Beginning Of The End Of Business As We Know It?

Jon Husband kindly alerted me to Umair Haque’s blog post The Beginning Of The End Of Business As We Know It. Haque proposes that the economy is in a state of institutional collapse and says that we can possibly escape “this death-with-a-whimper” through behavioural innovation, creating new sources of advantage by reconceiving value-creation and the costs and benefits we respond to. His suggested five pathways to behavioural innovation are: stewardship, trusteeship, guardianship, leadership and partnership. He aligns leadership with challenging the status quo, which brings me to an academic article that impressed me when I first read it’s prescient observervations.

Socially Responsible Strategising

Called Taking Strategy Seriously: Responsibility and Reform for an Important Social Practice, it was published in December 2003 in the wake of Enron. The authors argue that it is time to take strategy seriously in a number of ways including “building more heedful interrelationships between actors within the field, particularly between business schools and practitioners”. The article makes the case for strategising as a multi-actor, socially responsible activity. Its analysis is detailed and pulls no punches.

It identifies as actors management teams, consulting firms, gurus, financial institutions, business schools, business media, state institutions and pressure groups. Gurus and the business schools they are associated with are criticised in the article for being “implicitly enrolled” in endorsing Enron, as are prestigeous business journals for publishing unquestioning and uncritical accounts of Enron’s apparent success. Stock market analysts and investment banks also get their collars felt for “pumping up the stock with recommendations that flew in the face of conflicts of interest”.

Challenging The Status Quo

In the UK, we are hearing increasing admission from Members of Parliament of the need for parliamentary reform. MPs’ behaviour is being loudly challenged by the force of public anger, leading to a number of them saying that they will not stand for re-election at the next election. Two things strike me as notable. One, for all the talk of the end of newspapers, it is a prominent newspaper, The Telegraph, that has led the charge. Second, ‘behavioural innovation’ from MPs has certainly not come about because they know it makes sense. They are not easily prized from the fruits of vested interests and entrenched attitudes of entitlement.

And so it is within the eco-system of institutions that oil the wheels of business. Institutional reform rarely comes from within, even in crisis conditions. Can we as individuals do anything to contribute to institutional reform? Can we influence and curtail the sort of mutually reinforcing behaviour displayed by the actors who fuelled the Enron myth? I think we can but not as lone voices. We need to use social media for more than self-promotion and entertainment. We need to come together as communities of critical consumers of what we are being told, with voices as loud and as powerful as those that criticise products and services.

Maybe then we will begin to see the beginning of the end of business as we know it.