It is easy to imagine, in these enlightened times that totalitarianism is from a bygone age. Remarkably, perhaps, there are still businesses that operate using the kind of hierarchical systems and culture that might be familiar to medieval kings or South American dictators from the 1970’s.
Systems with privileged elites whose roles are defined by supplication of the next person up the line, competing with their peers for favour and demanding that those in their own sphere of control make them look good. The old incentives of money and status rule, as do the old disincentives of banishment and disfavour – physical execution, however, is unusual these days.
What is most remarkable about this is the temptation to think of business as being at the forefront of operational efficiency and modernity and not that they exist in some temporal warp. But some do.
From a purely business perspective the totalitarian model is horribly inefficient and high risk. Totalitarian businesses inevitably create subordinate totalitarian fiefdoms, more usually known as silos, where lesser princes and dukes run microcosms of the whole and compete with the other princes and dukes for the attention and favour of the king. While simultaneously subversively enriching themselves, building their power base and plotting the downfall of the king. The princes and dukes are never working for the benefit of the whole. Parallel systems are created to compete with each other wasting resource and effort. In fact the entire culture is competitive – all the way down the line.
The irony is that many of these structures have developed to their current state under the mantra of “creating shareholder value” – something that is, in many cases, only a byproduct of the pursuit of executive wealth and power. The short term focus also, inevitably puts the same shareholder value at extreme risk of collapse, as we have seen repeatedly, at extraordinary cost to both shareholders, taxpayers and employees.
The further irony is that most of these businesses are populated and run by decent people who were doing their best – with a few notable exceptions.
So what is going on?
Perhaps the first thing is that unless we are lucky or make a deliberate effort it is difficult not to be inculcated with the idea that hierarchy and deference to authority are the only available models for organisational structure. This is clearly untrue, but without real exposure to alternatives it is easy to accept that the very hierarchical structure of our childhood continues for the rest of our life.
We end up believing that at work the only available relationships are “parent/child”, with us having to play one or the other depending on the situation. Ironically we also have a perfectly good model for peer relationships in those we have with our friends (often among the best relationships we have), but we choose not to apply that model at work very often. There are some very successful businesses who do – Mondragon, John Lewis and WL Gore are good examples.
However changing the structure of a corporation is quite a challenge, so is there anything inevitable about corporations being totalitarian?
In a word – no. There is nothing intrinsic to the corporate structure that forces them to totalitarianism. There are many corporations which, if not quite democratic, are based, largely, on collaborating peers and teams. Corporations that are focussed on collective success and where the culture is supportive and nurturing. These corporations may never achieve abrupt growth and headline making results, but equally they rarely crash and burn at shareholder/taxpayer/employee expense, and often deliver strong long term performance. Based on much of the work that I am currently doing, I also believe that corporations can shift from totalitarian to collaborative, and that failure is inevitable for those who do not.
Another intriguing factor might be age. If you look at this list of countries by age, countries with a median age of less than 25 are far more likely to be dictatorships than those with a median age of over 3o and if you look in the 25-30 age range you will find most of the recent democratic revolutions. This may be explained by the work of my friend and colleague Roger Steare and his Moral DNA survey (do take it, it is free and very informative). What the 80,000 plus global results of the Moral DNA survey show is that we are at our most obedient before we are 30 and that after our early 30’s our own reason and rationality become more important in our decision making than obedience.
The implications of this are that it is far easier to operate a command and control structure when the bulk of the population (of a business or country) are younger and therefore more compliant – the average age of the population of China passed30 between 1985 and 1990, the Tiananmen Square protests took place in 1989. As the a population ages there are relatively greater numbers of over 30’s who are not part of the formal hierarchy – perhaps these are the people who end up leading the revolutions, behind the scenes?
What do you think? Please comment and discuss here – click on the blog title and scroll to the bottom to find the comment box.
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