I love this quote. At first it sounds very critical, but thinking about it more it reveals something deeper: companies are a collection of people, if those people aren’t satisfied with the work they will move on and delivering value to investors will be that much harder. So maximize for worker happiness while delivering enough ROI to your investors, not the other way around.
Uh, the article explicitly mentions "those who manage the corporation" not "those who work for the corporation".
You're thinking of regular workers, but i would bet 10$ that the author is thinking about upper management (not even team-leaders or middle-managers).
When one says “social system,” as this author actually does, do you think he arbitrarily excludes people below a certain pay grade?
Author distinguishes corporation from employees in following sentence, so managers likely refers to employers which employ the employees. Employees are those who are employed by employers, the managers are those employers.
Is your interpretation of the author’s argument that Person B and all of her superiors hold the same objective of improving the quality of their work life, but that Person A does not hold this as their objective?
When the author states "the principal function of most corporations is not to maximize shareholder value, but to maximize the standard of living and quality of work life of those who manage the corporation", the author was implying that this is wrong.
They then stated that "Employees have a much larger investment in most corporations than their shareholders. Corporations should be maximizing stakeholder, not shareholder, value to employees, customers, and shareholders."
Thus the author semantically implies that "employees" are a separate group of persons from "those who manage the corporations". If employees and "those who manage the corporation" were the same group of persons or part of the system, then it would not have been necessary for the author to claim that corporations should also maximize value for employees, they would have only mentioned customers as the excluded group of stakeholders.
I did reread that part and I was clearly wrong. You are absolutely correct, it refers to a wider category.
Now I kinda want to take person up the comment chain on their bet.
The entire basis of their analysis is that these arbitrary distinctions people propagate in common parlance are not real.
Peter Drucker was on top of this. It's so obvious yet so often forgotten (ignored?). An organization is a group of people.
Jumping back to systems thinking. People can respond a number of ways in organizations. Enter 'policy refusal' (see Donella Meadows' systems literature for more). Executive wants A to happen. A is not in employees' best interest. Employees ignore, delay, obfuscate, outright refuse, or actively undermine A.
People are very good at policy refusal. Executives are good at not knowing its happening.
The Effective Executive is great as well. It's hard to narrow down because he was such a prolific writer. Recommendations are also hard because you've got to meet the reader where they are. I picked up and put down Drucker early in my career. Years later, the same pages burst with insight when I read them.
Those of us who actually grew up with nothing and suffered through minimum wage labor and were able to change our class and turn our lives around through labor look at you people like you're from another planet.
1) It is possible for many to work their way through the labour ladder and find good life.
2) “The System” can incentivise corporations to maximise transfer of wealth towards the top brass without incentivising it to raise wages any more than only to keep people from leaving.
And they can do that without being exploitative. People go to their bosses and ask for more money. Some percentage of the time they get it.
If you were in business for yourself you would have to negotiate your own prices. Being employed isn't really different, just the risk is much less. You're trading something away for the security of a regular paycheck.
And they're still not being exploited. You're describing people that cannot fend for themselves. Also not everyone you're describing is only receiving basic sustenance. A lot of people in this situation live reasonably middle class lives.
They shouldn't do it too much, or then society responds in various ways (unions, legislation, etc.), so in that sense it's much like shareholder value. The company owners cannot write themselves a bonus equal to the entire profits of the company, or the shareholders will get mad. But they can certainly write themselves generous bonuses nonetheless. They don't have to completely maximize shareholder value, or completely minimize exploitation; they just have to do enough.
Who owns the company? The people who work there? The person who founded it? The people who the founders sold shares to? Or the people who lent it money?
Legally it’s the people who own shares. And if they miss their debt payments, it’s the lenders.
Companies can inform their shareholders “if you want to invest, here is how we operate differently.” Bezos and Buffet both do that in terms of defining focus and time horizons.
One may want to optimize for worker happiness first, but that’s not legal ownership. (Employee engagement is a predictor of shareholder return, but it’s hard to measure, and different from happiness)
The vast majority of shareholders have very little skin in the game, while the employees of the company absolutely have a lot of skin in the game. The employees depend on the company for their livelihood, whereas a shareholder is generally just trying to make money on their money.
One way to frame the question is “If the company gets a million dollar windfall, who should get it?” Employees? Owners? Even the most customer centric company won’t say a cash payment to customers, though they may say improving service or R and D.
Considering that managers compete to climb the hierarchy, I'm surprised to hear this claim from a systems thinker. It'd predict that managers work 40 hours or less per week, for example.
"Corporate behavior is shaped by managers shaped by this competition" seems a more realistic starting point.
Don’t tell we need to adapt your standard culture (e.g. new work) because that’s what makes everyone happy.
I think your characterization is accurate.
Edit: I’m talking about big co execs, not founders. They are typically two different breeds.
Any system that relies on people being selfless is doomed to failure.
(Even charity work is selfishly motivated - people like the status they get from donating to charity, praise from their social circle, and feeling good from doing it.)
I'm not convinced this is true. I can think of some small organizations full of employees who could make more money elsewhere but who are dedicated to an altruistic cause.
Sounds like you agree with me.
BTW, the D Language Foundation is an example :-)
Improving the performance of the parts of a system taken separately will not necessarily improve the performance of the whole; in fact, it may harm the whole.
Problems are not disciplinary in nature but are holistic.
The best thing that can be done to a problem is not to solve it but to dissolve it.
The healthcare system of the United States is not a healthcare system; it is a sickness and disability-care system.
The educational system is not dedicated to produce learning by students, but teaching by teachers—and teaching is a major obstruction to learning.
The principal function of most corporations is not to maximize shareholder value, but to maximize the standard of living and quality of work life of those who manage the corporation.
1) The education system is designed to corral children for working hours so their parents can be cogs in the machine.
2) The education system is designed to produce a minimum competence so that the students can eventually become cogs in the machine.
At no point was the public education system designed for anything significantly different from "average".
Any effective excursions from average are a result of some exceptional teacher bucking the system rather than being helped by it.
The system has been a tool used by some to advance their own selfish goals, but it's hard to say things about the system as a whole that is is actually honestly applicable across the entire system.
And it's even more complicated by the grudges people hold against the terrible teachers they had. it's understandable. Teachers hold important positions of authority in our most vulnerable and developing years. When they do not do what's best for us, it's a massive betrayal, and I can see why many would hold onto that and allow that to shape their entire view of the system. But it is an extremely skewed view.
Yes and no. Disciplined Minds by Jeff Schmidt has a different take (one I agree with), which argues that the educational system is dedicated to producing political discipline. Yes, this serves the interest of the teachers, and no, the system is not designed to produce learning. But it's highly arguable whether you could truly design, build, and sustainably run an institution which reliably produces autodidacts and independent thinkers, particularly at higher levels, particularly since it's difficult to impossible to measure how reliably such an institution is succeeding at its mission.
The approach I'm currently working with is to ask them to do difficult tasks (such as math problems that don't have a straightforward, mechanical process to produce an answer), then I watch them work. When they get stuck, I try to get them to explore what they know and think about what would help them break a bit of new ground, but so far it's been very hard to guide without showing. Generally, they struggle for a bit and then I show them a couple of ways in which they could make progress. This seems to have very good results, but I can't imagine how it could be institutionalized effectively when you start to get beyond the most elementary topics. Even with only two students it's challenging to manage.
Not just the sciences. Rigid, path-dependent taxonomies are a plague in all disciplines and in daily life.
Just look at us politics today: the discussions around “infrastructure” and “defense” are hobbled by the descriptions of those words rather than addressing the structural issues themselves.
>Errors of omission are generally much more serious than errors of commission, but errors of commission are the only ones picked up by most accounting systems. Since mistakes are a no-no in most corporations, and the only mistakes identified and measured are ones involving doing something that should not have been done, the best strategy for managers is to do as little as possible. No wonder managerial paralysis prevails in American organizations.
I've seen bright forward thinking leaders who delivered results get canned when one reasonable bet doesn't pay off, but mostly I've watched decision-makers stall when action is badly needed. This explains very succinctly what is wrong with so many places I've worked.
Except for actual accountants, for whom I can attest certainly do hunt down omissions. Especially when it's not your money you're spending.
I also have a little bit of the feeling that the emperor has no clothes, since in spite of all their ideas, I can't find any major company that has successfully transformed an industry based on systems thinking, nor can I find any major social ill that has been solved through the application of systems thinking. If anyone has any concrete cases of those, I'd also be interested.
I have a blog post working on applying Donella Meadows' Leverage Points to an engineering problem (incident retrospectives), but it's unsatisfying enough that I haven't figured out how to make it publishable.
I'm having trouble understanding this point. Is he saying the interactive manager looks backwards at what he might have done differently in the past, to be in a better place today? Would a better term for this be a "retrospective manager"?
Or does this mean something else?
People like Ackoff are discussing healthcare and education systems. As a software developer I find I can't learn much about agility/velocity there.
"Retrospective" does not suggest anything about the delay. Could be a manager who comes up with 20yo war stories all the time. I rather believe it is about tight feedback loops and "interactive" captures that quite well.
Which I found to be a dramatically different, and dramatically easier question to answer than something like “where do you want to be in 5 years?”
I found it help me shift away from trying to make predictions, and towards making healthy, productive (not self-sabotaging), well-rounded decisions with obvious long term benefits.
Basically all the engines in Chess start with the present position, and try to look into the future move by move. To be able to find the winning position like that is almost impossible for the position they were looking at. And yet, if you give the idea to an average Chess player, they will work out how to get a Checkmate. They will do so by finding Mate, then working back on how to get the board to that state. They will find the winning position when they reach the current state.
He's simply taken this idea and generalized it further to more than Chess.