Coaching Conscious Direction

Entrepreneurship is one of the greatest acts of individualism that can be experienced. It provides a sense of freedom to the person starting, owning and managing the business that cannot be experienced when a person actually has a job in the corporate world. The aspect of collectivism can be seen in many enterprises, not the least of which would include Fortune 500 businesses or the military establishment in any country. At the highest levels within an organization, false values of corporate leaders have promoted self-serving individualism instead of promoting social responsibility, many of which are paying the price today with fines and jail time. Are the steps to grow a business in an entrepreneurial environment established as a need to pursue a conscious direction brought to bear by individual style or collective input? Which approach best prepares a business for growth? Which approach is more conducive to superior leadership values and ethical decisions that are brought forward by situational circumstance? Can collectivist concepts be executed properly within a business environment without harming individual freedoms that are integrated into daily decisions being made?The rise of entrepreneurship after WWII gave way to many new types of businesses. The so-called “Mom and Pop” stores of the early baby boomer generation was not a wholly new phenomena, but it was new in the fact that opportunity was being matched with individual fortitude that many who had participated in the war brought to bear in a business. Many small businesses actually became large businesses with private ownership. The fruits of a capitalistic society were hard at work in the United States and the other allied countries. The scars of fascism and Nazism, those who were members of the National Socialist German Worker’s Party, which in 1933 under Adolf Hitler seized control of Germany, were still healing when business relationships and opportunities were acted upon. This resulted in a solid push toward an individualistic approach that steered companies and workers clear of collective authority. The entrepreneur was an individualist who practiced singular values from a personal perspective. The result manifested itself in the business culture of the time and molded many of the business values that are seen today within privately held companies.

On the other hand, the new experiment was being put into place by Lenin in what was to become the new Union of Soviet Socialist Republics. The teachings of Karl Marx and a “collective society” were brought into being with a “one size fits all” doctrine. This resulted in few entrepreneurial opportunities where the government made the decisions on behalf of the people for the “collective good”. A classic statement made by Marx appears in the preface to his A Contribution to the Critique of Political Economy when he states:

“The mode of production of material life conditions the social, political, and intellectual life…It is not the consciousness of men that determine their being, but, on the contrary, their social being that determines their consciousness.”1

Why should anyone struggle if the ethos and culture automatically support a system that supports everyone equally? Workers simply accept the culture that is provided for them as long as their benefits are provided and the economy stays healthy enough to support the business. Owners support a collectivist internal culture while taking profits for individual gain. Rebellion takes place when technology gains begin to threaten worker stability and process changes in production. The workers have little concern that process changes and new methods are, in fact, dynamic, based on factors such as newer technology, education, or a material change in the process itself. The struggle truly occurs when business owners begin to look inward refusing to look at historical precedent and retaining old ideas and processes thus blocking any new economic development within the business. For example, the automobile industry in the early 1970’s started to experience increased competition from the foreign automakers. The industry refused to acknowledge that economic concerns, fueled by gas shortages and an increased dependence on auto usage, were becoming major factors for the domestic industry. There was also the increased technology, performance, and design factors that played part in the decline of market share and allowed the Japanese to seize a sizable share of the market.

Organized society is a common goal of socialism and a parallel can be drawn to organizations in the business world. It is close to the hearts of those that profess socialism. F.A. Hayek talks about establishing a “conscious direction” in his book The Road to Serfdom.

“The common feature of all collectivist systems may be described, in a phrase ever dear to socialists of all schools, as the deliberate organization of the labors of society for a definite social goal. That our present society lacks such “conscious” direction toward a single aim, that its activities are guided by the whims and fancies of irresponsible individuals, has always been one of the main complaints of socialists critics.”2

Establishment of any direction, conscious or otherwise, organizational or societal, must have a primary point of introduction. The question then becomes is the direction, established by individuals in business which have primary input into the process, better enacted as a single directive or should a collective direction be established to drive the business?

Planning is an important part of the decision-making process. Business owners often search for a common goal that employees can rally around. This keeps primary business objectives in front of the employees. It also firmly establishes a conscious direction that owners and executives want to pursue in the daily course of business. Bill Gates’ vision of a computer in every home was clearly a common goal for Microsoft. An organization without common objectives is similar to a rowboat without oars, it will drift aimlessly in the water. It does not seem to make much difference if the business owner supplies the definition of the common goal or purpose or an internal group establishes it. What does matter is the general acceptance of it and a common understanding of how the organization will work together to achieve the goal.

“The welfare of the people, like the happiness of a man, depends on a great many things that can be provided in an infinite variety of combination's. It cannot be adequately expressed as a single end, but only as a hierarchy of ends, a comprehensive scale of values in which every need of every person is given its place. To direct all out activities according to a single plan presupposes that every one of our needs is given its rank in an order of values which must be complete enough to make it possible to decide among all the different courses which the planner has to choose. It presupposes, in short, the existence of a complete ethical code on which all the different human values are allotted their due place.”3

Thus, in addition to commonality of business objectives, the plurality of business objectives is important in the establishment of a conscious direction. Singular objectives may limit some employees while providing focus for others. Business leaders that take a strictly social view of planning often find that their decision making and the direction established has many gaps. For example, the owner of a large grain company may be forced to let part of harvested inventory spoil due to storage issues. If a way could be found to use the grain to feed the poor, then the loss would seem less tragic in personal humanitarian terms. Regardless, the loss for the business would be the same in either case. It then becomes a decision of conscious direction established by owners that have their own ethical and moral codes of leadership. Owners with specific ethical codes of conduct established by industry standards, educational business institutions, an individual self-imposed value system, or otherwise often make decisions based on the collective good of the organization are individual in nature. The decisions are made individually even though the outcome of the decision may be for the collective good of the organization.

Is individual style or collective input more conducive to superior leadership values and ethical decisions that are brought forward by situational circumstance? At the end of the day, it seems that a combination of the two is critically important. Those individuals that show superior leadership qualities always gather input from others whose opinions matter most.4 Though these decisions may not be discussed at the lower levels of an organization, it is sure that alternatives and potential outcomes are bantered about and discussed by upper management to provide a conscious direction for the business or organization.

“The point which is important is the basic fact that it is impossible for any man to survey more than a limited field, to be aware of the urgency of more than a limited number of needs. Whether his interests center round his own physical needs, or whether he takes a warm interest in the welfare of every human being he knows, the ends about which he can be concerned will always be only an infinitesimal fraction of the needs of all men. This is the fundamental fact on which the whole philosophy of individualism is based.”5 This idea of common action is limited to those areas where decisions or common ends are agreed upon by upper management. This may not produce the ultimate or final decision, but it builds on the commonality of other decisions which serve as the organizational direction finder, or the establishment of a conscious direction for the business.

This then begs the question, can collectivist concepts be executed properly within a business environment without harming individual freedoms that are integrated into daily decisions being made? Business owners rely a great deal on voluntary agreement to guide the actions of the organization where voluntary agreement already exists. Where points of contention exist, the leader is prudent to collect alternative views and weigh the outcomes of the decision to be made based on a collective understanding of the intended direction. Without consensus, the organization will splinter and fragment, producing factions which will support individual approaches based on the belief of a common good. At lower levels of the organization, this will become divisive and threaten the long-term well being of the business. Short term these factions will be hidden and will not be able to be seen by leaders within the organization.

It becomes incumbent on business owners and organization leaders to establish a scale of business values which individuals can draw upon in times where individual decisions are being made for the collective good of the business. There is seldom a decision made which does not become dependent for its achievement on the action demanded. The decision that guides individuals toward practicality normally will serve individual ends. Otherwise, the decision may be tabled, or put off, until other critical elements are included in the process. The factors dependent in planning for specific outcomes require other people to be involved at virtually every level of the organization to create employee buy-in, successful management, and continuity of direction.

In a business where establishment of a conscious direction depends on individualistic values, the direction cannot be made solely based on the business’ ability to agree. It will often be necessary that decisions from smaller groups within the organization be implemented because this group may be the only group able to agree with a common approach or direction. As long as a free discussion is held during which all alternatives, outcomes, and consequences are thoroughly discussed, the conscious direction selected will be accepted by the majority within the organization. Regardless of the intended outcome, a collective decision is made and conscious direction is established. The values used by the individuals able to participate in the decision making process are part of the collective agreement within the business which provides a firm foundation for the individual decision being made.

Every business forms its own culture over time. How decisions are weighed and made within an organization is part of that culture. The scale of business values established by owners and leaders are critical to the ethical and moral consequences of decisions that are made both individually and collectively. Individual decisions support collective decisions. Both approaches play an important part in the establishment of conscious direction within a business. To guide an organization by simply one approach may be dangerous to the long-term health of the business. A combination of collective and individual input will generate the best results at all levels within the business.

RESOURCES:

A Contribution to the Critique of Political Economy, by Karl Marx, translated by N.I.Stone, published by Charles Kerr Publishing, Chicago, IL, 1904.

Authentic Leadership, by Bill George, published by Jossey-Bass Publishing, San Francisco, CA, 2001.

The Road to Serfdom, by Freidrich a Hayek, published by The University of Chicago Press, Chicago, IL, 1994.

Why Smart Executives Fail, by Sydney Finkelstein, published by Portfolio, a member of the Penguin Group (USA), Inc., New York, New York, 2003.

Notes:

1A Contribution to the Critique of Political Economy, by Karl Marx, translated by N.I.Stone, published by Charles Kerr Publishing, Chicago, IL, 1904, preface.

2The Road to Serfdom, by F.A. Hayek, published by The University of Chicago Press, Chicago, IL, 1994, page 63.

3Ibid., The Road to Serfdom, by F.A. Hayek, page 64.

4Why Smart Executives Fail, by Sydney Finkelstein, published by Portfolio, a member of the Penguin Group (USA), Inc., New York, New York, pages 226-227.

5Ibid., The Road to Serfdom, by F.A. Hayek, page 66.

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