What are organisations really for?

This is something I’ve been thinking about for a while – I think modern organisations – especially corporate ones – have forgotten what they are really for.

History of organisations

Back when people started to organise into collaborative groups, aka tribes, the purpose was initially strength in numbers. Over time, individuals gravitated to the tasks they were best at; and the tribe came to rely on them to get that task done. Whatever someone had a penchant for doing, so long as the tribe found that activity useful in some way – including pure entertainment value – the tribe would adjust itself to allow ways for each person’s special talent (or Genius, in my lexicon) to be used as fully as possible.

As tribes became cultures, and then societies, and then economies, they became too large to operate as a homogeneous whole, and they split into smaller units, each with a need for certain tasks too be carried out, and opportunities for those with a penchant for those tasks to provide value by doing them.

The first real commercial organisations were the crafts guilds, providing a way for talented people to learn a trade and bring their value to the world. From these came small businesses, with a Master taking on Journeymen and Apprentices – still with the purpose of making it possible for the individuals to bring their genius and value to others.

Rise of the Company

Then, at a certain point in history, mechanisation meant that if someone made a large investment in machinery, it was possible to generate more value from the same number of workers. And that was when the focus shifted from collaboration aimed at helping the individual’s talent reach the customer, to organisation aimed at getting the most from the machines in which the owners had invested their capital. Getting a return on capital took over as the primary concern; capitalism had arrived.

For a long time, capitalism played a valuable role in fuelling human development, and made significant contributions to improving mankind’s lot. The returns expected by the owners of the capital seemed justified, given the contribution they were funding to a better life. People stopped dying of preventable disease (in the developed world at least), and life-spans grew longer.

Shareholder Focus

Somewhere along the way, some bright spark had the idea of getting lots of people with money to each put in a bit of capital to buy machinery, build factories, develop new products, all in exchange for a share in the company – in the form of share certificates. So now, instead of one beneficial owner with a clear vision of what the business is there to do, there are multiple owners, who may or may not agree on its purpose.

Add to that the fact that these multiple owners then worked out that if you could get a nice return from a share in one business, you could probably do even better with shares in several. So each owner’s focus became less clear too – a recipe for confusion about what each business was supposed to be achieving.

Trading away purpose

And then another bright spark came up with the idea of an “exchange” where you could sell your shares, so now investors could easily get away from their involvement with the companies if they became irksome to them, or if things started going a bit pear-shaped. And yet another bright spark came up with the idea of putting your spare money (capital) into a “fund” that someone else would run, investing your money for you, in lots of different companies. And finally, a whole bunch of bright sparks came up with the idea of “derivative” investments, so they weren’t even investing in companies at all!

At every stage, ownership and control moved further away from any connection with what the business was actually for. Investors are no longer nobly contributing to something they want to see getting out into the world, they are just too far removed from what’s actually going on inside the companies. The only way they can know if their money is being used effectively is by the amount of profit they see getting paid out as dividends. The profit motive has now usurped the proper purpose of a business.

Real purpose

I believe if you go back to the origins of organisations, the proper purpose of any organisation, whether commercial, public sector or charitable, is to enable those who work in it to use their skills, talents and unique genius to make the world a better place for some group of other people – whether that’s by designing and building smart motor cars, by putting on amazing and amusing entertainment, or by providing the wherewithal to bring clean water to communities in the developing world.

And my question is: how can this true purpose retake the primacy that the profit motive usurped?

Are we truly represented?

Is our geography-based system of representation still the best form of democracy?

After all the shenanigans of the Brexit referendum here in the UK, I have found myself pondering upon what democracy really is, and how best to design a system of representation that delivers it.

Democracy is generally understood to be government of the people, by the people, for the people.  In practice, that usually becomes not by the people, but on behalf of the people.  We elect representatives to re-present our views in a parliament, and we have to trust that they will do so.

I’m basing this article on the UK, but in most democracies, like the UK, we elect our representatives based on geography.  That has practical advantages – we can trot along to our local MP’s (or equivalent) surgery and tell them what we would like them to find important.  And if they are a good MP, they will take the matter up.  But it is also based in the premise that all the people in a geographical area want roughly the same things and find the same sort of things important.  The recent referendum showed how false a premise that is, with most votes being in the 51-60% range in favour of one side or the other.

And we cannot realistically expect MP’s to take up something that we are the only ones to have raised, if there are other matters that more local people are more concerned about.  MPs have limited bandwidth, and so does parliament.

That has the effect of marginalising ideas that are at the edge of the consciousness of a society.  You may say that’s as it should be – if it’s on the edges of what people are interested in, why should it get air-time in parliament?  The problem with that view is that nothing will ever change, because that leading-edge thinking gets suppressed, not by government dictat, but by it simply not getting discussed in the corridors of power.

Let’s try a thought experiment, these are not real numbers, but let’s say there are maybe 5% of the population overall who would like to see a kindness-based system of government.  With 650 MP’s, that would mean we should have 33 of them willing and able to re-present that idea in parliament.  But because each individual MP is elected by a majority (well, technically a minority much of the time) of the people in their geographical area, unless there are maybe one or two areas where the 5% of the “Kindness Rules” tribe congregate and can create a majority, they will probably not manage to get anyone at Westminster.  So they are reliant on their local Tory or Labour MP bringing it up, which is unlikely, because (quite rightly) they are focussed on what the majority who elected them want.

I find myself asking: why do we continue to define constituencies by geography?  It made sense when the system was originally designed – centuries ago – when difficulty of communication meant having someone local was important.  And most people’s major concerns were about local issues, the wider world having little effect on them.  But with modern technology enabling the communication and discussion of issues much more widely, could we not select our representatives from across the nation, based on their views rather than where they live?

There are all sorts of difficulties with putting such a system in place, not least the potential length of the ballot paper in each polling station!  But again, technology could provide an answer – perhaps with voters selecting their choice electronically.  The risks associated with that are amusingly demonstrated in a fictional US Presidential election in the movie “Man of the Year” with Robin Williams, but I am sure it is not beyond the wit of C21 man to come up with a solution – perhaps mini-printers in polling booths printing off physical ballot slips?  Or a list of candidates posted on the wall with reference numbers for voters to copy onto ballot papers.

Those are just off the top of my head, I am certain the geeks can come up with something equally as robust as what we currently have.

Of course, we probably won’t ever see anything like that, because the sheer variety of candidates and views has the potential to destroy the relevance of political parties, so they would probably all use the massively-undemocratic “three-line whip” to defeat anything that came close, as the major parties have with PR in the past.

But imagine if we did – what if you could elect someone who genuinely represented your true views about the way you want the world to be?