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Opinions

Corporate Confucianism


In his post last year on FP, Harvard professor Stephen M. Walt makes a compelling argument that Confucianism may be a better model for understanding state policy and decision making than traditional frameworks like realism or liberalism. Walt argues that the tenants of Confucianism allow us to assume that most states operate with a degree of incompetence – often making decisions without adequate information, experience, or understanding. Indeed, one need not look far to find plenty of examples of seemingly moronic decision-making by the powers that be. The Confucian model is not only a thought provoking lens for political science, but is also an interesting model for understanding organizations.

However, I would make one caveat: focusing too much on the individual seems somewhat flawed. In this interpretation of Confucianism, the assumption is that people are incompetent or at least prone to stupid decisions. To balance our latent stupidity, society must create rigid systems and controls to keep us in check. While it’s easy to point fingers at the people in power (perhaps for good reason), often it is the system itself that promotes such failures. Aside from the rare transformational figure, the individual has limited impact next to the collective machinery of a government or organization. This article in the New Yorker highlights how President Obama succumbed to the unbending culture of Washington, which again points to the pervasive nature of culture. When a country, company or group has a culture that allows for. or even promotes incompetence, then the problem becomes systemic. What makes this challenging is that these “incompetent cultures” often are built on success and achievements of the past.

Staying with political science for a moment, the politics in the United States illustrates how nations are plagued by cultural stagnation. Twenty-five years ago, the majority of world’s nations modeled at least components of their founding charters after the U.S. constitution. Today however, most young nations find a document created 230 years ago less relevant and are instead likely to reference the more dynamic Canadian constitution. Why? Because the U.S. constitution has been slow to evolve and insists on adhering to concepts written before there was indoor plumbing. Other nations have figured this out, but the U.S. is unable to evolve. It is no wonder Washington politics has become such a quagmire.

For our purposes, the examples Walt provides of common pitfalls governments fall into also capture many of the challenges a stagnant culture can create for organizations.

1. New circumstances. Walt points to the absurdities the nuclear age brought, namely how Russia and the U.S. squandered trillions building weapons that could obliterate the world many times over. When companies are faced with change, there is a tendency to use old strategies to tackle new problems. Look at Nokia’s struggles to adapt to the smartphone market or U.S. car companies (any easy target I know) and their issues to developing vehicles suited for a world with oil above $100/barrel.

2. Unfamiliar environments. Similar to the first point, when companies enter into new environments, they are often faced with markets, cultures, and rules that are far different than what they’re used to. The tale of China’s feverish growth is littered with cautionary stories of MNC’s failing to understand the environment they were entering. Best Buy, for instance, wrongly assumed their U.S. model of enormous box stores and sterling customer service would lure consumers away from lower-priced, local options. This was not the case. Most organizations quick to laud the importance of understanding their environment, but in practice this often means relying on intuition than actual data. It takes a conscious, systematic effort that imbeds environmental awareness into the culture of the organization.

3. Overflowing in-boxes. When faced with change – whether it be new circumstances, unfamiliar environments, whatever – the challenges and problems created by some shift often seem endless. For many companies, there is a tendency to tackle too much at once. However, when a company takes on more issues then they can handle, the process grinds to a halt or blows up spectacularly. This is because not enough time is spent fully understanding what a problem is and how best to solve it. Companies should leverage their strengths and focus only on issues that have both the greatest impact and the greatest room for improvement. (We often encourage teams to develop a set of simple rules to help focus their efforts on tasks and issues that have the greatest impact.)

4. Taboo topics. Just like nations, organizations that restrict open discourse will limit their ability to fully leverage their people resources. This leads to missed opportunities to innovate, catch issues before they become serious, or otherwise maintain a competitive advantage. In today’s business world, where emergence and collective input are essential, operating with antiqued notions of secrecy puts organizations in a precarious position that frequently leads to setbacks if not tremendous failure.

5. Ideological blinders. Walt warns us to be wary of “anyone offering up universal and unquestioned truths about politics or society” and the same can be said for organizations. While there may be less zealots in organizations than politics, there are plenty of examples of companies making blanket assumptions about the world around them and paying the price for it. Kodak, for instance, assumed Americans would never desert their brand for Fuji and that digital cameras weren’t a viable replacement for film.

6. Finally, Success. Edgar Schein explains culture as a set of assumptions built on a group’s shared successes (aka autopilot). As I said in earlier in this post -these assumptions can lead to a common trap for organizations that need to innovate or adapt. Companies become resistant to risk taking, instead adopting a status quo that assumes what worked in the past will work in the future – because SUVs were popular in the 90’s, they’d be popular in the 2000’s. Sustained success requires constant adaption and new learning.

Opinions

Leading from the Front

28 March
Leading from the front

I have four boys between the ages of five and ten years old that are full of energy, enthusiasm, and curiosity. A simple family trip to the grocery store can turn into a complex activity of herding them through the various aisles and ultimately to the cashier.

On a recent shopping trip I discovered that they responded different ways to me leading them from behind versus the front. As long as I stayed amongst them, I spend my energy on communicating boundaries, disciplining violations, and responding to every request for chocolate (a family favorite). As I moved out in front and “pulled” them along, they put their focus on me and keeping up with the list of things we needed to accomplish. The boundaries and distractions no longer held any power as their focus was on the goal of keeping up with daddy.

This simple analogy describes my own frustration with our current political leaders. Too often they are stuck leading from behind and are scared to challenge us to a higher calling. As a community, we need a big goal, something to keep us optimistic, energetic, and focused. When we think of the great leaders of history like US President John F. Kennedy, they did exactly this. Kennedy’s great call to the US was to be the first nation to the moon. At the time he made this challenge, there was no way to get to the moon…it was unthinkable. The unthinkable became impossible and then inevitable as society focused on a goal that was so far ahead that no singular person, community, or company could have achieved on its own. China has done the same with milestones like the Olympics in Beijing and the World Expo in Shanghai and experienced enormous leaps in the development of society. Yet today the two biggest economies in the world largely lack a focus and I can’t point to any singular purpose or goal that unites them in their future.

Here’s a call out to Barack Obama and Xi Jingping to step out, think big, and lead from the front!