Author Alasdair White
When Margaret Thatcher became the Prime Minister of the United Kingdom and her soul mate, Ronald Reagan, became President of the United States, it did rather seem that a new era had dawned: one in which collectivism died and individualism became the dominating philosophy. Gone were the restrictive practices of the unions and the limitations on what we, as workers, were allowed to do and in came a new approach to the work relationship (see my essay of 2000 entitled New Realities). No longer a case of master-slave, it became one of willing buyer (the employer) and willing seller (the worker) and a negotiated agreement was reached that, in many cases, left the worker with the right to earn whatever he or she wanted, and the company with a motivated and highly performant workforce. It all seemed like a win-win situation and the world (or, at least, the advanced economic world) was changed forever.
By the Nineties, the new philosophy had spawned its fair share of extremists: there were the Geekoists spouting that fictional character’s mantra “greed is good” and proposing ‘big hairy goals’ to ‘stretch’ the performance of the workers with unlimited bonuses to reward the best results. Then there were those who felt that society was changing unacceptably and that collaboration was dead and selfishness was the norm – but their voices were drowned out by the sound of money being made. As a British trades unionist said at the time ‘it is difficult to say to a man who owns his own house and takes his holidays abroad, “Brother, let us lift you out of your poverty and protect your interests against those who would exploit you,” especially when he is about to buy the latest in electronic equipment’. Between these two extremes, most of us recognised that the freedom to earn what we want is a good thing but that we need to work collaboratively if we are to succeed.
The extremist gurus won! Management by Objectives (an approach dating back to the Fifties) became refined and goals and targets for everything became the norm – indeed, even in areas in which targets were inappropriate. The laissez-faire economic model became driven by targets, managers became obsessed with targets, politicians imposed targets without understanding the consequences, and the culture of management by numbers ran rampant. As with anything taken to extreme, fault lines began to appear: CEOs began to find their performance defined by share prices (over which they had no control), and the greed of the investors came to dominate. Short-termism ruled OK!
In many ways, it seems inevitable that under such pressures, some managers lost sight of the ‘greater good’ of the company or the society in which they served as public servants and became fixated on ‘achieving the numbers’. And that led, almost equally inevitably, to a culture in which a failure to meet the targets was always someone else’s fault and achieving the targets was solely attributable to the managers. Interpersonal management skills declined, the blame culture took over, the penalties for failure were not imposed, and the work place became almost as polarised as it was in the 1960s and 70s.
Even the giant corporate collapses – always as a result of executives driven by personal ambition, greed and personal success (as against the success of the enterprise) – didn’t cause the numbers-obsessed managers, their investors and those in government to blink! Aberrations, was how these collapses were viewed. Even the ‘workers’ didn’t care as long as it was not their company that had been driven into bankruptcy. No one thought twice about the executives of failed companies being reemployed elsewhere at enormous salaries as they were given another chance to destroy another company. The penalties of failure were not just ‘not applied’, they had ceased to exist. It was almost as if people were ‘entitled’ to destroy companies, to fail to deliver, and to continue to receive a salary. This entitlement culture was a derivative of the individualistic capitalism of the 1990s and the early years of this century.
Result is that less than ten years later this uncontrolled rampant, individualistic, laissez-faire capitalism has caused too many companies and far too many of the public (the consumers) to feel they are entitled to borrow money to buy the things they want and to live well beyond their means. The result is that the bubble has burst in a spectacular manner – the collapse of the world’s credit system being just the most evident outcome.
But the long-term is not all doom-and-gloom. We have a chance to revise the system, to set in place minimal but much needed controls, and to move away from economic extremism. The laissez-faire system is flawed but not terminally – objectives and targets are needed but we need to learn how to set them and we need to know how to reward success and penalise failure. And we need to develop collaborative working practices.
Did we get is wrong? No, but we didn’t get it right either. Now we have a chance to fix it.
Posted in