Tuesday, 17 February 2009

Politics and George Orwell’s invention of modern management

Well no Orwell didn’t if honest, but the notion of double-think he set out in 1984 still provides a fantastic insight into the modern manager’s mind. As to what it means double-think is being able to simultaneously hold two contradictory beliefs and accept both of them. It’s also being able to deliberately tell lies while genuinely believing them to be true and to forget any fact when it becomes inconvenient.

If you want some examples of double-think just scratch the surface of the banks being bailed out, taken over, acquired a new CEO etc. and ask how many of the senior managers and executives in each one are currently forgetting inconvenient facts? How many are desperately disassociating themselves from old business strategies (and departed executives) while scratching about for a new patron to latch onto? And finally how many are desperately crow-barring into every conversation examples of how they personally warned such and such about the possible consequences of such and such a decision as if their buying wholeheartedly into the previous culture hadn't secured them their current position? From what I’ve been hearing and reading pretty much all of them.

Don’t kid yourself that double-think is just about these sea-change moments, not a chance. Double-think is key to the everyday mindset and integral to the very fabric of a business. Take the example of competency and when being wholly incompetent is a good thing. For instance, in any major PLC a group function that’s a waste of space means it's divisional equivalents get an easy life, result! Even better the divisional equivalents look good by comparison, so result 2 times!

Double-think figures here because these are exactly the kind of underlying truths only ever discussed in the pub after work on a Friday. Otherwise, from 9 to 5 the incompetency, lack of credibility and ignorance of entire departments and/or senior individuals transmogrifies into successful networking opportunities, meaningful strategic interventions and real scope for facilitating the enhancement of long-term capabilities aligned with key core competencies i.e. vague mince that only ever subtracts more than it adds to the bottom line.

And that’s how it is, which leaves me wondering how different bankers are from politicians given the strenuous efforts the former are making right now to limit government's role in banking.

Lets take some practical examples - whereas bank CEOs have to manage institutional investors, politicians have their own equivalent which is the major party donor. Similarly, while politicians love constantly tinkering with say education policy to prove to the electorate they are doing things every new executive operates under a seemingly moral obligation to change things, thus proving to his or her stakeholders that he or she (who am I kidding, it’s a he) really has made a best-in-class difference. CEOs and politicians also share a love of rhetoric, so sure the precise clichés, buzzwords and modes of delivery might differ, but the double-think principles underlying both are the same.

Yet despite all these obvious similarities and shared interests (you like mission statements? Me too, hey lets meet up sometime to discuss our 5 core values over coffee), no bank CEO is currently waiting in the reception of his head office on the off chance a treasury official or minister walks by. I wonder why?

For me the difference stems from democracy. Executives like politicians use patronage to secure their own position and reward friends, but thanks to the magical power of HR departments armed with compromise agreement, a CEO can also punish opponents and people he simply doesn’t like, gestures that send out a clear sign as to what is/isn't acceptable. A politician on the other hand needs to make alliances and respect rival power bases, in other words politicians need to compromise and actually develop realistic assessments of the different ways his or her actions are perceived.

Politicians you see are subject to scrutiny and criticism of a spectacularly wide-ranging and incessant variety. The CEO by contrast runs a personal empire wherein he decides what is and isn’t acceptable, establishing a culture that allows him tp wear whatever new clothes he likes knowing full well everyone is going to ignore his danglies and proclaim that the emperor’s new clothes are indeed da bomb.

It’s this range of criticism, pressure, vested interests, compromise and public scrutiny that political intervention introduces and a private sector CEO wants to avoid. I mean his whole applecart gets turned upside when he finds himself having to justify his actions rather than simply assert and – dear god – answer follow up questions.

I wonder though, I mean essentially my argument is that CEOs want to remain the kings of all they survey due to ego rather than any intrinsic private sector good/public sector bad kinda thang. Are things that simple? Probably not, but dear god when I remember the kerfuffle I once got caught up in over which executive could and couldn't lease himself a private jet I know from first hand experience how important a factor it is. As for 1984, well ignore the film(s) whatever you do and read the book instead, especially the end where Winston Smith finally succumbs to double-think.

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