Clause 61: The Pushback Blog

Because ideas have consequences

Three Forces that Will Shape American Life

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There are three forces that will determine our future. They are essential to our lives, and they are often misunderstood or underappreciated. They are ownership, accountability and risk.

Ownership

The term knowledge worker is generally credited to Peter Drucker, who had been writing about it back in 1959. There were knowledge workers before this: a military officer is a commander, but has also been a knowledge worker since at least Napoleonic times. Lawyers have always been knowledge workers. However, it was in the mid-twentieth century that knowledge work began to proliferate.

If you want to make your commanding officer look like an absolute fool, do exactly what he tells you to.
— Military precept

In order for a person to be effective in knowledge work, the person must be engaged. A person waiting to be told what to do will be a failure as a knowledge worker. For the person to be engaged, the person must feel that her contribution is wanted. You can’t have it both ways: you can’t have an engaged worker hanging on your every command. Without ownership of the task, engagement falls away.

Why is it that I always get the whole person when what I really want is a pair of hands?
— Attributed to Henry Ford

There has long been a tension in organizations over knowledge work. By its very definition, it does not admit detailed supervision. If the manager has to review every decision of the worker, then two are doing the job of one. The manager who attempts this will have a very small span of control. However, there is a conflict with the centripetal forces of the organization: status, privilege and the need for control.

The tension between ownership and control has never been fully resolved. Some management teams achieve a modus vivendi that allows their enterprise to succeed for a while, but ultimately the balance cannot be maintained. The organization either hardens into a controlling environment, or the lack of control causes it to burst at the seams.

That’s just how it always went with one of these new Silicon Valley hardware companies: once it showed promise, it ditched its visionary founder, who everyone deep down thought was a psycho anyway, and became a sane, ordinary place.
— Michael Lewis, The New New Thing, p. 47.

And sane, ordinary places get same, predictable results. Disengaged people hang around sane, ordinary places; engaged people leave at the first opportunity.

The problem also exists in the public space. The orthodoxy we learned in seventh grade civics says that power derives from the consent of the governed. Passive consent or active consent? It’s a harder question than it looks. From the evidence of recent experience, you can fool many more of the people much more of the time than we are comfortable with. But, having fooled them, you can’t credibly turn around and ask them to take responsibility for the results.

Accountability

You can find material praising accountability, but it is really more selective than commonly understood. Second-person accountability — accountability for you — is always a Good Thing. First-person accountability — accountability for me — is a trickier subject.

Clearly, when the outcome is positive, the person responsible is in favor of accountability. However, when the outcome is unfavorable, it becomes an orphan. There are always extenuating circumstances why I shouldn’t be held accountable for the bad outcome.

The American education establishment has shown thought leadership here, promoting the idea that only they can evaluate their own results. Only the professionals are equipped to hold themselves accountable. From this you make a living?

The problem with inadequate accountability is that no learning takes place. If no one is accountable, everyone does the same things they always did and hopes for a different outcome. “The definition of insanity is doing the same thing over and over, hoping for a different result.”

Risk

The story of the society over the past hundred years is the story of the attempt to remove risk from everyday life. It has not worked, and resulted in epic boredom. It has also caused people to no longer understand risk and how to manage the tradeoffs. The country has become risk-averse in to a level that cannot be sustained, that cannot allow it to function. We have also fixated on spectacular hazards with remote probabilities while being blind to less consequential hazards with higher probabilities.

Our modern middle class is the descendant of an older gentry composed of independent farmers, small businessmen, self-employed lawyers, doctors and ministers.
— Barbara Ehrenreich, Fear of Falling, pp. 78-79.

As Ehrenreich notes, independent farmers, small businessmen and self-employed lawyers faced business risk. The new middle class that arose since mid-century largely consisted of a credentialed salariat. This cohort is highly risk-averse but often does not recognize the risk it actually incurs. When I hear someone talking about buying stock in his own employer at market price, I know I am in the presence of someone who does not naturally think about risk.

Some nations have sought planning capacity by socializing production — one or more basic industries. Some may try planning by the socialization of natural resources, while others may socialize the delivery of central services. Some may socialize banks while others seek to socialize the distribution of goods. The United States has so far skirted all these alternatives in favor of socialization of its most valuable resource: risk.
— Theodore J. Lowi, The End of Liberalism (2nd ed.), p. 289.

At a macro level, the elimination of risk had produced, by 1960, a producer-centric economy with only the fiction of profit-and-loss discipline at the large corporate level. This ultimately resulted in bailouts for corporations such as Lockheed (1971) and Chrysler (1980). If the corporations were allowed to go under, where would all the workers go?

The economy can still be characterized as “socialism for the organized, capitalism for the unorganized,” as Lowi did in 1979. Patches of capitalism are observable in technology, where business mutates too fast for public policy and administration to keep up. The core of the economy, however, is managed with the goal of socializing risk. That is great for people who fail, but not so great for people who have to subsidize supporting those who fail.

Reducing risk through public policy, by regulation and underwriting, protects the underperforming and incompetent. It rewards them for holding the economy hostage. This approach suffers the same deficiencies as avoidance of accountability: what incentive does anyone have to learn, to do better next time?


These three basic forces — ownership, accountability and risk — are out in the wild having real, if unseen, effects on everyday life. Left improperly understood, the will upturn the carefully crafted society that has been built in partial ignorance of them.

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Written by srojak

May 11, 2013 at 10:22 pm

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