Monday, December 1, 2014

A thing called people

How organisational theory fails society and business

I have witnessed again how organisational theory can sometimes overwhelm our humanity and even destroy value.

Paul is an experienced farm-hand who has helped in establishing new citrus plantations in this neighbourhood. He is one of the hardest working, loyal and dedicated workers I know, but has been laid off because, he has been told, he does not fit in with “the project’s business profile.”

Paul is by no means unique or even unusual. It’s a story that is replicated in its hundreds of thousands throughout the world daily and disturbingly so in an environment of high unemployment such as South Africa. It is the result of a key tenet of conventional economics upon which organisational theory is based that insists on expressing everything as a quantifiable resource, something to be positioned in boxes in an overall construct that can be manipulated and steered. These “boxes” include resources such as air, water, minerals, land, labour and capital amongst others. Organisational theory itself has added another called “the market”.

The theory then takes it one leap further to the understanding that resources have to be exploited in the creation of wealth and prosperity. To breathe life into these boxes an overall system is needed, giving birth to the grand theories of capitalism, communism, socialism, fascism, nationalism and many offspring. From there we have developed immovable ideologies, fanatical stances and open conflict in paying homage to a giant matrix that works as long as we all dance to its tune of abstracts and aggregates. The root cause of the dissension around systems is simply about who should be exploiting what for whom. In the process we create conflicting collectives and an inexorable centralisation of power.

If all of our calculations, research, science and technology have not yet produced one absolute, universal and permanent “ism” that, like gravity, defies contradiction, then there clearly is no such system. French economist, Thomas Piketty, is just one of a number of authorities that have criticised Capitalism in the 21-st century. This detraction could easily be applied by another expert to socialism or any other ism.

All of this can be consigned to theory. But once we have based intransigent approaches and institutions on these theories and have become addicted to them, our trust and security is shaken to the core when they do not deliver in practice, in turn creating a sense of hopelessness.

The case of Paul is just one example of the dehumanising and debilitating effect of concepts such as the “human resource”. It is easy to measure the cost of this resource. It is far more difficult to calculate its benefit and full potential, indeed impossible if this potential is cramped into carefully constructed organogram boxes. Equally dehumanising are terms such as “human capital”, “people asset” and “labour costs”. The only resource cost elements of human effort are skills, experience and qualifications. Its real value is far more dependent on the immeasurable such as willingness, dedication, loyalty and creativity.

There are many examples of where human ingenuity has flown in the face of conventional organisational theory. The view that something cannot be done because it has not been done before is the silliest of all postulates. Indeed for the most part innovation and creative entrepreneurship are arguably the result of challenging the conventional, of an ability to look beyond the obvious, of out-of-the-box thinking and often even beyond potential self-gain. That is, after all, what risk is about.

Labour is only one element of a need to go back to zero based thinking in all organisational theory. But it is by far the most important. We have seen examples of what can be done here and abroad such as in the Ohio employee buyouts in the US, and labour cooperatives such as Mondragon in Spain. We simply have to revolutionise the relationship between labour and capital, especially in South Africa.

There is no reason why we cannot develop our own unique approach; with value-adding pockets each with its own common purpose and shared destiny. (See a recent book on the subject here.) It brings to mind that inspiring thought by American author Margaret Mead: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has.”

I was further reminded of the labour imperative in recent reflections of the Great Depression of the early 1930’s. The most important definitive characteristic and frightening feature of that event was high unemployment – 25% in the US and up to 30% elsewhere. We have been living with unemployment levels above that for decades. Therefore, on that metric alone we have been in a depression for many years irrespective of what any other number has shown. For one in three employable especially young South Africans, their default position has been pessimism for a long time.

Yet we run like rabbits from the hounds of media hysteria, low economic growth, a weakening Rand, credit ratings, trade deficits, government deficits, civil unrest, and parliamentary disturbances. To a greater or lesser extent they are all symptoms of that one ailment. It is as if we have become immune to the cause, but not the symptoms. We appear to be immobilised by structured and protected collectivism, with each vested interest stubbornly protecting its turf as defined by clich├ęd theory and outdated ideology. We are so addicted to this construct that when this gets rattled as we have witnessed in recent times, instead of celebrating a clear fragmentation of power, especially in politics and labour, we plunge into doom.

In going back to basics we need not and should not lose sight of two fundamental pillars:

· the essence of economics is adding value to each other and

· the essence of our humanity is a deep desire to do so.

Few things are a greater threat to this spirit than imposing an “ism” upon it.