or<\/p>\n\n\n\n
What is this all about<\/p>\n\n\n\n
For this essay I want to drop a wall or two and take a different perspective. But first things first and to the second title. Let me answer the question as straight forward as I can. This is a series of essays about business. To be more exact: management theory is the most commonly used term for it, meaning not really economics, more the inner workings of organizations, not the whole shenanigans. Although I tend to often overstep boundaries, so, sorry.<\/p>\n\n\n\n
\nThe Board Room Version: For fifteen essays we went “Down the Rabbit Hole”. The first part is complete. Here is the summary which show the problems are known, the tools exits, the gap between knowledge and implementation is the subject. “Conversations with the caterpillar” – the second part – begins with the constructive question: not what is wrong, but what do we need for it to become right. Let’s have a puff.<\/em><\/p>\n<\/blockquote>\n\n\n\n
The first title is of course a reference to Lewis Carroll’s wonderful book “Alice in Wonderland”. Alice’s journey is a coming-of-age story in which growing up does not mean just taking over established rules. It means that the language, logic and knowledge we adopt from others – the grown-ups – may fail us. It is only through learning, trying out, experimenting that we can sharpen our judgement in a world where language and identity have become unstable. I am reminded of this every time I dive into a topic and discover that it is like an adventure, with a castle filled with wisdom but also traps. Going down the rabbit hole as Alice did means leaving the comfort of your normalized knowledge and entering a bizarre new land. It’s thrilling but at the same time a bit frightening. This possibility of discovering something wonderful and new has always been my main motivation to read and write.<\/p>\n\n\n\n
These first fifteen essays follow the classical form of critique. Meaning seeing an issue and trying to get to the bottom of it, showing where the traditional view has cracks or even breaks down. And I hope I already showed you some hints at alternatives. But this is the first part called “Down the Rabbit Hole”. So if there is a first, there has to be at least a second part. But more on that later, sort of at the end, well not quite the real end. Ah, you are all intelligent people, you’ll see it when it comes.<\/p>\n\n\n\n
\nOn how you can help me<\/em>: If you read this, please also interact with it in some way. Like it, hate it, share it, but please do so by clicking a button or writing a comment on LinkedIn<\/a>, Substack<\/a>, Instagram<\/a> or Facebook<\/a>. If you don’t, the stupid algorithms prevent it from being seen by other people. I’m really depending on and thankful for each reaction – doesn’t have to be positive. I can really take the disagreement. Believe me, it’s part of my whole thing.<\/em><\/p>\n<\/blockquote>\n\n\n\n
So where has the journey taken us so far? Good time to give you a bit of a treasure map. But please be aware, the map is not the territory, so I included links for you to check out the different essays.<\/p>\n\n\n\n
The gunslinger manager<\/a> takes decisions without a method other than his gut. But we have 2500 years of scientific reasoning which should give us a blueprint for decision making. We saw that intuition has limits, as well as our own rationality. What we need is a more fundamental framework for decision making. And we bookmarked Deming’s Profound Knowledge as something interesting.<\/p>\n\n\n\n
The problem of middle management<\/a> is being trapped between seeing problems but being unable to solve them. Data analysis showed us that the most important issues in a company are due to common causes, which can only be solved by changing the system. Senior management is responsible for the system but KPIs and bonuses are rewarding the wrong things. If not Performance Management then Systems Thinking could be a better approach.<\/p>\n\n\n\n
Then we started to look at entire companies and how they do during periods of change. Change management<\/a> fails often because it confuses culture with communication. Loss aversion, organizational inertia and superficial communication hinder change in organizations. Schein explained to us that culture happens on three levels. Only if you work with the most fundamental level, the basic assumptions, can lasting change happen. Problem is that these can only be experienced. So the whole thing would need to grow from within, not by a newsletter from the top.<\/p>\n\n\n\n
I then took you on a trip to the sky to look at a more abstract concept. Thanks for trusting me, because it was important that we look at how reality is perceived<\/a> in society. Both Boorstin and Goffman see a separation of the ideal of things and the image of things, or the stage and the backstage. And the images and the play are replacing what the idea behind it originally was. The same thing happens in business when slogans become more important than the methods or improvements. Eventually we saw that the image eats reality.<\/p>\n\n\n\n
Back at work, we looked at its history.<\/a> We saw that it developed for as long as there have been humans. From hunter\/gatherer to farmer to craftsman to factory worker to salary man: Work was gradually separated from life and became a biography. The home\/office separation is only 150 years old. Work and who we are, our identity, are closely linked together, and in today’s business reality that is a problem because work is not stable anymore. Gig work, part-time, changing jobs every three years. Does that mean our identity becomes unstable?<\/p>\n\n\n\n
I then forced you to look at the uncomfortable topic of control at work<\/a>. Sorry, but hey, not all things are nice. Control in the office is a topic since Taylorism. RTO is only the newest version of a game that is based on the same unverified assumptions. We saw that controlling management style is not a way to cope with passive employees – it actually produces them. Visibility of employees at work can be used as a control tool to internalize control because we feel like we are constantly watched. But most importantly the question of what kind of work we are creating these environments for has never been answered.<\/p>\n\n\n\n
Then it got really heavy because we had to look at mental health at work<\/a> and why it is a problem of the organization and not only the person. We saw that burnout is by definition a mismatch between people and their work environment. We saw that high demand and low autonomy jobs where you get no support are the worst for your health. Autonomy, competence and connectedness are central to our wellbeing. There is a blueprint for how companies can act, but the most important part – reshaping work environments and content – is never implemented.<\/p>\n\n\n\n
I then introduced you to the big problem of applying simple behaviorism to humans at work<\/a>. What might work well with rats in a maze can easily backfire with employees. Reward systems can become forms of punishment, destroy teamwork and ignore root causes. Most importantly, rewards destroy intrinsic motivation for work. Which is essential, because so-called hygiene factors like salary and bonuses can only demotivate if missing. True motivation comes from work itself, if work is well designed. Employees need to be understood as more than tools or resources. Kant has shown us that people are always ends, not just means.<\/p>\n\n\n\n
All of this brings us to the people in charge: the managers<\/a>. The job is an invention of the industrial age. But the content of the job is a big enigma. Sure, there is the reality that has been studied, but it’s chaotic and overloaded. Plus there is a large gap to what some people have taught it should be. Follett and Drucker have positive visions of broad societal roles but see the structural problems holding the manager back. We see a job that has accumulated but did not have the time to develop into a real profession.<\/p>\n\n\n\n
We took a slight detour and enjoyed some high quality time with quality management<\/a>. I made sure that all of you saw that customers define quality, not some internal specification. But we also had to see that this can easily become a superficial commitment. The implementation is the problem, and it is a choice, not a knowledge problem. Quality is really value creation, because it shifts the view from internal to external reference. And most important is that the customer has to be inside the value creation process, not at the end of it. And it is also here where all the good and the bad a company produces affects the customer. Bad decision making, structure, culture, control, mental health, evaluation \u2014 the customer experiences all of it.<\/p>\n\n\n\n
And of course I had to add another history lesson. This time it was the history of corporations<\/a>, which began in Ancient Rome. The beginning already showed a pattern that would repeat itself across history: Corporations took over some public function, generated wealth, produced fraud and required periodic corrections. The same pattern held true 2200 years ago as it did during industrialization. The source of the issue is that ownership and control were separated as a founding condition of the corporation. A study of the law shows us why it is hard to be healed. The idea was that corporations would get rights and duties by law, but law is mainly used to protect the rights, not enforce the duties. Accountability has never been resolved in a public discussion.<\/p>\n\n\n\n
Until 1970, when a short essay seemingly changed everything. Friedman claimed that managers’ sole responsibility is to maximize profits for shareholders<\/a>. He was backed up by scholars who invented agency theory and promoted ownership and incentives as an alignment tool for managers. The media and Wall Street jumped on the bandwagon. But the whole idea was wrong from the beginning. A corporation cannot be reduced to contracts serving shareholders. The facts were wrong: managers did not systematically destroy shareholder returns, and stock-based incentives did not improve long-term operating performance. It was legally wrong: shareholders own shares, not corporations. And the outcome was wrong: exuberant executive pay, short-termism and inequality rose while shareholders received no promised golden age. There were always alternatives, but the ideology that had formed produced worse outcomes than the system it replaced.<\/p>\n\n\n\n
Going so far down into the rabbit hole, I needed to take a quick breath of logic. So I introduced you to the world of sustainability<\/a>. Because sustainability is not only an ethical discussion, it is also a principle of resource management. The distinction matters because one requires value alignment, the other just arithmetic. Every resource your business needs has a regeneration rate: workforce, customers, suppliers, natural inputs. The regeneration cycle of almost every resource that matters is longer than your management time horizon. Carlowitz coined the term in 1713 and created a three-step program: use what you have more efficiently, find alternatives where the resource is being depleted, invest in regenerating the supply before you need it. This makes sustainability into a straightforward business practice.<\/p>\n\n\n\n
With some fresh air, we needed to tackle the heaviest topics, and it all starts with standards. Clause 5.1 (leadership & commitment)<\/a> is the key to any management system, because the clause asks a moral question – do you take responsibility for this system. We saw that morality – what you claim to follow – and ethics – the discussion on why it is important – is something most companies avoid. And the people within claim neutral technical positions while quietly deciding, without any moral reasoning, what the right thing to do is. This gives you moral stances that were never actually tested. Yet the ethical discussion \u2014 whether they still hold up \u2014 never happens.<\/p>\n\n\n\n