Have you ever wondered why the exhortation “This Is Business!” should be an acceptable and definitive justification for a decision that undermines a business’ structural integrity? Typically, these decisions involves implementation of operational efficiency measures such as making employees redundant while demanding fewer people to carry the same work load sometimes even without getting paid for over-time, renegotiating employee benefits (including pensions), instilling fear of losing one’s job, deference of maintenance, etc.
Does this justification suggests that business operates within an alternative realm―separate from the rest of the world―subject to its own laws of cause and effect, including a different social-, and legal system, with different norms, values, morals, ethics, etc.?
Structural integrity refers to a system’s ability to hold together under stress―which includes its own internal dynamics―without causing systemic problems or collapse. Hence, pushing or eroding a system’s capability and capacity compromises its structural integrity. And, success is limited by the value chain’s weakest link, which is revealed when poor economic conditions erode a system’s margins for error.
Col. John Boyd USAF discovered that a system’s weakest link is its ability to communicate or interact with its environment. He identified three aspects of communication and interaction that can either diminish, or sustain and improve a system’s structural integrity.
- Physical aspect―represents the world of matter-energy-information all of us are a part of, live in, and feed upon.
- Mental aspect―represents the emotional/intellectual activity we generate to adjust to, or cope with, that physical world.
- Moral aspect―represents the cultural codes of conduct or standards of behavior that constrain, as well as sustain and focus, our emotional/intellectual responses.
Physical-, mental-, and moral isolation causes communication and interaction to fail, which destroys the moral bonds that sustain and improve a system’s structural integrity.
Physical-, mental-, and moral interaction causes communication and interaction to succeed, which enhances one’s opportunity to cope with unfolding circumstances. Therefore, Boyd writes, “With respect to ourselves we must:
Surface as well as find ways to overcome or eliminate those blemishes, flaws, or contradictions that generate mistrust and discord so that these negative qualities neither alienate us from one another nor set us against one another, thereby destroy our internal harmony, paralyze us, and make it difficult to cope with an uncertain, ever-changing world at large.
In opposite fashion we must:
Emphasize those cultural traditions, previous experiences, and unfolding events that build‑up harmony and trust, thereby create those implicit bonds that permit us as individuals and as a society, or as an organic whole, to shape as well as adapt to the course of events in the world.”
When moral aspects are upheld―when decision makers do what is right and when they walk-their-talk; when their word is their bond―people feel, on a mental level, motivated to and capable of formulating adequate and timely responses to unfolding events, which embolden their physical behavior in the world.
However, the opposite is also true; when morality is undermined―when they no longer know what to believe is true or false―people feel insecure, threatened, and have difficulties making sense of their environment. Eventually, on a physical level, they just stop trying, they disengage, give-up, and resign in order to start working for a competitor. This phenomenon is the source of what is known today as the war-for-talent.
Good or Bad?
Economic- and business principles, theories, practices, etc. are in and of themselves neither good nor bad―they are just what they are; nothing more and nothing less. Good refers to pursuits that are sustaining the world in which we live and bad refers to pursuits that are diminishing the world in which we live.
Whether a pursuit sustains or diminishes the world in which we live is determined by the specific purpose a decision maker has in mind when choosing and implementing a particular business principle, theory, or practice. Every decision maker can exercise his/her free will to choose either to raise up the world in which we live to its highest level of creative possibility, or to facilitate its destructive abilities! This exemplifies the power of our minds, which we cannot diminish but we can choose to use it for good or bad!
Business is predicated on a simple exchange principle: “Give buyers more in USE-value than the CASH-value you take from them”, which motivates people to do business with you. This implies that if USE-value is not immediately evident, potential buyers will haggle over price, which reduces profitability. And, if the CASH-value you demand exceeds the USE-value you offer―which is generally known as price-gouging or profiteering―you will tarnish your reputation and lose respect.
Decisions that stunt development of and undermine a business system’s capability and capacity cannot fail to undermine operational effectiveness, organizational culture, morale, pride of workmanship, and thus employee engagement, and profitability. As an employee, it’s wonderful to hear executive leaders take pride in their work force, being described as a key asset. It’s quite another to be treated as a liability; a fungible resource.
Do I really need to spell out the effect of moral leverage here? What motivated executive decision makers to implement more operational efficiency measures? You know the answer! Isn’t it ironic that executives complain about a lack of employee engagement and the so called war-for talent?
Dr. Deming said: “Nobody gives a hoot about profit” because decisions taken by executives show no consistent concern for maximizing profit over the long term. Performance is a function of developing a system’s capability and capacity. Have you ever heard a NASCAR team owner justify decisions to undermine the team’s capability and capacity by saying “This is motor sport”?