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Managing as if the world matters

Mon, 14th Jan 2019

As the transmission belt between ideology and the behaviour of companies, the most important actors in the modern economy – and one moreover that transmits both ways via economic and political power – management has always been much more important than most people imagine. Never mind Brexit: on the way it develops from here may now depend the future of the world.

It has done so before. In the decades after WWII, the (mostly) virtuous circle of rising profits feeding into investment in new plant and above all good jobs, fuelled a (mostly) balanced rise in prosperity across Western economies that could not be matched in the rigid Soviet bloc. But as Henry Mintzberg has often insisted, the fall of the Soviet Union wasn’t a case of capitalism defeating socialism. It was a case of balanced, plural societies, comprising vibrant private, public and civic sectors, proving more flexible and productive than unbalanced ones consisting only of a public sector. Now, having learned the wrong lesson, the West, particularly the Anglophone West, is making the same mistake as the Soviet Union but in reverse: encouraging a rapacious private sector to exploit or eat everything else in its path.

The upheavals of 2016 allow us to connect up the suddenly visible economic dots: these, together with other manifestations of populism and and nationalism erupting like a plague of boils all over Europe, are the direct outcome of our own lack of balance, which, if left unchecked, will see our pretensions crumble as comprehensively as the Berlin Wall in 1989.

The irony is that what today’s malcontents, however crude their expression of it, actually want, is neither complicated nor outlandish. In a 2017 Legatum survey, respondents listed, in order, food, water, emergency services, healthcare, housing, jobs and education. A car and air travel came way down on the list, which probably hasn’t changed much since the 1950s, the main difference being that then everything on it was in the realm of the realistically attainable.

Now as then, the key ingredient is jobs, which are largely the creation of a vigorous private-sector – ie companies. The corollary, as commentators such as the FT’s Martin Wolf never tire of pointing out, is that how companies are managed and to what ends – the ideology of management – is a macroeconomic issue of the highest importance. In case there is any doubt just how high, here is Colin Mayer, former dean of Oxford’s Said Business School, in his much-noticed new book on the corporation, Prosperity:

With the emergence of the mindful corporation we could therefore be on the edge of the most remarkable prosperity and creativity in the history of the world. On the other hand we could equally well be at the mercy of corporations that are the seeds of our destruction through growing inequality, national conflicts and environmental collapse on scales that are almost impossible to conceive of today. We are therefore on the border between creation and cataclysm, and the corporation is in large part the determinant of what way we will go.

Our very future, he goes on, ‘depends on reinventing the corporation’. The good news is that that is perfectly possible – Mayer points to the six previous ages that it has evolved through since Roman times, steadily increasing its purview through public services, guilds, towns, universities, the church, hosplitals, trading, manufacture, transport, safekeeping, lending, insurance and financial instrument trading, as evidence of the corporation’s extraordinary Protean ability to adapt to and embrace new purposes and functions according to the demands of the times. The bad news is that this animate, dynamic form has been captured by an abstract, mechanistic management and governance model that prevents further evolution by positing a corporate ‘end of history’ converged on a one-dimensional shareholder-controlled profit-oriented enterprise model.

Changing that means changing the underlying ideology of management. And that won’t be easy. Back in 1998 Sumantra Ghoshal and I wrote a piece for the FT about the spread of ‘asshole management’ – ‘an infernal cycle’, driven by the demands of the capital markets for ever greater returns, ‘in which managers, change agents and academics were all collaborating to make both work and leadership … a crippling  and inhuman experience’. Twenty years later that ‘profoundly coercive system’ has tightened more than we could have imagined as activist hedge funds and private equity have squeezed companies until the pips – pensions, careers, welfare and now jobs – squeaked and popped. Surveillance capitalism, allowing companies to manipulate and hack humans – to the extent of compromising free will, in the view of some observers – has added another vicious twist to the screw. In self-fulfilling prophecy, this has now become the norm: we no longer imagine there is an alternative. Ruthlessness begets ruthlessness, so we now have asshole companies and asshole (‘hostile’) government departments as management and corporations recast everything they come in contact with in their own reductive, inhuman image. It’s no accident that the US now has an asshole president, the perfect incarnation of of a capitalism that makes assholes of us all.

Yet could we, just maybe, have reached – apologies – peak asshole? The idiocies in Trump’s self-contradictions are too gross to be treated with anything other than contempt. Big tech’s excesses have triggered a backlash that is gathering momentum.The Orwellian ‘reversifications’ (John Lanchester’s term) that current management systematically leads to – banks that make people poorer, hospitals that kill, welfare that immiserates, a Home Office that creates aliens not citizens – are beginning to create a similar outcry. The insulting contrast between the jobs, housing and public services that we want and the HS2, Heathrow expansion and Brexit that we get has come into focus like never before. Above all the miasma of fascism drifting up from our fractured societies puts any idea that we can return to business as usual out of the question.

In their 1986 blockbuster Megatrends, John Naisbitt and Patricia Aburdene wrote: ‘Whenever a new technology is introduced into society, there must be a counterbalancing human response… We must learn to balance the material wonders of technology with the spiritual demands of our human nature’. That’s true. But just so there’s no misunderstanding, the technology that most urgently needs humanising is the meta-technology that underpins how all the others are used, management.



                                                                                                                                                                                                                    














 

 


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User comments

Andy :: 22nd Jan 19
As per my comment in the previous article, could it be that the expansion of self-managing teams in their re-invention of the organisation be the source and outworking of the humanising of work?
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