Blog← Older posts
‘The arts of life…turn out to possess their own special methods and techniques…Bad judgement here consists not in failing to apply the methods of natural science, but, on the contrary, in over-applying them’.
Isaiah Berlin, Political Judgement
Ever since the European Enlightenment reason has been regarded as the hallmark of our humanity. The French philosophes argued that it was the power of abstract thought that separated us from animals. Only reason promised a certainty that could free us from the tyranny of tradition, dogmatic faith and arbitrary rule.
Reason and rationality
There was, however, not a single Enlightenment. While the French took Descartes as their model and focused on the supremacy of his rational method, the English and Scottish Enlightenments emphasized its limits. For the British the essence of human nature was a moral sense of right and wrong and a natural empathy for others. For them reason meant reasonableness, not rationality. These different perspectives have led to radically different understandings of change in social systems, exemplified by the clash between the conservative Edmund Burke and the radical Thomas Paine and their differing views on the French Revolution. Burke saw it as an unmitigated disaster, a destruction of community and tradition that heralded the age of ‘economists and calculators’. Paine, on the other hand, cheered it to the echo.
American politicians have never quite figured out which branch of the Enlightenment they belong to. Jefferson and Hamilton took opposite sides and, despite his conservative views, even Ronald Reagan was fond of quoting Paine’s aphorism that ‘We have it in our power to make the world over again’. The divisions continue to this day. Conservatives, like Burke, are aghast at the thought of intellectuals trying to design and build what can only be grown, while the followers of Paine espouse progressive agendas to make the world anew.
American management, in contrast with politics, has never been in much philosophical doubt. One can track the roots of this confidence back to the 19th century influence of French thinking in the United States Military Academy at West Point, the nursery of so many early management pioneers. When the business schools were reformed in the late 1950s, Anglo-American philosophy was in a tight, analytic orbit. Academics aspired to make management a science in the mould of economics. Scientific rationality was seen as the only true knowledge and the scientific method as the only valid form of inquiry. Thus management was deemed to be a technical practice involving the application of theory. Organizational change was viewed as a rational, top-down, outside-in process, a perspective that reached its peak in the re-engineering craze of the 1990s. Even today, to be told that one is ‘rational’ is taken as a compliment and deviations from scientific rationality are described as ‘flaws’ and ‘biases’.Change, General | Tagged AI, analysis, big data, calculation, Cartesian, economists, Edmund Burke, Enlightenment, existential, French Revolution, Hamilton, identity, instrumental, Isaiah Berlin, Jefferson, Mercier, political judgement, pragmatism, rationality, re-engineering, reason, Ronald Reagan, Sperber, Steven Pinker, Thomas Paine, utility, West Point | Leave a comment
Language is rooted in metaphor. In their popular book, Metaphors We Live By (1982) George Lakoff and Mark Johnson showed the pervasive role that our embodied experience plays in our understanding of how the world works, or might work. We excel at grasping how one abstract object or experience is like another, more concrete one. Thus happy is ‘up’ as in “I feel up”, while sad is ‘down’. Sometimes the meaning has to be determined by context. When I say, “It’s all downhill from here,” it means that things are going to either get worse or get easier. Whatever the case, this perspective suggests that our minds are primarily analogical rather than analytical and that we think in frames before we think in facts. It’s the frames that determine which facts matter and what they mean.
This use of metaphor is particularly important when it comes to understanding cause-and-effect in complex systems i.e. interactions where causality is non-linear. If one wants to understand anyone’s view of causality in an organization look at the metaphors they use. The dominant frame in Anglo-American management theory and practice is that of the engineer, the manager as a lone, detached observer looking at a complicated machine whose workings are understandable, at least in principle. Objectivity and scientific rationality, prediction and control are the order of the day and the role of the manager is that of an actor/agent in a knowable world, rationally calculating (predominantly) his options and issuing crisp, actionable instructions backed up by sanctions and incentives. The mind of the manager is idealized as factual and forensic, rather like that of the hyper-logical Mr. Spock in Star Trek. I will call this view the ‘Cartesian Framework’ in honour of the debt it owes the French rationalist philosopher René Descartes, but it could also be called ‘Newtonian’ for its dependence on classical physics.Change, General | Tagged Cartesian, causality, change, complex systems, creativity, George Lakoff, Gilbert Ryle, innovation, language, Mark Johnson, metaphor, Newtonian | Leave a comment
The theme of the 2017 Global Drucker Forum to be held in Vienna later this year is “Growth & Inclusive Prosperity – The Secular Management Challenge”. Dictionary definitions of prosperity mention a condition of being successful or thriving, especially economic well-being – a desirable accompaniment of living. What’s the essence of living then? Three Viennese psychotherapists came up with three distinctly different answers:
• Sigmund Freud (1856-1939) claimed that it was the ‘will to pleasure’
• Alfred Adler (1870-1937) argued that it was the ‘will to power’
• Viktor Frankl (1905-1997) contended that it was the ‘will to meaning’
All of them have a kernel of truth, for it’s difficult to imagine humans flourishing without each of these incommensurable components, although the mix would be different for every person. Perhaps they are stages in life. When one is young it’s mostly about pleasure; in adulthood our focus is on power and control and in old age we become makers of meaning. But we are always concerned with all three.
One suspects that Peter Drucker would have supported Frankl’s emphasis on our quest for meaning. Frankl wrote that meaning could be found in three contexts that were close to Drucker’s own experience:
• Through significant work and achievement
• Through relationships, love and caring
• Though suffering and courage in times of adversity
Once again, all three are surely necessary for a meaningful life. Frankl stressed the importance of the individual sense of responsibility that has to emerge from these experiences, the responsibility to accept the different tasks that life sets for every one of us and to find answers to the problems that we face. Echoing Nietzsche, he writes, “He (who) knows the ‘why’ for his existence, … will be able to bear almost any ‘how’”, which reminds one of Drucker’s thoughts on the primary responsibility of leaders to continually articulate the mission and purpose of their organizations.Change, General, Leadership | Tagged Adler, Clayton Christensen, community, complex systems, Drucker, Frankl, Freud, identity, meaning, means and ends, pleasure, power, prosperity, purpose, utility | Leave a comment
In the early hours of Wednesday November 9 2016 I was as bemused as everyone else. Donald Trump had won the presidential election and would be the 45th President of the United States. The last polls I saw had given Hillary Clinton about an 80% chance of winning and none of the commentators had seen an upset coming. As a Canadian, however, I thought that the Americans had an awful choice to make and in the end the man I wanted to lose had beaten the woman I wanted to lose…. After my initial shock wore off I started to think through what had happened and what is likely to happen from an ecological/systems perspective.
Back in March I wrote about the ecodynamics of Donald Trump. I said that it was helpful to look at society and its institutions, not as static systems, but as ecological processes. From this perspective successful social institutions 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 that conserve the habits that made them successful, but render them inward-looking and insensitive to the changes that are going on outside. In his book, The Rise and Decline of Nations economist Mancur Olson describes how, over time, vested interests and rent seekers clog the system and prevent meaningful change. When this happens, as their familiar narratives break down, societies often reach for outsiders, radicals on the fringes, who offer either new narratives or the revival of old ones. Trump’s narrative is the latter, the promise to “Make American Great Again”, and restore an era of growth and prosperity last seen in the 1950s and 1960s.Change, Leadership, Strategy | Tagged Anglo-Saxon capitalism, capitalism, change, community, complex systems, democracy, Donald Trump, ecocycle, ecological perspective, Hillary Clinton, Lawrence Lessig, lobbyists, Mancur Olson, narrative, NRA, power trap | Leave a comment
Over the decades organizational culture has devoured hundreds, if not thousands of strategies. One of the most recent examples is the case of Wells Fargo, where culture not only ate a long-standing, apparently successful strategy but last week also consumed its CEO, John Stumpf, who resigned under enormous pressure. The headline story in the business section of news in the past few weeks has been that over the past five years the bank has fired 5,300 employees (10% of whom are branch managers or higher) for opening new accounts without the customer’s permission. Apparently this was the unintended consequence of an aggressive strategy focused on cross-selling: if a customer has a checking account why not sell them a car loan together with credit card, mortgage and wealth management services? With the profit margin on straight lending squeezed by low interest rates, cross-selling has become the modern mantra for bankers and even used to justify mergers and acquisitions for the cross-selling opportunities they present. Objectives and targets for cross-selling were embedded into Wells Fargo’s performance management system and ridden herd on by layers of hard-driving executives. At the top was Carrie Tolstedt, Senior Executive Vice President of Community Banking, known to some within the bank as ‘the watchmaker’ for her obsessive concern with detail. An investor briefing on the business reveals a mechanistic model of the economics of retail banking with the profitability of cross-selling on clear display: customers with eight accounts with Wells Fargo are five times as profitable as those with only three (the industry average). The so-called “Gr-eight initiative” was the bank’s internal goal of selling at least eight different financial products to each customer.Change, General, Leadership, Strategy | Tagged acquisitions, banking, Carrie Tolstedt, Cartesian mindset, cross-selling, culture, ethical code, ethics, Goldman Sachs, Jack Welch, John Stumpf, mega-bank, mergers, muppets, Norwest Corporation, outcomes, performance, process, scale, strategy, Timothy Sloan, Wachovia, wells fargo | Leave a comment
“In a multi-layered complex system stability is achieved by having the big and/or slow processes govern through constraint the smaller, faster processes. Sudden change can take place in a complex system when agents at one level escape the constraints usually exercised by agents in another part of the system.” This is a quote from my book, Learning from the Links, a systems perspective on golf and management. I was making the case that in a golf swing the big, slow muscles of the torso should constrain the smaller, faster movement of the shoulders and arms that, in their turn, should limit the even quicker movement of the hands. When the hands escape these constraints, the system becomes unstable and the result is an erratic golf swing over which one has little control.
The same principle applies to all complex systems, including political ones. The Founding Fathers ensured that this was the case in the structure of the American government when they wisely arranged the different branches of government in a systems hierarchy of constraint. The House of Representatives is elected every two years, Presidents every four years, the Senate every six years (on staggered terms) and the Supreme Court is elected for life. For similar reasons James Madison favoured representative democracy and rule by experts over direct democracy and rule by faction. The intent was to create a stable system of checks and balances that could handle only modest change and would not be subject to sudden radical movements. There are similar hierarchies of constraint in parliamentary systems. An elected House of Commons turns over much faster than an appointed Senate (in the case of Canada) and the hereditary House of Lords in the UK. The Canadian Senate is the “Chamber of Sober Second Thought”, whose role is to reconsider and modify the sometimes impulsive actions coming to it from below in the systems hierarchy.
From a systems perspective, when British Prime Minister David Cameron agreed to a referendum on whether to remain with or leave the European Union he was risking that a small fast system might escape the constraints of representative democracy and the sovereignty of Parliament. It has escaped and the result is crisis and chaos. But it is also opportunity for both Britain and the EU.
The Lost Narrative of the European Union
Three years ago I gave a presentation to the International Forum on the Future of Europe in Vilnius, Lithuania. In it I suggested that the problem with the EU was that it had lost its narrative and become an anonymous, rule-driven bureaucracy of technocrats. I used an ecological perspective to show how the EU had been born in the aftermath of the Second European Thirty Year War (1914-1945) as a passionate movement to avoid further conflict among the nations of Europe. After initial success, greatly aided by the rebuilding of Europe’s shattered infrastructure (catalyzed by theMarshall Plan), it became a series of increasingly ambitious economic and political projects. In that process, however, like all successful institutions, it became much larger, more calculative, rule-driven and bureaucratic. The stories told by economists and bureaucrats are rarely compelling and, as the original narrative was lost, means became ends-in-themselves.
Economic attachments are fragile. We may work for money, but we live for story. An ecological perspective suggested that any “buy-in” would be temporary at best and that the resulting tepid commitment would fluctuate with the EU’s economic fortunes. In good times people might mildly favour the European enterprise, but in tough times they would tend to default to their national narratives and identities that are much more emotionally powerful. This is especially true if economic gains are spread unevenly and significant segments of the population feel left out and ignored. The result was widespread euroscepticism that, as Nigel Farage, the leader of Britain’s United Kingdom Independence Party (UKIP) proclaimed, was all about national identity. The Brexit Referendum became a contest between technicians in favour of the status quo and populists promising a return of a Little England narrative. The story won.
With Crisis Comes Opportunity
“Never let a good crisis go to waste” is a quote often attributed to Winston Churchill but never sourced. I think that the idea probably comes from Ancient China and perhaps the I Ching (Book of Changes). In my first book, Crisis & Renewal, I explored the role that crisis plays in the renewal of complex systems. Wind and fire, flood and pestilence clear away old growth in temperate forests and open up patches, where there is equal access to water and light. Here, young organisms fueled by nutrients from a recycled past, can flourish and renew the system.
In Britain it seems likely that the old political party arrangements no longer reflect the new divisions in the electorate. The old bitter arguments about means – varieties of capitalism or socialism – may have been replaced by a sharper disagreement about ends and alternative narratives – Little England or Great Britain? The Labour Party seems to be a “walking ghost”. It performed poorly in the referendum, with many of its members ignoring its call to “Remain”. Its leader, Jeremy Corbyn, now faces a leadership contest that, even if he wins, leaves the party divided and in poor shape to fight a general election. From the Right Nigel Farage and UKIP threaten the Conservative Party. Indeed it was this threat that David Cameron tried to quell by agreeing to a referendum in the first place. Perversely, he has succeeded only in reinforcing UKIP, clearing the way for them to become a political power domestically. So the Brexit crisis may act as a catalyst for the reform and reconfiguration Britain’s political parties, something that would be extraordinarily difficult to do in normal times.
As for the EU, it’s time for its leaders to reflect upon the entire project. Those with direct experience of World War II are nearly gone and with their passing the founding narratives of the EU become a distant memory. The administrative integration of the EU’s members needs to be needs to be slowed and even rolled back. The creation of the Euro was a bold but premature move, freezing the system when it still needed significant wiggle room. All the attention should be on a regenerating the European narrative and the creation of compelling experiences that build and maintain it. It won’t be easy. The challenge was well stated by the late historian Tony Judt in his paradoxical thesis that Europe has been able to rebuild itself politically and economically only by forgetting the past, but that it can define itself morally and culturally only by remembering it. Perhaps it’s time to start the process again with the generations born since 1945.Change, General | Tagged American government, Anglo-Saxon capitalism, complex systems, crisis, David Cameron, destruction, directdemocracy, ecological perspective, Founding Fathers, Great Britain, James Madison, Jeremy Corbyn, Little England, means and ends, Nigel Farage, renewal, representative democracy, rule by experts, rule by faction, Senate, Tony Judt | Leave a comment
It’s easy to be critical of business books. What had been a dull cottage industry until the publication of Tom Peters; and Bob Waterman’s In Search of Excellence (1982) became an exuberant enterprise that churns out a vast number of products in many subcategories. Business books, in other words, have become a big business. The motives and abilities of the writers who toil in these segments — self- help, how-to, CEO biographies, corporate narratives, big-picture panoramas, focused functional pieces, to name a few— are as widely varied as the categories themselves. Serious research-based, academic efforts, sometimes well written but often full of impenetrable jargon, share shelf space with ghostwritten executive vanity puffs: sweet confections designed to buff images. There is a steady deluge of books from consultants, for whom business books are, at a minimum, thick business cards and essential to establishing their credentials.
As is the case with every genre, a few of these books are fantastic, some are good, and many are, alas, quite bad. At times, business books can read like expanded articles, bloated blogs, or padded PowerPoint presentations. Many writers assume that success implies capability and we can all become successful simply by studying success. The evidence for this is equivocal at best and riddled with attribution bias (our tendency to take credit for our successes while blaming failures on factors beyond our control). Much business writing poses an even subtler problem: a failure or perhaps a reluctance to recognize that while the “whats” in business — desirable outcomes — are generic, the “hows” are particular, specific to each and every organization. It’s true, for example, that an enterprise’s strategy and organization must be “aligned,” but what that means and how to do it in this organization, with our people, right here, right now is much less obvious. Organizations are complex systems, in which cause-and-effect is nonlinear, path-dependent (history matters), and often unknowable in prospect. Deciding what to do (or not do), and how and when to do (or not do) “it,” is a matter of judgment and experience, as managers try to accomplish short-term objectives while keeping their longer run options open. As a result, consumers of business books that offer simplistic checklist-driven solutions run the risk of being trapped between one-off stories that cannot be replicated and universal principles that cannot be practiced because they are too abstract.
If they can’t tell us what to do, how can business books help in such a world? And how, in the age of 140-character tweets, disappearing SnapChat texts, and highly attenuated attention spans, can we justify spending hours, or a whole day, engaging with a 400-page volume? As a professional consumer (over the years, I have reviewed nearly 150 books for s+b), producer (I’ve written three myself), and avid fan, I can think of three principal reasons.General | Tagged business books, management, meaning, narrative | Leave a comment
“There seems to be something wrong with our bloody ships today…” remarked Vice Admiral David Beatty to his Flag Captain. Beatty was commander of the Battle Cruiser Fleet at Jutland, and his cool comment belied the scale of the catastrophe. It was 4.26 pm on May 31, 1916 and from the upper bridge of the battle-cruiser Lion he had just seen her sister ship, Queen Mary, disappear in a shattering blast as both main magazines exploded. Twenty minutes earlier another battle-cruiser, the Indefatigable, had vanished in a sheet of smoke and flame and, although Beatty did not know it at the time, the Lion herself had narrowly missed a similar fate only by flooding her Q turret magazine with sea water.
At the Battle of Jutland, the greatest sea battle of all time, the British Navy would lose three battle-cruisers carrying over three thousand men in less than three hours. It was not bad luck, it was bad management: the result of the Navy’s inability to manage a complex system from design through to execution. For the roots of the disaster lay in the design of the ships over a decade earlier. Thus the problem was systemic and Beatty’s puzzled comment represents one of the more dramatic instances of the bewildered reaction of a CEO to symptoms of systemic problems in the field. Continue reading →Posted in Change, General | Tagged battle-cruiser, Bismarck, complex systems, context, David Beatty, HMS Hood, HMS Lion, Horace Hood, Indefatigable, innovation, Invincible, Jutland, Nelson, Queen Mary, Trafalgar | Leave a comment
In Landmarks of Tomorrow (1959) Peter Drucker wrote “We still profess and we still teach the world-view of the past three hundred years… a Cartesian world-view.” It is a world-view redefined by Lord Kelvin (1824-1907): “… when you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely, in your thoughts, advanced to the stage of science, whatever the matter may be.” Everyone in management knows it as “If you can’t measure, you can’t manage it”, an aphorism often incorrectly attributed to Drucker. Given his attitude toward Kelvin’s world-view, he would never have said anything like that.
The Cartesian world-view assumes that the whole is equal to the sum of its parts. It is a static, mechanical world, where all causality is linear. Inertia is the norm, conscious, deliberate thought is the only valid form of inquiry and science is the only valid form of knowledge. Drucker wrote, however, that a new world-view was emerging: “Underlying the new concepts of modern physics is a unifying idea of order. It is not causality, though, but purpose….The new world-view, in addition, assumes process. Every single one of these concepts embodies in it the idea of growth, development, rhythm, or becoming. These are all irreversible processes…” Later he contends, “We need…a strict discipline of qualitative and irrevocable changes such as development, growth or decay. We need rigorous methods for anticipation of such changes. We need a discipline that explains events and phenomena in terms of their direction and future state rather than in terms of cause – a calculus of potential, you might say, rather than one of probability. We need a philosophy of purpose, a logic of quality and ways to measure qualitative change. We need a methodology of potential and opportunity, of turning points and critical factors, of risk and uncertainty, constant and timing, “jump” and continuity. We need a dialectic of polarity in which unity and diversity are defined as simultaneous and necessary poles of the same essence.” (my emphasis)Change, General | Tagged Berlin, change, Descartes, Drucker, ecological perspective, Iraq, judgement, Kelvin, management principles, measurement, purpose, science, systems thinking, weight-loss | Leave a comment
I am now publishing my blogs both here and on LinkedIn. In this case this article is already on the site (in Latest News About the Book), so just the link is here. It’s an article I wrote last year for Leading & Change, an online magazine: Cultivating Organizations: The Background to The New Ecology of LeadershipPosted in Change, General | Tagged change, complex systems, ecocycle, ecological perspective, means and ends, The New Ecology of Leadership | Leave a comment ← Older posts
Subscribe to David's Blog
- March 2018
- July 2017
- April 2017
- November 2016
- October 2016
- June 2016
- May 2016
- April 2016
- March 2016
- December 2015
- November 2015
- October 2015
- May 2015
- March 2015
- January 2015
- December 2014
- November 2014
- September 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
- August 2013
- July 2013
- June 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
- December 2012
- November 2012
- October 2012
- September 2012
- August 2012
- July 2012
- June 2012
- May 2012
- April 2012
- March 2012
- February 2012