Corp Unc & Philos

An interesting website

Recently, I was offered the opportunity to contribute to the Newsletter of the site The Official Board , which was founded by Thomas Lot, a former Chief Executive at Apple Europe and Amazon. I took the chance to give a few thoughts about why so many mergers tend to destroy value.

It was a pleasure to contribute to this simple but clever Web 2.0 application. Its purpose is to keep an updated information on the 20 000 largest corporations in the world, as far as their charts are concerned. It is a very ambitious project with a high potential.    

Corporations are the speech of the people

Henry James once declared that

"the novelist succeeds to the sacred office of the historian".

John Dos Passos implemented the idea, as suggested by Alfred Kazin in his introduction to "The big money". Putting together the life of Henry Ford, F.W Taylor, T.Veblen and the fiction of Charley Anderson, Mary French and Margo Dowling, is quite meaningful indeed.

What is fiction, what is reality ?

A question which concerns above all the large corporations. Their declared values and history that  can be read on corporate brochures are more often fictious than real. The english language has a very accurate expression for that : wishful thinking.

The saying : "Reality outpasses fiction" deserves to be taken seriously. The problem is to know where reality can be caught. The answer is given to us by John Dos Passos : wondering what USA is, really, he says :

"USA is the speech of the people".

What people say is the best access to corporate truth. It is only a matter of interpretation.

Mary Douglas, institutions and management

Mary Douglas, the british anthropologist, passed away last may. Her researches have greatly contributed to a better understanding of how institutions work.

In 1986, she wrote in her book : "How institutions think"

"Institutions fulfill the same tasks as theories." *

According to her, institutions, including business corporations of course, are made of the same representations as those that are produced by individuals. This observation helped her develop a deep understanding of institutional dynamics. As she said :

"Individuals tend to leave important decisions to their institutions and deal only with tactical matters and details." *

In other words, individual behavior is mostly instrumentalised by institutions. This approach naturally reminds us of what the french philosopher Gaston Bachelard said :

"Scientific instruments are materialised theories." *

The common point between institutions and scientific instruments is their capacity to materialise mental representations and give them an opportunity to become active, in the social world and in the physical one, respectively.

The german sociologist Max Weber had an intuition of this phenomenon, when he wrote in 1913* :

"Not a single average consumer has the least idea about the production techniques involved in the goods he uses everyday. The same can be said about social institutions." *

This reality is still too often ignored in contemporary management practices. As they act, leaders tend to forget how their decisions are highjacked by the institutional processes that keep repeating themselves. They prefer to believe that the gap between their intentions and the results stem from imperfect collective execution.  This is how the concept of Human resources is meant to conceal  what actually is the corporate unconscious .

* My translation from french

Free or unconscious will ?

Read in The Economist (Dec 19th) :
Free to choose ? Modern neuroscience is eroding  the idea of free will.  Excerpts :

"Only in the past decade and a half, has it been possible to watch the living human brain in action in a way that begins to show in detail what happens while it is happening. "

And : "Shrinking the space in which free will can operate could have some uncomfortable repercussions".

Three observations :  first, the relevance of free will is not a new topic. Philosophy has questionned it for centuries. What about these words from Pascal, the 17th century French philosopher ?  "The heart has its own reasons that reason does not know".

Secondly, human sciences over the last hundred years have produced evidence against the idea of free will. The unconscious, as Freud has shown, follows its logic which entirely drives the behavior of individuals. More recently, one has become increasingly aware of the social origin of the unconscious. I think for example of Mary Douglas's essay "How institutions think". In particular, the corporate unconscious proves to be a major actor in the business environment.

Thirdly, this awareness, it seems, helps better understand the mechanisms of collective actions and behavior. Warning about its "uncomfortable repercussions is a surprising conclusion. Another example of the wide-spread confusion between positive science and human practice. It is a fact that  the progresses of neurosciences are still subject to misinterpretations which indeed, may lead to "uncomfortable consequences" if not urgently corrected.    

The role of business in society and corporate meaning

I recently came across an article by Ian Davies of Mc Kinsey & Co, written a year ago. It raises an issue which is bound to become crucial for business leaders in the near future : business's role in society.

There are two extreme ways to look at it : the first is Milton Friedman's phrase, "the business of business is business". The second is the so-called corporate social responsibility (CSR). According to Ian Davies both attitudes fail to match the requirements of the coming business environment because they do not integrate social issues in the core of strategic management.  Examples, obesity for food producers or the danger of cigarettes for tobacco companies.

To me, the interesting point in this article is : "there is an implicit contract between big business and society". This is even more relevant than it sounds just because, by definition, all businesses stem from a social question, provided one goes back to the entrepreneur and his or her personnal implication.

What strikes me more and more when working with entrepreneurs, is their relentless will to make an idea become a reality. Apart from a few exceptions, the idea that drives them is nothing else than a contribution to social questions. What I find astonishing, and it is a consequence, is their tendency to consider personal profit as secondary. 

It is a myth to believe that entrepreneurs are money-driven ; what drives them is achieving a long-lasting and efficient contribution to social processes.

Ian Davies suggests that CEOs should "articulate publicly the purpose of business in terms less dry than shareholder value".  Which is a necessity. The only question is how and where the purpose of their business is to be found ?

There is only one direction to look into : the corporate history. This is where its basic and genuine intention lies, as close as possible to the founder-entrepreneur. The most serious limit to what Ian Davies recommends is to believe that you can decide what the purpose of a business is without going back to why it has come to existence.

There is a lot of evidence based on experience that an increasing concern for the business's role in society will require above all a deep understanding of the corporate goal and meaning as it has developped and not only as one would like to shape it up for the future.   

About the unconscious

Judging from the trafic and comments on this blog,  the notion of "unconscious" remains unclear to some of the visitors. Here are some elements that may help clarify a concept which is not as complex as one thinks.

1. The unconscious is neither individual nor collective. Freud wrote :

"Mass psychology is the most primitive human psychology. Individual psychology is a more recent development"

2. The unconscious is not a second, deeper and more intimate ego, but :

"made up of pure externality"

3. Once this "myth of interiority" is done with, the unconscious reveals itself as being part of the social link, therefore closely related to language. Jacques Lacan :

"The unconscious is what you say" given also that "an act is a speech"

4. The question is who speaks ? Vincent Descombes :

"Institutions supply the meaning that individuals, in turn, make their own" so that

"Individuals are the authors of the sentences they make but not of the meaning of these sentences."

The business corporation being an institution, the role distribution becomes clear : what individuals say or do in their daily activity is suggested by the corporate unconscious, without being known to them.

This, I hope, will help. Comments are welcome.

What is "Corporate Unconscious" ?

Whoever worked in a company is familiar with the corporate unconscious without really knowing about it. What is striking when joining a new firm is the behavior of people, whether individual or collective, the words that are recurrent and above all, the processes that are repeated everyday.

The corporate unconscious is to the firm what the invisible hand is to a nation, accordind to Adam Smith.

At the origin, a business is nothing but the desire of an entrepreneur. Even when the business model looks simple, it is a highly complex compromise between the destiny of a man and the turmoil of reality. Altogether, these factors are connected into a structure which determines collective action according to a meaning that remains unconscious.

Whatever takes place within a firm is meaningful but the daily operations do not require any clear idea about it.

Awareness of the phenomenon is growing. People tend to talk more and more openly about their professional experience. The purpose of this weblog is to provide an opportunity to exchange views on a topic whis is increasingly but not always accurately, taken into account in management practices.