Is it time for a Management Rethink?
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For a long time, management and administrative sciences have been a sum of independent silos, where very diverse subjects are joined with very light common threads. In my opinion, there is one common thread which is called leadership and this is treated as a silo subject, as if it where finance or marketing. It is time for a new vision, a Management Rethink.
What is the common thread here?
In some moment of time and space, administrative sciences and economics fell in love with the spreadsheet. One of my favorite lines says: “More fiction has been written in Excel than in all the history of Word”. All mergers and acquisitions are built on financial models that are built on great promises of synergies and optimizations, which in reality never seem to materialize. The great winners end up being those who structured the spreadsheet, who charged their fees without a link to any long-term success whatsoever.
For a while I have been reading about the Austrian school of economics and their way of understanding the market as a social process. I have also been reading authors such as Richard Thaler, Dan Ariely, Daniel Kahneman and Amos Tversky. All these readings can be classified as behavioral economics. Their conclusions go far beyond what I saw in university, as there is no focus on mathematics and equilibrium graphs and all ultimately conclude economics is a derivative of human behavior.
The trader and author of The Dao of Capital, Mark Spitznagel says that economists and administrators fell in love with physics and tried to imitate that field while forgetting that behind all the numbers is the human species with all its emotions and irrationality.
Read about Spitznagel’s last trade
Underestimating the brain
When one begins to understand the real-world applications of neurosciences, one understands that the human brain is a much more complicated machine than what was previously presumed. Not only do we have a rational conscious, but our decisions are taken by our unconscious or meta conscious a couple of seconds before they arrive to the rational part of our brain. This effect was called the priming effect by one of my professors, the well-known Dr. Nestor Braidot.
Like the iceberg, the unconscious is colossal and seems to be hiding while we only see the smaller conscious
There is no mathematical formula that can replicate how the human mind works even though, artificial intelligence does its best at imitating it. Still, it lacks the crucial connection to a superior level of consciousness we have, even though we might deny it or not be aware of it.
Mathematical models fail and proof can be found in two situations. The first is how two Nobel Prize winners created a financial crisis in 1998 when their Black-Scholes option pricing model failed taking their investment fund LTCM under with huge consequences for the world economy and anticipating the financial crisis of 2008. A second is the current massive variations in all epidemiological models in the current health crisis. Experts have been rather useless in making their mind if face masks work or don’t work. That is the level we have reached. All models have failed.
Beyond Excel
Perhaps it is time to move away from complex formulae with lots of Greek letters that sound very scientific but can’t express reality and move towards topics more related to human beings. For those who criticize that something without a mathematical model behind it has no value, I will remind you that still physicists can’t figure out how to connect subatomic physics theory (standard model) with the big celestial objects in Newtonian physics.
So maybe it’s time to bring the spreadsheet down from its ivory tower and have a more integral theory for the people who work in companies, those we call human beings.
I was always criticized for my lack of spreadsheet obsession and because I knew that human beings were something very different from the dry version sold by administrative sciences. At times I even tried to accept the model, but hated what I became and finally abandoned those mental schemes. Numbers have their role, but they are only a part of something more macro, they might be a description of the story but are not the story.
Management and administrative theory stuck with whatever Elton Mayo and Abraham Maslow did in the 60s and did not advance much further than that. There was no philosophical development that evolved after these proposed theses and their known methodological flaws.
I am not a fan either of the positive psychology movement that has become so fashionable because I find them empty and with a lack of criticism and self-criticism that sounds like wishful thinking. Books like The Secret might be clever and entertaining but are most definitely not a handbook for anything.
In my personal experience I have found a number of factors that give a way to good leadership practices but that have no role on an academical pensum for a business career or an MBA. This is to what I refer to Management 2.0
Stoic Philosophy
Marcus Aurelius, Seneca and Epictetus. These are names of some of the most well-known Stoic philosophers.
Stoicism is a philosophy of personal ethics informed by its system of logic and its views on the natural world. According to its teachings, as social beings, the path to eudaimonia (happiness, or blessedness) for humans is found in accepting the moment as it presents itself, by not allowing oneself to be controlled by the desire for pleasure or fear of pain, by using one’s mind to understand the world and to do one’s part in nature’s plan, and by working together and treating others fairly and justly.
The Stoics are especially known for teaching that “virtue is the only good” for human beings, and that external things — such as health, wealth, and pleasure — are not good or bad in themselves (adiaphora), but have value as “material for virtue to act upon”.[1]
Keeping calm when the world is raging, is a virtue in decision-making roles. The problems faced by roman emperor Marcus Aurelius, a former slave as Epictetus and Seneca, who was a political enemy of the likes of Nero and Caligula are the same as the ones we face. They are not new and unique problems but rather common human problems in all ages.
Buddhism
Photo by xandro Vandewalle on Unsplash
From my lectures on Buddhism I have found clear and interesting concepts. The 4 noble truths are clear and undeniable. In a succinct manner:
- Suffering: living involves suffering. Being born, growing, aging, losing, not having your wants met. All is suffering.
- The origin of suffering: We suffer because we have desires. The more we desire, the more we suffer.
- The end of suffering: When we eradicate desire one stops suffering.
- Following the noble eightfold path: Don’t say, do or think nasty things. Stay away from shoddy business deals.
These are simple concepts that allow a straight and ethic life with great results. You don’t have to go into dogmas, the concepts are easy, clear and in many cases obvious.
Don’t look for happiness as it is a vain concept, too full of expectation and practically impossible to achieve. Seek contentment, which is a concept that searches for balance and equilibrium with what’s inside you and with what you have. It’s a much more realistic goal and it leads me to my next concept.
The science of acceptance
The science of acceptance is a philosophy I read from a Colombian philosopher called Gerardo Schmedling in his manifesto, Aceptologia. It is the science of accepting what is happening in the world, understanding the illusion of control and that going against the universal life force is an energetic expenditure without much return on that effort. It is a practical way of living in which you do not renounce living your normal life, you just renounce to control the universe and accept what is going on and managing the situations as they come. Following this philosophy, which is very similar to eastern philosophy, is accepting our role in the universe by changing ourselves and not expecting change from others, therefore living a more peaceful and meaningful life.
Religion
Aside from all rituals and the sectarian view they provoke, religions have significant ethical codes that are very valuable which in fact are really behavioral codes, and many merge in what is called The Golden Rule: Do not do unto others as you would not have them do unto you
This concept is present in all the three monotheist religions and is first spotted in the Old Testament in the Book of Leviticus (19:18). It was also attributed to Rabbi Hillel the wise, who said that the phrase resumes the whole of the Torah, the rest being commentary. Jesus used the same words (Matthew 7:12, Luke 6:31) and they are found in the Hadith, the oral and written recollections of the life of Mohamed.
They are also present in the Hindu Mahabharata, the Upanishads, the Jainist Sutras as well as all around Buddhist scripture.
An ancient and universal concept which is the corner stone of human relations and by default, the role of managing people.
Not one mention of this concept did I find in my university studies, maybe because it was too obvious and unremarkable. By focusing on teaching modern psychological theories, WACC model calculation and free cash flows they forgot the most important concept that world religions bestowed on humanity and quite possibly the most important concept for humanity, and by derivative to the role of managing people.
Trans personal Psychology
Lastly, I reference trans personal psychology, an obscure term that has been coined to name all the unexplainable.
Carl Jung was the first modern psychologist to generate an accepted academic theory with great scientific acceptance, and his concepts of collective unconscious and synchronism are still thought and studied. The collective unconscious is that great information field akin to the data availability of the “cloud”, but composed of the information of those who are alive, those who are no longer alive and those yet unborn. None of this is new. We are just reconstructing what the ancients knew that humanity lost in previous ages, and which are not at all incompatible with modern findings in physics.
All my personal experiences have showed me that the field has very valuable information for decision taking. The information is hard to interpret and there are multiple methods of interpretation, some more reputed than others but in general terms all have the capability of providing valuable information. It is also a field full of conmen and charlatans, so it is fundamental to look for reputed practitioners.
Trans personal psychology can explain, heal and solve what cannot be solved in a traditional manner. There are healings that require regressions, invocations and negotiations in other planes and dimensions.
I wish to mention the effect Bert Hellinger has had on me. His development of family constellations that can also be adapted to companies, are a way to find and resolve trans generational conflicts. I am proof of their effectiveness and their way of getting to the bottom of things in a faster and more certain way than most consulting diagnostics. His understanding of the family structure, how it works correctly and how it does not, as its effect on the human psyche is original and perfectly exportable to analyzing companies. Both are micro-societies, fractals of a greater society. I also wish to mention and recognize Stanislav Grof and his holothropic breathing technique.
Leaving the business plan alone
Human behavior goes way beyond what we understand, and the focus of economics and administrative sciences on the Excel spreadsheet and the “business plan” implies that they are closed to greater sources of information and to a more considerable number of possible scenarios.
Maybe time has come for the business pensum to include more about human dimensions than to prescribe more pseudo-scientific control methodologies. We don’t need new administrative theories, we need more philosophy, more human knowledge and getting in touch with trans personal sources that can help the business mission so that it can be fulfilled in a balanced way that works for all stakeholders.
Whoever uses these tools will find that they become better decision makers and consequently, better leaders. Maybe academia will get it someday instead of looking to recreate a new version of Taylorism in a digital environment.
[1] Source: Wikipedia
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