Why
Do We Still Do It? The
curse of ‘Panacea Mania’
Robert Burke
Business
as just a way of occupying the day for human beings seems to get
increasing support when we see a multitude of business panaceas,
such as BPR, TQM, JIT, HRM, Benchmarking etc get such prominence and
support. Yet there is
little evidence that these ‘miracles’ have actually made any
difference, except, that is, for those who invented them (Lester:
1997).
This
same argument is now current regarding the millennium bug and
whether or not this was a real threat or not.
If it was or if it wasn’t is not the point and there will
be arguments for both sides. What
is the point is that organisations have manoeuvred themselves into
positions where panaceas thrive.
In other words there is little confidence in making one’s
own decisions.
All
these panaceas have evolved, in my view, as a result of inadequate
leadership. That is,
they were designed by clever people, usually academics in business
schools or clever consultants, to prop up inadequate
(underdeveloped) leaders with processes and procedures that have
effectively isolated people in leadership positions from making
decisions of real significance, that of ensuring sustainability and
meaning for both present and
future generations. If
we look at some of these people now we can see that many have
reached ‘Guru’ status and, as a result, have keen followers -
even disciples.
So
why do we still do it?
It
is my view that we still do it as the alternative, leadership
development in its real sense, is too much of a paradigm shift from
the way “good” management has been espoused and taught post
WW11. This,
particularly from those business schools and influential consulting
firms still deeply entrenched in ‘panacea mania’.
The
threat to creating the required change in leadership attributes
could well be seen in coming from these traditional approaches to
business education. Indeed,
the late futurists Robert Theobald (1999) says;
“We
are becoming aware that learning institutions and learning societies
are necessary to future success. Unfortunately we are also
discovering that effective learning does not take place in
traditional schools and colleges. The real challenge is always to
provide people with the interest and skills to be self-motivated
learners. Regrettably, past patterns of teaching have often numbed
the spirit of inquiry that children naturally have. In addition,
concentration on single styles of learning excludes others who gain
knowledge in other ways, such as using their hands and their bodies.
It is to be hoped that current schools and universities will adapt
but much of the most interesting innovation is coming outside
them”.
Paul
Wildman’s observation (Futures: 1998) in his article ‘From the
Monophonic University to the Polyphonic Multiversities’ argues
strongly the view that seeking alternatives to the “one right way
of knowing” must become the educational imperative.
Leadership
development is not only about learning management practice skills,
as important as these are but, more importantly, about learning
about your individual self, your part in the ecosystem, and the way
in which you can positively influence the future.
Recognising
this still remains a problem as many of the existing organisational
leaders will still ask the question “If
they know so much about it why aren’t they as successful as I
am”? The answer to this becomes apparent when these
organisational leaders undertake experiential leadership
development. From this
they learn to value themselves (and others) more and that the façade
of success is just that – a façade.
They learn the value of learning, of different ways of
knowing, as Inayatullah (1999) brilliantly writes about, and the
value of a more balanced life - perhaps even adapting Handy’s
concept of ‘Portfolio Living’ (1997).
They then realise that those who understand leadership and
practice it are
successful – really successful – albeit without the need to
demonstrate it materialistically!
Experiential
action learning, participatory action learning (futures thinking
action learning) and systems thinking start to take on more
importance in leadership development particularly as we enter the
end of the information age and start the knowledge era.
Other ways of knowing take on significance in the knowledge
era as we develop skills in using our other intelligence such as
intuition, instincts and relationships to enable us to better
understand and survive in chaos (order and disorder together) and
increased complexity (webs rather than linear determinates).
Newton,
with his linear deterministic theories, and Descartes, with his
mechanistic models, have served the industrial age well but their
theories are no longer sufficiently robust to serve the knowledge
era. What was important
with Newton and Descartes, however, was that science and philosophy
developed a nexus that was mutually compatible and mutually
acceptable. This is
probably the reason they survive even today.
We
are now seeing equal compatibility and acceptability amongst some
scientist and philosophers today with the important emergence of
futurists such as Sohail Inayatullah, Richard Neville, Paul Wildman,
Richard Slaughter, Peter Ellyard, Jan Lee Martin, Tony Stevenson and
others. In particular
the compatibilities described by Capra in his 1997 book “The Web
of Life – a New Synthesis of Mind and Matter” (Harper: 1997).
Here Capra explains and offers reasons for the radical
synthesis of breakthroughs in science, complexity theory, Gaia
theory, chaos, social systems and ecosystems.
The
important shift for leaders is now in the form of sustainability,
purpose (meaning), people as animals, future generations and the
creation of processes to enable the fundamental shift from human
life as ‘owners’ of the planet to human life as
‘part-custodians’ of the planet.
That is, all life becomes of equal importance – not just
human life. This shift
to an ecocentric worldview leadership has enormous consequences on
the way in which human and other forms of animal, vegetation, water
and air life will coexist for mutual benefit.
By
shifting our emphasis in this manner humans begin to take real
concern for the welfare of other species and of the environment.
They realise that just as it has been possible to exterminate
forever many forms of life, that possibility of extinction becomes a
closer reality for human life every time a species is made extinct
– which happens many times over daily.
What must become obvious is that this is the real leadership
challenge humans need – that of real purpose, real meaning, real
caring and real cooperation, rather than subjugating these needs to
outside caring organisations, such as Greenpeace, Amnesty
International and the RSPCA.
So
what does this shift mean for organisations and for careers for
human beings?
The
biggest unknown for the individual in a knowledge-based economy is
how to have a career in a system where there are no careers. This is
the reality of today. In
overcoming this uncertainty it is necessary to become a life long
learner and be constantly gaining new skills in order to be as
multi-skilled as possible and therefore have greater opportunity.
This implies that the traditional schools, colleges and
universities must embrace the other ways of knowing as part of their
curriculum. This
further implies development of new leadership paradigms for our
programmed knowledge institutions.
Humans
are already in an age where there are no careers.
That is, the concept of a job for life no longer exists, even
in the Church. For
example, The Sanitarium Health Food Company, an organisation
dedicated to providing funds for the mission of the Adventist
Church, has began a process of ‘downsizing’, ‘retrenchments’
and “Business Process Reengineering”, on the recommendations of
a well known accounting and consulting firm.
A process that one can imagine would not even have been
contemplated a decade ago. The
Anglican Church now requires its ministers to ‘justify’
themselves financially in order to remain employees of the Church.
Are these ‘good’ decisions or are they a result of
successful consultants taking over the leadership of these, and many
other, organisations with their panaceas and ‘ecorat’ (economic
rationalist) simplicity?
Organisational
longevity is also a thing of the past.
We know that 40% of the Fortune top 500 organisations of a
decade ago no longer exist. Mergers
and acquisitions have not generally proved to be the panacea sought
as often little effort is placed on the needs of individuals other
than shareholders. As a
result the overwhelming influence of cultural imperatives dominate
and the precious energy needed to create a successful merger or
acquisition is dissipated into corrosive actions of individuals,
usually those individuals in senior management roles where the
corrosive content takes on mortal significance.
It
is therefore illogical to think that business is logical otherwise
the great majority of start-up businesses wouldn’t fail as they
usually proceed to start-up based on a very well prepared logical
strategic plan, with embedded economic rationalism more often than
not supported by a Bank secured by assets.
But they do fail more often than not because they are
restricted only to the intellect in their formulation and do not
take into account the other ways of knowing.
It is not only start-up businesses that have this problem.
Remember that only 40% of the Fortune 500 companies of a
decade ago still exist. Why is this?
Given
these facts it is a convincing argument that current leadership
practices have failed and that the espoused economic rationalist
approach has created great social and organisational imbalance.
Put simply, the economic rationalist simplistic approach
coupled with simplistic panacea mania has failed.
So
why do we still do it?
Probably
because our addiction to ‘panacea mania’ has made it very
difficult to give the habit up.
Transformational Leadership Development (TLD) offers a safe
and effective withdrawal from this habit.
Those
involved in TLD programmes need to encompass Futures thinking
(transforming communication), systems thinking (from the parts to
the whole) and transformational thinking (from left to right to
right to left thinking). By
doing so they imply that a synthesis
of the mind with the matter is the dramatic change in the way we
look at things. This
probably emanates from, amongst others, the work of Thomas Kuhn and
paradigms. Kuhn defined
paradigms as ‘a
constellation of achievements – concepts, values, techniques, etc.
– shared by a scientific community and used by that community to
define legitimate problems and solutions’ (Kuhn, 1962, adapted
from Capra, 1997).
A
new nexus is emerging that involves scientists and futurists with
the emerging psychology based leadership developers such as Malcolm
Davies, Phill Boas and Lynda Norman.
Indeed Malcolm Davies (1999) argues that organisational
outcomes are a direct response to leadership outcomes. He relates
leadership and awareness of the Big 5 Factor Model that is studied
in psychology (Openness [intellectance, school success etc],
Conscientiousness, Extraversion [ambition, sociability],
Agreeableness, Neuroticism) or OCEAN.
This goes beyond TMI, MBTI, which are extremely useful and
important tools, or whatever else have you. This is where reputation
is the common theme as it is reputation that ensures success.
From this come the leadership outcomes that are a result of
the transformational leadership development of the leader/s,
regardless of where they stand in the organisation.
The
four components to the ideal attribute are;
1.
intellectual stimulation,
2.
individual considerations,
3.
inspirational motivation and
4.
idealised behaviour.
The
way in which you will treat any given situation will depend on your
personality.
Your
personality will be the result of whatever transformational
leadership development you have had, acquired experientially,
programmed learned or by your other ways of knowing (instincts,
intuition, relationships etc).
From
this the leadership outcome will come.
From the leadership outcome will determine the organisational
outcome.
Transformational
Leadership
Development
|
(Adapted
from Davies, 1999)
Leadership
and Organisational outcomes will determine the individual and the
organisation reputation. Reputation and effective organisational
outcomes come from how close Leaders are to the ideal leadership
attributes.
However,
often leaders with a high transformational leadership development
often pose a threat to those who are inculcated to the rational way
of thinking, particularly those in the professions such as
engineering, science, accounting, marketing etc., professions
influenced strongly by Newton, Descartes and others.
Often people destroy a good leader to shield their own
personality disorders. Terms
such as “All’s fair in love and war” were made popular, it
seems to me, to “justify the means to get the end desired”.
In other words our organisational culture has developed a
strong movement towards perfecting the corrosive context.
Those
who have developed strong transformational leadership skills have
generally worked through whatever derailment factor they had/have in
their personality (and to differing extents most of us do!) in order
to overcome these corrosive learnings.
It
is extremely important that organisational leadership strives for an
ecocentric worldview and the ideal leadership attributes because of
what happens when they don’t. People in leadership positions such
as CEOs, Boards and Senior Management, create the ‘corrosive
context’ within organisations, when they fear personal exposure
through the ideal attributes that the transformational leader is
exhibiting. Their learned response is to destroy the enemy – in
this case the transformational leader.
The
following will give you a better illustration of this;
U.S.
Dollars
Comparison
of GE and Westinghouse
(Millions)
(Revenues,
1976 – 1996)
Source:
Ghoshal & Bartlett ‘The Individualized Corporation’
“The
bottom line of the story is stark.
At the starting point of the tale, Westinghouse and GE were
comparable companies, seen and spoken of as worthy rivals.
At that time, Westinghouse was about 40% the size of GE in
terms of annual revenues. At
our 1996 end point, GE is ten times larger.
In a two decade search for corporate renewal, three
successive generations of top management presided over a massive
decline of a major American institution.
There
are many reasons for Westinghouse’s inability to achieve durable
transformation. However,
the roots of its corporate sclerosis lay in its behavioural context.
And Westinghouse is not an isolated exception.
Like Westinghouse, many large companies have, over the years,
developed a behavioural context that, while superficially benign,
has had a corrosive effect on the behaviours of their members.
Only
by explicitly recognising the central characteristics of this
inherited context and understanding how it affects management
perceptions and actions can those who want to revitalise their
organisations replace its most pernicious qualities with others more
conducive to genuine and durable growth and renewal”.
(Ghoshal
& Bartlett, 1997: pp144-145)
As
a CEO I experienced the corrosive context through the introduction
of leadership development and the learning organisation which
threatened the ‘establishment’ of the global organisation that I
was the Australian CEO of. This
was further exacerbated by the fact that my company, which was
originally part of an UK based multinational which was subjected to
a successful hostile takeover by a competitive European based
multinational, achieved less than 1% of the total global sales but
over 10% of the global net profits.
We were clearly, on a productivity basis of tonnes per
employee, the most profitable company in the group and arguably the
most profitable company of our type in the world.
The
story goes that after the takeover our parent found that it had two
organisations in Australia in the same business.
One (mine) highly profitable and the other highly
unprofitable. Put
together my companies profit was not enough to balance the other
company’s loss. As a
result the combined organisation was unprofitable. There were also
two CEOs who held very different views on how the new organisation
should be run when it merged. This
problem was solved when the senior management of both
organisations decided that they preferred my methodology to that
of the other CEO and made that clear to the Group’s European based
Chairman. This did not
sit well with the new global parent as they had selected my
counterpart shortly before the takeover with the express purpose of
him becoming the sole CEO after the takeover.
But, because of the unexpected support for me from both
organisations, they were left with no choice but to appoint me sole
CEO and pay the other CEO off.
The
result was that within a year we were able to create the success
mentioned above without bloodshed (downsizing) and were indeed
highly profitable again with a new culture based on trust, learning
and transformational leadership development.
I believed our success would be enough to cement my position
and my philosophy even though I was one of the only CEOs of the
vanquished organisation to survive the takeover.
I was wrong. The
company’s success created animosity and fear and I was subjected
to a continual barrage of enquiry and suspicion that led to me
having no choice but to resign.
Not
long after this I was approached to take over the role of CEO of a
publicly listed company. This
company was in rapid growth and had developed a high profile.
It was a company very much in the public eye.
It was, however, clearly stuck in the entrepreneurial stage
and needed people to move it into an integration stage and to a
renewal phase.
This
required employing highly skilled people, introduce learning and
transformational leadership development and purpose through futures
thinking. It worked.
The
company consolidated its position in a growing market in 1994/95,
during my period as CEO, earning a net after-tax profit of $1.1
million Australian dollars. This
was a 19% increase on the previous year’s figure.
|
|
1994
|
1995
|
1996
|
1997
|
|
Operating
Revenue
|
5,477,000
|
10,540,000
|
15,883,000
|
17,854,000
|
|
Operating
profit
|
1,357,000
|
1,673,000
|
1,807,000
|
883,000
|
|
|
|
|
|
|
Operating
Results 1994-1997
The
strategy was based on meeting a broad-based consumer need in an
efficient, environmentally friendly way.
However,
it was announced on March 31, 1998, long after I had resigned, which
was the 13th August, 1996, that the major shareholder (a
Malaysian multi-national) would support a planned capital
restructure to finance working capital as the company faced a loss
to June, 1998 and abnormal costs of about $7 million Australian
dollars.
In
a statement, the company said it would cancel one 25 cent share for
every two held and make a one-for-one rights issue to raise about
$5.3 million Australian dollars.
The Australian Chairman stepped down from that position but
remained on the board and the Australian Managing Director “would
retire” to be replaced by a Malaysian CEO.
I
believe that the reason for this dramatic reversal of fortune was
due to the dismantling of the principles of the learning
organisation we had put in place and the complete dependence on the
rational method of management.
Shareprice
November 1995 – November 1997
This
dramatic reversal is graphically illustrated by the rapid decline of
the shareprice after I left as depicted above.
As
a CEO, the challenge is always to focus on rational explanations of
outcomes. These can
include in human relationship terms, using strong cognitive
analytical methodologies and the cultural implications rationalised
as a result eg. Strategic planning, human resource planning, career
planning.
The
companies I have mentioned have high visibility in society today.
Edgar Schein (1997) is quite right to point out that a
description of an organisation’s culture makes public the deeper
underlying aspects of that organisation at a time when it is still
very much part of the scene. This
is the reason I have not used the actual names of the organisations.
Similarly, I have not identified any individual for the same
reasons of respect for the individual.
This
creates a further challenge when it is necessary to review
individual behaviour by trying to avoid a “good” or “bad”
interpretation on that individual’s behaviour in terms of
consequence on the organisation’s culture and its performance,
therefore this paper focuses on the decisions and circumstances.
Davies
(1997) claims that with the introduction of the systems paradigm it
brings with it a host of differences that make a difference. One
result of the fast changing environment is that new tools are needed
to more effectively deal with the chaotic ever changing situation.
Many of the tried and true tools of management that have been
developed over the last hundred years or so have assumed a linear
deterministic world in which the single goal of business is profit
making. Whittington (from Davies: 1997) called this underlying
paradigm of assumptions the classical paradigm of strategy. He has
pointed out that the pace of change requires a new paradigm.
Linear determinism is no longer a good enough approximation
and we now need to embrace emergence. Profit making is not good
enough to manage by. We need a range of things to focus on in order
that profits will be made by the organisation.
Once
systems theory entered main stream thinking people began to realise
that organisations are systems too. In systems everything can be
seen as influencing everything else. It is like the human body where
all subsystems influence the whole system and vice versa. When we
see organisations as systems we soon realise that there are
important aspects of those systems that we have not paid sufficient
explicit attention to in reviewing how best to run organisations in
a very chaotic world.
The
uncertainty question is “from
manufacture to market: understanding the options?” is really
asking the individual to answer Will
my business be part of the future? And this should become the
driving force for any CEO seriously committed to a future of
ecological and economic sustainability within the framework of an
ecocentric (earth-centred) worldview and values.
To
achieve this means effective communication.
There
is an acceptance that communication works by delivering a message or
a meaning. In
cross-cultural communication it is my view that communication has to
deliver both the message
and the meaning because
different cultures have different ways of knowing.
This was of particular importance in the merging and
institutionalizing of the first company I mentioned above as our
parent was European based with a well established culture of its
own.
Another
objective is to demonstrate that organisational cultural imperative,
whether it be ethnic based or philosophically based, will determine
how the organisation operates.
The evaluation of its success will not necessarily be made in
financial terms only, hence the argument that the bottom line result
is, to an extent, a myth. This
is not to suggest that a strong bottom line is not sought, desirable
and highly prized, or attainable or not, only that the bottom line
will be judged as “good” or “bad” according to the
“rules” put in place by the cultural imperative of the
organisation. Overall
this is a circumstance of communication.
In
management courses we are taught that communication
is a process, especially a cognitive process with a social context.
In my view this is only partly correct.
This view supports the intellect as the main basis of
communication and does not take into consideration the other ways of
knowing and communicating such as intuition, instincts and
relationships. There is
an emerging view that intuition, instincts and relationships play a
more significant part in organisational effectiveness than has been
previously appreciated.
We
are also taught that communication
is about the way we construct meanings from encounters with others.
I like this example better as it not only suggest reason,
philosophy and rationality, but also suggest a sense experience from
the evidence gained from the encounter with others.
The meaning also includes intuition, which could involve
spirituality, which gives us a direct perception
of knowledge.
Communication
is concerned with the reduction of uncertainty and therefore is
inevitable. Communication
effectiveness, however, is largely related to how well we can
co-ordinate our meanings with those who interact with us.
Communication on an ethnic and cultural level needs a
learning catalyst and a critical friend (the communicator) because
no two people perceive things in exactly the same way.
It is asking too much, in my view, to expect different ethnic
and organisational cultures to perceive things in exactly the same
way. Yet, I argue that
from my experiences, this is largely what is expected from
organisations hence the addiction to panacea mania.
This
leads to leadership or more specifically leadership effectiveness.
Throughout this paper I have argued that management and
leadership are extremely important but are fundamentally different
from each other. In my
view management is more easily accepted and understood and that most
CEOs are very competent with management practices.
However leadership needs to go beyond just good management
practice to encompass behaviour, the human elements and ‘web’
relationships in organisations and understand these.
The
increasing support to the notion that rational intelligence and
cognitive ability are associated with “good” management and
non-rational intelligence and emotional intelligence is associated
with “good” leadership is beginning and successful organisations
are aware of it.
In
conclusion it needs to be emphasized that organisations are systems
and that for the organisation to be effective it has to be good at
both the rational and non-rational to move beyond ‘panacea
mania’, and to encompass the other ways of knowing.
REFERENCES:
Lester,
R (1997), Presentation to Australian Business Limited
Theobald,
R (1999), Email communication
Wildman,
P (1998), ‘From the Monophonic university to the Polyphonic
Multiversities’, Futures, Pergamon, UK.
Inayatullah,
S (1999) The Australian Financial Review Jan 1, 1999
Handy,
C (1997), “The Hungry Spirit”, Hutchinson, UK
Capra,
F (1997), “The Web of Life” Harper Collins, UK
Davies,
M (1999) Personal communication
Schein,
E.H., (1997), “Organisational Culture and Leadership – Second
Edition”, Jossey-Bass, San Francisco, USA.
Ghoshal,
S & Bartlett, C.A. (1997) “The Individualised
Corporation”, Harper, USA.
ABOUT
THE AUTHOR:
Dr
Robert Burke is Managing Director of the Futureware Corporation,
Principal of the Australasian Centre for Leadership & Innovative
Management and Associate Professor of Innovation Management,
International Management Centres Association.
He is a director of Australian Business Foundation Limited
the “think tank” of Australian Business which exists to
strengthen Australian enterprise through research and policy
innovation. He has had over 20 years experience as CEO of Australian
subsidiaries of International organisations.
