Why do companies exist and do they need to?


This question might have seemed pointless about 10 years ago. A company, in its popular sense, was the most effective way to coordinate resources (such as people, time, materials, money, ideas) to viably produce goods and services. It still remains an effective mechanism, the difference today is that alternative means are available. What is pertinent about these alternative means is that they have the potential to change the economics of how business produces and distributes its merchandise. More than that, these alternative means overcome some of the significant limitations and constraints of the traditional design of business. Consider for example, that if a retailer wants to expand into a new market, it has to get physical product to customers in these new markets. 10 years ago (I use ten years in the proverbial sense throughout his post) the best way to do this, was to setup a bricks and mortar store as the mechanism for transacting with customers. This involved significant risk, because of the uncertainty that the investment in buildings, inventory, staff etc. may not bear fruit. The costs of performing a transaction with a customer in a new market were implicitly high because of the mechanism used. To illustrate a point about transacting mechanisms, consider how the availability of the internet and the virtual storefront changes the economics of retailing in a new market. The cost of a bricks and mortar infrastructure is obviously eliminated, which alone significantly reduces how much value is at stake.  Clearly the virtual storefront is not sufficient in itself to constitute a business in a new market, a logistics infrastructure, a financial infrastructure etc. is still required. The model for getting merchandise into customers hands will change and it will no doubt have its own risks. The point however, is that the simple act of digitizing the retail storefront significantly lowers the financial and bureaucratic cost of transacting in a new market. Digitization lowers the cost of the transaction and this redefines the risk. Amazon is a case in point. It’s history is vastly different from a traditional retail venture. For starters it retailing mechanism was nowhere near as capital intensive as say, starting up a Walmart store. Amazon began in a garage and within two months sold product in 50 American states and 45 countries. A traditional bricks and mortar retailing model could never scale up this way. The point is not that bricks and mortar is dead, the point is not that the internet is the proverbial “way to go.” The point is that as transaction costs come down it offers a new paradigm for conducting business and, more importantly that the new paradigms have the potential to overcome some of the key limitations and constraints faced by traditional models of business. In an economic climate where growth and development is nowhere near the effort and investment made to generate it, perhaps it’s time to look at alternative paradigms. The digital economy offers huge promise.

Does management know how to work?


The profile of management has changed substantially in the past fifteen or so years. It’s hard to recognize the magnitude of these changes in the same way that it’s hard to recognize the changes in your own children on a daily basis. If you take a snapshot of management today, it will likely be younger and better qualified than people in the same situation about a decade ago. The qualifications profile will also likely have a strong bias towards some kind of commercial qualification. For example I worked in a blue chip bank with a multinational footprint. The director I reported to was qualified as a chartered accountant, MBA and also had a legal degree. This kind of profile was common among senior management of the bank and remains so. This kind of setup feeds itself. It values its own image and as a result the old guard of management has slowly been displaced from the system. This perspective shows up in recruitment processes today. Look at a typical modern job specification and it will likely be heavy on KRA’s, qualifications, experience etc. The more numerous the better. A young Steve Jobs would be unlikely to make the grade set by corporate recruiters today. Of course there are exceptions and they remain exactly that.

The question is has all this change resulted in better quality of work? This begs another question. What is work and if you asked a manager or director that question today would they have a meaningful answer? I suggest the answer to these questions is NO and I submit the poor state of the economy as evidence. The question of what is work is not to be confused with the question “what work do you do?” The latter question is easy to answer. It does not necessarily translate to the creation of value and is not the subject of inquiry in this post. I’ll tender a definition of work from Bröms1 et. al. Work is a system that links each workers capacity to serve with a customer’s specific needs. Herein is the essence of a job description, all else is dressing. I also tender that if you measure most management today against this one line specification they will fail. They do not know how to work! I would further suggest that the successes of the last decade have been despite management.

What then has been the contribution of management to work? Its role is implicit in the “traditional view that an organization will reach its bottom line goals if it drives employees, suppliers and other stakeholders to achieve financial targets in their work2.” Compare this to the prior one line job description and definition of work. In this context it is easy for someone to be in a position of management and not really know the company’s products, technologies or customers and how they are related. In this context operating targets are used to drive and indirectly control work. This is where the notion of management and a worker arises from. The worker is the one who actually knows these aspects and relationships of work and delivers the actual value to the customer. The management term for this aspect of work is the word “detail.” Of course management cannot know the detail today. They cannot manage their large portfolio of responsibilities if they did. This approach to work is no different to managing a game of football by looking at the scoreboard. The reality is that when the score is not satisfactory, one ultimately has to look at the players and how they play the game. Management has to know the game to make a difference. Consider a typical scenario however. The score is unsatisfactory. The star striker is called in. His metrics show that he has not taken enough shots at the goal. He is put onto a performance management process. Pull up your socks or face dismissal he is told. It is taken for granted that the player is defective. After all the company paid top dollar based on the players track record and management got a pat on the back when they recruited him. Management will get another pat on the back when they let him go. After all managing people, [….workers] is not an easy job. Is it? It is certainly easier than knowing what work is and doing it.

This distortion in managements approach to work has taken a long time to show up. The reason may be that the “line” has been slower to change and has buffered managements effects. Today however, even the line is changing rapidly to fit managements image. What this means is that corporations are forgetting how to work and your customers probably know it.

Management is younger and better qualified today. The tenure, qualifications and experience need not become the boundary within which management stays/plays. They can serve as the means to get to grips with work in ways that prior generations of management could not. The means of management are not its ends. Management needs to take up its proper role, and “proper role of managers is to lead people to understand business as a system of work, a system that links each worker’s capacity to serve with a specific customer’s needs3.” This is the essence of management.

  1. Johnson, H. Thomas; Bröms, Anders (2011-01-20). Profit Beyond Measure: Extraordinary Results Through Attention to Process and People (Kindle Locations 232-233). Nicholas Brealey Publishing. Kindle Edition.
  2. Ibid. (Kindle Locations 356-357).
  3. Ibid. (Kindle Locations 232-233).

Money: The Miraculous Meme


Money today is not backed by any tangible substance. It’s real worth lies in the fact that it is a representation of our values! It re-presents in the form of a universal measure what we value. This makes it a remarkable instrument. Even if it was backed by a precious metal for example and we transacted via the commodity instead of the paper representation, the principle that the commodity represents our values would remain.

   Whilst the exchange of money today is largely an unconscious transaction, it is really a miraculous process of engagement. What is really being exchanged are human values. I value something that you can offer and the money that I give to you in the process, gives you access to something that you value. It is hardly surprising then, that we have evolved the mechanism of money. It facilitates human development, engagement and self expression. Money is a tool of human evolution.

    The relationship has gone awry however. Humanity has hijacked evolutions game. Money has become an end in itself rather than a tool of transcendence. Humanity has made its values subservient to its creations. In the process the master has become the slave. We have forgotten the purpose of our creation and have built entire institutions around the delusion. Currency markets are an example one such institution. They are built on the idea of attributing value to something that has no intrinsic value, other than our valuing of it. It is hard to see this self-deception from within a system that is a self-deception in itself.

    These notions are not suggesting that money is an evil conception. On the contrary it is a remarkable conception. It has been at the centre of human progress for centuries. But is its time coming? Is this tool reaching its limits in serving evolutions purpose? New forms of universally re-presenting human values are emerging. They are not fully formed but in the process of coming into being, for example Bitcoin and PED. Bitcoin is a digital currency “designed around the idea of a new form of money that uses cryptography to control its creation and transactions, rather than relying on central authorities.[1]” A PED is a currency used in a virtual world called MindArk[2]. In 2009 the Swedish authorities granted a real world banking licence to the MindArk virtual bank. There may be other forms of “currency” emerging. These new forms are not necessarily better than what we have in the same way that the first electric filament light bulbs were not better than a gas lamp. There may be a way to go but is the writing on the wall? It is speculation to determine when mainstream mechanisms of transacting will undergo fundamental change. The timing matters not. What matters is that the next frontier of change has appeared on the horizon as it always has. Humanity is being invited to a next stage of evolution. We can embrace it or we can go kicking and screaming as some of our predecessors might have, at the dawn of the industrial age. How will we respond in the age of memes[3]?


[3] a cultural unit (an idea or value or pattern of behavior) that is passed from one person to another by non-genetic means (as by imitation); “memes are the cultural counterpart of genes”

What matters about the questions that you ask about work, is not the answers that they lead to


What matters about the questions that you ask about work, is not so much the answers that they lead to, but what they reveal about the person asking them. What they reveal, is at the heart of creating value through the system of work.

    Ask Jack Welch what work is. Pose the same question to Richard Branson, Mark Zuckerberg or Warren Buffet. Ask employees in your business this question. Ask an engineer, an anthropologist or military commander. The answers will not be the same and they need not be the same. What the answers will describe are different forms of work. The form of it will change from person to person, through time and space. What is of consequence here is WHY the answers are different. It has implications for the way that work is designed and coordinated. The factors that lead to different answers need to be accommodated for. Neglect of this aspect can lead to dissonance in a business with the potential to destroy it. Even worse it can lead to a lot of corrective action that can push a business quicker and deeper into dissonance.

    In simple terms the answers are different because each person’s capacity is different. This seems obvious. We’ve been schooled into this notion from an early age. This notion is grounded in an idea of betterness, that some have more or less capacity than others. IQ tests and HR architectures are built on this premise. There is also a countermovement that advocates that people have equal capacity, and there are structures built on this premise. The latter notion reflects in the culture of “new age” companies of our time. In effect both of these notions are extreme points on the same continuum and there exist many varieties in-between. If one strips away all of these frameworks or ways of describing human capacity, what will remain? What differences in human capacity will become apparent? An entirely different continuum becomes apparent. The same capacity that enables a toddler to explore its surroundings enables an engineer to design a bridge. They have different tools at their disposal. The toddler has his raw senses and instincts whereas the engineer has his entire discipline as his toolset. But the tools are not the source of learning and creating. They are the means through which learning and creating expresses itself. The toddler and the engineer are clearly different, but they are also the same at some level. Army generals on opposing sides of a battle clearly have different world views, but they are also the same at some level. A policeman and a school principal are clearly different but they are also the same at some level. It is this level of human capacity that business neglects at its own peril. What is evident here is that there are innate human capacities that are prior to any intellectual constructs, and there are forms that this capacity can express. The engineer expresses a design for a bridge, the toddler expresses his work of art on your living room walls. They draw upon the same innate capacity which is reflected differently in their particular expressions.  

    There is a third factor that relates to innate human capacities and its expressions. The same army general that gives the order to march may completely surrender to the whims of his newborn child, responding to its every cry without question. The capacities that we draw upon and the forms that we express also depend on the “life conditions[1]” that we experience. It is this triad that is at the heart of creating value through the system of work. Yet it is this triad that receives the least attention in most organizations today. It is this triad that is revealed through the questions that you ask.

    Bröms et. al. described work as “a system that links each worker’s capacity to serve with a specific customer’s needs.[2]” This perspective puts human capacity at the centre of value creation. Whilst this notion is not new, it calls for a deep attention to human capacity. The language to work with this aspect of business is available and accessible. The nature of our organizations is ever evolving. What is required now, if business seeks to thrive, is to pay attention to the organization of our nature.


[1] Beck, Don Edward; Cowan, Christopher C. Spiral Dynamics. 2006. Blackwell.

[2] Johnson, H. Thomas; Bröms, Anders (2011-01-20). Profit Beyond Measure: Extraordinary Results Through Attention to Process and People (Kindle Locations 232-233). Nicholas Brealey Publishing. Kindle Edition.

“We frame problems in terms of solutions we know how to deliver”


About 500 years ago Nicolaus Copernicus wrote a paper that would have profound implications on our view of the world. Prior to Copernicus, mainstream society believed that the Earth was the centre of our solar system. Copernicus made a case that showed instead that the Sun was the centre of our solar system and that the Earth and other bodies rotated around it. His paper had staggering implications for society and for some time he resisted making his findings public for fear of scorn. His work remained deliberately low key for almost 30 years for this reason. Copernicus had information which did not fit the prevailing paradigm of society. Rather than change its patterns of thought to fit this new information, society’s tendency was to throw out the disruptive information. It took a lot of persistence, at the time of Copernicus, to overcome the momentum of legacy thinking.

Today the challenge has evolved. We live in an age that is rich with new ideas and a society that is quick to assimilate them. But an underlying blindness remains. It is a blindness that we acquire unconsciously in the process of becoming schooled into adulthood. More formally this schooling is conveyed in the form of various disciplines e.g. Business, Science, Humanities etc. The language through which we learn them contains within it a simple distortion. For example, if I take a hammer and strike a typical windowpane with it, it would seem obvious to conclude that the windowpane broke because I struck it with a hammer. The hammer and the force that I apply it with are the cause of the window pane breaking. I could construct a test to prove this hypothesis and strike the windowpane with a feather instead and it will likely remain intact. And so on. The evidence is strong. The problem here is with the word cause. It seems so innocuous and “because” of that, it taints our perception deeply. What we may not recognize in this example is the role of the windowpane itself.  The same experiment applied to a brick wall will yield a different result. When we forget the role of the windowpane we forget to consider a big part of the reality that we are interested in. What we initially see as a cause is but part of a richer situation. Even then there may be other factors more subtle that we do not see and account for. What we see is actually defined by what we expect, not vice versa. To quote Robert M. Pirsig  “Seeing is not believing. Believing is Seeing1.” The real problem here is that we are rarely taught to recognize this distortion and accommodate for it. Our disciplines are taught to us in a matter of fact way and we become conditioned towards a certain way of relating with the world, through these disciplines. We see anything outside of this way as a misfit or distortion. Like the citizens of the earth centred solar system we keep our patterns of thinking and throw out what we see. An Eskimo does not see ice in the same way that a city dweller might. Although ice remains ice, everything about it changes when our way of perceiving it changes. The problem is not outside of us.

In the context of business, this distortion can show up as interpersonal conflict, poor decision making, surprise outcomes, economic shocks to name but a few. It is not a problem of lack of information but narrowness of perception. These situations arise in good measure because we cannot see the situation fully for what it is, like the role of the proverbial windowpane in the earlier parable.  What we see is defined by the particular discipline one has been conditioned in, like operations or marketing or cost accounting etc. The disciplines are not problems in themselves. They can provide a diversity of perspective which is valuable in itself. The problem arises when we only see within the particular discipline and therefore cannot value what lies outside of it. We are conditioned to “frame problems in terms of the solutions we know how to deliver2.”  Not vice versa. This conditioned blindness is kept in place, in some measure, by our language. Listen to the conversation in corporate boardrooms, the classes in business schools or look at the headlines on Bloomberg, Reuters or other popular media and you will read “Wall street opens higher on earnings optimism”, “Stocks advance on profit outlook as gold rises” etc. Tomorrow the rationale and theories will have changed. They contain an unconscious acceptance that there is an explanation within our grasp, a cause that can be found and so we see what affirms this unconscious expectation. Taleb3 calls this kind of perception, confirmation bias. It’s what we don’t see that makes tomorrow’s headlines different, and this pattern we don’t recognize easily.

How do we transcend this conditioning? It cannot occur from within the practices that we are schooled in, like strategy, economics or leadership because the distortion in seeing is within their structure. A key step is to dis-identify with these disciplines. You are not an accountant, a lawyer or scientist etc. You have these skills but they are not you. They are tools in service of your interaction with the world. As a child you could use your hand to explore and understand your surroundings without having a concept of hand in mind. Said another way, when stuck with a problem, one should first look at the valuing system/discipline rather than the problem itself because the form of the problem is a function of the valuing system. There may be several valuing systems in play at the same time. The obvious one is the particular formal discipline through which one interrogates the situation. An operations expert was tasked with getting people to use staircases instead of escalators as a way of saving energy. He slowed down the escalators, had them shut-off when not in use and even placed barriers to prevent people with large objects, such as shopping trolleys, from getting onto them. Little changed as people found workarounds to these measures. A psychologist when tasked with the same problem focused instead on incentivising people to use the stairs. He painted them the colour of piano keys and installed a system to play a corresponding sound when stepped on. Droves of people chose the stairs. The operations expert neglected people’s valuing system and in fact stoked them, the psychologist got people to revalue the situation. This is not to say that all problems require psychological solutions. It is simply to make the point that when we look beyond our conditioned way of perceiving, novel solutions can be found.

The language distortion that is embedded within the tools that we are conditioned in is more subtle, yet perhaps more pernicious. It is a way of valuing that is beneath the rules of the discipline. This is the trap of being blinded by familiarity. For example: we widely accept that gravity causes the apple to fall from the tree. Credible scientists have confirmed this and we are taught it this way. We take the word “cause” for granted and use it loosely in our conversations. The reality is a far more complex situation then it seems on the surface. For starters apples were falling from trees long before we had any concept of gravity. We might have had other concepts then and believed them with equal vigour at the time. Gravity is a concept. We have chosen to define it in a certain way and superimposed this definition on reality. This is not a problem in itself because we need some framework to work with reality. The problem occurs when we mistake the map for the territory and disregard anything that does not fit the concept or, try to explain away the reality so that we can keep our concept intact. The problem occurs when we accept implicitly the cause that we have established in the language of a particular discipline. Progress cannot occur in this way. We can buy some time but eventually the concept is so far from an evolving reality, that whatever we build from it misleads us, resulting in shock outcomes. Then we re-evaluate our concepts. This is where the world of business is at present. The discipline is producing unexpected outcomes of severe consequence. It’s time to use the constructs of business with more caution. We need to listen to ourselves and others more closely and look for the implicit “causes” that we embed in our conversations and news headlines. Catch these “causes” and ask whether what you say and hear is really true. Perhaps a new perspective will start to arise and we can then start framing solutions in terms of the problems that we see.

  1. Pirsig, Robert (2011-11-30). Zen And The Art Of Motorcycle Maintenance: An Inquiry into Values (p. 68). Random House. Kindle Edition.
  2. Beck, Don and Cowan, Christopher (2006). Spiral Dynamics. (p. 22). Blackwell
  3. Taleb, Nassim Nicholas. Fooled by Randomness. Audio Edition

Standards at the expense of quality


How valuable would it be to business, if every worker brought the highest quality of contribution to work? Ask any manager or HR practitioner and they will likely say that this is such an obvious expectation, that the more pertinent question now is how to accomplish this. Yet efforts to accomplish this defeat their own purpose because they emerge from a mis-perception. This mis-perception is the separation of the worker from work. The issue of quality of work cannot be meaningfully addressed as long as this separation remains.

This separation is so deeply rooted in the history of work that it is hard to recognize that it even occurred. One may argue that perhaps this separation is appropriate, after all the institution of business has been built on this notion and it has had a tremendous track record of success. It is what allowed Henry Ford to bring the car to the “average man” and more recently put mobile devices in the hands of billions of people. If anything it strengthens the argument for separation. This line of reasoning is a red herring. It forgets that these very commodities were conceived in minds of craftsman, not workers. And a “craftsman isn’t ever following a single line of instruction. He’s making decisions as he goes along. For that reason he’ll be absorbed and attentive to what he’s doing even though he doesn’t deliberately contrive this. His motions and the machine are in a kind of harmony. He isn’t following any set of written instructions because the nature of the material at hand determines his thoughts and motions, which simultaneously change the nature of the material at hand. The material and his thoughts are changing together in a progression of changes until his mind’s at rest at the same time the material’s right.’ (Robert M. Pirsig)  Quality is implicit in this relationship between worker and work. They are in harmonious co-creation of each other. Separation has no meaning for a craftsman.

So let’s accept that true craftsman in the context of a corporation are rare. For some it will seem far-fetched to think of a call centre agent, a worker on a production line or teller in a bank as master of a craft. Not everybody can find this kind of harmonious union with their work today. It is a privilege reserved for a few, like artists perhaps. Modern commerce does not have the time to accommodate this aspiration. It achieves quality through much more expedient means and expediency is what it’s all about. It achieves quality through standards. Organizations have rules, processes and a variety of prescriptions which some technocrat has compiled for others to follow. It matters not so much whether you care for what you do as it does that you comply with the standards. A good worker is a compliant worker. This has become the working culture of our time and everyone is in collusion to keep it going, workers, corporations and business schools included. Today it is the norm to find the full expression of yourself outside of work. Work is the means to an end. Corporations use workers to get their work done and workers use corporations for the means to fund their real aspirations. Separation and fragmentation are the order of the day. The idea of work life balance springs from this notion. It is a lie that we have fabricated to compensate for relinquishing the craftsman in us. It is not surprising that such a system weighs down on itself, with the few that we call leadership and management mandated to buoy it up.  The separation is what makes them relevant. They exist because the misperception exists. Does this mean that there is no room for leadership and management? It does not. It does mean that their purpose is not to keep the separation in place, but to remove it. This is not easy to achieve if you have been schooled into separation all of your life.  It is the design template of our society.

So how do we put quality back into work? How do we put the worker back into work? How do we make work a craft again? There are two practices in the bedrock of quality work. Master the tools of the craft and cultivate a deep presence to work. The two are not mutually exclusive. Master the tools until “you master them with such proficiency that they become an unconscious part of your nature. You get so used to them you completely forget them and they are gone” (Robert M. Pirsig). In the midst of this kind of proficiency, presence arises. Presence then allows you to be with the event or object as it develops, sculpting the outcome moment by moment like a master craftsman. You see this for example in sportspeople in a peak moment. Their actions seem to defy all reason and we stand in awe. What we really stand in awe of, is the harmony of it all.

But presence also needs to be nurtured. Fear is the enemy of presence. It removes one from the work and shifts the focus to the self. When one is focused on the self, work becomes subordinate. Our contribution becomes bounded by what is safe. We adopt the role of compliant worker and the compliant worker only gives what he needs to. Standards then become the box that we stay within, rather than the bedrock on which we stand to build greater outcomes. Standards become the enemy of quality. And how do we treat this condition? With more standards.  More standards draw more energy and attention from presence and invite strain. Strain invites more fear. The system consumes itself.

Now you cannot release others from fear if you are fearful yourself. You cannot find freedom and excellence by changing the system of work either. Fear is not in the system or from the system. It is reflected in the system, and it reflects what is already in you, as your image would reflect in a mirror. So the process of cultivating craftsmanship starts with the release of fear. Fear thrives on judgement. This is a misuse of judgement. Recognize the judgemental labels that form our everyday lexicon.  This worker is an under-performer. There is much that is implicit in this label under-performer. What is true is that this worker did not produce the results that were expected. This perspective invites a different course of action than labelling the worker an under-performer. In the latter case (worker is an under-performer) the worker is defective and requires correction. In the former case the work is lacking and requires attention. One course of action invites a focus on work and the other invites a focus on self under the guise of focusing on work.  And when the self is threatened it seeks to defend its integrity. Work is subordinate. Quality is of no consequence. Work becomes the enemy of the worker.

Standards are not problems in themselves. Quality is not an esoteric goal. It is not the outcome of the one dimensional structure of standards and leadership driven accountability. Quality is the essence of work and work is a system that links each workers capacity to serve with a customer’s specific needs. What difference will a craftsman make to your business? Put the craft back into work and let caring be the ultimate standard.

Why caring makes all the difference to quality of work


‘Sometime look at a novice workman or a bad workman and compare his expression with that of a craftsman whose work you know is excellent and you’ll see the difference. The craftsman isn’t ever following a single line of instruction. He’s making decisions as he goes along. For that reason he’ll be absorbed and attentive to what he’s doing even though he doesn’t deliberately contrive this. His motions and the machine are in a kind of harmony. He isn’t following any set of written instructions because the nature of the material at hand determines his thoughts and motions, which simultaneously change the nature of the material at hand. The material and his thoughts are changing together in a progression of changes until his mind’s at rest at the same time the material’s right.’

Pirsig, Robert (2011-11-30). Zen And The Art Of Motorcycle Maintenance: An Inquiry into Values (p. 159). Random House. Kindle Edition.