GROWTH. TRANSFER. LEGACY.
As one year ends and the next one begins, it seems obligatory amidst the celebrations to also consider the gripes, disgruntlements and unfinished business trailing us as we trundle forward into 2018. And we’ve all got a bunch, don’t we? A group of friends and I began our inventory New Year’s Eve over dessert, and a spirited discussion lasted late into the evening and sparked up again the next day.
For me it was an occasion to lament the absence of strong, unifying leaders on our national stage, and to once again pose the test question I raised a year ago in a post about Steve Bannon: which of our leaders are convincingly advancing a strategy for the country that will make us successful in the world, optimally benefit our citizens, and stabilize our national politics? Despite the hopes of many, the consensus answer was no one.
The national stage presents a more challenging environment for aspiring leaders than ever. The prolonged divisiveness and resultant stalemate in Washington dissuades many from seeking electoral office, and few hold out hopes of great leaps forward any time soon. The collective sense of our group was that work at the local, grassroots level is the best hedge we all have against discouragement, and most in our number have found meaning there in the past year. One friend concerned by low voter turnout in our last national election devoted herself to getting out the vote in her area of northern Virginia. Another friend works in different ways to educate and empower the next generation of women leaders. A third is involved in an intensive training for school teachers to embed leadership skill-building in their teaching of the full range of academic subjects.
All are choosing to make a stand, to take a personal leadership role wherever they find themselves, that will help bring about the change they want to see in the world. It’s in that spirit that I bring forward a piece about business leadership in the 21st Century – context for ‘answering the call’ of leadership – that I wrote some while ago and maintain as a page on my website. I adapt it here to welcome in 2018.
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Leadership in a business enterprise is a difficult, dynamically changing task. It is the highest and best use of certain kinds of talent that there is; so, it’s not for everyone, and not something to take lightly. Many are called, but few are chosen, goes the saying. If you hear the call, there is no guarantee you’ll be good at the job. In fact, few leaders pass a whole career without tasting failure. On the other hand, if you hear the call, you will never forget whether you answered it. It will sit there in the Inbox of your Ambition, on the Bucket List of your Work Life and haunt you, the less travelled road diverging in the wood that could make all the difference between a life fully lived and one with nagging questions.
Maybe you’re the organized one in a startup, considering whether you should opt for the CEO role. Maybe you’re the Director of Brand Marketing, considering whether you should vie for the VP Marketing role. Maybe you’re the head of strategy and corporate development, considering whether you should take a business unit president role. Maybe you’re a CPA in an audit firm, considering whether you should take the VP Finance role at your favorite client.
So, it says here that if you hear the call, if you feel the urge and sense the possibility that if you tried this, you could make a difference, then you should give it a try. You owe it to yourself. And if not to yourself, maybe you owe it to your team, or your company or your boss or your spouse or your children or your parents or your god or your destiny . . . or someone.
If that feeling that you owe it to someone is talking to you, listen. It’s an essential prerequisite of leadership. For you it presents a promise like no other … for there is nothing quite like the experience of having other people look to you to lead the way and count on you to get it right.
The passing of one year into the next is a time of reflection, a time for stepping back and thinking big thoughts, a time to build up steam for the next big push forward. In that vein, here are two ideas –Two Things to Ponder – to carry with you on your leadership journey, vital parts of the context for exercising your leadership role. In my view, every leader should find a way to reflect them explicitly in practice.
Thing One is addressed most pointedly to graduates of our nation’s business schools. It is an emerging body of thought about management as a force for good, promulgated until his untimely death in 2004 by Sumantra Ghoshal, a prolific business researcher, writer and teacher with a global reach and perspective. He died on the brink of a fundamental reworking of the theoretical basis for education in management practice.
Driven by his belief that people are born good and only learn to act selfishly when threatened in some way, Ghoshal was vexed by two thinking modes dominating the practice of his academic colleagues. First, their propensity for discovering behavior patterns in their research, and then building theories and proposing management practice based on the assumption that people will always behave that way—which ignores the fact that people can learn and their intentions can change for the better. Second, the dominant influence of transaction cost economics and agency theory on all the management disciplines, from finance to strategy, such that companies are seen as markets whose organizational and interpersonal interactions are transactions to be managed so as to maximize shareholder value—which subordinates all nuance in motivation and the vast range of human emotional sentiments to economic success.
Ghoshal warned that if you teach people that these things are truths long enough, as management educators have done, enough of their students will behave accordingly, such that management education will enshrine destructive motivations without ever debating their place. In a world so instructed, good intentions – what Abraham Lincoln called ‘the better angels of our nature’ – become marginalized. “Bad management theory is at present destroying good management practice,” Ghoshal concluded, observing that the dominant leadership archetype of today, “hard driving, decisive, ruthless, heroic, independent, volitional, male” was an inevitable outgrowth of this inadequate theory and related teachings.
Finally, he saw legislative and regulatory forces acting at the beginning of this century, not without reason, as if driven by the fundamental premise “that management, left to itself, is evil and that society’s primary task is to prevent the exploitation of people by companies. This premise runs the risk of becoming a self-fulfilling prophecy, thereby further damaging the credibility and legitimacy of companies, as institutions, and of management, as a profession.”
These words from almost a decade before the Occupy Wall Street movement, the rise of the 99 Percent faction, the polarization of Congressional debate and the gridlocked economy of the Obama years in the US are a sober warning of the risks incurred when leadership does not embrace the challenge of being a force for good.
Ghoshal’s extensive research and writing covers a broad array of strategy, organization and management topics, but he had only begun to link his work into a comprehensive theoretical base and explore the implications before he died. While the momentum of the conversation collapsed when he passed away, the implications for practice are manifold.
The goal of my work and yours, if you so choose, is to reenergize leadership’s engagement with choices in the critical few domains that matter – strategy and organization, engagement and execution, managing self and other – from the perspective of leadership as a force for good.
Thing Two is relevant for leaders in all organizations and at any level. It is a body of thought about sustainability, and the emerging recognition that the planet’s natural resources, which have been seen in practice as infinite, but are in fact finite, are currently being utilized in such a way that, absent fundamental changes in how we operate the global economy, the children of today’s young leaders will inherit a natural world on an irreversible declining path.
A leading spokesperson for this point of view is author Peter Senge, in his 2008 book with four co-authors, The Necessary Revolution: How Individuals and Organizations Are Working Together to Create a Sustainable World. Citing numerous scientific studies reporting highly elevated levels of CO2 in the environment and a 30- to 50-year lag for its full effects to be felt on temperature and climate, they argue we are confronted by an 80-20 Challenge – we make a 60-80% reduction in global emissions within the next 20 years, or face irreversible and uncontrollable effects of increased CO2 levels. The authors highlight some early examples of those taking up the challenge so as to show it’s possible to do so, and the examples are instructive and inspire hope.
More importantly, they also de-construct the thinking behind the crisis and encourage us to know its sources in our own thinking and actions. Like Ghoshal, their main point of engagement is around how we think. It’s this analysis of the underlying thinking that I believe most instructive for today’s leaders.
Here it is in brief: the Industrial Age system of thinking delivered economic growth and prosperity by optimizing production and consumption over other societal goods. This in turn led to unintended consequences in the natural and social spheres. Waste production was and still is seen as inevitable and a business opportunity. Resource depletion called and still calls for innovations in extraction and development of substitutes. Planning assumptions such as ‘energy is infinite and cheap . . . there will always be enough room to dispose of all our waste . . . basic resources such as water and topsoil are unlimited’ are still made without question, so inherent in the thinking that they are not called out explicitly as assumptions.
By implication, there is no problem the system produces that markets, new technologies and appropriate laws, regulations and enforcement methods can’t solve. In addition, negative social impacts, such as lost jobs, environmentally determined illnesses, and the societal consequences of economic inequities, since they are inevitable under this system of thinking, are hence acceptable side-effects of the economic production system.
There are of course countervailing forces. Constraints imposed by scarcity coupled with technological innovation and the ever-fresh appeal of the entrepreneurial economy are fueling an explosive growth in ideas and initiatives in both public and private sectors. These forces will undoubtedly help to re-balance availability, access and usage of natural resources.
But it’s this entire pattern of thinking that has led inevitably to the 80-20 Challenge. It is only by reversing this thinking in the ways we lead organizations going forward that we will stop continuously causing the crisis.
There is no easy recipe for this, and Senge and his co-authors wisely don’t pretend otherwise. One can’t topple grand institutions with siege tactics; they’ll just outwait you. Instead he points to grass-roots examples – the theme of our New Year’s Eve discussions – as the exemplars of the pathway forward. ‘Leadership is about how we shape futures that we truly desire, as opposed to try as best we can to cope with circumstances we believe are beyond our control.’
Applying Ghoshal’s thinking here, the implication is that the force for good that leaders can exercise is in finding ways to serve the interests of a sustainable world. Good things are happening. Activist voices fueled by social media are garnering attention and effecting positive change (e.g. Mighty Earth on meat industry pollution; DivestInvest on sustainable energy). Healthcare professionals are banding together around opportunities to sustain life in resource-challenged environments (e.g. 1for3.org in Palestine; Doctors Without Borders around the world). Business schools are now featuring courses on social and environmental responsibility as well as ethics (e.g. MIT, Wharton). Companies are tithing some percentage of their profit to sustainability efforts (e.g. runjanji.com); some go even further to ensure a sustainability focus across their supply chains (e.g. Patagonia). There’s also the emergence of “buy one give one” in recent years (e.g. Warby Parker; Tom’s) — though often a marketing tool and sometimes controversial, the reason it works is because consumers respond to it, essentially voting with their wallets; if it works for one business, we know other businesses will respond.
Turning the ship around is slow and tedious, but there is a discernible shift going on. The question for all of us is this: how will we contribute this year?
Comments? I’d like to hear your thoughts. Email me at email@example.com
 ‘Towards a Good Theory of Management’, in Sumantra Ghoshal on Management, p 12.
 The Necessary Revolution, p 372.
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