from the past, master the moment and create the future. For a recent sample of a short keynote to the 10th Annual Global Drucker Forum see the embedded link.
Back in November 2016 I wrote a blog in the immediate aftermath of Donald Trump’s election. As a Canadian I thought the Americans had had an awful choice to make but was just as surprised as many others were, when the man I wanted to lose beat the woman I wanted to lose.
An ecological lens suggests that it’s helpful to look at abstract systems like democracy and capitalism as dynamic ecological processes, rather than as static structures. That is, both capitalism and democracy are configurations of complex adaptive social, economic and political systems that have their own internal dynamics, analogous to those of complex adaptive ecologies, like forests and estuaries.
From this perspective successful social enterprises, both political and commercial are conceived in passion, born in communities of trust, grow through the application of reason and mature in power. Here they tend to get stuck in systemic traps, structures and routines that conserve their habits and protect their success but render them inward-looking and insensitive to the small-scale changes that presage trouble. In economic organizations the result is decline and possibly disruption by smaller, faster enterprises wielding new technology. In political bodies the result is gridlock which, if it persists, can lead to political disruption and insurrection.
In their two perceptive books, The Broken Branch (2009) and It’s Even Worse Than It Looks (2011), political scientists, Thomas Mann and Norman Orenstein gave us a broad overview of how the gridlock emerged in the American Congress. Most importantly, they outlined the changes that led to the polarization of its members and the emergence of a quasi-parliamentary system, built upon opposition, in a constitutional republic where the separation of powers demands negotiation and compromise to get anything done.
A Systems Trap
For a more systemic view of how both Democrats and Republicans have unwittingly contrived to build the trap that ensnared them, one can to turn to Lawrence Lessig’s 2011 book, Republic, Lost: How Money Corrupts Congress – and a Plan to Stop It. He showed how an economy of influence emerged in Washington and bred what he calls dependency corruption. This is not straightforward votes-for-dollars bribery; that’s illegal and happens only rarely. It’s a far more deceptive process. The ‘cheese’ in the trap is the money that members of Congress need to run for office. With campaigning almost a nonstop activity (especially since the mid-1990s), so is the need to raise funds. This is a huge distraction from the business of government in its own right. The obvious source of funds is from those who have an interest in legislation, which means that Congress has to be concerned with issues that attract factional interests rather than the broader public interest. As a result Congress’ agenda consists of topics suitable for fund-raising and its members have little interest in simplifying regulations or tax codes: complexity enables them to raise funds from interested parties. Thus the concerns of Congress steadily diverge from the concerns of the population at large. In the medium-term participation in the political process may drop but the resentment keeps on building…
The Power of Narrative
Narrative is central to our identities at all levels of a society. The nation itself is made up of the stories people tell about it and each other. When there are a few, widely-shared stories of struggle and achievement, a nation feels strong and coherent. America after WWII was like that. The nation had emerged from the depths of the Depression to become the arsenal of democracy and had saved Western civilization. In the aftermath of the war America was the only large industrial country with its infrastructure intact. The economy boomed as soldiers returned to start families, poor Southern farmers migrated to rich Northern cities and American generosity rebuilt a shattered Europe and Japan. After the dark years of struggle during the Depression the American Dream seemed to be thriving.
But in complex adaptive systems nothing lasts indefinitely. Strengths become weaknesses and America’s post-war prosperity gave its industries little incentive to update their technology and business practices: the defeated nations had no option. The post-war American advantage survived only about twenty years before the other industrial countries caught up, rebuilding their economies with new, more efficient technologies. The seeds of globalization began to sprout and domestic jobs started to leave, starting with low-tech industries, like textiles and furniture and migrating toward TVs and cell phones. New technology led to a drastic reduction of labor across the board, especially for those without a college degree or technical qualification. People’s stories began to change as their experiences diverged and tales of struggle and misery proliferated. Wages stagnated as much of the middle-class was reduced to poverty. For many the American Dream died.
As its narratives break down and fragment so does society. We may work for money, but we live for story. When both collapse people become desperate. Few have captured this process more compellingly than Pulitzer prize-winning playwright, Lyn Nottage. In her prescient 2015 play, Sweat, she chronicles how Reading, Pennsylvania, once a prosperous industrial town was reduced to poverty and how its people lost their livelihoods and their shared narrative.
We know from history that in desperate times, when people feel failed by their institutions and betrayed by their politicians, they will often turn to political outsiders, fringe radicals who promise to restore the nation to its former glory by upending the existing order. We know too that at these critical times, when the way ahead is so uncertain, a leader’s values will be crucial to the taking of effective action. Unfortunately there is no guarantee that those who emerge to lead have the right ones. True values do not become visible in prepared speeches, but only in behaviour under pressure. In 2016, instead of getting a Nelson Mandela, America got Donald Trump, a man whose amorality and narcissism made him manifestly unsuited for office. But Trump promised to “Make American Great Again” and to restore an era of growth and prosperity last seen in the 1950s and 1960s. Beguiled by the click-baited traps of social media, too many in the Republican Party made a conscious decision to hold their noses and go along with the choice. Indeed the most depressing feature of the last four years has been how many affluent Americans, politicians, pundits and citizens alike, have eagerly embraced a Faustian bargain and sold their souls for power. Now midnight is here and the Devil has come to collect their souls and that of the Republican Party.
In Part II of this blog I will outline the theories behind what is happening and in Part III discuss what they suggest can and should be done.
“And twofold always… May God us keep
From single vision and Newton’s sleep!”
(William Blake, Double Vision)
I read with great sadness of Rabbi Lord Sacks’ sudden, untimely passing on November 7. His writings have been a source of inspiration and really helpful ideas to me. I discovered them only a few years ago, while continuing to work on my ecological perspective on management. Sacks’ thoughts on the moral and social ecologies that underpin the ability of human beings to cooperate and work together have been especially useful. They apply at the organizational level but have been even more helpful in extending the ecological framework “up” a few systems levels from there to that of society and the state – the level that Sacks was most interested in.
Sack’s writing reaffirmed for me the dual nature of human beings in society and the benefit of a binocular mind, like that suggested by an ecological/evolutionary perspective. (The New Ecology of Leadership (2012).
A central tension in life is between our existence as individuals and our lives as social animals, between ‘Me’ and ‘We’. Sacks’ favourite quote was from the Jewish sage, Hillel the Elder (BCE 110-10 CE), “If I am not for myself, who will be for me? And being only for myself, what am ‘I’?”. Hillel’s observation anticipates by over two thousand years the views of the sociobiologists and their mantra, “Selfishness beats altruism within groups. Altruistic groups beat selfish groups.” (Wilson, D.S. & Wilson, E.O., Survival of the Selfless, 2007). The resulting tension between competition and cooperation is experienced at every level of living, in families, in corporations and in societies.
2020 marks the 50th anniversary of Chicago economist Milton Friedman’s famous (or infamous, depending on your point-of-view) claim that the only social purpose of business is to increase profits. This doctrine proved immensely popular among corporate managers but has been increasingly challenged as being harmful to society. McGill management professor, Henry Mintzberg was an early critic and has been a consistent advocate of a broader approach to social purpose.
Victorian political commentator Walter Bagehot (1826-1877) once wrote “The whole history of civilization is strewn with creeds and institutions which were invaluable at first, and deadly afterwards.” That describes Milton Friedman’s work – very helpful in the beginning but a hindrance subsequently.
I graduated from Chicago’s MBA program in 1972, imbued with the idea that management was all about the allocation of resources, as assessed by the Capital Asset Pricing Model (CAPM). I had majored in finance, studying with Gene Fama his newly-developed Efficient Market Hypothesis that was shaking up the world of finance. I was ready to change the world of management….
I soon found that practicing managers weren’t using theory to tell them what to do – they were using it to rationalize what they already wanted to do. Back then it was clear to young managers like me that the great post-war boom in economic activity was slackening and that the large corporations had accumulated a great deal of fat and were guided by a fuzzy sense of purpose that supported a relaxed ‘country-club’ approach by managers. We young Turks wanted to change that and make corporations more efficient. Fama and Friedman’s perspectives and theories proved invaluable in cutting through tired old stories with a powerful counter-narrative. The era of conglomerates, leveraged buyouts and private equity was launched on this new logic.
At first this new approach seemed very successful. Conglomerates thrived and their founders like “Tex” Thornton of Litton Industries, Hal Geneen of ITT and Jim Slater of Slater Walker (in the UK) became business folk heroes. The exploits of LBO firms like Kohlberg Kravis and Roberts (KKR), fueled by junk bonds, were celebrated in the press and their billionaire principals regarded as geniuses. But it didn’t last: monolithic concepts taken to their (il)logical conclusions never do. One has to take time, change and people into account: nothing lasts unless it is incessantly renewed.
It seems that enterprises (and both democracy and capitalism can be thought of as giant enterprises) are conceived in passion, born in communities of trust, grow through the application of reason and mature in power. The young become old and success is followed by excess. Gradually control of the corporation was taken over by elites, who used concepts like Friedman’s to rationalize their actions. Ideas once used to challenge outdated attitudes were now used to justify the new, emergent status quo. In recent times in Anglo-American business the result has been the steady liquidation of productive enterprises, the creation of oligopolies and the emergence of a bloated financial sector. Value extraction has replaced value creation.
Deadly indeed, but we know the enemy and it’s not Milton Friedman: it’s us.
A few months ago I had the pleasure of meeting Hunter Hastings online. Hunter is an economist by training, a member of the Mises Institute and a follower of the Austrian School of economics. We got to chatting and he saw my presentation When the Science is Uncertain Turn to the Humanities, which I delivered for the I4J Leadership Group. As a result he asked me to do a podcast for the Mises institute
The podcast has now been published as Business School Fallacies: Acting Your Way To Better Thinking.
Thanks Hunter – it’s been a pleasure working with you!
Too little, too late
Only a local doctor and his colleague recognized the pattern – a plague was beginning to sweep through the population. They tried to alert the authorities, but the government was reluctant to sound the alarm. Some action was taken, but the language was optimistic and politicians downplayed the seriousness of the problem. It took a jump in the death toll before serious measures were taken: the town was sealed, and a plague officially declared. The pestilence went on to ravage the city, as usual affecting the poor the most.
From allegory to analogy
You may recognize this story outline from Albert Camus’ The Plague (1947). Anyone who has read his newly popular allegorical novel would know what to expect during a pandemic. At the onset of the current coronavirus pandemic, when there was little data, experts conducted what can be thought of as an analogical inquiry, using the liberal arts.
They consulted historians who had studied the flu pandemic of 1918 and other plagues from the past. They looked for comparable coronaviruses, like SARS and MERS. They began to compare experiences in different countries with similar circumstances. They searched for metaphors and analogies, even fiction like The Plague for ideas that might be relevant.
Action before data
Like so many entrepreneurs, it seems clear that those countries whose leaders took early decisions to quarantine their societies, based on wise judgement, had much better experiences. They were willing to commit to action, rather than wait for the inevitable delay for data and calculation. Only once data was available could they claim to be ‘guided by science’ and ‘evidence-based’. But because of the exponential growth of the virus, a few days delay could make a huge difference.
What really matters
“There are only two or three human stories,” wrote Willa Cather, “and they go on repeating themselves as fiercely as if they had never happened before.” We are living through just such a story right now.
The universe may be made of matter, but we humans live in a world of value and significance, of ‘what matters’. Science deals with fact, narrative deals with truth. As screenwriter, Robert McKee explains, “What happens is fact, not truth. Truth is what we think about what happens.”
Leadership requires empathy and decency
This is the power of analogical inquiry. The liberal arts help us learn from the experiences of others, to feel what they felt and to think what they thought. We call the quality ‘empathy’, the essence of what it means to be alive and the critical ingredient of effective leadership – a preoccupation with “what matters”.
This is Camus’ message: the “plague”, ill-fortune and injustice in its many forms, comes and goes but never completely disappears. It is the underlying human condition, to which our response must always be one of caring – ‘common decency’ “There is no question of heroism in all this,” says Dr. Rieux, Camus’ narrator, “It’s a matter of common decency. That’s an idea that makes people smile, but the only means of fighting a plague is – common decency.”