Adapted from a manuscript draft of Creative Systems Theory:
“The chief business of the American people is business.”
What ultimately is wealth? How do we best measure it? How do we best increase it—personally, institutionally, globally? And how do our concepts of wealth impact how we think about economics and the kinds of economic structures we create?
Industrial Age-style leadership and Industrial Age institutional models are proving insufficient for emerging business realities. What ways of thinking about leadership and organization might best replace them?
What is the appropriate relationship between business and ethics? Does business have a moral responsibility for future social and planetary wellbeing and if so in what sense?
We could have put economics and business first, before science and technology. Money has become our time’s ultimate abstraction, and with Transition making right-hand dominance complete, modern culture’s most determining force. What kind of government we get, what kinds of books and movies are available to read and see—and what kinds of science gets done—have been determined increaingly by economic forces. But being that economics has historically been considered a “social science” (from times when money was thought of more as a something to utilize, as apposed to truth itself) and that the significance of the human dimension in monetary interactions is now more recognized, we appropriately place economics and business second.
Rethinking Economic Structures
Starting with the more abstract world of economics, we need to rethink economic structures and the assumptions that underlie them. Cultural Maturity can help us only in the most big-picture sense. But several of Cultural Maturity’sthemes—uncertainty, change, and the need for mature systemic perspective—provide insight.
At the least, Cultural Maturity helps us recognize uncertainty in the economic sphere. More specifically it helps us understand how the prevailing worldview of the last century can hide us from sufficient appreciation of risk. We can turn to the global economic collapse of 2008/9. I wrote the three paragraphs that follow during the year before the downturn began. I hesitated then to include them out of concern that they might sound overly alarmist or even apocalyptic.
“There is one last observation essential to mature perspective. It concerns the role of uncertainty and limits to knowing. Earlier I noted John Kenneth Galbraith’s quip about there are only two kinds of economic theorists (those who don’t know the economic future and those who don’t know they don’t know). Cultural Maturity argues that if we are to make wise long-term, collective economic decisions, we need to more deeply acknowledge what we cannot know.
“No one questions the fact that the stock market is uncertain—captive to unpredictable fluctuations. But we tend not to question more fundamentally. Given that the economic sphere is the realm of culture we have most mythologized in recent times, such blind faith is predictable. We assume that markets, given time, will continue to expand and our financial investments—personal and collective—will be rewarded. But this is not at all guaranteed. Economies are open, “chaotic” systems. Even with modern safeguards, minor fluctuations have the potential to result in dramatically unexpected outcomes. Factor in globalization, inescapable limits to energy resources, the common modern practice of massive budget deficits, the calamitous potentials of modern warfare and terrorism, the rise of new economic powers, the always-present potential for natural disasters (of great scale), and changes to the environment with potentially massive consequence and we get a picture that is much less secure than we like to pretend. (Financial consultants casually assure their customers that the stock market has consistently outperformed other investments for the last eighty years. And it may well continue to do so. But eighty years is no time at all when it comes to prediction —and particularly so if we are predicting in the midst of all manner of social discontinuities. And some of the new factors are not question marks—they are certainties. I think particularly of globalization and limits to energy resources.)
“This is not to be alarmist or to predict some pessimistic future. It is simply to propose that we must better factor in the unexpected if future economic policy is to foster security. As it says in the prospectus, ‘past performance is no guarantee of future earnings.’ This warning pertains not just to our personal financial choices, but even more, ultimately, to the economic choices we make as nations and as a species.”
Cultural Maturity’s emphasis on the need to think more systemically pertains to economic structures not just in terms of the importance of recognizing interconnections and thus potential house-of-cards relationships. As important is its argument for thinking about economics itself in more fully systemic “bridging” terms.
We return to the critical Question of Referent task of rethinking wealth and progress. Cultural Maturity proposes that such rethinking will be critical not just to effective wealth creation but to the design of economic structures that are stable and sustainable.
This conclusion invites a further important observation with regard to what we saw with the recent global economic collapse: its foundation may have been ideology more than error. The “masters of the universe” conviction that markets can be self-regulating might seem rational in the context of modern belief, but it reflects an extreme polar—ultimate right hand—view. We can think of of the collapse’s ultimate cause as a last-word, mythologized belief about how economies work and what makes them work well. Such belief encourages perverse incentives—for example, where a financial insider can turn a quick profit then abandon ship before the ship’s inevitable sinking. More fundamentally, the simple fact that it takes one half of truth and makes it final truth makes house-of-cards instability a predictable result. The best of thinkers fell for this ideological trap. Alan Greenspan apologized in the midst of the financial meltdown, saying that before he had not considered that bankers might put their self-interest ahead of the wellbeing of banks and stockholders (a truly remarkable statement from such an intelligent man).
It is not possible to know how much of a role such ideological blindness played in the global economic meltdown. It is possible that what we saw is fully explainable in terms of natural fluctuations, new global realities, simple greed, and poor choices. But looking long-term, if Cultural Maturity’s picture holds, the implications of this kind of analysis will be increasingly important to consider. Economic structures that can serve us—structures that can support advancement and be stable and sustainable—must be maturely systemic. And they must be so not just in their appreciation of technical complexities, but also in reflecting a more complete picture of how economies—and people—work.
Leadership and Organizational Change
As these thoughts suggests, culturally mature perspective is only beginning to have significant impact on formal thinking in economics. But the broader world of business has contributed important pieces to Cultural Maturity’s new picture.
This might surprise some people. Given that it is the business sphere that has most obviously benefited from modernity’s material definition of power and worth, we might expect it to be the last place we would see culturally mature innovation. But responding quickly to changes in circumstances is particularly important in busness (as with any more right-hand pursuit). Softer concerns like government, education, or religion can hold onto outmoded dogmas for long periods without putting us in great jeopardy. When old business practices stop working, the feedback is rapid—and often brutal.
Some of the best new thinking about leadership comes out of the business sphere. Respected business writings emphasize the importance of thinking systemically, embracing uncertainty, practicing transparency, applying “intuitive” as well as rational thought process, openness to change and numerous other Cultural Maturity-related themes. And business is also where we find much of the best new thinking (and old) about organizational dynamics. We see, for example, growing emphasis on attentiveness to customer needs, interest in the greater responsiveness often possible with decentralized organizational structures, and recognition of the value of understanding and responding to diversity.
While such proposals for innovation can be powerfully insightful, they also vary greatly in how fully they get at Cultural Maturity’s task. Consistent with our baby-step progress toward what may be ultimately possible, they often fall considerably short. This is an important recognition if we are to apply new thinking in useful ways
Theories of “new management” can be equally vulnerable to falling off either side of the maturity’s roadway. Often formulations are much more about extending modernity’s right-hand material story than in any real way rewriting it. Cultural Maturity agrees that helping businesses become quicker on their feet, more informationally and globally networked, and more attentive to markets is important, but it also notes that such initiatives are often more about playing the game better and faster than changing the game. And left-hand fallacies provide just as ready traps. New-management advice that includes inserting left-hand values into business’s right hand world—applying intuition to business decision-making, establishing bottom-up management structures, including environmental and humanitarian concerns in the business equation, or incorporating spiritual values—may support culturally mature possibilities, but as often it represents a liberal or New Age flipping of the poles of conventional business assumptions than anything new or ultimately helpful.
Another area where business contributes to new thought relates to the importance of global perspective. We see some of the most cutting-edge thinking about global dynamics in the world of business—which again makes sense. It is possible for a short while to ignore the global dimensions of education, health care, or religion (though increasingly difficult). But ignore global economic relationships and both national economies and individual businesses are quickly shut out of the game.
Again Cultural Maturity cautions that proposals that may seem to be mature often are not. Frequently. at this point, global perspective translates into a simple extension of modern material expansionism. I think of three related bridgings necessary if business is to contribute to culturally mature leadership at a global scale.
The first brings us back to economic forms and philosophies. We tend to identify globalization with free market capitalism (often extreme right-hand forms of it). Particularly in lesser-developed countries, unfettered free markets can be very unequal in who they reward and easily lead to destabilization. The second requires us to step beyond the either/or of globalization and protectionism. Globalization by itself represents only half of the integrative story. The other half understands, respects, and protects local and regional realities. The third, the importance of bridging haves and have nots, is informed by each of these but deserves special attention. Success in business used to be about being sure you were one of the former and the other guy one of the latter. In a globally interconnected world, if we don’t all generally prosper, no one will prosper.
The motivation for a maturely systemic global perspective might at first appear mostly a desire for fairness. But in the end it proves just as important for the selfish interests of the industrialized world and the advantaged more generally. If an economy is dominant—as has been the case for the Unites States—it can temporarily get away with regarding the world primarily as a market (without great knowledge of the needs and realities of its diverse inhabitants). But in a globalized world, economic inequities become destabilizing forces—contributing to terrorism, and worse. And there is no guarantee that the current economic order will continue to prevail. There are those inherent instabilities. And, within our lifetimes, China, perhaps the European Union (and possibly India Indonesia. Brazil, and Russia) will become significant competitors to the U.S. on the economic stage. In the case of China, the U.S. may often need to take a back seat. (The old story went that the trade deficit wasn’t a problem because the West is supplying the brainpower and the rest of the world is supplying unskilled labor. Increasingly, the West is supplying raw materials and markets and both brainpower and labor are coming from outside sources.) Whatever transpires, we will need to make our way in an increasingly multi-centric economic landscape. More systemic understandings of global complexity—systemic in the deepest, culturally sensitive sense—will, in the decades ahead, prove ever more essential.
Rethinking Wealth and Progress
We can tie all these observations back to the new sense in which all question have become moral (we could simply say systemic). We have tended to think of business (like science) as “value free.” It has been enough that the world of business and economics protected our assets and provided jobs. Other realms—religion, art, government—supplied the missing pieces.
Culturally Maturity presents a more consciously integrative picture. The old view had its timeliness, but it is ultimately neither sustainable nor a view that can ultimately serves us. At a personal level, Cultural Maturity emphasizes the great importance of being more conscious of the values we apply and thinking about wealth in ways that better include all that matters to us. At a cultural level, it sees no priority more pivotal than the parallel tasks of rethinking progress and developing more inclusive measures for societal well-being.
Cultural Maturity’s view is in no sense “anti-material.” It proposes that, as with other more right-hand values, much has been very good—very creative—in the evolutionary process that has made the monetary referent supreme. Economic competition’s transcendence of class-based privilege—offering as it does that we might pull ourselves up by our bootstraps— has supported equality. And a material bottom line, by removing conceptual and moral impediments to economic progress, has helped produce a standard of living—certainly for the wealthy, but also for the masses—beyond anything known before. Cultural Maturity proposes that these liberating aspects of the economic should only grow in importance.
But Cultural Maturity also makes explicit that this evolutionary direction has limits—again our Dilemma of Trajectory. To continue in this direction without a counterbalancing integration component would estrange us from the richness of life that money as abstraction was initially meant to measure.
Transitional Absurdities commonly reflect the application of monetary measures when such measures are absurdly inadequate. We see self-worth equated with “net worth”; mass consumer culture becoming our community; government and law going increasingly to the highest bidder; and the media ceasing to be communication and becoming instead only vehicles for selling products (and increasingly little more than delivery mechanisms for addictive stimulation).
The need to redefine wealth and progress sits at the heart of today’s crisis of purpose. Just as much our physical safety and survival depends on it. Without larger perspective, we end up unquestionably accepting an economic worldview that requires unsustainable growth for its stability—with inescapably dangerous ultimate consequences.
Business’s Bottom Line
Rethinking wealth and redefining progress gets at the personal and social dimensions of this revisiting of referents. What about the more institutional dimension—how individual businesses measure profit? In times past, providing jobs has been enough of a contribution. Might we assume that this needed moral reevaluation to produce changes here too?
Certainly changes are needed—particularly as corporate power becomes evermore centralized and markets increasingly global. Some of the most obvious needed pieces: better curbs on deceptive practices (that ultimately undermine public and stockholder trust), more attention to the social and environmental effects of corporate polices, greater cooperation between management and labor (necessary from both directions not just for business’s human dimension but if businesses in the future is to profit), and greater emphasis on long-term decision-making.
But we face the critical question of what will drive such greater responsibility. The obstacles can appear considerable. Even when corporations have the best of intentions, redefining the bottom line is easily a showstopper. Businesses committed to being more sensitive to the environment, more supportive of worker autonomy, more attentive to the health of the communities in which they reside, or more concerned with long-term stability, have often had to backpedal when they recognize that new ways of doing business are cutting into shareholder profits.
Government certainly has a role. Government regulation can stifle business, and there are limits to what government can—and should—do even within the most enlightened of business/government relationships. But government’s absence is no more the solution (as events like the record bankruptcies of Enron and WorldCom in 2002 and the more recent global economic meltdown attest.) Government needs to provide safeguards and also to serve as a creative catalyst. Think of a tax on carbon serving to fuel a “green” Industrial Revolution.
Cultural Maturity proposes that the biggest factor ultimately will be simply facing (changing) facts. In the end, needed changes are about responding to the inevitable. Some of that inevitability derives from logical consequences of unsustainable behavior; start running low on needed resources and you better change the game. Other aspects tie more directly to Cultural Maturity’s predictions.
Some of this facing of facts will happen at a corporate level. Leave behind our modern and Transitional cultural tendencies to mythologize the corporate boardroom, and indiscretions should become more readily visible. We should also better recognize their inconsistency with reliable wealth creation. Dishonest accounting practices will lead to lost investor confidence. And behaving in less that socially responsible ways will mean becoming less attractive to the brain power businesses need to run effectively and less trusted by the people with whom they might wish to do business.
The broader population should find it increasingly clear that policies based only on short-term profit are inconsistent with long-term social benefit. And we should see reaction not just to specific business practices, but also to consumer culture as a whole. We should find the marketing of materiality as meaning—particularly to our children—increasingly unacceptable and people less willing to be a part of such exploitation.
Concentration of corporate power and ever-larger advertising budgets should make people less and less comfortable with caveat emptor as an ethical precept. It should become obvious that here too it cannot work to make the truth of one small part of the creative—its extreme right hand—the basis for decisions that impact, often irrevocably, larger wellbeing. We should find people voting with their feet—or more accurately, voting with their pocketbooks—when they confront business practices that run counter to ultimate social benefit.
A Thumbnail Summary: Cultural Maturity predicts …
—that business will continue to play an important role in rethinking leadership, organizational theory, and global perspective.
—that we will rethink economic policies and structures to better reflect systemic realities.
—that we will better recognize that business and economics always have moral dimensions.
—that we will bring new attention—and new maturity of perspective—to economic referents of all sorts: personal wealth, business profit, and more general measures of progress..
How would you describe the systemic contributions of business and economics? How are the demands of those roles changing? What are the implications of changes you see for how we think about business practices and economic structures both within countries and more globally?
You have been hired to help a well-run but traditionally managed company become—in the words of its board of directors—a “business for the twenty-first century.” How might you start? What potential traps would you want to be sensitive to?
Devise a measure to replace the Gross Domestic Product as our referent for “economic” growth”—one that better reflects ultimate effects on collective well-being. What variables would you want to include?