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In a dangerous world, mine can no longer be bigger than yours

12 August 2017

Why do we have juveniles running the world, obsessed with demonstrating that "mine is bigger than yours"? The president of the country with the largest nuclear arsenal on earth insists that no other country will ever have a bigger one, as if 7000 warheads are insufficient. Why does this country give any single person—let alone this loose cannon—the power to launch that? The only answer I can imagine is that “getting them before they get us” has had higher priority than protecting life on earth from an inadvertent catastrophe.

For his part, Putin insists on making Russia bigger, if not better, at the expense of its neighbors. At the expense of its people too, who pay the price of these leadership ego trips. But more so the people of North Korea, and the American soldiers who fell in Vietnam and Iraq.

Why do we have juveniles running the world, obsessed with demonstrating that "mine is bigger than yours"? The president of the country with the largest nuclear arsenal on earth insists that no other country will ever have a bigger one, as if 7000 warheads are insufficient. Why does this country give any single person—let alone this loose cannon—the power to launch that? The only answer I can imagine is that “getting them before they get us” has had higher priority than protecting life on earth from an inadvertent catastrophe.

For his part, Putin insists on making Russia bigger, if not better, at the expense of its neighbors. At the expense of its people too, who pay the price of these leadership ego trips. But more so the people of North Korea, and the American soldiers who fell in Vietnam and Iraq.

Blame not just Putin, but NATO, because when the Cold War ended, it too decided to get bigger, by taking in nations on Russia’s flanks. With the Cold War gone, NATO had nothing to do. And so it found something to do, namely bring the Cold War back. Putin  was quiet then, not now.Talk about irresponsible posturing.

Meanwhile China sticks it to a weaker neighbor over some irrelevant hunk of rock in the sea This it does to claim--or is it to grow?—its territory. Boys may be boys, but we had better get the juveniles out of the schoolyard before they blow us all to bits.

Russia and China are ruled by power. America is ruled by reverence. Americans revere their president the way Catholics revere the Pope. Now CNN broadcasts its relentless disparagement of the incumbent alongside its mindless deference to the office, as if the two can be separated. Will American children be reciting the name Donald Trump alongside Thomas Jefferson?

Face it: the president of the United States of America is an unscrupulous ignoramus.  Yet almost half the voting population put him into office, and may well do something similar in the future. Accordingly, despite the many thoughtful and concerned people in the United States, can anyone outside the country ever trust it again? Now we have the incumbent facing off on behalf of the “free world” against the devious brute of North Korea. They deserve each other, but no-one else deserves either of them. Hold your breath.

The problem is built into the organization—really the disorganization—of our world. In a village with weak government and no police force, the thugs take over. This is the state of our global village. Three countries have taken over, and vie with each other for power: over who has more nuclear weapons, or greater control of its neighbors, or an additional hunk of rock in the sea. Thanks to “leaders” who never made it past the schoolyard, we may never make it past them.

What's the alternative? To wake up, not such leadership, but all of us who tolerate its nonsense. Thankfully, more and more people across the political spectrum, hitherto passive, are getting the message. Never before have so many concerned people been prepared to vote with their feet, their ballots, and their pocketbooks. They just need some way to channel that energy into constructive change. And that will take some new thinking. So how about this, for starters at least?

There are almost 200 countries in the world, some of whose governments are insufferable, but many others that are quietly democratic. Acting together, as a coalition of concerned democracies, the latter could exert their influence to challenge the bullies who put us at risk.

We need world government with teeth and legitimacy, not a Security Council whose five permanent members all have nuclear weapons, histories of bullying, and rank (with Germany) as the largest exporters of armaments in the world. This is an Insecurity Council, and judging from Syria, a War Council. We need a Peace Council.

Does such change sound utopian? Sure it does. Shall we therefore stick with what we have, and destroy ourselves sooner or later?

© Henry Mintzberg 2017. See Rebalancing Society…radical renewal beyond left, right, and center.  

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A CEO letter to the Board...long overdue

29 July 2017

Dear Members of the Board

I am writing to you with a proposal that may seem radical, but is in fact conservative. That is because my primary concern as Chief Executive Officer is to conserve this company as a healthy enterprise. You are now paying me so much that I can no longer manage this company as I should. I hereby request that you cut my salary in half and eliminate my bonuses.

We have talked a great deal about teamwork in our enterprise, that our people are all in this together. So why am I singled out by virtue of my compensation? Bonuses are the worst part of it. Like everyone else in this company, I am being paid to do my job. Why should I be paid extra to do a good job? If I believe in this company, I buy the stock. If I don’t, I quit. The misguided assumption behind these bonuses is that I, as CEO, do it all.

Dear Members of the Board

I am writing to you with a proposal that may seem radical, but is in fact conservative. That is because my primary concern as Chief Executive Officer is to conserve this company as a healthy enterprise. You are now paying me so much that I can no longer manage this company as I should. I hereby request that you cut my salary in half and eliminate my bonuses.

We have talked a great deal about teamwork in our enterprise, that our people are all in this together. So why am I singled out by virtue of my compensation? Bonuses are the worst part of it. Like everyone else in this company, I am being paid to do my job. Why should I be paid extra to do a good job? If I believe in this company, I buy the stock. If I don’t, I quit. The misguided assumption behind these bonuses is that I, as CEO, do it all.

Now I am getting hate mail from our employees about my pay. This is certainly disconcerting, but more troublesome is that I have no reasonable reply, short of claiming that I must be several hundred times more important than they are. Is this leadership? Is it any way to run a company?

We have had a good deal of discussion at our board meetings about the long-term health of this company. Why then am I being rewarded for short-term gains in the stock price? You all know perfectly well that I can use all kinds of tricks to drive up that price, and so reach my bonuses, while destroying real value—and helping to do a number on our economy too.

Ever since we started this Shareholder Value nonsense, our values have gone to hell. The frontline employees tell me that this gets in the way of serving customers: they are forced to see dollar signs out there, not people. Consequently, many of them don’t give a damn any more. As one put it to me recently: “With all this counting, we don’t count. So why should we care?”

I have always prided myself on being a risk taker; that is one reason you put me in this job. So how come I cash in big when the stock price goes up but pay nothing back when it goes down? Some risk taker! You know what: I’m tired of being a hypocrite.

I know the excuse we have been using all along: that I am just being compensated to keep up with CEOs in other companies. This makes me a follower, not a leader.  Enough of this complicity in behavior that we all know to be shameful. My salary should not be some kind of external trophy, but an internal signal about the culture we are trying to build.

So please, help me to concentrate on managing this company as it should be managed.

Sincerely,

Your CEO

© Henry Mintzberg 2017.

An early version of this commentary was published in the Financial Times, as “There's no compensation for hypocrisy" (29 October 1999), and it first appeared on this blog on 24 October 2014. I post it here now, with revisions, in the hope that some responsible CEO somewhere will finally listen.

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What could possibly be wrong with “efficiency”? Plenty.

14 July 2017

Modified version of blog posted 10 October 2014 and, 9 September 2015.

Efficiency is like motherhood. It gets us the greatest bang for the buck, to use an old military expression. Herbert Simon, winner of one of those non-Nobel prizes in economics, called efficiency a value-free, completely neutral concept. You decide what benefits you want; efficiency gets you them at the least possible cost. Who could possibly argue with that?

Me, for one.

I list below a couple of things that are efficient. Ask yourself what am I referring to—the first words that pop into your head.

A restaurant is efficient.

Did you think about speed of service? Most people do. Few think about the quality of the food. Is that the way you chose your restaurants?

Modified version of blog posted 10 October 2014 and, 9 September 2015.

Efficiency is like motherhood. It gets us the greatest bang for the buck, to use an old military expression. Herbert Simon, winner of one of those non-Nobel prizes in economics, called efficiency a value-free, completely neutral concept. You decide what benefits you want; efficiency gets you them at the least possible cost. Who could possibly argue with that?

Me, for one.

I list below a couple of things that are efficient. Ask yourself what am I referring to—the first words that pop into your head.

A restaurant is efficient.

Did you think about speed of service? Most people do. Few think about the quality of the food. Is that the way you chose your restaurants?

My house is efficient.

Energy consumption always comes out way ahead. Tell me: who ever bought a house for its energy consumption, compared with, say, its design, or its location?

What’s going on here? It’s quite obvious as soon as we realize it. When we hear the word efficiency we zero in―subconsciously―on the most measurable criteria, like speed of service or consumption of energy. Efficiency means measurable efficiency. That’s not neutral at all, since it favors what can best be measured. And herein lies the problem, in three respects:

1. Because costs are usually easier to measure than benefits, efficiency often reduces to economy: cutting measurable costs at the expense of less measurable benefits. Think of all those governments that have cut the costs of health care or education while the quality of those services have deteriorated. (I defy anyone to come up with an adequate measure of what a child really learns in a classroom.) How about those CEOs who cut budgets for research so that they can earn bigger bonuses right away, or the student who found all sorts of ways to make an orchestra more efficient.

2. Because economic costs are typically easier to measure than social costs, efficiency can actually result in an escalation of social costs. Making a factory or a school more efficient is easy, so long as you don’t care about the air polluted or the minds turned off learning. I’ll bet the factory that collapsed in Bangladesh was very efficient.

3. Because economic benefits are typically easier to measure than social benefits, efficiency drives us toward an economic mindset that can result in social degradation. In a nutshell, we are efficient when we eat fast food instead of good food.

So beware of efficiency, and of efficiency experts, as well as of efficient education, heath care, and music, even efficient factories. Be careful too of balanced scorecards, because, while inclusion of all kinds of factors may be well intentioned, the dice are loaded in favor of those that can most easily be measured.

By the way, twitter is efficient. Only 140 characters! This blog is less so.

References

Herbert A. Simon Administrative Behavior: Second Edition (Macmillan, 1957, page 14).

This TWOG derives from my article “A Note on the Dirty Word Efficiency”, Interfaces (October, 1982: 101-105)

© 2017s Henry Mintzberg

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