AUGUST, 2006
In this issue:
1. Reader Feedback
2. Miscellaneous Newsbits
3. August Editorial: “Overcoming Fundamentalism in Business”
4. Preview: Next Month’s Editorial
5. Quote of the Month – William James
6. Hot Link of the Month
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1. READER FEEDBACK AND FOLLOW-UP
Last month’s editorial, “The Ubuntu Way,” was inspired by a conversation I had with career peacemaker Susan Collins Marks, a native of South African. A SVP with Search for Common Ground, Susan was a member of the Western Cape Regional Peace Committee set up under South Africa’s 1991 National Peace Accord. In a recent interview for Yes! A Journal for Positive Futures, she stated, “Everyone has a different truth.” Never have we been so excruciatingly reminded of that reality than with the perpetuating insanity in the Middle East. Susan told her interviewer that the work of peacemaking “is largely a rehumanizing process, calming the fears by destroying dehumanizing stereotypes. When two enemies truly hear and understand each other’s stories, they discover their shared humanity.”
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2. MISCELLANEOUS NEWSBITS
International Spirit at Work Awards
The fifth annual International Spirit at Work Awards Ceremony, and second annual International Spirit at Work Awards and Alumni Conference, will be held October 27th through 29th at the Garrison Institute in New York. The awards were inspired by Willis Harman (1919-1997) and I have been asked to host the ceremony by “re-presencing” Willis sharing a few personal anecdotes from my times with him. I was privileged to chair the selection committee for the first awards in 2002 and invite you to consider joining us at this three-day residential gathering. Here is the link for more.
Philosophy for Business; a New Article
This UK-based electronic journal, published by the International Society for Philosophers, has published another one of my pieces in its July edition (in addition to the one the ran in June), “‘Why Good People Do Bad Things in Business: The Negative Influence of Systems on Human Behavior;” please read the editor’s intro too.
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3. AUGUST EDITORIAL
(adapted from article published in June ’06 issue of Philosophy for Business)
Adam Smith, considered by many to be the “father of capitalism” and the creator of the “invisible hand” metaphor for the free marketplace, was a moral philosopher. He lived in the 18th Century before mass advertising, the practice of “creating demand” and the proliferation of publicly-traded stocks and stock exchanges. He could not have envisioned how the marketplace could become so manipulated, or “un-free.” Neither, I suppose, could he have envisioned the myopic focus on ever-growing profits and such short-term thinking as we find in today’s business climate.
Fundamentalists in business are fond of referencing Smith’s invisible hand as a traditional rationale for their strict adherence to bottom-line fixation. They like to cite experts, as if quoting holy scripture, usually in short passages or phrases. In the 1970s, U.S. Presidential Economic Advisor Milton Freidman opined the only social responsibility for a business is to produce profits for its owners. Invisible handers are quick to echo Friedman’s opinion. After all, Friedman won the Nobel Prize! How could he have it wrong?
About the same time, American transformation theorist George Land published Grow or Die in which he compared growth patterns in nature with organizations. Birth, death and transformations were explored as organic and evolutionary.
Adam Smith
Recent decades have seen a radicalized interpretation of growth in organizational leadership. “Grow or die” has taken on a sort of imperialism in boardrooms around the world. The fact that things in nature are constantly expanding, growing, dying and evolving has become narrowly defined as economics being the sole benchmark for business. Or, as we often hear, “It’s all about the money!” To “grow or die” is no longer a theory or philosophy in business; it is now the accepted “reality” of the day in the eyes of all but a few exceptional business leaders. It is such a common assumption in the mainstream that the media and the general public accept it as normal.
In addition to this growing bottom-line absolutism there’s been an intensification of pressure to generate greater profits in a shorter period of time. Not only is growth expected to be non-stop, so is the rate of increase!
Exclusive focus on the financial bottom-line is the epitome of fundamentalism in business, adhering to an absolutist viewpoint with a certainty that rivals papal infallibility. Trees and animals in Nature are constantly growing or aging, this is true. New leaves grow while older ones die. In the animal kingdom, skin and fur are shed while new growth takes their place. Some growth is visible; some not. There is always something dying and something being born. This is how Nature works. But focusing exclusively on economical measures, which is unnatural, will eventually kill the organism we call corporation like cancer cells running amuck.
Profit and economics are an essential part of any business but they are not the ONLY reason business exists. To take such a fundamentalist point-of-view is akin to saying the sole purpose of the human body is to circulate blood. Oxygenated blood is essential to staying alive but our bodies have many other functions. Similarly, businesses serve their markets by filling a need or improving upon some product or service. They provide noble engagement for their members and, generally, aim to improve the human condition in some way. They provide environments where workers learn and grow, contribute to their communities and, as all businesses must, deliver a return on investment to their owners.
Grow or Die was a compelling title for Land’s book which may explain why it was so widely adopted as a mantra for those who like to “quote the scriptures.” Thus Land joined Smith, Freidman and other oft-cited authorities for the fundamentalists who love sound bytes that reinforce their cherished beliefs, even if they take the authority’s words out of context. Smith and Land certainly would object to the way their work is being distorted for fundamentalist motives.
An interesting trait of the human mind is to utilize any dogma which reinforces one’s worldview or beliefs, even if it means distorting the authors’ intent. This is how fundamentalism is born, whether the beliefs are about religion, the law, medicine, government, education or business. Any beliefs held as superior and reinforced by dogma can become fundamentalist. In the case of business, if anyone has a propensity to be greedy, selfish or in a hurry to get rich, one only has to find a way to justify one’s behavior. What better way to justify than to regurgitate Adam Smith’s “invisible hand,” Nobel Laureate Freidman’s decree for exclusively seeking profit, or Land’s challenge to either “grow or die”?
Visionary futurist and social scientist Willis Harman would compare such a fundamentalist approach in business to the absurd notion of the human heart asserting that it was the most important part of the body. Based on this assertion, therefore, it should receive all the nourishment. All other parts of the body would be starved because they weren’t as important in the view of this imperious heart. Can you imagine how long a person’s heart would last if the kidneys, lungs, pancreas, brain and other vital parts were starved of nourishment in deference to the royal heart?
Corporations are human-made organisms, associations of human beings. To see this association as having one solitary purpose and responsibility, to grow only in economic terms, is such an extreme view that implosions like what happened to Enron, WorldCom and other corporate collapses will become more and more commonplace.
The business philosophy expressed by Adam Smith in the capitalists’ bible, The Wealth of Nations (1776), was set in a context of morality. You rarely hear the fundamentalists reference his other book which was published a few years earlier, Theory of Moral Sentiments (1759). Smith’s genius allowed for a truly free market to self-correct and ultimately serve everyone’s welfare. The pursuit of self-interest was not incompatible with morality. Modern capitalism has devolved over the past two and a half centuries into a Darwinian means of getting as much as possible for a few at the expense of the many. Many businesses rely more on complying with laws and regulations that they do on their own consciences, or morality. This is not only a mutation of what Smith had in mind, it is unsustainable.
It is time for an explicit business cosmology that echoes Smith’s principles and reflects the realities of the day. This cosmology would recognize: 1. people can be manipulated to make certain buying decisions through clever and subliminal advertising, 2. laws and regulations favor some classes over others and 3. day-trading speculation has replaced the true investment of capital.
The healthy organism, human-made or Nature-made, is balanced, vital and sustainable, with all its components or cells functioning in collaborative harmony. There are many ways to grow, ways that may not fit into the single focus on the fiscal bottom-line. Nourish all parts of the organization and it will be a healthier place to work, people will have more fun and it will likely last longer if it is satisfying a real market need.
This is when enterprise comes alive, when people are openly excited to be working in, doing business with and investing in enterprise.
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4. NEXT MONTH’S EDITORIAL:
“The New Literacy”
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5. QUOTE OF THE MONTH:
“A great many people will think they’re thinking when they are merely rearranging their prejudices.” – William James
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6. HOT LINK OF THE MONTH
Berrett-Koehler Publishers, Inc.: publishers of progressive business books; based in San Francisco, California; have published three of my compiled anthologies – Working Together (with Angeles Arrien), When the Canary Stops Singing (with Pat Barrentine) and New Traditions in Business.
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KEYNOTES THAT MAKE YOU THINK!
John delivers keynotes talks to corporations, associations and conferences. A list of his topics can be viewed at Keynotes That Make You Think! For references check: What people have said about John as a speaker.
John is a San Francisco writer and businessman-futurist. His latest book is Getting to the Better Future: A Matter of Conscious Choosing. More about John can be found at About.