Tuesday, August 31, 2010


I wish I could have met Joe Scanlon. This fiery former prize fighter was a tough trade union leader who saved a steel company in Ohio from bankruptcy by convincing his union brothers and sisters to help save it. Such actions are not unheard of. Albert Koopman flung open the doors to participative management in South Africa at the height of labour unrest in the early 1980’s. I personally covered something similar at the Ergo Gold recovery plant near Brakpan, where the plan was developed between a local shop steward and a Human Resource manager. There are many more with varying degrees of participation and flexibility that show that we do not have to be trapped in this frightening and destructive confrontation we are witnessing in South Africa. It is proof again of the capacity for innovation and sustainable change at grassroots level despite any oppressive environment.

clip_image002[5]Where does all this anger come from? Anger that can lead to mob violence, leave patients dying in hospitals, and learners severely disadvantaged.

In his recent article Sipho Ngcobo gave us a good insight into the politicisation of the workforce. This was entrenched in the days of Nic Wiehahn when political aspirations of the disenfranchised were transferred to the workplace. Labour has always been a key ideological issue polarised powerfully against capital. While this expression has softened substantially throughout the world, South Africa seems to be going in the opposite direction. At the same time it is tearing at the very fabric of a crucial relationship where wealth is being created, in businesses and in government activities that should be supporting wealth creation. There is perhaps some solace in the fact that the most recent conflict has been between labour and government and that this may weaken if not rupture the unholy alliance between these two estates.

One of a comprehensive list of the key grievances that are bedevilling these crucial relationships is the absence of a common purpose and common fate between employers and employees. It is one that can be addressed at a micro level to buck the overall trend.

Business enterprises are the wheels that keep our entire transactional lives turning. As a collective of individuals it is one of those expressions of the human condition that make us social animals. Belonging to any collective, being a member of a pack not only gives security but also satisfies the need to be needed. It is often the most tangible expression of our preparedness to ignore immediate self-interest for the sake of a greater cause or of another person. This is most clearly seen in healthy families.

But it has an enormous downside. Too often, our own sense of right and wrong and our universal values can be clouded by the pack mentality. Membership of any group or collective should be based on one key principle alone: the fact of its being a means to unleash our true value, which lies in our capacity to make a contribution to the good of others. The group or collective is not an end in itself, but a means to that end. If the collective itself does not serve the broader other, then it will amount to little more than multiples of self-interest, enslaving us to our lower and grosser attributes. Of course, many collectives exist for the limited purpose of serving their members only. There is not much wrong with that especially if the group is set up to care for society’s neglected. But the moment such a collective sees its purpose as coercively, corruptly or fraudulently taking or “getting” from others for the group’s interest; it loses its legitimacy and allows people to hide behind banners, flags, mobs and slogans to escape individual accountability. This is not empowering for the individual. Indeed it is disempowering and debilitating.

The success of any collective depends on adherence to principles of common purpose and common fate. Common purpose should be tangible, definable, indivisible and clearly understood by all. The value of this purpose, both for individual members and the group, will be manifest in service to others outside the group. Common fate means both joint and individual accountability for the collective’s actions, as well as equitable (not equal!) sharing in the fortunes and misfortunes of the group.

If we were to hold the modern company up to this norm, we would have to concede that it fails dismally in many respects. For one thing, many people in such a collective have very little sense of belonging. This feature is automatic and spontaneous in most other collectives, whereas companies have to go to great lengths in holding social events, handing out T-shirts with logos, rah-rah occasions, and team-building exercises, to instil some sense of common belonging.

Linked to the absence of belonging, indeed probably because of it is the fact that companies seldom have a common purpose anyhow. Virtually all involved in a company have defined the purpose of their involvement primarily as a means of material self-enrichment. So a company is prejudicially defined as a place of getting. Yet for most, it is the place of expressing their contribution to others.

Establishing common purpose in a company is actually very simple. It is rooted in the natural economic law that supply exists to serve demand. The purpose of a company is to serve its customers. It is the purpose of the entire collective, including shareholders, employees, and even arguably the state through its involvement in providing infrastructure and services. The alignment of all individual behaviour to this common purpose will unleash the full potential of the company and become the ultimate empowering tool for everyone involved.

Most people at heart prefer to behave and be viewed as contributors. Most prefer to be seen as givers rather than takers. The fact that the working environment is not fully conducive to focusing on contribution and unleashing the best in the human potential, must clearly have an eventual effect on company success and sustainable national prosperity. It’s not the premise that’s at fault, but perceptions, behaviour, language, and of course, the most powerful of all, the accounting system. All of these will be dealt with in greater detail in future writings.

The rallying points for common purpose in any company should be its mission statement, its vision and its values. Despite their being plastered on walls many employees don’t know them, understand them, believe in them or experience them as being the true and vital driving force of the company. Most mission statements today reflect a serving motive and companies have gone a long way towards fulfilling their stated intentions towards their customers or markets. What seems to be missing, however, are perceptions and reinforcing behaviour from within.

Common fate is closely linked to common purpose, for without common purpose common fate would not make sense. Broadly, it means common accountability and sharing in the fortunes or misfortunes of a company. In a specific and more tangible sense it’s reflected in rewards such as shareholder returns, employee pay, and government revenue or tax. Achieving common fate is extremely difficult when the three reward categories are seen to be in conflict with each other.

Very often rewards are out of alignment with the actual fate of the company, so an essential link in common fate is destroyed. It becomes even more incongruous when executives are awarded huge bonuses after employee lay-offs. Common fate is also destroyed if labour is seen as a “market” commodity and not as an integral contributor to common purpose. It spawns another collective in an organisation, in the form of labour unions whose existence depends on an assumption of inherent conflict between the parties involved.

The rift is fully endorsed and reinforced by the accounting focus on the bottom line or profit. Because it fallaciously expresses everything that isn’t part of shareholder rewards as a drag and a cost and a burden, it is the least common to all the contributors.

One needs a measurement that is truly and genuinely common to all. It is wealth created or value-added. Ultimately, all rewards are dependent on wealth created. There is a deeper logic to the use of this key measurement. It is absolutely essential to common fate to have common purpose in place. Achieving full common purpose and particularly common fate is undoubtedly almost impossible because there is no single generic definition of human nature. Individuals represent a myriad of different aspirations and expectations.

But without question we can move substantially beyond the current point of assuming an inherent and inevitable conflict between the different stakeholders. We can start by redefining our perceptions about companies themselves and understanding the power of giving in creating wealth and individual contentment. And we can start with one company at a time!

“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.” – Margaret Mead.

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