The Guardian today carries an obituary for Robert Oakeshott (1933-2011), pioneer of worker-cooperatives and employee-owned enterprises, whom I once invited to speak at the University of Zimbabwe and with whom I then spent an enjoyable dinner in Harare, at a time when the Government of Zimbabwe was sincerely promoting industrial and agricultural worker co-operatives, supported by many western aid donor agencies.
Archive for the 'Corporate culture' Category
One annoying feature of the verbal commentariat is their general lack of real-world business experience. A fine example has just been provided by political blogger Marbury, who derides Gordon Brown for not asserting himself when Prime Minister over his Cabinet Secretary on the matter of an enquiry into voicemail hacking at certain newspapers.
Well, to be fair to Gordon Brown, Marbury has clearly never led an organization and tried to force the people below him to do something they adamantly oppose doing. No doubt, Brown when PM could have ordered the Cabinet Secretary to implement a public enquiry, but every single person in the chain of command could then have: (a) leaked the CabSec’s advice opposing the instruction, and/or (b) exercised their pocket veto to delay or prevent the enquiry happening, and/or (c) implemented it in a way which backfired upon Brown and the Cabinet. No rational manager tries to execute a policy his own staff vehemently oppose, even when, as appears to be the case here, he knows he has morality, the law, good governance, and the public interest all on his side.
For some time, I have been writing on these pages that the currently-fashionable paradigm of the Information Society is inadequate to describe what most of us do at work and play, or to describe how computing technologies support those activities (see, for example, recently here, with a collection of posts here). Most work for most people in the developed world is about coordinating their actions with those of others – colleagues, partners, underlings, bosses, customers, distributors, suppliers, publicists, regulators, und so weiter. Information collection and transfer, while often important and sometimes essential to the co-ordination of actions, is not usually itself the main game.
Given the extent to which computing technologies already support and enable human activities (landing our large aircraft automatically when there is fog, for example), the InfoSoc paradigm, although it may describe well the transmission of zeros and ones between machines, is of little value in understanding what these transmissions mean. Indeed, the ur-text of the Information Society, Shannon’s mathematical theory of communications (Shannon 1948) explicitly ignores the semantics of messages! In place of the InfoSoc metaphor, we need another new paradigm, a new way to construe what we are all doing. For now, let me call it the Joint-Action Society, although this does not quite capture all that is intended.
I am pleased to learn that I am not alone in my views about InfoSoc. I recently came across an article by the late Peter Martin, journalist, editor and e-businessman, about the lessons from that great disaster of privatization of Railtrack in the UK. (In the 1980s and 90s, the French had grand projets while the British had great project management disasters.) Here is Martin, writing in the FT in October 2001 (the article does not seem to be available online):
Railtrack had about a dozen prime contractors, which in turn farmed out the work to about 2,000 subcontractors. Getting this web of relationships to work was a daunting task. Gaps in communication, and the consequent “blame culture” are thought to be important causes of the track problems that led to the Hatfield crash which undermined Railtrack’s credibility.
. . .
These practical advantages of wholesale outsourcing rely, however, on unexamined assumptions. It is these that the Railtrack episode comprehensively demolishes.
The first belief holds that properly specified contracts can replicate the operations of an integrated business. Indeed, on this view, they may be better than integration because everyone understands what their responsibilities are, and their incentives are clear and tightly defined.
This approach had a particular appeal to governments, as they attempted to step back from the minutiae of delivering public services. British Conservative governments used the approach to break up monolithic nationalised industries into individual entities, such as power generators and distributors.
They put this approach into effect at the top level of the railway system by splitting the task of running the track and the signalling (Railtrack’s job) from the role of operating the trains. It is not surprising that Railtrack, born into this environment, carried the approach to its logical conclusion in its internal operation.
. . .
In 1937, the Nobel prize-winning economist Ronald Coase had explained that companies perform internally those tasks for which the transactional costs of outsourcing are too high.
What fuelled the outsourcing boom of the 1990s was the second unexamined assumption – that the cost of negotiating, monitoring and maintaining contractual relationships with outsourcing partners had dropped sharply, thanks to the revolution in electronic communications. The management of a much bigger web of contractors – indeed, the creation of a “virtual company” – became feasible.
In practice, of course, the real costs of establishing and maintaining contracts are not those of information exchange but of establishing trust, alignment of interests and a common purpose. Speedy and cheap electronic communications have only a minor role to play in this process, as Coase himself pointed out in 1997.
. . .
And perhaps that is the most useful lesson from the Railtrack story: it is essential to decide what tasks are vital to your corporate purpose and to devote serious resources to achieving them. Maintaining thousands of miles of steel tracks and stone chippings may be a dull, 19th century kind of task. But as Railtrack found, if you can’t keep the railway running safely, you haven’t got a business.”
Reference:
Peter Martin [2001]: Lessons from Railtrack. The collapse has demolished some untested assumptions about outsourcing. Financial Times, 2001-10-09, page 21.
Claude E. Shannon [1948/1963]: The mathematical theory of communication. Bell System Technical Journal, October and November 1948. Reprinted in: C. E. Shannon and W. Weaver [1963]: The Mathematical Theory of Communication. pp. 29-125. Chicago, IL, USA: University of Illinois Press.
Here we go again! We have another blogger predicting the end of the office. Funny how it’s almost always bloggers and journalists and thinktank-swimmers doing this – always people whose work, most of the time, is by themselves, and who therefore fail to understand the nature of actual work in modern organizations. As I’ve argued before, workplace interactions are primarily about the co-ordination of actions and the assessment of people’s intentions concerning these actions, not (or not merely) about sharing information. Why did Barack Obama summon the Chairman and CEO of BP to the Oval Office earlier this week? Why was the CEO also called to testify before Congress? Why didn’t the President or the Congressional Committee simply place a conference call? Because it is very difficult, perhaps even impossible, to accurately assess another person’s intentions without immediate physical proximity and face-to-face interaction with said person.
If all you are doing is writing a blog or researching a story, perhaps you don’t ever appreciate this fact about work. But anyone tasked with doing something other than writing knows it. Seth Goodin thinks that within 10 years TV programs about office work will seem to be “quaint antiques”. I bet him they will not at all. Moreover, I bet the people in those offices will still be using paper, still having meetings, and still talking by the water-cooler. In fact, while you’re placing my bets, put me down for 100 years, not 10.
Writing about the macho world of pure mathematics (at least, in my experience, in analysis and group theory, less so in category theory and number theory, for example), led me to think that some academic disciplines seem hyper-competitive: physics, philosophy and mainstream economics come to mind. A problem for economics is that the domain of the discipline includes the study of competition, and the macho, hyper-competitive nature of academic economists has led them, I believe, astray in their thinking about the marketplace competition they claim to be studying. They have assumed that their own nasty, bullying, dog-eat-dog world is a good model for the world of business.
If business were truly the self-interested, take-no-prisoners world of competition described in economics textbooks and assumed in mainstream economics, our lives would all be very different. Fortunately, our world is mostly not like this. One example is in telecommunications where companies compete and collaborate with each other at the same time, and often through the same business units. For instance, British Telecommunications and Vodafone are competitors (both directly in the same product categories and indirectly through partial substitutes such as fixed and mobile services), and collaborators, through the legally-required and commercially-sensible inter-connections of their respective networks. Indeed, for many years, each company was the other company’s largest customer, since the inter-connection of their networks means each company completes calls that originate on the other’s network; thus each company receives payments from the other. Do you seek to drive your main competitor out of business when that competitor is also your largest customer? Would you do this, as stupid as it seems, knowing that your competitor could retaliate (perhaps pre-emptively!) by disconnecting your network or reducing the quality of your calls that interconnect? No rational business manager would do this, although perhaps an economist might.
Nor would you destroy your competitors when you and they are sharing physical infrastructure – co-locating switches in each other’s buildings, for example, or sharing rural cellular base stations, both of which are common in telecommunications. And, to complicate matters, large corporate customers of telecommunications companies increasingly want direct access to the telco’s own switches, leading to very porous boundaries between companies and their suppliers. Doctrines of nuclear warfare, such as mutually-assured destruction or iterated prisoners’ dilemma, are better models for this marketplace than the mainstream one-shot utility-maximizing models, in my opinion.
You might protest that telecommunications is a special case, since the product is a networked good – that is, one where a customer’s utility from a particular service may depend on the numbers of other customers also using the service. However, even for non-networked goods, the fact that business usually involves repeated interactions with the same group of people (and is decidely not a one-shot interaction) leads to more co-operation than is found in an economist’s philosophy. The empirical studies of hedge funds undertaken by sociologist Donald MacKenzie, for example, showed the great extent to which hedge fund managers rely in their investment decisions on information they receive from their competitors. Because everyone hopes to come to work tomorrow and the day after, as well as today, there are strong incentives on people not to mis-use these networks through, for instance, disseminating false or explicitly-self-serving information.
It’s a dog-help-dog world out there!
Reference:
Iain Hardie and Donald MacKenzie [2007]: Assembling an economic actor: the agencement of a hedge fund. The Sociological Review, 55 (1): 57-80.
Since we so rarely have the chance to thank those who have influenced us, I have previously listed teachers and non-fiction writers who have influenced me, and listed the public lectures I have attended. I thought it appropriate also to list the people I have worked with whom I have admired and learnt from as managers, which I do here:
Victor Barendse, Andreas von Blottnitz, Will Bobb, Gene La Borne, Judy Bradford, Jan Buettner, John Cornish, Don Day, Wanchai Ekraksasilpchai, John Griffiths, Neill Haine, Ben Hancox, Tony Hawkins, Michael Heath, Jin-Young Hwang, Walter Kamba, Mathieu Lasalle, Marian McEwin, Michael Orr, Maureen Piche, Jerry Rossi, Leanne Thomas, Dennis Trewin, Henry Vandemark, Don Warkentin, Richard Wetenhall.
Effective leadership is context-specific: what works in one domain on one occasion may not work elsewhere or with the same people at other times. However, in looking across the people whose management skills I have learnt from, I realize there are some common features which most share to a greater or lesser extent. One is a sharp intelligence, which may be manifest in many diverse ways (verbally, mathematically, organizationally, etc). A second feature is a marked ability to read the emotions of others and to sense the social dynamics of a group or a meeting. Good managers know their audiences well. A third feature is an ability to read their own emotions (a skill which is surprisingly uncommon) together with an ability to control the public expression of these emotions when it so behooves them; most of the people I have listed would make good poker players. A fourth feature is an integrity of purpose – enthusiasm, honesty, transparency, directness, fairness, a willingness to argue for positions, and a willingness to consider evidence before reaching conclusions. Finally, all of these people are effective at getting things done – not a skill to be sneezed at, despite the generally low status that doing things has among the chatterati.
I started talking recently about getting-things-done (GTD) intelligence. Grant McCracken, over at This Blog Sits At, has an interview with Paula Rosch, formerly of fmcg company Kimberly-Clark, which illustrates this nicely.
I spent the rest of my K-C career in advanced product development or new business identification, usually as a team leader, and sometimes as what Gifford Pinchot called an “Intrapreneur” – a corporate entrepreneur, driving new products from discovery to basis-for-interest to commercialization. It’s the nature of many companies to prematurely dismiss ideas that represent what the world might want/need 5, 10 years out and beyond in favor of near-term opportunities – the intrapreneur stays under the radar, using passion, brains, intuition, stealth, any and every other human and material resource available to keep things moving. It helps to have had some managers that often looked the other way.
Alex Goodall, over at A Swift Blow to the Head, has written another angry post about the bonuses paid to financial sector staff. I’ve been in several minds about responding, since my views seem to be decidedly minority ones in our present environment, and because there seems to be so much anger abroad on this topic. But so much that is written and said, including by intelligent, reasonable people such as Alex, mis-understands the topic, that I feel a response is again needed. It behooves none of us to make policy on the basis of anger and ignorance.
The Sydney Morning Herald tomorrow reports that staff at the New South Wales Law Reform Commission are being invited to apply for their own positions. Apparently, the current staff there are staying in their posts too long, thereby reducing staff turnover, with the serious consequence that:
Zero turnover means that no opportunities arise to attract, develop or retain highly skilled employees.”
It’s always the damn employees who cause trouble for the proper functioning of the Human Resources Department. How can HR possibly execute policies to retain valuable staff if nobody ever threatens to leave!?
Visiting my local dojo this week, I saw an advert for a Workaholics Anonymous meeting that also takes place there. They meet fortnightly, on Saturdays from 10 am to 12 noon. What a pity, since Saturday mornings are my most productive work-times of the week!