Costs as Cause

If the business is incurring costs, if it is spending more than it is taking in, then clearly tightening the belt is the obvious solution. Dire circumstances call for dire action! Guided by either/or thinking, the situation obviously calls forth a cut versus spend decision.  In a world where profit is paramount, everything is reduced to the choice between profit and loss—it is the way many business minded people role.

All costs are to be avoided, at all costs! This cost-cutting policy means no further spending on labor, advertising, marketing, sales, travel, except perhaps a little on electricity just to keep the lights on.

And what about the work of the business that requires incurring costs for transportation, labor, raw materials, and other such resources? We manage by the numbers and the numbers say it is time to circle the wagons. Relating to cost as a 4-letter word, one basically cuts costs to the bone, or at least to a level that is commensurate with current revenue toward returning the business to profitability.

There is nothing in this approach that allows you to do anything that would incur more costs that could potentially make for a better future.  It is a waiting game, waiting until profitability returns.  Because cost is the cause for less profit, costs must be significantly reduced (or eliminated) before the business is seen as again profitable.

Just how long will one have to wait?  Likely, until either there is a change in profitability or until the viability of the business is diminished.  That is to say until management does irreparable damage to the system, until there is no longer a (viable) business to manage. Eliminating the business of cost is just like bloodletting.  However, done to the extreme it can literally suck the life out of the system.

This view is all about eliminating costs, as if costs are causes. How or why is such a belief so prevalent?  It is a combination of having a short-term mindset and having the ability to do simple arithmetic.

In regard to the first point, essentially all costs equate to spending since the benefit of investment is most often realized beyond the (short-term) horizon and thus imperceptible.  To the second point, since profit is what’s left after costs are subtracted from revenue reducing costs to a minimum means more is left over.  Costs are cause for not enough profit—any fool can see that!  Therefore the single-minded focus on costs as a cause of not enough profit.

Accordingly cutting costs to the bare bones, particularly labor costs, is a popular action.  If one views people as labor, as merely something that diminishes profit—yes as a cost—then of course one will seek to minimize labor costs.  From this perspective, not doing so would be foolish.

Also it is equally foolish to put more into something that is subtracting from the profit that is so desired.  After all the business of business is not to provide goods and services, these are merely means to realizing profit.  Profit by any means is still profit! Moreover, often this strong desire (at times an addiction) for maximizing profit compels business leaders to seek the cheapest labor wherever it may be irrespective of the effects on the system, no matter the impact on quality and society—both issues unrelated to what’s in it for ‘me’ in the short-term.

Yes this scenario does seem a bit ridiculous.  Effective leaders don’t respond this way, particularly the entrepreneurially minded business leaders.

Cost as Necessary Outcome

To the entrepreneur costs (in the form of investment) is the means toward building a viable business.  And for the more mature business investing and not divesting in the business is the way to sustain the system’s viability.  Therefore in a well-managed business there is an understanding of the difference between spending and investment—not all costs are the same.  Therefore decisions around costs are not merely either/or decisions of cut versus spend.

Those in touch with their entrepreneurial spirit and who don’t suffer from short sightedness understand: a) that doing any activity requires expending energy which creates costs—costs are not causes but are unavoidable outcomes unless you do nothing; b) that not all costs are wasteful and unproductive and it is important to differentiate between spending and investment; and c) treating cost as a 4-letter word is reactionary and reflects a short-term focus which doesn’t allow for proactive development initiatives that would likely improve the revenue stream making costs productive.

Progress (with its requirement of investment and viability) is more important than growth in profit.  Subverting progress and viewing cost as cause of diminished profit is not the way of the wise.

Effectiveness in leading is about ensuring the system is managed to last and not simply to make the next quarter’s profit number or even next year’s.  The business of business cannot be profit and the future is not a series of short-terms.  Being of a different mind and leading with an understanding of (a), (b) and (c) above will most likely allow one to create a more favorable future for the business, and everyone touched by the business.

Accordingly, to the effective leader cost is not a 4-letter word to recoil against.  Incurring costs through investment initiatives is a way to ensure the viability of the system.  It is critical therefore to differentiate between spending and investment, between value-added and non-value-added costs.

Not doing so lumps all costs as spending, inevitably causing the system great harm and a short life.  Treating all costs as spending results in a lack of investment in support of the system’s viability.  If one hasn’t the ability to continue to exist in the future—if you aren’t viable—no amount of profit will help.

A Final Word (For All Who Aspire to Lead)

Cost is an outcome and not a cause.  Managing as if it is a cause with a focus on results along with the belief that the future is just a series of short-terms is a fool’s game. No amount of hope will help.

We create tomorrow’s reality by the decisions we make today.  If those decisions are ones that reflect a recoiling against all costs—reducing our choice to cut versus spend—then we are being reactionary and short sighted.  If, however, we believe having a future is a worthwhile expectation and want it to be better, then we must have the courage to enact it, to invest in it.

Getting the most out of people is not a bad thing but in the extreme it translates into squeezing the life out of them.  As Deming exclaimed, “beat horses and they will run faster—for a while.” Doing more with less implies squeezing more and more out of people until they drop.

When is the extreme pursued?  When the goal is to maximize profit: when corporations squeeze whatever is left to get just that much more profit. From a previous post, according to Ethan Harris, chief economist at Bank of America Merrill Lynch, “companies are squeezing their labor costs to build profits.”  Moreover, as noted in an interview with the Huffington Post, Kathy Bostjancic, director for macroeconomic analysis at the Conference Board “most of the productivity gains have gone to corporate America and stock prices.”

Our economic system rests on the belief that it is just if those who don’t benefit sacrifice for those who do.  We don’t have to go to China to find evidence of workers sacrificing in service to corporate gain the history of work in U.S. industrial society shows both wages and working conditions were abysmal.  It is only through the efforts of an organized labor movement beginning in the late 1800’s (e.g. Haymarket Square) that humane treatment (e.g. living wages, 8-hour work day, safe working conditions etc) to those laboring to do the work has been realized.

Perhaps today’s corporate overlords are seeking to return to the good ole days for the sake of greater profits.  Consider the following from a previous post

The two-tier wage structure of the Chrysler Corporation (as well as in GM and Ford) wherein labor for their U. S. manufacturing is hired at the rate of $14/hour.  Some might say this creates more jobs, but if the jobs weren’t there already a low hourly rate wouldn’t create them.  That is to say, it doesn’t create jobs it just makes it far more profitable for corporations who have the work to hire people to perform that work.  It appears that it is an issue of where corporations make more with the cash they have on hand, in the financial markets or in the labor market. The guiding premise is if a corporation can get people to work for far less (or nothing) it could make a lot of money!

Gains for Me

The notion that productivity gains drives higher standards of living beneficial to society is only true to the extent that people in society—beyond the shareholders and executives—participate in the gains in productivity. According to an August 17^th 2011 article by Jim Zarroli (a business reporter for NPR), “the U.S. economy may be slowing to a crawl, but a lot of individual companies are richer than ever.” Moreover, a 2011 report by the Congressional Budget Office (CBO) shows that between 1979 and 2007 income grew by 275% for the top 1% of households, 65% for the next 19% and under 40% for the next 60%, with the bottom 20% of households only realizing an 18% growth.  Clearly the further away from the top the further away are the benefits.

In light of the current higher productivity levels and the greater number of people who are either unemployed or underemployed clearly more are benefiting less.  Why?  To a large extent the corporations are in business solely for their own self-serving purposes—the business of business is profit for top executives and major shareholders. It seems doing more with less translates into a select few realizing most of the benefit.

If, in general, fewer and fewer people directly participate in the benefits from productivity gains then the resultant higher standards of living become society’s burden.  With fewer and fewer sharing the benefits there are more and more moving closer to the edge of poverty.  Society as a whole suffers as the income inequality gap widens, as evidenced by the research of Richard Wilkinson and Kate Pickett presented in their book, The Spirit Level.

Since many of society’s corporations receive support and advantage from society—extracting from society whatever they can for self-serving purposes—without providing commensurate return, they could be considered parasites rather than partners of society. Progress in society cannot possibly be realized under a system where everyone is in it for him or her self—such a system subverts progress.

Doing More For More (of us)

However if the intent of the business enterprise is improving quality, not maximizing profit, then as Deming’s chain reaction indicates productivity would not only improve, the company would capture the market with better quality and lower prices as well. This enhances its competitive advantage and increases the company’s viability—portending a favorable future—enabling it to provide more jobs.  In this view of business, more and more people win—customers, shareholders, executives, employees, suppliers and society!  Deming learned from his decades of helping companies improve quality, “improvement of quality begets naturally and inevitably improvement of productivity”.

So the fundamental question is whether this society is a society of ‘We’ or of ‘Me’.  That is, whether we are in this society with a commitment to the advancement of our collective wellbeing or with a commitment to advancing one’s self-interest.  If the former then we rise and fall together and if the latter we all fall (eventually) as we each struggle alone, except of course those at the top.  Every person for him or her self is not the way to a better society for all or a sustainable society.

For all of us to realize the benefits from increases in productivity we need to transcend self-interest.  The responsibility of business is not merely the simplistic notion of maximizing profit for the owners and executives. Decisions based solely on what’s in it for me brings disorder to and the dissolution of society—it is just plain suicidal.

Wanted: Leaders for Action

Bostjancic recognized the need for corporations to begin hiring in order for demand to increase leading to the need for the production of more products/services—a growing economy. Bostjancic also notes the difficult decision corporate executives have before them saying “it’s very difficult to stand out like that and to be bold because if no one else is doing it, and you’re proven wrong, you could be penalized.” And Bostjancic continues, “if the economy does turn down, then you’ve over-hired, you’ve over-invested.”  One is frozen against taking action if and only if: a) one fails to understand that having sufficient income enables consumer demand that causes the need for production; b) one doesn’t understand that money is the energy transferring substance in an economy and only if it flows can the economy remain vibrant; and c) one lacks the courage to lead.  Waiting for someone else to make the decision you are unwilling to make is not the way of leadership.

It is time for businesses to be led by those who manage business with a different mind—a caring mind.  Because organizations are reciprocally interdependent with society and the environment, viability any human activity system necessarily requires ethical, social and environmentally responsible action.  The leaders of business we need are not narrowly and superficially fixated on maximizing material self-interest—exploiting whatever they can. The leaders we need critically think about the underlying precepts of our current system and understand how detrimental it is to our collective wellbeing and the viability of a business enterprise to continue following the herd.

If they are in deed leaders then they will cease merely following and erroneously believing that what’s in it for me is all that matters.  They will cease being parasites and have the courage to act as partners to society.

Growing economies are growing not because business executives react to and feed off them, they are growing economies because true leaders proactively contribute to their (continued) viability.  They don’t just extract from others they invest in others.

Accordingly, with the use of data—often referred to as analytics when mediated by computer technology—evidence-based approach to management seems to be the latest wave (or perhaps fade) in management practice.  Metrics are the sought after critical kernel to effective management decision-making.  This belief is often expressed as: We need to collect data because we need the numbers to tell us what action to take!

Deming was adamant in warning us of the cost from believing in the falsehood that if you can’t measure it then you can’t manage it, asserting “the most important figures that one needs for management are unknown or unknowable!” In spite of this warning, a less than critical use of data persists.  It is not that using data is wrong it is using data uncritically that is wrong.

Thought Can Deceive

The blind and uncritical embrace of data can mislead us into thinking that the numbers are ‘the thing’.  Just as we know that the map is not the territory, we must also be mindful of the fact that the numbers are not ‘the thing’ but rather they are abstractions of the constructs of concrete experience we are seeking to understand.  If we manage solely by the numbers then we will blind our self to the very essence of what we are seeking to manage, deceiving our self by thinking that the numbers are ‘the thing’. Again Deming offers us warning, “he that would run his company on visible figures alone will in time have neither company nor figures.”

Moreover, as Alfred Korzybski noted “a map is not the territory it represent, but if correct, it has similar structure to the territory, which accounts for its usefulness”, the same holds true for data and the associated constructs they (are intended to) represent.  So the fact that we measure and collect data—that we have numbers—doesn’t mean that the numbers we have are relevant or that they adequately represent the construct in which we are interested in understanding, that the data are valid.

That is, valid data is data that actually are representative or reflective of the intended construct we seek to make inferences/decisions about as well as the context within which it is being applied.  The data must actually be collected using an operationally defined and meaningful characteristic of the construct to which we are speaking.  Moreover, the data one collects must be applicable in the context in which it is being applied.  The issue is not whether data although not perfect are good enough, but whether the data are valid: If data are not valid then the data are not relevant!

A Construct Is Not A Variable

Many make the mistake of trying to directly measure or quantify constructs or concepts.  A common example of this mistake is when people (as customers or recipients of products/services) are asked to rate on a scale of say 1 to 5 the quality of __________ (e.g. instruction, service, product etc.).  Quality is a construct and as such it cannot be directly known through measurement.  Thus trying to measure quality in this way is an exercise in self-deception.  All that can be gathered are opinions. And there is a difference between measuring something and soliciting peoples’ opinions about that something; these are not the same and to treat them as the same is to commit a grave error!

So the fact that one can collect data—asking people to complete a survey—doesn’t mean that what is collected has any relevance, meaning or usefulness. The notion of the quality of something has many characteristics, and it is these characteristics when operationally defined as variables that lend themselves to quantification.  The variables are the map of the conceptual territory and thus to the extent that the variables are valid representations they can be useful. Hence if we are interested in measuring qualities of something then we must operationally define variables that re-present the characteristics of the construct of which we are interested.

It is About Relevance

So not all data are relevant and moreover that which is relevant is context limited.  Often people are asked to evaluate or assess whether this or that met their expectation or goals.  On an individual basis this type of question makes sense, as long as one knows what the person’s reference point or anchor is, after all this is the context of the response.  Each individual has his/her own anchor, his/her own context.

So to ignore the individual contexts and aggregate the responses from among many individuals across varying these contexts is tantamount to aggregating all types of apples, pears, plums and oranges.  Mixing context makes no sense and renders the data both meaningless and thus useless. Even data relevant in their own context when placed in different contexts can be rendered irrelevant.  Just because we can add numbers doesn’t mean their sum or average has meaning.  Data are not everywhere applicable and appropriate.

Again Lord Kelvin offers us thoughtful advice, “the more you understand what is wrong with a figure, the more valuable that figure becomes.”  This doesn’t mean that we can justify using whatever data we have in whatever way we wish by simply stating, it isn’t perfect but nothing is perfect so we can use what we have. Such justifications can’t make what is invalid valid!

When we apply data beyond its appropriate and useful limits then we are in effect misusing data; we are doing something that is a very harmful and destructive.   So it is imperative that we understand (and stay within) the limitations of the data we collect.

Apart from the above factors affecting the validity of the data one collects, there is also the fact that quantitatively derived knowledge is not the only way of gaining knowledge about things, particularly those things that involve human experience. That is to say, we must temper this enthusiasm for metric-based management with the wisdom inherent in the following (attributed to sociologist William Bruce Cameron), “not everything that can be counted counts and not everything that counts can be counted.”

More to the point, the most important aspects of what we are managing are not always knowable by measurement. To avoid being deceived by your thinking, think critically about what you are setting out to do.

The answers one gets is significantly influenced by the questions one asks.  Knowing the questions to ask is thus critical to having valid data.

Whether it is a team or an entire organization it would seem that trust, engagement and energized relationships are paramount to the success and sustainability of any endeavor requiring the collaborative effort of people.  After all for people to engage toward productively working together they would have to trust each other, and for them to persist in their efforts their interactions and relationships would have to be inherently motivating and enlivening.

To this point Richard also suggests that such leaders “provide the social glue” via a shared vision.  As many have asserted teams—a collective of individuals cooperating—need a shared vision.  As previously discussed, there is little doubt a vision can provide the glue and the context for meaning that is so necessary.  However these will be realized if and only if the vision is both unifying and vivifying—any vision won’t do, even if it is shared and/or bought into.

A unifying and vivifying vision is not a vision that people have to ‘buy into’!   Such a vision inherently resonates within people, thus it is not something that people have to be persuaded to support or be provided incentive to support in a quid pro quo arrangement.

So how would such a vision arise?  Its emergence begins with the inner knowledge that the value of people does not begin and end with the instrumental value they provide in support of some goal or mission.  Accordingly its emergence is likely only when those in authority—often called leaders—are themselves in touch with the unchanging aspect of their very being, with their humanness.  When this happens those in authority are able to exhibit the courage to relate to and connect with people core-to-core.

It is all about the energy field from which those in authority operate.  If the leader uses the triad of fear-desire-pride as the bases of his/her practice then all that will emerge will be rigidity of mind, divisiveness and competitiveness—in general whatever can be born of fear will spring forth.  However if courage-neutrality-willingness (a.k.a. self-initiation-non-attachment-engagement) is the energy field that forms basis of one’s management practice then trusting relationships will develop; and with trust comes wonderful and unique capabilities—the actualization of human potential.

When there is mutual trust, people acknowledge their interdependence and their interactions not only become helpful and collaborative they become synergistic. Moreover performance can be sustained because positive energy attractors make it possible for human energy to increase through synergetic (i.e. energy producing) relationships. That is to say our energy is increased not decreased when the nature of the relationships with work and each other resonates within our very being.

Being free independent individuals necessarily means people can freely do as they please or more specifically that they should do as they wish for their own pleasure—(my) life is all about me getting what’s mine without interference.  Apart from being unencumbered in seeking what we want, this belief also implies there is no obligation that an individual has to other individuals, because such obligation would be tantamount to an imposition (by another) upon one’s freedom to act as he/she desires.

Being independent also means I depend on no one else and no one else depends on me—everyone is on his/her own.  This implies that we each are separate with different intentions, hence the importance of being free to enact these intentions.  I think and do for me and only me.

With collective action requiring individuals to follow an idea that is likely not one’s own, it leads to everyone’s action being constrained or circumscribed by this idea.  Thus acting as or in a collective is something that must be rejected by free independent individuals—there can only be free independent individual action if there is no constraint or obligations.  That is, free independent individual concept as the overarching theory to guide order-creating policy necessarily means collective concerns are denied out of existence.  Thus, action upon each other (in pursuit of self-interest) is far more likely than acting with each other (in support of collective interests).

[Note following this idea might not even be possible because it equates to restricting one’s action by the imposed idea of another—specifically that you ought to act as if you are a free independent individual.  Hence this essentially means that another’s idea for how to order life is imposed upon your life and in conforming to the idea of someone else you would no longer be acting from your own idea as a free and independent individual!]

A Thought Experiment

Let’s conduct a thought experiment where we take the notion of free independent individuals to its logical conclusion. In this experiment we make the assumption that free independent individuals is the foundational principle upon which life is structured.

So we have a number of free independent individuals—a crowd of people—inhabiting Earth.  In this created world of free independent individuals each roams about following his/her own plans in pursuit of his/her own ideas unfettered by the ideas, needs or wishes of another.  Everyone is on his/her own doing his/her own thing!  Now let’s fast forward to the future to see what has come of this world of free independent individuals doing his/her own thing.

Absent of collective shared values, laws and ideas of what is right and good there is no rationale for or vision of a ‘we’ and hence no government.  After all a system of governance is antithetical to the notion of free independent individuals who believe that their freedom rests upon them not being encumbered and having no inherent or institutionalized obligations to others that would impinge upon them acting in accordance with their own plan for pursuing their own interests.  So for example, in place of government, we see each individual ensuring his/her own safety and security through his/her individual idea that each believes affords him/her safety and security.  Likely fearful of each other they each equip themselves with weapons of their choice for protection.

Also there are no other public services simply because there is no vision of a collective—a.k.a. a public—there are only autonomously acting independent individuals. In short there is no need for any public anything since each has the unquestionable right to act independently and free from accordance with or obligation to the ideas of another person or persons.  Individual rights are supreme.

Moreover, in this world we see each person learning independently (of course) on his/her own.  Learning is purely individual learning since accepting ideas from another would necessitate displacing one’s own idea with that of another’s and would equate to another’s idea directing one’s actions, which is counter to free independent individual action.  Also as a result there is an absence of scientific knowledge, as both science and its advancement would be impossible without cooperative and collaborative action.  Generally the advancement of knowledge among a crowd of individuals is quite unlikely because following or working with the ideas of others would be strongly resisted among independently acting individuals—creative and synthetic thinking would be rare.

Because the efficient and effective functioning of any system rests upon collective action there are no such systems in this free independent individual world. Therefore the existence of a functioning system of exchange and economic activity, as well as the development of industries and business organizations would not be possible. The whole idea of free independent people willfully coming together in support of the accomplishment of another’s idea and interests—especially when no obligation can be assumed from the other to them—is antithetical to unbridled autonomy, to a world of free independent individuals.

With each free and independent individual acting as if each has dominion over the resources nature provides, each will use them as he/she sees fit.  That is to say, there is no concern for either what is left for others or how it is left for others, since either of these implies an individual has an obligation to or is constrained by the others.  Again this runs smack in the face of being independent of other individuals.  Stewardship of the environment, not only for one’s self but for all others who have or will have a need for these resources is a concept that cannot be embraced within this world.

Moreover, to the extent that doing one’s own thing allows for procreation we have the corresponding (although remote) possibility of future generations of free independent individuals. That is, the likelihood of this is near zero since it requires two independent individuals giving up their independence to be dependent on each other and to be obligated to a third individual.  If this remote possibility did materialize, clearly infant mortality would be off the chart (100%) since newborn human beings could not live for long as free and independent beings.  In other words, since the development of a human being requires one or more individuals being obligated to and responsible for the child’s development, this required collective action is antithetical to a world of unbridled autonomy.

My life is all about me getting what’s mine cannot be the way to a high performing society, much less a healthy and harmonious society.  Why?  A society of people implies the existence of a collective, a ‘We’ and not merely a crowd of ‘Me’s’. Being free independent individuals does not necessarily mean we should freely do as we please or more specifically that we should do as we wish for our own pleasure.

History provides more than enough examples of intelligent individuals (acting as if they are free independent individuals) without a complimentary understanding and heartfelt sense of oneness with other beings doing horrible things.  The 2008 Financial Crisis is a case in point where unencumbered people inflicted harm upon many others in their pursuit of their own interest; there was no felt concern or responsibility for the consequences others might experience, there was no sense of ‘we’.

This thought experiment, which takes the belief that human beings are at base free independent individuals to its logical conclusion, clearly shows the idea to be more fantasy and fabrication than fact.  It should be clear from this thought experiment that free independent individuals as a principle for life is a recipe for the destruction.  If people critically think about this notion the vast majority will acknowledge its falsehood and its destructive impact on society.

Interdependent Not Independent

Acting as if we are free independent individuals is antithetical to our very nature.  It is counter to developing humanly productive relationships for the satisfaction of our inter-subjectness—we are social beings not merely separate independent beings. Consequently by structuring our life following the idea that we are free independent individuals—that we have no connection and obligation to each other—we necessarily lose our sense of humanness.  We become less than human, with an increased likelihood of committing inhumane acts—all in the name of independent individual freedom.

So people are not simply independent beings but rather social beings who must communicate and commune with other individuals in a social system for mutual development, for both individual and collective development.  Consequently, each individual requires being in helping relationships with others for the development of each other’s potential.  Individuals need to harmonize with other individuals, as there is an inter-subject aspect to being human as much as there is an individual intra-subject characteristic.  Human beings are social beings as much as they are individual biological beings—people exist collectively not strictly individually.

Collectivism is no more a dirty word than is individualism.  To deny or renounce the need for collectivism is to refuse one’s own humanity.  The individual and the collective are part and parcel to our humanness, thus being human means we have a responsibility to both.

Of course as individuals we have the right to pursue our interests but we also have the responsibility to do so without impinging upon the right of others to do the same, now and in the future! Moreover while we have the responsibility to develop our humanness we also have the responsibility to facilitate its development in others.  Accordingly, we must act as individual agents as well as collaborative parts of a community.   This is not an either/or choice.  It is important that we each understand our (shared) nature and the fact that we each impact the environment within which we all live.

If we only could see that we are deeply interconnected and that we truly need each other—if we can transcend self-interest—then we’d have little difficulty embracing our responsibilities to each other and accordingly making our society a more human society.  The solution to our difficulties will not emerge by attaching to one end of the individual to collective spectrum. Doing so would lead to self-destruction. Responsible people will not be selfish and short sighted and thus not act in a way that would diminish the prospects for the continued quality of life of all individuals. By transcending self-interest and embracing our I-We nature we can each lead the evolvement of our society to a higher level of human existence ensuring a brighter future for generations to come.

Most have experienced the energy associated with a wide range of emotions/feelings from guilt, anger and fear to compassion, joy, and love.  And probably we know people, or know of people, where it seems that their life is lived in just a few of emotional states.  Some seemingly are forever angry and fearful and some are unceasingly compassionate and joyful.  We’ve also experienced the influence of another’s energy upon us: those embodying negative energy can depress or drain our energy while those exhibiting positive energy can be vivifying.

Appropriate Use of Energy Fields

However, both negative and positive emotions can be beneficial when used appropriately.  Harvard Medical School psychiatrist George Vaillant, M.D. notes that negative emotions are essential for individual survival—the fight or flight response—and as such are all about ‘me’ in the moment.  Whereas positive emotions extend concern beyond the boundaries of one’s own skin and beyond the immediate moment since they enable flexible, integrative and creative patterns of thought and behavior.

In Power vs Force David Hawkins explains and calibrates the levels of energy (i.e. consciousness) ranging from negative attractors (i.e. energy fields) to positive attractors that are significant determinants of behavior.  The attractor levels ranging from negative energy to increasingly more positive energy, in non-linear progression are: shame, guilt, apathy, grief, fear, desire, anger, pride, courage, neutrality/non-attachment, willingness/engagement, acceptance, reason, love, joy, peace, enlightenment.  Courage, the middle energy field in the progression, is the point where a person’s behavior begins to be initiated from within and thus reflects the foundation for the expression of one’s own power.   Up to this point the energy fields (shame to pride) represent levels of response to outside forces and beyond this point represent increasing levels of self-awareness.  Moreover, as one’s energy is canalized by or is given purpose through increasing self-awareness greater human potential is actualized.

Commonly Employed Attractors

However for most people employed by an organization, and subordinated within its system of management, the energy field leveraged in one’s work-life can be an obstacle to realizing one’s potential.  Even though most in management desire to have engaged employees the systems and processes they put in practice can be obstacles to what is desired. For example, those in management seeking to control the focus of people’s attention and behavior can create a context wherein the satisfaction of one’s needs is conditional, what is essentially management by negative attractors.

Commonly found in use within most organizations is the fear-desire-pride triad.  This triad underlies most of management’s fear-based methods (e.g. annual performance appraisal, merit system, incentive system/pay-for-performance, management-by-results/MBO, reward/punishment system and accountability system) for forcing people’s actions/behaviors to align with the strategy and goals of the organization and/or the desires of one’s manager.

The practitioners of these methods might argue that they are not using fear but rather they are merely offering the possibility for reward, recognition and promotion in exchange for behavior leading to desired results.  It is simply a quid pro quo transaction, a purely economic transaction—if you do this then you get that.

What is conveniently glossed over or denied is that offering a reward is synonymous to a threat of punishment, of not getting what is offered as reward/incentive or worse getting fired—if you don’t do this you won’t get that (or you will get what you don’t want).  So reward and punishment are inseparably different sides of the same coin!  The same energy field is in play whether one is forced to either seek reward or to avoid punishment.  Whether the carrot or the stick, force is in play.

By influencing behavior through the use of force one turns attention toward things of extrinsic value and away from intrinsic human potential.  Invariably inherent potential is inhibited from emerging. Moreover, given the ephemeral nature of things of outer value, causing people to act in pursuit of them promotes attachment to the material things in one’s life (e.g. possessions, position, thoughts).

The desire for such things is unending.  How much recognition or reward is enough?  How much reward will satiate the desire for more reward?  What gain—material or positional—will quell the desire and make one proud enough? The point is, the cravings initiated by fear, desire and pride are insatiable—the ego can never have enough.

So why is this a bad thing?  After all it keeps everyone busily moving toward a goal that can’t be meet once and for all—it keeps us working hard.  Isn’t this the thinking underlying our economic system, that the pursuit of self-interest and unlimited material gain will keep people industrious?  Doesn’t this provide just what management wants, busy hardworking people?

Although employing the fear-desire-pride triad does in deed cause people to react, such behavior does not represent genuinely engaged action.  This triad facilitates a way of being—of canalizing energy—leading to increasingly greater attachment to thoughts and things.  Moreover, not only does it keep people running on the wheel—so much effort yet so little progress—it leads to intense selfish behavior (a.k.a. greed).

So the more one focuses on fear, the more intense the feeling of fear becomes and the more it begins to control behavior and limit the choices a person is able to perceive. In effect, by holding fear centrally in mind—as the attractor of one’s energy—people limit their ability to perceive (and interpret) anything without the constraints that fear imposes.  Acting out of fear, people tend to think and frame things in either/or terms making the full range of possibilities imperceptible.  In fact, people can become blinded by their fears.  No wonder change is so often resisted!  Moreover people with fear haven’t the courage to think anew as fear obstructs self initiated meaningful behavior, self-determination and self-efficacy (i.e. psychological empowerment).

George Vaillant asserts that human beings are hardwired for positive emotions and that these emotions are essential for the survival of humankind, which is beyond individual survival.  The implication being that in life, we each need to progress toward more positive fields of energy and to canalize our energy into greater levels of self-awareness thus realizing the power of being human.  In other words, the more positive the energy fields the more genuinely engaged and universally caring people will become.  But, the more we employ negative attractors the more people will be caught up and stuck in a vicious and selfish cycle leaving them unable to freely exercise their capabilities.

Positive Energy Triad

A more humanly productive triad to employ is courage-neutrality-willingness (a.k.a self-initiation-non-attachment-engagement).  As previously mentioned courage is the beginning of self-initiated behavior, of intrinsically motivated action.  Being courageous implies exercising one’s will in order to face fear without allowing it to dictate what happens next. This is the beginning of truly humanly productive behavior and the pathway to increasing levels of awareness.

Therefore facilitating others through the positive energy fields requires eliminating the use of extrinsic factors to cause others to act.  It means enabling others to realize the power they themselves have while recognizing that outside forces do not (and should not) dictate their behavior. Again as the saying goes it is not what happens in life so much as what you do with what happens—this is the difference that makes all the difference!

Neutrality according to David Hawkins is the energy field where “release from the positionality that typifies lower levels” occurs.  At this level people are free from attachment to material outcomes or identification with labels and the associated either/or thinking that limits perspective and stifles creativity.  In other words, fear, desire and pride no longer compel people to defend or prove anything or to frame issues in us-against-them terms, which minimizes cooperative behavior. Moreover the non-attachment that underlies neutrality affords people the confidence and flexibility of mind to entertain ideas—even those challenging to their own thoughts—and to do so in collaborative relationship with others.

Willingness is the energy field wherein open-mindedness opens up even further through reflective thinking and a widening concern for others.  At this level, according to Hawkins, people are “willing to face inner issues and don’t have major learning blocks.”  When people are willing and able to think reflectively they afford themselves the opportunity to develop and bring to the world more of the potential that lies within them—everyone benefits.  Not inhibited by fear, desire and pride, such people welcome productive feedback that makes them true learners—truly engaged—in life.  Furthermore the collaboration and learning that this energy field affords enables the work performed to be high quality work.

Leaderships Facilitates Power

Once a leader ceases viewing people as means to their ends and begins understanding people as ends in themselves, then he/she will be able to see the value in changing the triad upon which his/her approach to leading rests.  As argued in a previous post, to truly lead one must cease appraising performance and begin facilitating performance!  Changing one’s operative triad is necessary for a judge of performance to become a facilitator for enabling potential and improving performance.

Changing one’s operative triad requires a major change in the level of consciousness through which life is ordered.  Quoting Joseph Campbell, “when we quit thinking primarily about ourselves and our own self-preservation, we undergo a truly heroic transformation of consciousness.” Isn’t this the journey all leaders must take for themselves to be humanly productive and to enable the potential and power of others to spring forth?

Most certainly he/she would not even think about how the organizational environment influences the actualization of people’s potential.  Likely he/she would look for creativity—the antecedent of innovation—from those few individuals who he/she deems genetics had been kind.  Such a leader would also dismiss the creative potential everyone else could provide.  Interesting work goes to those few thought to have the creative gene and the rest (of us) get the boring stuff.  In effect, what such a leader would be doing is limiting the potential of the organization.

Its Inherent Not Incented

As discussed in a previous posting, creativity is an inherently natural human capability; young children are remarkable in exhibiting this human attribute of mind. Why do they exhibit it and yet most adults don’t?  Young children haven’t yet developed habits of thought that closes the mind and constrains playfulness. If only work was more like play! Children haven’t yet been assimilated or acculturated into a culture were fear-based management practices are seen as best practice and risk averse action is the normative behavior.

To be fair, the suppression of the creative spirit most often starts at the time the child begins formal education and its pummeling continues throughout, thus preparing each for the world of work in organizations. Captains of industry assert that they seek creative minds while at the same time implement systems of management that inhibit the very thing they say they wish they had.  Why else would most innovation be seen predominantly emerging from outside, not inside, the organization?  That is, the greatest influencing factor toward the emergence of creativity is the environment within which an individual lives not genetics.

Each and every person is creative—they likely demonstrated it as a child—and can therefore exhibit creativity as an adult if each is encouraged and facilitated to hold a question and thus to embrace and explore that question—this is where the environment and leadership have a role.  Each can hold a question if the organization is a system for learning and not merely a system for profit.  When profit concerns dominate then efforts toward creativity and a better future (i.e. progress) are most often abandoned.

Culture Is Capability

While every organization self-actualizes, not every organization actualizes its greatest potential.  Because of the organization’s culture many are limited, not in potential but in what’s likely to emerge.

The fact that the environment has far more to do with creativity emerging suggests that far more creative potential would surface in organizations if those in authority attended to providing an environment, a culture, supporting creative emergence.

Because culture is the order defining collective mind of the organization, wherein the in-practice shared values and beliefs reside, it influences perception and informs behavior of all members.  Hence, because culture circumscribes capability, it essentially defines capability.  Culture can either facilitate or frustrate creative emergence. For example, an organization that is structured and managed to be a system for learning would have a far different culture than one that was structured and managed as a system for profit largely because of the markedly different in-practice shared values and beliefs.

Leading Creativity

In 1965 Abraham Maslow provided a management policy, Eupsychian Management, identifying essential assumptions upon which to build one’s management practice—today we might call this leadership.  Some of the 36 assumptions directly relevant to creativity include:

• Assume everyone to be trusted
• Assume in all your people the impulse to achieve
• Assume there is no dominance-subordination hierarchy…
• Synergy is also assumed
• Assume an active trend to self-actualization–freedom to effectuate one’s own ideas, to select one’s own friends and one’s own kind of people, to “grow,” to try things out, to make experiments and mistakes, etc.
• Assume that everyone prefers to feel important, needed, useful, successful, proud, respected, rather than unimportant, interchangeable anonymous, wasted, unused, expendable, disrespected.
• Assume a tendency to improve things
• Assume that growth occurs through delight and through boredom
• Assume that fairly well-developed people would rather be interested than be bored
• Assume that fairly well-developed people would rather create than destroy
• All human beings, not only eupsychian ones, prefer meaningful work to meaningless work

Despite the guidance from Maslow as well as that of many others (such as Deming, Ackoff), in general management practitioners remain committed to command and control methods.  Hence leadership and organizations wherein creative potential is actualized are rare!

In those rare instances, leaders of organizations where creative thinking and high performance are evident understand at a deep level that the assumptions they make and the practices they take are critical to the space they provide for others to exercise their capability.  Effective leaders know that culture is capability! Therefore they know that to facilitate the emergence of a culture wherein trust, collaborative efforts, the spirit of quality and meaningfulness abound begins with an insightful and vivifying vision.   They know that an organization absent of an enlivening vision expunges meaning from the work of the organization and with it creativity.

Because people’s ideas enable a business to remain viable, leaders know the importance of modeling the behavior they wish to see throughout the organization; of they them selves being open to creative ideas.  And correspondingly to not put into practice processes and systems that inhibit the creative spirit.  For example knowing the creative process is not cost efficient, they won’t put in place processes that require them to be managed as a cost or by cost alone.

The creative process is iterative, non-linear and unpredictable.  Accordingly it does not always result in material gain or achieve the desired outcome, so management practices holding people accountable for results would not be the way of facilitating its emergence.

However, while many ideas will not produce material gain entertaining all ideas will ensure a productive flow of ideas—ideas bring about more ideas. An organization where this is understood likely will reflect a culture invested in the future—an investment oriented culture—wherein the short-term doesn’t obstruct the long-view.

In such an organization there would not only be a general openness to ideas for improvement that challenge the way things are thus enabling the organization to remain relevant and viable, the work itself would be challenging.. In such an organization you would find people experiencing joy through their work and the creative spirit manifesting throughout.

It should be no surprise that so many people have negative experiences with the practice; that people abhor the annual performance appraisal.

As discussed in a previous posting the annual performance appraisal is a pathway to mistrust and not to high performance.  It enacts fear as the means of getting people to do what management wants—it is the go-to-lever for inciting action.

What action does one get?  Self-serving action.  After all one’s continued employment depends on it. Individualism not interdependence is the rule of behavior. Since ‘my’ results matters what I do for ‘me’ to get those results is what counts—in the end it’s about ‘me’ winning! As the saying goes, I don’t have to out run the bear, I just have to out run you!

The annual performance appraisal fosters the reinforcing attitude that you are on your own, which is an easy attitude to embrace given the system of economics—the context within which we conduct business—advances a self-interest focus. While the ‘you’re on your own’ message is easy to accept, because it fits together, it undermines the quality of work and the overall performance of the organization. The effect is the relationships among people are anything but helping and productive—synergy, the means to creativity, cannot possibly emerge.

The annual performance appraisal doesn’t foster a sense of interdependence among the members of the organization.  So in the end, both individuals and the organization lose.

So what would be better?  If the intent is to improve performance, not merely appraise it then facilitate its improvement!  So how do you do that?  You need a system for learning and not a system of appraisal.  In short, facilitate don’t appraise! Wouldn’t facilitating—which means to aid, to further, to help—be far better?

Integrate the plan-do-study-act continuous learning and improvement cycle into every job, especially management’s. Make this cycle the essential part of everyone’s responsibility.  Provide just-in-time feedback with the intent of facilitating learning. When feedback is not used for ranking, categorizing, labeling and reward/punishment—when it is not a means for accountability—then it turns from being harmful to helpful. Be a coach and counsel not a judge.

As Warren Bennis asserted, managers do things right and leaders do the right thing.  So stop trying to do the annual performance appraisal right; don’t just try to get it right but rather step up—exhibit the courage to care—to do the right thing: put a stop to this foolish practice of appraisal! Stop appraising and start facilitating.

Since leading is about showing the way forward, it requires having the will and ability to look beyond the immediate horizon. This means that executives ought not place the focus of their attention on results in the short-term.  Fear of short-term loss will limit both perspective and potential.  As Katherine asserts “you can’t focus on what’s just happened because you can’t change it…you have to balance that with maintaining focus on what the next steps are.” In other words leadership requires taking the long view that broadens a leader’s focus of attention and concern. Leaders who are willing and able to gain perspective are able to see beyond the immediate issues and gain the critical insight and necessary foresight to set a sound strategic direction for the enterprise. Shortsighted leaders can’t possibly show the way beyond the horizon!

Effective leaders know that there can be no sacred ideas and that he/she is not the one and only person with creative ideas. Thus effective leadership is also about facilitating the expression of the potential that lies in others.  This means that the effective leader provides the space—physical and psychological—within which people can freely exercise their capabilities and where creativity can emerge.  When sharing a recent leadership lesson Katherine noted “I’m learning more about being quiet, stepping back and having my team really direct more of it.  And to help them think about things as owners.”  Enabling people to gain a sense of ownership affords meaning and joy in work.  When people are meaningfully engaged then the likelihood of their creative abilities emerging increases.

Effective leaders facilitate learning so that the prospects for tomorrow will be better. Katherine expresses this principle when talking about the culture she strives to create,  “If you’re really the owner of a piece of work, you’re actually excited about the feedback because it’s going to help you improve what you’re doing. I think you have to have a culture where being wrong is O.K. — at least during the process — so that people can say, O.K., I got this piece wrong, but now I’ve corrected it and we’re moving forward to a better answer.” That is to say, leading for learning is central to effective leadership: And for this to be fully realized fear must not be part of the culture, which brings us back to the first step toward leadership.

Moreover it is not a strategy that supports the viability of the business.  Why? Because it runs counter to the elemental consumption-production dynamic upon which the conduct of business depends. The economic enterprise must not only create a product or service but it must also create demand for (consumers with the means to purchase) its’ product or service. Producing without having a population willing and able to consume would not be prudent—likely learned in Business 101.  As demand is created and sustained the need for (and cause of) production is sustained.  So as consumption continues the need to produce continues, it is a reinforcing cycle.

Cost or Cause

Labor can be seen as a cost of producing profit or it can be viewed as an investment toward enabling both production and consumption.  Henry Ford understood the latter quite well, as he provided his factory workers with a higher hourly wage than could be earned elsewhere.  This strategy not only improved the morale of the workforce making them more productive, it provided the Ford Motor Company with willing consumers who could afford to buy what Ford produced.

An article by Bernard Condon (an AP Business writer) suggests corporations are quickly approaching the limit of their cost cutting profit maximizing strategy.  Unfortunately, such a strategy is for scoring short-term profit not for sustaining a business.  It is a strategy formulated in the minds of shortsighted people who have little or no concern for what lies beyond the short-term.  To such people nothing else matters except what can be gained (especially for themselves) before the end of the current term.  Short-term thinking limits the life of the business!

Though hindsight can inform foresight—understanding history can help to avoid repeating it—it doesn’t mean that using the present versus the past comparisons, as the basis of decision-making, is the best way to manage.   Yet, most if not all management reports (intended to incite action) place the focus on the present against the past—variance reports abound.  The concern is for increasing such things as profit, revenue and shareholder value in the short-term.  The following question is representative of the type of questions that seem to consume management’s focus of attention: How did we do this quarter versus last quarter or versus this quarter last year?  They don’t quite understand that, although with two points a line can be drawn, two points don’t constitute a trend and the long term is not the linear sum of short-terms!

Mindful of the Future

However when the future becomes a concern, then realizing progress and taking the long view become important considerations in management decision-making.  Once we realize that the future is where we will spend the rest of our life, looking forward becomes the means of assessing our current position. It means we don’t forsake the future for gains today.  Then progress, not growth, becomes a key measure of success—the point of reference is the future not the past.  Shortsightedness no longer rules the day.

Realizing progress means that the viability of the organization is improved and not diminished by the decisions one makes.  This means that management relates to employees as subjects and not objects; to view people as people, not as a thing called labor. That is, to ensure viability management must invest in, not divest of, people.  With this commitment to invest management will increase the likelihood that the people employed are talented people.

Today with knowledge continually advancing and challenging organizations to adapt, learning becomes a critical aspect of an organization’s capability.  Thus toward sustaining viability, making a commitment to continually develop the potential of people by providing opportunities for learning is paramount.  However, the benefits of education/learning are not (fully) realized in the present or short-term, but rather most likely in the long term.  The need to take the long view and make such a commitment should be clear.

Though we cannot predict the future with certainty, we certainly do influence it.  We do in deed participate in creating the reality we will experience.  Since we will live in the future doesn’t it make sense to turn our attention to it and invest in it?  Doesn’t it make sense to conduct business differently?