It’s the Operating System, stupid! – A quest for a European Humanistic Management Movement
by Hans Stoisser (with contributions from Lukas Michel)
THIS BLOGPOST WAS FIRST PUBLISHED AT THE DRUCKERFORUM’S BLOG
“Enough! Enough of the imbalances that is destroying our democracies, our planet, and ourselves,” writes the Canadian management thinker Henry Mintzberg.“ A society out of balance, with power concentrated in a privileged elite, can be ripe for revolution.” – How can that be?
In the West it has been our enduring crisis: an overleveraged financial economy, huge debts and imbalances, increasing inequalities, and resistant high unemployment rates. At the same time we see stock markets at all-time highs and CEOs earning obscene amounts of money. This is what Henry Mintzberg is referring to and what is threatening to undermine our basic institutions like democracy, market economy, rule of law, and civil society.
A different global society
Additionally, the crisis in the West together with Asia’s and specifically China’s positive economic track record has led to the replacement of the liberal democratic nation state as the role model for the global society by the state capitalistic system.
In fact, the new model is a combination of state-capitalism – where the state is seen as an important actor in the otherwise corporate world – and shareholder value thinking – where the purpose of a business to make money is seen as an overall good for society – which is highly attractive for elites everywhere in the world. Authoritarian regimes, together with an oligarchic private ownership, patriarchic societies, the rule of elites instead of law, and an oppressed civil society, are again in advance. This has resulted in the rise of an unprecedented rich ruling class from China to Russia, Saudi Arabia to Brazil, and Nigeria to Angola.
Hence, the West’s self-inflicted crisis is also backfiring on it from the outside its boundaries and a different form of global society is emerging.
Economic and social crisis inside, less influence and reduced power in the rest of the world, what can the West do to not destroy its basic institutions?
Assuming that the emerging global society is a self-organizing social system, solutions along the political left-right scheme become meaningless. No single government or multinational corporation has enough power to control the system. It is the interplay of decisions and actions taken by governments, supra-national institutions, civil society organizations, national and multinational companies and the like which is shaping the future of our planet.
Looking for high-level parameters capable of influencing the global society, Peter Drucker has given us a hint. Long ago he realized that knowledge societies are societies of organizations with the single organization as a key element. And behind each of these interdependent organizations are people whose practice is put to work by an “operating system”. And this, of course, is …
… the Art of Management.
While the choice of the management system is independent of the type or the activities of an organization, it is a value-decision that articulates fundamental principles, ideas and values of what we think an organization and hence society is all about.
With the global triumph of mainstream management thinking, principles center almost solely along financial values and financial engineering. To overcome its implicit logic of “winner takes all” we need a managerial operating system, which helps managers to deal with the increasing volatility, uncertainty, complexity and ambiguity of our emerging global society.
We think such a system can only be based on an appreciation of the individual and a sustainable use of our planet.
A European Humanistic Management Movement
Europe has come a long way to arrive at its “humanistic worldview”. From ancient Greece to the Renaissance, the Enlightenment, the Protestant Reformation right up to the modern peace project called the European Union. European Humanism with Kant and Rousseau brought forward the concept of self-responsibility as the human trait that determines motivation and meaning.
The appreciation of the self-responsible individual as a manager, employee, customer or any other stakeholder is the solution for a higher ability of organizations to act in a turbulent environment.
Only a people-centered management based on humanistic values allows drawing on the ingenuity and creativity of the human beings.
In any organization values are articulated as operational principles, which guide its decisions and actions. For aEuropean Humanistic Management Movement we think the following constituting principles can be put forward:
- The raison-d’être of any organization is value creation for society (public value) and not maximizing the value of the own organization.
- The operating system and toolbox, guiding decisions and actions, follow systems and design thinking rather than a pre-dominant financial focus.
- Organizations shall be adapted to people rather than people to organizations.
- Configuring everyone’s toolbox to cope with the challenges of a dynamic environment is an ongoing management task.
Values, routines and tools constitute the operating system of an organization. As such, the modern toolbox has a design where principles allow for choice, routines raise the awareness for what matters most, tools help people to remain focused on creating public value and leadership interactions build trust. It is this toolbox that simultaneously caters to the humanistic values and at the same time to addresses the challenges of a turbulent environment.
With this, the choice on the right design of the operating system becomes one of the most important leadership decisions and at the same time it is the central “lever” for shaping the global society. The self-responsible individual is incompatible with a pure shareholder-value driven approach, but is needed to cope with challenges of an emerging global society and disruptions of new technologies.
Executives of private and public organizations have the power to transform the operating system of their organizations as a badly needed evolution to prevent yet another revolution. This can help rebalance society in ways to promote value for the common good and not to further undermine the basic institutions of democracy, market economy, rule of law, and civil society.
About the authors:
Hans Stoisser, entrepreneur, management consultant and author with a longtime experience in emerging countries. His book “Der Schwarze Tiger – was wir von Afrika lernen können” will be published in September (Kösel Verlag).
Lukas Michel, author of the two books The Performance Triangle and Management Design, mentor for executive teams and associate of the European Drucker Society.
posted at the Druckerforum’s blog by Ruben Nelson:
Notionally, you are on a vital track — if we do not consciously change something very fundamental in our modern Western form of civilization, all of the cultures that embody risk decline and death as liberal democratic cultures.
I wonder if your understanding is deep and reflexive enough to make a difference. I fear it is not, but then I am a stranger to you both. I have just one question/observation:
1. Is the metaphor of an “operating system” rich and deep enough to get at the underlying issues of the need for and fact of a civilizational-level transformation. To my ears, your piece still rings of the same management mentality that got us into trouble — we stand outside that which needs to be controlled and fixed and we can do this objectively. (For example, see your first sentence of your last paragraph. I have known hundreds of senior executives in every sector of society and not more than 1% came close to having such capacities.) While you use the language of “humanistic”, it is not clear that you have plumbed the depth of what is entailed in being a human person in the early decades of the 21st Century.
None of this is meant to dissuade you from your line of thought; only urge you to pursue it with greater care and depth.
Ruben, thank you for questioning the metaphor of an “operating system”. Indeed, is it “rich and deep enough” for ”a civilizational-level transformation”?
Apparently, something specific exists which keeps any organization or “social system” together and makes it operating. Independently of what this organization is actually doing. One way to look at it is from systems science. E.g. Stafford Beer has defined six systemic functions – operating, coordinating, optimizing, auditing, clarifying, setting values – which, in case they are taken care of, make an organization “viable”. Or Fredmund Malik speaks of specific management tasks as opposed to expert tasks. – We think it is the management of an organization, which has the power to change or at least to influence this mode of operation, which we call operating system.
Remarkably, during the last 30 years the mode of operation of organizations in the corporate world has changed and has converged to a standardized model. Worldwide. Based on Shareholder Value thinking, globalizing communication structures and a universal MBA education.
Of course, in the moment 99% of senior executives in the corporate sector don’t think of bringing in humanistic values just for themselves. And many don’t see the self-responsible human being as part of the solution. – Unless they will be part of a “movement”. As we have witnessed with the “Shareholder Value movement“ which in the last 30 years has changed the corporate world.
In any case, we believe that influencing the mode of operating systems of organizations is a key lever for “civilizational-level transformation”. It is a third starting point to do so, besides influencing the consciousness of people and making changes at the level of the overall political and economical system.