Managing Leadership^®

As we have observed, trade flourishes in an environment where there is trust in one’s partners – confidence that understanding is mutual and everyone will keep their word. It is also important to have an infrastructure of legal protections, to which recourse can be taken when there is disagreement about whether that has been accomplished.

That infrastructure is important, because it acts like a safety net for a high wire walker, assuring everyone that they have reliable safeguards. The consequence is that they will venture to take risks, to undertake alliances and endeavors, that they otherwise might not. This adds impetus to the creativity, productiveness, and growth of the economy.

The interesting thing, though, is that there is not always the necessary cultural connection between the infrastructure and the atmosphere in which commercial gymnasts are expected to produce dazzling performances. For example, there are economies in the world that have, in effect, translated and imported non-native commercial codes in order to modernize the way commerce is regulated in their countries and to demonstrate to foreign investors that their markets can be entered with confidence.

But the problem is that these codes did not grow naturally from the cultures where they nominally hold sway, they do not make inherent sense to the natives of those cultures, they do not answer the needs or expectations of locals who continue to do business there as they always have, and they are thus largely disregarded. Or, they are selectively applied – both in particulars and over time. None of this is necessarily duplicitous, but it certainly is confusing – and can be quite disheartening – for foreign investors enticed into this environment by its surface familiarity.

Of course, something like this can and does happen within individual economies, as well. In either event, the result is an erosion of trust, with a consequent slowdown, if not breakdown, of investment and trade. Commitments to promises are reconsidered, reinterpreted, or simply put on hold. Compensation is demanded up front, reducing liquidity and paralyzing commercial activity. The familiar language of shared commercial practices and values degrades into an equally familiar atmosphere of allegations and counter-accusations.

At times, the situation can become so bad that we suffer a sort of ethical disorientation, and delude ourselves as well. We really believe that our words reflect our actions, and we do not see the sinuous deception in our increasingly strained rationalization of reality with our rhetoric.

Indeed, many argue that this sort of situation is the natural outcome of capitalism, which, based as it is on coarse self-interest, works to distort and degrade human nature and relationships. We have seen that this is not the case, but rather results, itself, principally from miscommunication and misunderstanding.

But is the economy as a whole the only place where this happens – or even the most common venue? Do you not see this at work, where high-sounding hyperbole is crafted by top management at consultant-facilitated off-sites and then unveiled to declare that the empowerment of employees, a risk-taking culture, and a decentralized learning organization are suddenly in the “corporate DNA?”

Does it not often happen that when junior managers and employees are emboldened to act on this they discover, sometimes most unpleasantly, that the old rules seem somehow to still be in actual force? The infrastructure turns out to be false. There is no mutual agreement about what it means in practice, exceptions become the norm and obtuse rationalization displaces frank communication.

Management consultant Shaun Kieran, in a comment to “Creating destruction,” vividly draws attention to this problem, pointing out that senior management all-too-often fails, when push comes to shove, to practice what it preaches. The disjunct between these poisons the atmosphere. Trust erodes, faith in mutual understanding, interest, and interaction declines, and creativity and growth slow to a stop. Not in the economy. In your business.

Do indeed practice what you preach – but be sure as well to learn your sermon from the choir, to build the culture from within, rather than try to impose it from without. That is a key difference between intelligent management of organizational leadership, and thoughtless expression of singular individual leadership.

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This post is a part of a series. You can learn about and link to the other articles here: Conceptualizing capitalism

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Today’s tip: Speaking of uni-directional approaches to best practice, please see this important argument, by Wally Bock, advising caution about methods that are inattentive, or even dismissive, of the always robustly evolving dynamics and feedback inherent in the real workplace.

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