business, Charles Handy, Communism, Corporations, human capital, Knowledge Economy, Peter Drucker, Progress, Society, Talent
The sensible consensus is that communism became all but extinct with the end of the Cold War. I say it may be so, but the mindset that fueled it continues to live unhindered. Your next thought may be that I am referring to North Korea. But I have something much closer to home in mind: the U.S. corporate sector. Yes, you didn’t misread. I will dare to say that the mindset of the corporate sector in 2014 is eerily reminiscent of communist thinking.
Given the audacity of the argument, a bit of context is in order. Back in the 1970s the great Peter Drucker, widely acknowledged as the father of modern management, promised us the so called “knowledge economy”. The distinguishing feature of this new age in economic development was to be the “knowledge worker”, the singular factor that would make or break corporations. Charles Handy, the management philosopher, took Drucker’s predictions further. In his “Elephant and the Flea: Reflections of a Reluctant Capitalist” masterpiece manuscript, he proposed nothing short of the dilution of corporations as we know them. This is posited as a natural consequence of the increasing value of knowledge yielding individuals. More exactly Handy prophesied what one may term as the “freelance economy”, where “fleas”, a metaphor for independent professionals, would be “flying” from one corporate “elephant” to another, servicing them on an as-needed basis. Drucker’s and Handy’s predictions make a lot of sense. A knowledge economy prizes effective application of knowledge above all else. If knowledge is power, than individuals would indeed become more important than corporations. Talent would finally get Mahometian vindication in the proverbial hill story!
Ideas, or at least good ideas, are anything but predictable – indeed anyone who has dabbled in creative pursuits knows that inspiration is not constant! Incidentally, so are the intractable business problems which require true ingenuity. That is because in an increasingly complex world, causes and effects are caught in an ever changing ebb and flow. Sometimes contributing circumstances come together just right to give rise to what we cordially refer to as “intractable problems”. In this new and highly virtualized global economy, far from the constancy of Ford’s mechanistic assembly lines, the flux of ideas and problems reinforce Handy’s belief that talent should be engaged “on demand”.
In strong contradiction to the nature of the knowledge economy, corporations insist on communist-industrial era ownership of assets. “If knowledge is the new asset, by God, we will own it!” goes the implicit corporate psychology! Making this psychology explicit are slogans like “people are our most valued asset”. And then there are the headhunters: hunting talent on the great open economy ranges like wild horses and turning it over to corporations so that it can be tamed and made uniform by way of corporate trainings and team buildings. Never mind that Peter Drucker told us many decades ago that knowledge “walks out the door of corporations every night” in an allusion to the fact that knowledge workers are not assets that can be owned. Corporations insist on shackling talent to physical desks 40 hours a week. They offer relief from this acknowledged unnatural state for creativity by way of annual paid time off and every extra day off is trumpeted as a huge step up on the corporate ladder. And of course, they provide livelihood security in the form of a salary. While this scenario may look like paradise when compared to life in the former Soviet block or present day North Korea, it is nonetheless a miserable state of affairs for sentient human beings capable of great creative feats. Because intractable problems are neither predictable nor frequent, this working paradigm is indeed a waste for both the talent itself and for the corporations that prize it as a key asset. To understand why, let’s consider the opposite scenario.
Imagine a world where knowledge is viewed as an on-demand resource. Those who can manipulate knowledge with exceptional craft and efficacy are contracted when and where their skill is really needed. Engagements are limited in time and scope, achieving a specific goal in the form of a solution to a specific problem. Pay is directly correlated to the monetary value of the problem tackled. The bigger and more complicated the problem solved, the bigger the payday. The independent professional manages his or her own time, effort, energy and even chooses problems that are exciting and fun. There is no room for office politics. There is no reason to put up with a grumpy boss’ frustrations. This kind of a hypothetical world, where competence would reign supreme resonates with capitalistic principles. But these professionals would hardly be associated with cut-throat capitalists.
Turning back to the 40-hour week scenario, imagine the waste of great talent. Because the suitable problems are not always at hand, much of the 8 daily work hours are wasted in bureaucratic, non-value add activities. Talent is physically present but that means nothing in terms of efficacy – think of those endless meetings where the game is to put on an interested face while thinking of weekend plans. Corporations bulk at the idea of paying freelancers large sums occasionally. But how much more money are they wasting by paying lower sums constantly, keeping talent around full time to apply it to its true potential only occasionally? How much are all of us paying in terms of mediocre salaries because talent is shackled to a particular job when it could be freed to service multiple innovative needs that would in turn increase the collective prosperity of the species many times over? The full time employment proposition is becoming too expensive for the world’s economy. It is the equivalent of manufacturing inefficiencies before on-demand production was invented.
Top management thinkers form an increasingly coherent chorus intent on decrying the cut-throat capitalist nature of modern age corporations. They denounce modern corporations’ singular pursuit of profit for shareholders as inhumane and anti-societal. They provide ample evidence in support of growing social inequality. The world, they say, is moving too far to the right of the political spectrum with dire social consequence. I dare say the exact opposite. My view of the modern corporate sector is a metaphor of a large blender where talent and non-talent combine to result in average mediocrity. This in turn results in corporations that are painfully slow to react to opportunities, and collectively, they move the world forward at a snail’s pace. You may disagree with my view strongly and point to the iPhone and all the other interesting technologies that seem to overhaul our reality. You may even point to Clay Christensen’s disruption as an effective mechanism by which David start-ups topple Goliath corporations for the benefit of progress and shared prosperity. But my bar is higher still; I look at the world for what it could be. What if we had a million fold more “Davids”?
Stepping back and looking at the larger societal context, communism can be said to be an emergent condition wherever people congregate! It is deeply embedded in the mechanics of the social. The non-talented will always want to be mixed with the talented so that traceability between action and efficacy is blurred. Communism may just be part of social human psyche. But I remain hopeful that one day Drucker and Handy will be proven right. I remain hopeful that one day we will enter the knowledge economy not just in words but in fact.