where did business go wrong?
Bruce McTague
business consultant knowledgeable with regard to the intersection of technology, people, business and society.
“They display all the distinctly reductionist habits of expecting to come to ‘know’ the problem and objectively find the ‘right’ solution by dividing the problem into discrete elements to be tackled by experts who ‘know’ how to do it. Any range of solutions can be tried because, if they go wrong, they can be reversed with little consequence for the system. They will expect, consciously or unconsciously, that once the ‘real’ solution is found, the problem will go away and they will now have an ‘evidence-based’ decision that can be applied again should ‘the’ problem emerge again.”
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When I scribbled the “where did business go wrong,” I realized I could write a book in answer. Today I will focus on one thought – how business was stripped of substance which, inevitably, is about reductionism.
When discussing some of the issues business is facing, or has created, inevitably a lot of the discussion will be around “is capitalism good,” a lot of misguided conflation of materialism & capitalism and greed. Personally, I tend to shelve all of those believing business is about people making decisions for other people and whether those decisions are made to benefit people or dollars (ROI, stock market value, etc.). If business has gone wrong, it isn’t because of some system (because people created the system) its because people have got it wrong. So let’s focus on people.
The reality is the state of work has improved pretty significantly over the past century or so despite rampant Taylorism (partially because Taylorism DID improve overall business conditions for the worker). Today’s work, generally speaking, is less tiring and of shorter duration. The challenge is the other side of the Taylorism coin sapped work of substance, workmanship and meaning. Business, for the worker, became a relatively aimless pursuit of promotions or milestones where a worker often found themselves feeling relatively useless within a callous business environment tied to a clock. The way business was conducted only created worker resentment (in terms of meaning and later in money as inequalities increased) as one’s labor fell further and further away from any kind of personal craftsmanship. The reality was business began demanding different qualities in people than people would normally have brought to their work. This dissonance mandated the absence of the intrinsic humanness and the presence of only the extrinsic tools and labels. Work became subordinate to “necessity” and the ends (not the means). Along with this have arisen new technologies. These technologies have effective new uses, but they also come with new risks and challenges to business. In fact, many of these non-manufacturing/machine technologies raise questions about if and how not only AI technologies should evolve, but how all technology should evolve with regard to its effect on people. One could argue the only way to be able to design a better future of work, we will need to not only understand the threats but need to understand the AI systems themselves and how they work ON and With people (we should do the same with machines too). This will almost be a mandate as AI tools begins to help us make more and more types of decisions. As exciting as this technology is with great potential for good it also has the potential to disrupt the work as we know it today, hence, the workers as we know them today. If we are to steer the technologies between the benefits it can bring and the challenges it can create, business needs to seriously think about and build a set of mindsets, behaviors, attitudes, and standards that can guide the development of these technologies. You may note I did not suggest government regulation for policies because while they will be important in the future the most important aspect of the future of business and technology will be the involvement of humans themselves.
Which leads me to the stripped down version of business we have today.
In a world in which we tend to want to oversimplify things, far too often “business instincts” get stripped of any context or the rich & royal hues most typically associated with ‘good business instincts.’ In fact, instincts tend to be associated more with speed than effectiveness. In addition, we also strip leadership down to its barest and far too often suggest the importance of ‘’good business instincts’ as some superior skill <and instincts are not a skill but an attribute> inherent in good leadership. Basically substantive business decision-making has been stripped of reflectiveness and effectiveness in the interest of speed and efficiency. ‘Stripping down’ has led to ‘fail fast’ and ‘you are only successful of you are moving.’ What this means is business has stripped itself of its largest consistent value creation – people. Yeah. A slew of people talk about the next age of capitalism or ‘moving beyond industrialization’ as if industrialization was the issue. It wasn’t and isn’t. The issue is humans and their mindsets with regard to what work is and what business should be about. We can certainly let the tools decide those questions and a bunch of people are going about doing so – digital transformation, the “AI Age,” customer capitalism, creation economy, pick your buzzword poison. But I believe it would be a mistake to allow tools – who do not have human’s best interests in mind – making civilization shaping type decisions. In the end what stripped down business has done has hollowed out some meaningful substance and removed any slack so that when shit happens, it happens really fast with little to soften its blow. This has consequences not just on business, or the business, but the people.
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Sometimes life happens slow, then really fast.
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What business has done, as a machine built with a specific purpose to continue with growth at all costs, is actually burn the future in the present – ‘burn the future’ being not only global resources but human energy and intrinsic desire to contribute. To be clear. Progress, in and of itself, is not a bad objective, nor is growth (progress’s cousin), but over the past 100 years or so business has slowly stripped progress of its morality – or at least any serious moral reflectivity - replacing it with unqualified quantitative increases in transactions measured as prices paid in money. Growth, similar to technology, is uncaring of what is good for humankind. It is a measure, an objective, an ideology, bereft of morality in its means as it trudges toward its desired ends.
Which leads me to clarify growth as an issue.
It is lazy to suggest worshiping growth is where business went wrong. Growth, in many aspects, is good. The ‘wrongness’ is actually found more in, well, a constant desire for consistently more. What I mean by that is once you have attained a 15% margin, that becomes the standard. Lower means “you are doing something wrong” and higher means “you have done something well (and we should do more of it because this is the new standard).” If you grew 3% last quarter, less than 3% is bad. If your stock price hits X++, anything lower is bad. And maybe even worse is that within a growth mindset, maintaining where you are is bad. Everything is a stair step upwards or, well, you are getting worse in this business world. That is nuts. It is nuts because in order to maintain this kind of growth mindset you need to make sacrifices elsewhere (as I noted back in 2013 in how the generations have impacted how business has been conducted ) and in business’s case it has spiraled in a negative direction. Suffice it to say, productivity kept on getting stripped through “do more with less” in order to maintain the profits that had been established in a different time, different environment, and different context. The context changed, but the “growth” standards did not. This mindset, which drove a shitload of unhealthy behaviors and working cultures/attitudes, clearly contributed to where business went wrong.
Which leads me which leads me to how business stripping has had real societal consequences.
Business has a nasty habit of believing their business is their business and not the business of anyone outside of their business. However. Whatever business does and how they conduct their business has consequences in the marketplace, in the community, in culture, and in society. When business strips itself down to only the essentials internally it puts higher stress on external performance and less slack to deal with inconsistencies. While risk taking is the obvious sacrifice in this game, the larger impact is on how the business approaches the market and how the market responds. Stripping the business down to its bare bones creates an almost survive or die mentality with regard to how it deals with the marketplace. This means that encouraging consumption - even if it takes persuasion to some fairly uncomfortable moral places.?In addition, encouraging people to believe materialism is the pathway to happiness becomes the norm and essential to feeding the business. As a consequence, this shapes the actual conduct of the business. This happens because the margin of error is minuscule and success is almost an imperative. Societally this manipulation of purchase, attitudes, and societal beliefs is driven by the business because it has no slack. When you have no slack, you give no slack. It is a take or be taken world. It’s not even zero sum, it is less than zero. The impact in society and communities and at the kitchen table goes way beyond any simplistic “shareholder value” impact. Business doing wrong by people begets people believing wrong, in some form or fashion, is right.
Which leads me to say we have a long way to go.
Many of my peers, 50 & 60somethings, do not think business has gone wrong. Well. Assuming you didn’t want to talk about “woke” or “purpose” or social involvement where they clearly think that is business going wrong. But if you want to talk profits, revenues, and growth, well, they struggle to see what I would see. I get a lot of ‘blindness’ to misogyny, systemic racism and even a warped view on what is ‘work.’ And I almost get disbelief with regard to the malfunctioning of business and the linkage between business and society? Well. That’s crazy talk.
I say that to suggest at the C-level of corporations things are going pretty much in the wrong direction. Culturally, below the C-line, my bet is that a lot of things are happening in the good direction. The revolution to make business right is already happening—it's just that we don't always see it. And maybe it's good that we don't see it yet, until the very moment where it makes a lot of things shift, and the commitment to creating thriving sustainable businesses that create thriving sustainable societies can’t be stopped by people thinking business has not gone wrong. Maybe what I am suggesting is that the wrong in business will reduce everything to such a meaningless level that the good in business will be able to step in with a more meaningful future. Ponder.