Perhaps a simple example will help explain.  Consider that the computer screen remains black when you press the on-button.  What do you do?  Do you initiate an investigation of the internal switching mechanisms?  No, of course not!  Instead of examining the switching assembly and all other internal connections you should first look at the basic source that provides the energy for it to run; you look to see if it is plugged in and also whether the outlet to which it is plugged is ‘hot’.  The most basic, and often the simplest approach, usually offers the best solution, so begin by asking the basic questions.  Don’t get caught up in the all the branches and leaves, until it is necessary.

Simply seek first to understand the root dynamic of the system before placing both attention and effort on what are most likely problematic symptoms.  Attending to the leaves—and they are numerous—before gaining understanding whether the root dynamic is operating as intended will have you twisting and turning in all sorts of ways.  You will waste a lot of time and energy trying to solve a problem you have never taken the time to identify.  The symptom will subside but the problem will remain alive and kicking only to bring forth another symptom in the near future.

Unfortunately many are blocked from following this principle simply because they allow themselves to be deceived by their very own thoughts (which are usually strongly held beliefs).  They tend to be good symptom reducers but not so good problem resolvers.  Believe it or not there are people who actually trust all the thoughts their thinking has produced—as if their way of thinking presents what is true, absent of error and bias.  And how do they know that what they believe is right?  Silly, their thoughts tell them so!

Back To Basics

Let’s return to the issue of Krugman’s article, the seemingly persistent high unemployment rate that is symptomatic of a depressed economy.  So the basic question is, is the root reinforcing cycle of the economy functioning as intended?  That is, is it plugged in to an active energy source and is there a sufficient flow of energy to turn the cycle?

The basic dynamic is the consumption-production cycle.  That is, consumption leads to the need for production, which in turn provides income for people to act on the demand (i.e. unmet or unsatisfied needs and wants) and consume.  As demand increases—which arises from unmet or unsatisfied needs and wants along with the marketing, advertising and sales efforts of business—then the need for more production emerges providing more jobs thus increasing the ability for more people with sufficient disposable income to consume. As money flows the cycle continues.

The question then becomes is consumption sufficient enough to cause adequate production affording enough people disposable income enabling them to meet their needs?  That is to say, is the cycle a positive reinforcing cycle or is extraction happening causing a decrease in money circulating throughout the system?

Causing an Uncertain Future

When the number of people employed is minimized the resultant level of consumption will also move toward a minimum, which will likely not be sufficient to support increased production and additional jobs.  So when business management strives to maximize its short-run gain by minimizing the employee’s gain, they are in effect diminishing the flow of money through the system, a system upon which they depend and thus have a need for it to be strong.  A strong economy means less uncertainty.

However, as more businesses follow suit in squeezing what they can out of people, that in time, the diminished flow of money through the economy will cause a weak and even possibly a depressed economy.  Not understanding having a laser-like focus on short-term self-serving gain often is the cause of future pain, business leaders might wonder why future prospects are not as favorable for them—and any everyone else for that matter—and perhaps place blame on outside factors for this uncertain future.

Currently although productivity has increased—more specifically efficiency, doing more with less—the squeeze on jobs has diminished consumption (demand).  Even though the need to consume is there, the means (income) to fulfill the demand is not.  Money is not circulating.  As metaphor consider the economy as a water balloon where at one end is the owner/capitalist and at the opposite end is labor/general public.  Squeezing the water balloon at the opposite end will cause the owner/capitalist end to expand, leaving no more water to flow from the labor/general public end.

Today we have a squeezed balloon: businesses have laid-off millions of people and have since re-hired very few.  The effect is that money isn’t flowing throughout the system. Corporate profits are up and so too is executive compensation.  Money is accumulating and expanding the upper end of the balloon. Accordingly the flow of money at the opposite end amounts to a few drops and a trickle and a trickle can’t possibly keep things going. Once you drain the well, water can’t flow.

The inequality in realized gains, especially since the 2008 financial crisis, has left a select few with hoards of money and the masses in debt with very little income for consumption.  Corporations have been sitting on a tremendous amount of cash that diminishes the amount of money circulating through the system.  Accumulating and hoarding money—keeping it all for one’s self—is counterproductive to maintaining a growing economy. Essentially the cycle is unplugged; trickle economics is a myth.

Role of Money

A critical role of money is for circulation through the economy, not merely profit accumulation, since it is through the exchange of money that the economy is sustained and accordingly the supply of money increases which is a requirement for economic growth.  Let us not forget that commercial banks add to the supply of money, not by holding and hoarding it as deposits, but by leveraging deposits in lending money to people and businesses for investment—it is this investment that circulates money and strengthens the economy.  The point being that the circulation of money is instrumental to the health of the economy.  If circulation is cut off to a segment of the economy then that segment will die leaving the economy less capable of survival—all segments are needed.

Until people are provided the means for which to fulfill their needs and wants, demand can’t be fulfilled.  The consuming public hasn’t the money to exchange for goods and services, to keep money circulating.  Since the public hasn’t the means, then someone else—that’s either government or corporations or both—must step up and invest to increase the flow of money in and through the economy.

Clearly things are not functioning right!  According to Krugman there are many economist advancing the thought that the problem with the economy is structural, not functional.  That there are plenty of jobs but there is a mis-match between the knowledge and skills workers offer and the knowledge and skills jobs require.  Really!

Shifting the Burden

When either experienced skilled people or recently graduated college educated people can’t get a job then we have to begin wondering exactly what kind of work corporations are now performing that they weren’t prior to 2008!  Just what are they doing that work/business-experienced and educated people can’t learn if provided the opportunity?

If the answer is that business now requires different knowledge and skills than it did prior to 2008, then what exactly has fundamentally changed in the work of the business? If the work has fundamentally changed since 2008, how can those who are leading it do so without themselves needing to learn the new business?  If the work of the business has changed so fundamentally why then aren’t the leaders providing the necessary training so that those with education and work experience can learn how to do what is now needed? Why don’t leaders want to invest in the future of their business?

If this is not possible, if the educated and experienced people available can’t learn what is required, then how is it possible that those who led these organizations prior to 2008 today have the knowledge and skill to do so in light such a fundamental change in the work of the business?  When and how did their metamorphosis occur?

Could it be that hiring people will increase costs and moreover hiring and training people will add even more costs?  Could it be that business leaders are simply viewing all costs as an impediment to securing maximum short-term profit for themselves and major shareholders?  Could short sightedness be the cause of the difficulty?  Could it be that the sole intent of the business minded is to make profit, not products and services, and so (to them) profit is profit no matter the means?  Could it be that business leaders seek only to feed off the economy?

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.

According to Milton Friedman societal concerns are government’s responsibility.  As Friedman stated “there is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” This line of thinking, in light of the influence that corporate self-interest has on formulating law—the very rules of the game they are to stay within—has tragic consequences for everyone.

The focus of concern is so limited that it’s as if business operates only in markets and not in society—society is merely on the side.  I suppose in this sense it is market failure because the market does not reflect the societal cost of business decisions, and accordingly the business enterprise does not incur these costs.

Business Operates In Society Not On Society

Kochan asserts “what’s good for individual U.S. companies is no longer automatically good for business nationwide, for U.S. workers, or for the economy.”  As if it ever truly was!  When was this ever really the case? This growing disconnect is not so much about a failing market as it is about a system of orientation, a mindset destined to fail.  That is, what we believe about ourselves and the purpose of business are at the root of what we are now experiencing.

Kochan does acknowledge the alignment of needs between the U.S. business community and the U.S. economy, seemingly suggesting that these institutions have things in common.  He identifies a few characteristics of our current situation that collectively amount to (as he stated) a “perfect recipe for decline and a terrible legacy to leave to our children and grandchildren”:

• K-12 student performance that’s failing fast relative to that of comparable countries
• Companies invest far less than they used to in worker training
• Many jobs go unfilled because companies say they can’t find workers with the skills they need
• A large and growing population of people who have been unemployed for so long that they no longer look for work
• Wages have been stagnant for three decades, except in the case of the top 1%
• The gap between top earners and all others is greater than at any time since the 1920’s
• Unions are attacked as part of the problem, not (as they could be) part of the solution to these challenges.

These are not because of market failure but rather because the system of orientation (the mindset) of leaders in business and government—their beliefs and the way they think—doesn’t reflect an understanding of systems.  Seemingly those in authority are oblivious to the fact that everything is connected to everything else and so they decide and act as if things are independent.  Thus the unit of survival to them is them and their corporation.  However this does not negate the fact that nothing is just individually separate and independent, even though we structure life in society as if things were—this is the root of many of our socio-economic crises.

So what we have are decision-makers whose decisions have influence on life in society yet they have: limited scope of concern; a view of the future as a linear sum of short-terms; and a relationship to people as objects having only instrumental value in service to their self-interest.  We have business management with a myopic focus on results, especially those in the short-term, and correspondingly a preference for divesting not investing, coupled with decisions by elected government officials guided (if not directed) by their pursuit of their material self-interest.  Thus there is collusion between moneyed interests of private business and political parties—it is a fixed system—that in effect diminishes if not disregards concern for the collective ‘we’ of society (except of course in election years).  So what does this get us?  Kochan’s list (above) is a short list but an important list of observations emerging from the system we’ve created.

It’s a Tragedy

A few points on the list, when looked at together, suggests a deeper underlying dynamic.  For example, companies investing far less than they used to in worker training, many jobs going unfilled because companies say they can’t find workers with the skills they need and unions are attacked as part of the problem together indicate a shifting the burden dynamic is likely operative.  In a Huffington Post article on skills mismatch Andrew Sum (Northeastern University Economics professor), concluded from his analysis of data from The Bureau of Labor Statistics there is no “credible evidence of anything approaching a shortage in manufacturing workers anywhere in the country.”  In the same article Paul Osterman, professor of management at MIT stated “firms are always interested in shifting the costs of training to the public sector.”  So what we have is moneyed self-interest trumping collective interest in the interest of maximizing self-interest—a real tragedy of commons.

A tragedy of commons is not merely the fact that we share a common tragedy.  If the current situation was in deed just a common tragedy, then the institutions simply getting together—as Kochan suggests—to alleviate the common problem might be all that is needed.  Unfortunately given the root cause of the situation, what getting together absent of proper guidance would do is provide opportunity for more collusion.  This would lead to short-term symptomatic relief to appease the collective ‘we’ of society while (hidden from view) the select group of individuals (persons and corporations) would continue advancing their self-interests ensuring the underlying dynamic remains operative.

But we aren’t suffering from a common tragedy, what we have is a tragedy of commons where decision-makers see themselves as individual actors and fail to understand how deeply interrelated we are—concern is self concern not universal concern.  What is not included in the decision-making is what we have in common: our humanity, our environment, and life itself.

Seeing Wholes Is Critical

We are deeply and inextricably holarchically related, which means we shouldn’t act as if we are independent entities each seeking to maximize (our) self-interests.  We can’t proceed as if we aren’t highly interdependent and still maintain our viability.  For example if we are team of people then the team is comprised of a network of helping relationships and if we do things that destroy these relationships then we in effect will destroy the team.  In other words, we can’t forsake our constituent parts—which are systems as well—and expect to continue to exist.  We exist as living systems within living systems—wholes within greater wholes—and therefore we must think and act with this in mind.

An industry or a corporation that defiles or debases its environments as it pursues maximum monetary return cannot survive over the long term. So when we think about the unit of survival, we discover that it is not our little corner of the world, it is not our corporation or our industry, but rather the system and its relationship with other interdependent systems.  Holding this perspective, those in authority of an industry or a corporation would not consider itself the unit of survival but rather it is the industry or corporation plus its energy providing environments (which includes not only the natural environment but also society and the system of humankind). Polluting one’s source of life’s energy is not the way to sustainability and viability.

Until we change our system of orientation—the assumptions and beliefs we hold in mind that direct our decisions and behavior—we will not extricate ourselves from the situation we have created.  Like a boomerang the problems will keep coming back.  Paraphrasing Einstein, we can’t solve problems with the same level of thinking that created them.

What we are experiencing is the effect of the confluence of egoism, materialism and reductionism circumscribed in a mechanistic world-view—systems thinking is nowhere to be found in either development programs or education.

Therefore, what we (first) have is a meta-problem; an inability to correctly understand the problem because our system of orientation renders the underlying issue imperceptible. So we end up offering a solution to a symptom—treating symptoms—not the problem.  No wonder our problems recur, although with possibly different players but it’s the same problem nonetheless!   Ours is a problem of mindset not markets.

Our economic system has no (explicit) concern for ‘we’ in its design, it is all about ‘me’ getting what I can for ‘myself’—it is best labeled an egoistic economic system.  The pursuit of material self-interest is the guiding principle for all action.

It promotes (and requires) a belief system about what being human means that is narrow and thus limiting.  That is, it rests upon people believing they are at base individualistic, selfish, materialistic and competitive.

As discussed in It’s the EconoMe, Stupid, society to the egoist is “nothing but the sum of the actions of each individual; it is nothing apart from what each individual separately contributes to it” and what one can extract from others.

Making Society In Service

While most acknowledge that democracy is of, for and by the people, it’s objective is also to afford individual freedom in life in the pursuit of liberty and happiness. Since democracy is about having a society of free individuals it is rather easy to mold it into a system in service to egoistic economics.  That is, given the focus on individual freedom and without a similar compelling vision of a collective ‘we’—everyone’s responsibility to each other, to community—democracy is easily hijacked by self-interest.  Everyone believing in self-interest is not the same as people having a shared common interest.

Happiness when viewed through the lens of egoistic economics becomes the egotistical ‘Me’ having ultimate freedom to maximize ‘My’ profit. The story is that if you do what is expected, if you work hard in striving to maximize your material self-interest then you too will realize happiness.  If you don’t realize happiness then it is your fault, after all as the story goes we are all independent individuals each seeking our own gain. You’re on your own and should be lovin it! (That is if you are among the few who can win.) While this is an alluring story, it is also a foolish story to believe.

Think Again, Critically

Just a little inquisitiveness and critical analysis with an open mind would reveal that no one ever got what they have without the cooperation and help of others.  Each individual would be lost without the support and help of  ‘We’.

Thus we understand that life in society is not simply a collection of independent individuals bumping into each other as each exercises their notion of individual liberty to have it all for ‘Me’. The fact is that we need each other for more than the satisfaction of our material desires. We are not simply instrumental to each other’s needs. While our economic system would have us believe this for the sake of maximizing our self-interested desire to consume we are not mere cogs in this machinery.

It is a fact that each is an individual whole person and just as factual each is part of the whole of human society. That is, while you and I are different individual ‘I’s’ we are not separate ‘Me’s’.  This ‘I’ that I am and the ‘I’ that you are are deeply connected. And by acknowledging and acting on this connection we can become a ‘We’.  In our society we can sustain the unity implied by us being in this particular society.

Accordingly, we each must recognize our I-We nature and the dual responsibility that this implies.  Forsaking either one we forsake our self.  We have a very deep interpenetrating responsibility to each other’s unfolding, and therefore each of us is incomplete without each other.  As noted by Amitai Etzioni “the I’s need We to be” (The Moral Dimension). To treat anything collective with contempt is to disdain human society itself; the same can be said about the individual.  Moreover, with morality and ethics requiring a concern for ‘we’ a society of individuals where ‘me and mine’ is what’s important would find it impossible to avoid becoming an unethical society.

To hear people speak disparagingly about ‘those people who rely on society’s assistance’—you know the poor who have not gotten ahead on their own—you would think that they themselves took no help from society whatsoever.  They seem unable to understand that if not for society—especially the government policies written to favor their interests—the current gains they enjoy would not exist.  They wouldn’t have so much to love about ‘your on your own economics’ if the politicians they paid for hadn’t helped them to make the vast majority of gains derived from society their gain.

The collusion among moneyed interests and government—private business and political parties—is tantamount to injecting steroids into self-interested behavior.  It is nothing short of pure greed.  But in the context of egoistic economic society greed is good; the 1987 movie character, Gordon Gekko, and his 21^st century real life incarnates on Wall Street tell us it is so.  It is because of greed that the drive for getting and having goes forever unsatisfied ensuring a consuming and acquisitive society.  This has transformed what could have been a society of equals in regards to political power into a system for maximizing gain for a select group.

With money equating to speech, those with the most money overwhelmingly have the most say; the converse being those with the least money have the least say.  When money matters the people with money matter more!

It Can Be Better

In a culture that’s all about me getting it all for me, it is a bit naive to believe that those who rigged the system to serve their material self-interest will actually change things for the benefit of everyone.  You see the system is not at all broken, it is working just fine doing what it is rigged to do.  It is not that those in authority don’t know what to do to right the ship: It is that they haven’t the will to do what is right for the benefit of all.  We mustn’t forget that universal care and compassion is anathema to the greedy.

What we are facing is a self-imposed crisis of will.  We participate in the creation of our reality by acting on what we believe about our selves.  Having the will to change enables our ability to change. Where there is a will there is (always) a way also implies where there is no will there is no way.

Preserving What Is

In a self-interest based culture most people’s concern is a narrow (self-interest) concern.  Appealing to the general narrowness of concern among the citizens political parties readily gain support from various self-interest groups by creating fear among the people that their interest is at risk.  Such a strategy tends to be divisive (it creates an ‘us versus them’ mentality) which is exactly what those seeking to control the thinking of their audience requires.  If I can get you to think other citizens are detrimental to your interest and that I am on your side then you will support me, which is in my interest—after all my interest is what I really care about.  Facts must not get in the way of ‘me’ getting ‘mine’.

Political campaigns have devolved into medicine shows where each seeking election is selling his/her brand of snake oil while at the same time casting opponents and their supporters as the enemy as they play upon the fears of the audience’s narrow self-interest.  So election after election, congressional session after congressional session nothing fundamentally really changes.   It is the same wine in a different bottle.

So the assumption of egoistic economics (which guides the functioning of American society) that if you attend first and foremost to your self-interest—in the extreme holding supreme your liberty to do as your self-interest desires—then eventually and unintentionally everyone will benefit is at best clearly false and at worst destructive to society.  If America is the United States, then what is it that they are united about?  What is it that unites them?

The Root of It All

So what’s the problem with American democracy?  Egoistic economics is the problem! Self-interest can’t possibly unite!  Having only concern for me and mine is not the way to a well functioning sustainable human society—it is more the making of an unruly unethical collection of divisive groups.  Each seeking self gain does not lead to a unified effort toward a future better than the present.

Organizations that are sustainable are not designed and managed this way, so why would anyone believe society without a unifying vision that binds people together would have a chance of sustaining itself?  A wise businessperson would not even try to design and manage an organization wherein everyone is out for him or herself and where no one has concern for and commitment to the collective known as the organization.

It should be quite clear that a functioning viable society must advocate equally for individual and community—for the ‘I’s’ and ‘We’—since they are complimentary (and necessary) components of a wholesome society.

They are symptoms of an enacted belief by the majority of society, which has become institutionalized in society’s systems, that self-interest (which includes special interest) is paramount and correspondingly success in life is measured by the size of one’s material gain.  That is to say, they are symptoms of a wrongly purposed economic system becoming infused into every aspect of life in society, most notably government, education and of course the conduct of business.

In regards to the system of government, when wealth becomes so concentrated and elected officials become so money dependent then the conduct of government unavoidably moves increasingly in favor of the wealthy.  In effect, the very wealthy become the overlords of society.

Today we are clearly operating according to a set of beliefs that are antithetical to the advancement of democracy and the development of people.  The fact that we have elections—that we are allowed to vote—though necessary it is not sufficient to ensure democracy is operative and thus ensure freedom from oppression.  Voting when you have little choice does not equate to participation in choosing who will represent you.

Occupy Wall Street could provide the finger-snap that will awaken people in society from their hypnotic sleepwalk through life.

Oh you say people are awake, they aren’t sleepwalking.  Really!  As noted by Charles Blow, “most Americans now say that the fact that some people in the U.S. are rich and others are poor does not represent a problem but is an acceptable part of our economic system.” This is a manifestation of the unquestioned belief that material self-interest is paramount.

How often do people think the same thoughts in the same way they’ve always thought about them?  How often do they listen (without judgment) and seek to understand? How often have they actually explored perspectives that are not consistent with their view of how things are without filtering that of the other through the beliefs they hold so dear? Thinking is not merely a rearrangement of thoughts!

How often do you actually critically think about your thinking?  How often do you explore and challenge the beliefs and assumptions that are the foundation of your beliefs, thoughts and actions? How often have you actually improved the way you think and what you think about?

Those protesting the injustice and unfairness of the way things are in society are providing a wake-up call to everyone—just as the Vietnam and civil rights protesters did before them.  The Occupy Wall Street protest must keep the focus on changing the system and not follow the suggestion of what many pundits and news anchors offer, fixing on ‘a simple demand’ and/or forming or becoming aligned with a political party.  Either one of these would limit the scope, make for colonization of the message and turn the conversation more divisive.

The way things are is the result of a system of orientation that has ordered life in (our) industrialized society for quite sometime.  Thus its underlying assumptions and beliefs are hidden well below the surface of everyday experience. Since these have reached their extreme and have become massively destructive, they need to be brought to the surface for conscious exploration by an awakened critically thinking mind. To detach our self from our thoughts, which as Mahatma Gandhi said “is the prerequisite for effective involvement.”  Gandhi noted that attachment to our opinions often distorts our thinking—it keeps us from engaging the power of critical thinking.

This is not a left-right issue or a political party issue but a very human issue! We must break away from the habit of thinking in either/or terms—such thinking leads to fear and diminishes understanding.  It is time that we wake up to the fact that we are all the same: human beings seeking to live a fulfilling and meaningful human life.  It is not the time—and it is not clear when it ever is—to recoil against ideas intended to help everyone. We are so deeply connected that when others are unjustly treated we all suffer.  Yet because of an attachment to individualism as our guide we are unable to understand our interdependence and connectedness.  We must cease believing that it is all about me having mine so to hell with we.

What is a sure fire way to keep things as they are?  Continue to reinforce the primacy of the individual over the collective—keep people thinking in either/or terms.  Incite people to fear the bogyman by creating stories about those who aren’t members of their group. This keeps people fearful and reactive thus stopping them from thinking and actively listening (without distortion and judgment) to the ideas of others.  So the focus of attention turns toward demonizing others and most importantly away from collaborating with others toward fundamental system change.  Yes this is all part of keeping people from coming together to solve the problem thus ensuring things continue as they are.

It is time to let go of the thought that you are of this party or that and to embrace the fact that you are at base a human being and to acknowledge that each and every ‘I ‘ needs a vibrant ‘we’.

What we need is to develop as a society of people toward becoming a human-centered society—a viable society.  This requires a viable citizenry, which can’t be realized as long as the system fundamentally remains as it is.

The choice between Gilding and Hagel is not just one of threat versus opportunity (as Friedman contends), but of challenging the solidity of the foundation versus believing the foundation is unquestionably solid.  Based upon the summaries provided by Friedman, Gilding seems to be saying we must re-think the very precepts of what we are doing and Hagel is saying we must continue with the system and just up the ante (i.e. the Big Shift) to succeed—its re-think or re-load.

If Hagel is correct then our problems (e.g. inequitable distribution of wealth, unemployment, social unrest, environmental destruction etc) will go away because we will work harder together to learn faster and realize advances in technology that will overcome the ill effects of our actions.  But how do we come together when the system tells us we should care only about our personal material gain!

It makes little sense to try to turn a bad idea into a winning idea by increasing the investment in the idea.

If Gilding is correct (and I think he is and the argument in It’s the Econome, Stupid explains why) then following Hagel will only accelerate us toward committing suicide.

Friedman claims “my heart is with Hagel, but my head says that you ignore Gilding at your peril.”  It seems we ought to be using our critical thinking minds and not increase energy in applying the same system of orientation that caused The Great Disruption.

The process of learning, particularly in primary and secondary education, is a collaborative process involving student and teacher. Teachers facilitate learning more than they produce learning.  The paraphrased Buddhist proverb when the student is ready the teacher will appear succinctly expresses this fact.  Hence placing all responsibility (and blame) on the teacher for what is learned reflects a grave lack of understanding.  Such misunderstanding places supreme importance on teacher accountability for results—exactly what we are getting from Arne Duncan and other similar thinking reformers.

Of course improving the education and preparation of teachers is an important component, but so too is the preparation of students.  Although human beings are born with a curious and inquiring mind—a need to learn—this latter issue lies squarely in the lap of students, parents and community—it is an individual/cultural/societal issue.   What can we do to feed and develop the inherent need to learn? A focus on teacher accountability for results will do little.

To get education right requires that we cease using the same level of thinking that created the problem we now face and begin to think anew.  A place to begin is to critically think about and explore the question, why educate?

The very things that would help—systems thinking, statistical thinking, theory of human development and learning theory—apparently are not part of the knowledge base of the reformers. Instead, reformers continue to apply the same level of thinking–reductionism and competitive context setting—that supports poor quality. A focus on parts will unlikely result in an improved whole (system), since performance of the system emerges from the system as a whole, from the parts in relationship.

In short those in authority must re-think and thus re-design the system, and not merely manipulate the parts in pursuit of better results. Throwing money at a problem, absent of understanding, no matter the amount is never a sound approach.

Perhaps someone should teach Arne about the process of learning, though it is not clear that he is ready.

The Hype

Statements in a recent New York Times article on job growth misrepresent the pattern in the unemployment rate, which has actually shown an overall decreasing pattern since October 2009. The statement, “August brought no increase in the number of jobs in the United States, a signal that the economy has stalled and that inaction by policy makers carries substantial risk” is using July results (9.1) as the anchor for judgment as to what happens in August as a signal of the state of the economy as represented by the unemployment rate. Looking out to August, from July, there is about a 1 in 3 chance that the August number will be lower, a 1 in 3 chance it will be higher and a 1 in 3 chance it will be unchanged. Looking at month-to-month movement is not the way to developing understanding.  Two points do not constitute a trend; all the data are relevant toward understanding the state of the system.

The Story

The story is not that August is the same as July, that there was no movement in the unemployment rate between two points.  The story here is that business has laid-off thousands of people, are squeezing huge profits from those who are employed and yet business is not willing to hire.

The story is that those in authority don’t seem to understand that consumption-production cycle rests largely on a population of consumers having an income that enables them to consume what is produced.  The author of the article astutely noted, “The problem is less that companies are laying people off than that they are not hiring.”  Being able to produce at a high profit will not keep the consumption-production cycle turning if there is no one to consume what is produced—business produces in response to demand.  In fact astute business people realize that they don’t just create and produce products/services they also create and produce demand—why else would anyone invest in advertising!  Henry Ford grew his car-making business by hiring and paying people so that they could consume what his business produced.  It is about the basics of business and not about high finance and econometric modeling.

Statistically speaking patterns of variation are revealed over time and not from one point in time to the next. When we focus our concern on month-to-month differences—or the highest or lowest month—then the pattern in the data become unimportant and imperceptible. The one point attracting our focus gets all the attention and the important (more) long-term developing patterns are believed inconsequential and thus we put them off.  Inevitably the effect of this misplaced attention is the source of a future crisis.

The Reaction

So doing what Mr. Obama has done—acting on a misunderstanding—by instructing the Environmental Protection Agency to pull back on more stringent standards on ozone emissions will do little for the consumption-production cycle.  So our air quality has a slightly better chance of getting worse, right along with the unemployment rate.  It is mere superficial action to give the appearance that something is being done in response to the unfavorable unemployment rate—the concern is for something else, not on those unemployed.  Recall it was the absence of regulation in support of unfettered profiteering that caused the recession, not the creation and enforcement of regulation.  Perhaps profiteering is keeping the situation from getting better.

It is like saying the brakes failed to stop me before hitting a tree, so I am going to put a bigger gas tank in the car.  A focus on the outcome and not the cause turns attention to the fact that the car is stopped, not why it stopped.  With this perspective of course a larger gas tank will enable the car to go—that is if the brakes don’t fail again.

The Approach

Jay approaches error correction or problem resolution following the belief that “most mistakes fall into one of three categories: planning, procedures or performance.  Accordingly Jay contends “it’s important to understand what kind of mistake has been made before you try to deal with it.”  In other words it seems that Jay first determines the category of the cause of the mistake.  Is it a planning mistake, a procedural mistake or a performance mistake?

Jay tells of a situation involving the ordering of custom shopping bags for his picture-framing business.   The plot of the story centers on ordering—more accurately double ordering—custom bags.  Jay’s bottom line summary of the situation sums it up fairly well, “It turned out that a second order of bags had been placed only six months after a previous order.”  Given that each order provides about a 3-year supply of bags, this double ordering resulted in considerable inventory on hand.

The Investigation

Jay’s investigation provides the following account:

“I asked the purchasing person how this could have happened, and she told me that our inventory manager had said we were running out. I called the salesman from the bag company who I had been doing business with for many years and asked him if he thought it was odd for us to be reordering so soon. He said he did. As a matter of fact, he said he told the buyer that it was impossible that we needed to reorder so soon and that she should check the stock again. Which she did. Once again, the guy in charge of inventory told her we were running low. They put the order through.”

Following his approach Jay asked: “Was this a planning problem? No. Was this a procedure problem? Yes. The purchasing person was fairly new and someone should have been overseeing what she was doing more carefully. Was it a performance problem? Absolutely. The inventory manager had been careless before. After being told that the order must be a mistake, he should have figured out what was happening.”

So applying the planning-procedure-performance approach Jay concluded that it was not a planning mistake but rather mistakes in procedure and performance.  So whose procedure and whose performance?  After all one does need to find those responsible.

The Solution

Making a short story shorter, Jay talked to both the purchasing and inventory persons in the presence of the operations manager about what to do when a question of this sort arises.  Inevitably both these people proved irresponsible and were replaced.  As Jay concluded “This situation was mostly the result of having the wrong people in important jobs.”  (Can’t help but ask, who hired the wrong people?)

If as Jay claimed, “responsible employees do not have to be told they messed up”, then the solution seems quite clear, don’t hire irresponsible people!  If you have irresponsible employees then you’ve made the (first) mistake!  Was it a planning, procedural or performance mistake?

A System’s Perspective

The above approach is one based on reductionism in that it seeks to break the problem into discrete identifiable parts.  Unfortunately reductionism is not appropriate here as the concern is for the functioning of the whole—the performance of the enterprise—and its affect on the constituent parts, and not merely separate parts locally transacting.

In other words a business organization is a system—a network of constituents in mutual relation—and breaking it apart into separate parts will not afford understanding of the functioning and performance of the whole.  Performance is an emergent property and thus it can’t be understood through reductionism.

Let’s flash back in time to the early stages of a new enterprise where the business hasn’t grown enough to warrant employing others to help do the work—the time before employees. Let’s estimate the probability that this mistake would have occurred if the owner or two or three partners were doing everything.  The probability is near zero.  Why?  Many would say, because they are the owners and they care.  Although the fact that they care can’t be denied—and caring does have an affect—it isn’t the primary cause for the probability being near zero.

What the most likely reason is that (before employees) they would be in possession of all the information that they need.  Further they would have an understanding of how each and every function/activity that comprises the work of the business interrelates—they understand the works as a whole.  In short, they wouldn’t decide to act one way that would negatively impact them carrying out another activity. The decisions would most likely be informed decisions with an understanding of the impact each has on the business as a whole (i.e. the system) and on each of the other functions/activities within the system.

In summary why is it unlikely?  Those doing the work understood the system and their role in it as they perform each of the activities.  Unfortunately, the very popular way of organizing—dividing the work and managing each component as if it is not integral to the whole—is so very wrong.  Yet because everyone does it it is rarely questioned or challenged; it is the way management.

Different Perspective, Different Understanding

With this perspective the first mistake was in the structuring or organizing of the work of the business itself.  It appears that the work of the organization—which begins as a whole—was divided and parceled out as tasks for individuals to carry out.  Evidence of this is the purchasing manager did the purchasing and the inventory manager did inventory; each had their own separate responsibility.  When the purchasing manager was told “when a vendor or anyone else tells us that something doesn’t seem right, we need to look into it” and the response was “when you say we, who are you referring to?” suggests a lack of appreciation for the interdependent nature of each functional activity.  That is, the activities parceled out to at least this employee are not integrated with the (interdependent) activities of others—the work lacks wholeness and jobs lack connectedness.

What we have is divided responsibility, and with divided responsibility no one is responsible for the purchasing-inventory work of the organization.  What would make this even worse would be if employees were required to meet his/her own separate numerical goals specific to his/her individual job.

Different Mistake Identified Means Different Solution

What’s needed is shared responsibility, which is determined by the way the work (of the company) is organized/structured.  Of course the work of the organization has to be divided among many people but the many jobs also have to be integrated.  The work of the company must become whole again.

Not integrating it into a cohesive whole was (quite likely) the first mistake made by those in authority.  It is a mistake of management to organize and structure the work in a way that fragments it.  This sets people up for failure since it increases uncertainty about one’s role and makes it unnecessarily difficult.

Furthermore, the fact that the purchasing person was “fairly new” and apparently not properly trained and prepared was another contributing cause of the over ordering.  Recall, Jay even noted that the “inventory manager had been careless before”! Surely he/she is not responsible for his/her own training!  This is management’s responsibility to ensure that employees have the, support, knowledge and skills necessary to successfully do the work.

So the situation involves: a) not training new employees; and b) structuring the work so that responsibility is divided. Also the solution involved talking to those who made the mistake—with the implication that they were to blame—asking them not to make the mistake again, without looking deeper and further into the system itself seeking systemic causes and rectifying.  The actions taken only ensure that this kind of mistake will happen again, irrespective of the individuals employed to work in the system.   It would be more by luck that things went well!

Management must develop and maintain the system as well as prepare people (with education and training to build knowledge and skills) so that they can be successful in supporting quality in the work of the organization.  Quoting Deming, management works on the system, the people working in the system.  Management must do their job so that others can be successful at doing theirs!

We should care because this approach when applied to anything other than locally contained situations—that is when applied to complex systems—will actually create far more problems than the solution of the moment it is intended to address.  Placing all one’s energy toward minimizing the one cause or maximizing an isolated outcome will ultimately result in the destruction of the system itself.

Wise physicians know that treating the whole person is far more helpful to a patient’s wellbeing than a single focused approach toward short-term relief.  Similarly, wise business executives know that a single-minded pursuit of profit at all costs is eventually detrimental to the viability of the business enterprise.

Reductionism is also being played out every day by the very way organizations, especially business organizations, are organized and managed.  Since most business enterprises seek the same purpose—profit maximization—it is not surprising that they are brought to order in a similar fashion.  Effectually, to exercise control, the system is reduced to (i.e. broken up into) more manageable pieces.  Adding insult to injury, each part then is required to maximize the attainment of a goal in support of profit maximization of the whole.  The common phrase associated with an effect of this practice is silos—and many know all too well the adverse effects of this.  Some of the many unintended effects include: poor communication throughout, inadequate levels of cooperation and collaboration, waste, rework, and insufficient organizational capability to support strategy.  Yet those in-authority positions continue doing this!

In regard to the problem of America’s national debt, reductionism was the approach in the problem solving recently carried out before our very eyes by the U.S. Congress. Rather than developing an understanding of the functioning of the whole and its effect on constituent parts, the approach taken involved isolating elements as if they are separate unrelated things and choosing one as both cause and solution. The impact of reductionism in this case is compounded by a narrow focus.  So with only a few arguing for a systemic approach—calling for a more complete solution—reductionism won out.

Though it appears most economists predict that the effects of this single-minded action will likely have a deleterious affect on the economy and society, the full compliment of effects cannot be precisely determined, though all of the effects will emerge.

What can be said is that reductionism is not applicable to problem solving of dynamic complex systems.  Why?  With dynamic complex systems the concern is for the functioning of the whole and its affect on the constituent parts, and not merely separate parts locally transacting.  Interdependence along with the nonlocal nature of cause and effect in systems cannot be disregarded or separated out.

Moreover doing so diminishes understanding. Because a system is a set of relationships—deeply nested interdependent relationships—every action will affect multiple relationships throughout the system. Moreover one action has multiple effects and those effects are nonlocal and nonlinear—stated simply, you can’t do just one thing. Hence understanding of the emergent properties of the system cannot be realized by breaking things apart.  Reductionism as an approach to managing systems diminishes understanding and thus reduces the soundness of decisions.

Hence it is therefore foolish, futile, and ultimately fatal to attempt to solve problems of a system applying reductionism.  Moreover, we can’t overcome the effects of reductionism in the management of a system by further application of reductionism to solve the resultant problems.  As Einstein is remembered saying, you can’t solve problems with the same level of thinking that created them!  Doing so will likely lead to destruction—greater imbalance and fragmentation—of the system, reducing everything to rubble.