08/03/2012 § 1 Comment
We each see the world in a different way, from our own perspective. Things that are glaringly obvious to some of us are invisible to others. If I look at writing in Chinese it is meaningless squiggles – to someone else it can be the most enlightening thing they have ever read. A botanist can look at a meadow and see 50 different species of plant – to others it just looks like grass.
I was reminded of this truth last week, after I attended an event with the theme “Ownership – the only thing that matters for long term growth? Ownership is one of my themes, as regular readers will know, and it seems to be something of a hot topic at the moment.
Although the event was billed as a forum, it was largely about entertainment and “networking”, the focus of the event being three business celebrities giving their opinions on the theme. The first speaker (a market fundamentalist perhaps?) thought it would be a good thing if there were more competition amongst forms of ownership. The second speaker was adamant that any connection between ownership and growth was insignificant in comparison to the importance of leadership and management.
So far, so unsurprising. But the third speaker managed to both entertain and surprise me. A seasoned business journalist, he was the master of the pithy and witty phrase. He started off by saying he saw an organisation as a biological system rather than a machine. He then, with considerable insight I felt, listed various ownership models and associated behaviour patterns. Partnerships, he observed, are good at maintaining ethical standards because knowing you are personally liable for your colleagues actions means you keep a close eye on him or her. Cooperatives have poor management because the members are not sufficiently involved in the business to hold the management to account, or move them on when they are not working. Ditto with other mutuals (such as building societies and mutual assurance companies). But mutuals do tend to be more resilient than shareholder-owned businesses because they have less incentive to take big risks.
What took me aback was that after all this analysis, which matched much of my own observations, he concluded by saying that he agreed with the previous speaker that leadership and management was far more important than ownership. It seemed to me that this contradicted pretty much everything he had said before. It was certainly inconsistent with a view of an organisation as a biological system. He talked of management as if it was a small group of people who ran the business. Yet in a biological system, management is an emergent property of the system, not a function of one small part. And since ownership is a vital part of the system, it has a major effect on the management. If you want good management then of course you pay attention to who you appoint in key roles, but you also need to set up structures and processes that connect those people with the rest of the organisation and with the outside world, that support them in their work and that hold them to account for their actions and decisions. This is how you get better management over time – by creating a better system.
At first I couldn’t understand why this intelligent observer couldn’t see the contradictions in what he was saying. But in fact this blindness to the system effects in an organisation is, in my experience, quite normal. People see the individuals that their eyes present them with, and don’t see the patterns of behaviour that lie behind, that influence their every thought and action. Society blames the individual (Fred Goodwin, David Cameron, whoever) and ignores the system.
To me this is a classic case of not being able to see the wood from the trees. If you want to understand trees, studying lots of individual trees is a sound approach. But if you want to understand the wood, then as well as studying trees, you need to pay attention to the whole network of relationships between all the elements of the wood; the trees, the birds, mammals, insects, microorganisms, rain, air, and so on. It is called life ☺
I find the rational mind struggles to cope with all this complexity, but the intuition can do this quite effortlessly. So most doctors, schooled ruthlessly to use the rational mind, struggle to understand more holistic approaches such as homeopathy, acupuncture, Chinese medicine and so on. They are focused on the parts, which they can see and touch and feel, rather than the relationships between the parts. Of course you can’t actually see a relationship – you have to intuit it. This is why, in a time and a society where rational thinking is still the dominant way of engaging with life, I get blank looks or denials when I tell people that if we want to see different behaviour in business or in society as a whole, we need to look at the system. For me it is obvious but most people don’’t seem to see the relationships and hence are not aware a system even exists. One of these left brain types once famously said “There is no such thing as society”. She just couldn’t see it.
But then, seeing the world as a set of relationships is just one way of seeing the world. It’s my way. What’s yours?