How leaders—management in authority—respond to the question, what is the business of business, will likely pre-figure how they design and manage their organization.

If those in authority believe the business of business is profit then they will very likely organize and manage as if the world is their oyster. According to this system of thought, reality is a collection of objects (i.e. resources) and business is a tool—an instrument, a machine—for the purpose of exacting material gain from the assets or resources at hand. Resources include the people employed by the enterprise—objectified as labor.   I am sure you have heard or perhaps even spoken these words: our employees are our greatest assets!  Stop and think about this: Who really wants to be the useful tool of another?

Logically, leaders will seek to ensure that the business’ resources are used efficiently and effectively.  Given that the meaning of effective is relative to the focus of one’s attention, within this system of thought being materially productive equates to effectiveness.  Moreover, the setting of the organizing context and the management system that guides the actions of others will be shaped by this.  In other words, that which maximizes material productivity with least expense—that which maximizes profit—will guide decision-making.

Correspondingly, management procedures and processes will be devised to monitor and measure the behavior of those doing the work for the purposes of controlling: 1) what employees are doing (i.e. the work); and 2) how well employees are doing it (i.e. performance). Given that it makes for clear-cut decisions when everything can be translated into monetary terms, the latter objective is often translated into how much each individual and functional component contributes to the profitability of the organization.

Further, if those in authority are seeking a broader understanding, but consistent with this system of thought, they might even use the balanced scorecard approach to measure and monitor the behavior/performance on four general criteria.  These include: financial (e.g. return on capital); internal work processes (e.g. rework); employee/management (e.g. staff attitude, revenue per employee); and market/customer (e.g. market share, customer satisfaction).  Clearly this approach provides multiple outcome measures that span the entire surface of the organization. Unfortunately, management’s gaze is limited to the tangible surface-level aspects of the organization; it excludes, and thus ignores, the very human aspects that underlie what is observed at a distance.

So what’s missing?

Missing is the understanding that each person needs more than a paycheck from his/her work; that each has an inherent need to learn and to unleash his/her unique potential through the process of work—to actually create and develop through work.  Missing is the understanding that each needs to relate to and connect with others in a very human way—to be a contributing part of a We.  In short, missing is the understanding that people need to be humanly productive through work, and not just materially productive at work.

Why is it that we accept without question the existence and influence of the invisible hand when advancing the value of markets and yet are unwilling to acknowledge, understand and attend to the non-material aspects in organizing and managing a business?

Acknowledging, understanding and meeting these very human needs require an entirely different system of orientation. It is a system of orientation that advances the belief that the business of business is more than profit—not other than profit. Accordingly, both material and non-material human needs are very much a part of the purpose of the conduct of business.  Non-material needs are very much a part of each and every person’s life, so it shouldn’t be surprising they are an inextricable part of business.

Consequently the focus of attention of those in authority must not be just broader but deeper. Gazing at a distance at behavior, measuring and quantifying won’t be adequate.  Such practices will not afford those in authority the needed understanding of the very thing that underlies it all.  Those in management will need to engage with and listen to people, not simply measure, rank order and judge them.

In this system of thought, organizing and managing means creating and maintaining the space—both physical and psychological—that will facilitate the development of human potential. The difference is a change from command and control for material gain to concern for and care of the development of human potential through the work of the enterprise. That is, leading involves relating to people and making a conscious effort to meet their needs.

Attention to the development of human potential through the work of the enterprise will sustain viability and yield material benefit, but the same can’t be said about the converse.  Until those in authority organize and manage with a far deeper understanding—one that facilitates humanly productive work—any gain in material productivity will be misleading and short-lived.

What is your experience relative to these orientations?