Tuesday, June 21, 2011

What's The Point of the Exercise?

Ah, the joys of hanging out in San Francisco!
You get to hear smart people talking about interesting things, for one thing.
Like last night, when the good folks from the Rotman School of Business at the University of Toronto, lead by the truly exceptional Roger Martin, hosted an evening discussion of a new book, Artistry Unleashed, by Hilary Austen, and then this morning, when the topic was Roger's new book, Fixing the Game.
The two books, and the two discussions, had much in common, without actually making the link explicit.
Hilary's book argues for the importance of the artistic instinct in business--using the kinds of creative tools that artists use to make their art. The discussion last night was framed around "quantitative versus qualitative"--business loves what it can measure, fears what it can't. Artists are all about what can't be measured--your instincts, your imagination, your creative spark.
Roger's book takes on the dominance of stock-based compensation as the incentive to drive CEOs and top managers to higher performance, comparing the business game to the NFL. In the NFL, you've got the game on the field, which is all about winning and losing, and the game in Las Vegas, which is all about the point spread. But, Roger points out, the players and coaches can't bet in Las Vegas--which is exactly what CEOs and top executives are not only allowed to do, but encouraged to do through their incentive-based compensation.
Two good discussion, both of which stopped short of asking the fundamental question: What's the point of the exercise?
Why do companies drive creative thinking out--and then hire consultants to bring it back in?
Why do companies believe that their stock price is the true measure of their performance?
The answer in both cases, it seems to me, is that since the last half of the 20th century, American business has lost track of the real point of the game.
We've substituted pure financial return for the larger purpose of business--to create and grow a sustainable organization capable of making and keeping customers, developing a strong group of committed employees, and contributing to the larger benefit of society. And make a profit.
But not just to make a profit.
And not to maximize shareholder value.
Not to make a profit at the expense of sound business practices.
Not to make a few people as wealthy as possible.
According to Marcus Buckingham and others, something like 80% of all Americans hate their jobs (those who still have jobs).
According to the Gini Index, America is the most unequal advanced capitalist society in the world, and become more unequal over time.
The deeper issue that both Hilary and Roger are writing about is the widespread system failure that our current approach to business represents.
What is exciting is the thinking and questioning and commenting that Roger and the folks at Rotman are leading.
Now we need to see it spread.
Spread and go deeper.
Go back to first principles, to first questions.
Questions like, What's the point of the exercise?

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