By Martin Vogel
Earlier this year, I attended a talk at the RSA by Frederic Laloux, author of Reinventing Organizations. Laloux was every bit as inspiring as I had hoped after reading his book. But what has stayed with me also was a throwaway comment by Matthew Taylor, chairman of the RSA and former advisor to Tony Blair when he was Prime Minister. Reflecting on the paucity of organisational life, Matthew observed that we need a politics of organisation. Yes, I thought, this is exactly what we need and, at last, people are beginning to get it.
The politics of organisation was, of course, one of many absences in the General Election campaign. One of the successes of three decades of neo-liberalism is that what happens inside organisations has been ruled out of court for politicians. But at the same time, organisations – particularly private corporations – have become increasingly central to how our society is, well, organised. Most of us work in large organisations to earn our living and, with the hollowing out of the state, depend on them for the delivery of our public services. And what is left of life is increasingly mediated by the likes of banks that are too big to fail, food retailers whose chains extend from the convenience shop to the out-of-town megastore, and global internet businesses such as Google, Amazon and Facebook. How we experience them as employees and consumers and how they impact on society in general are among the most significant influences on our lives.
The stupendous victory against the odds of the Conservative Party could be seen as a reaffirmation of the philosophy that organisations should be beyond politics. That the first statement of the new Business Secretary, Sajid Javid, was a declaration that he intends to legislate further to curtail trade union power suggests that the new government is driven more by the class struggles of yesteryear than by the challenges of organisational life today.
But one of the surprising developments since 7th May is an emerging recognition that a politics of organisation must play a part in how Britain rejuvenates itself. That this arises precisely because of the importance of corporations in our society is expressed well by John Kay in the FT:
“The profit-making corporation is, should be and will remain the central institution of the modern economy. But that does not mean the purpose of a profit-making corporation is to make a profit; we must breathe to live but breathing is not the purpose of life. The purpose of a corporation is to produce goods and services to meet economic and social needs, to create satisfying and rewarding employment, to earn returns for its shareholders and other investors, and to make a positive contribution to the social and physical environment in which it operates…
“The good corporation — like the good smartphone or the good school — can be identified by what it achieves. It pays workers a living wage; it does not engage in aggressive tax avoidance. It develops the skills and capabilities of its employees and does not bewilder customers with complex tariff structures. It earns profits, reinvests some and pays a dividend to shareholders. Its executives spend more time walking around offices and shop floors than sitting in the meeting rooms of investment banks. The good corporation contributes relevant expertise to the formation of policy but does not engage in lobbying on a scale that corrupts political decision-making.
“The political and social legitimacy of the market economy, and of the corporations through which it functions, cannot simply be asserted — as it has been in the market-fundamentalist rhetoric that has dominated economic policy for the past three decades. Its legitimacy has to be earned by the behaviour of the leading economic institutions. That social contract has too often been broken in recent years. And drawing attention to that breach, and the measures needed to regain trust, is an agenda that is not hostile but rather friendly to the long-term interests of the business community.”
This is not necessarily a left versus right issue. The new Government’s talk of Blue Collar Conservatism signalled a desire to forge a more socially inclusive society that could embrace a politics of organisations. But it strikes me that the thinking is currently being driven most creatively by those on the left who are despondent about the resurgence of arid talk of Old Labour versus New Labour and are trying to define something more relevant to the times. Will Hutton argues that the defining challenge of our age – a more inclusive approach to wealth creation – can be brought about only by bringing corporations on-side:
“The left hungers for a utopia in which public power brings universal equity and well-being – the private sector relegated to the sidelines. It seems impossible to forge a new politics that recognises the co-dependency of public and private, the essence of the Enlightenment vision…
“The case for social justice and a strong public infrastructure is easy for a Labour leader to make. But he or she has to be unambiguously on the side of wealth generation – the third leg of the new political position – even while suggesting a reformed architecture in which it can be done better and more inclusively.
“It is a difficult political line to walk, but it has to start with a genuine respect for business. The young teams behind a brilliant start-up, the young company scaling up fast or even some of our great plcs are remarkable and critically important institutions – and what they do is tough, requiring great personal resourcefulness and resilience. At a time of great technological change they are vital for our future.
“Most of the people who lead them want to be constructive partners in building a better country, and also accept that Britain needs its own Googles and Apples, (while) privately very critical of much of the British framework that prevents it.”
If Will Hutton approaches this from the perspective of top-down policy formulation, Paul Cotterill – writing on the admirably named Though Cowards Flinch blog – envisages a politics of organisation being driven from the bottom up. He foresees workers challenging managerialism’s long-established financialisation of public services by taking responsibility themselves for their organisations’ delivery of what we here at Vogel Wakefield call social value:
“First and foremost, this means the producers of public services coming together – in a thing called the labour movement – and organising themselves to create better products. In a managerial system, there will be attempts to put a stop to this, because it offends managerial culture, and narrow interest, to suggest that the producers know a better way of doing things.
“So a key facet of a new politics of production will be the organisation of quality assurance and continuous improvement processes (inclusive of service-user co-production) will be the establishment/rejuvenation of institutions like Trade Unions Councils and Foundation Trusts, which develop a legitimacy first parallel to managerial systems (e.g. Ofsted, CQC) and then exceeding them.
“This is THE big challenge for the left in the next couple of years, without which there will be little substantive progress…
“Next, the challenge will be to expand on the concept of what a public service is, and to organise these institution of parallel legitimacy out towards them. We will need to organise out beyond the confines of traditional public services, and into those services which are there to serve the public – transport, then retail, then – of course – banking.”
This surely presents a more inspiring agenda for improvement of public services than than simply promising torrents of cash that voters doubt is readily available. And, as the economics blogger, Chris Dillow, suggests, approaches like this that give greater control to employees are likely to play a part in rectifying Britain’s collapse in productivity.
Curiously, in his own analysis of the election results, Matthew Taylor made no mention of a politics of organisation. But he did draw attention to the strange dislocation of the election campaign from the reality of how the world is changing:
“The 2015 election was largely a contest about who could make tomorrow better than yesterday, based on the assumption it would be pretty much like today. None of the parties seriously engaged with the major forces — technology, changing social attitudes and the many facets of globalisation — which will transform our lives over the coming decades.”
I’ve written before about how technology is changing the environment in which businesses operate, enabling the public to hold corporations accountable in unexpected ways. This has become a truism of management thinking. What’s less clearly discussed is how technology is changing organisations themselves and transforming the very nature of work. Technology has always done this. But as John Naughton, citing the work of Mike Osborne and Carl Frey, points out, what is different now is that automation is for the first time moving into areas of work that have traditionally been seen as cognitive and non-routine (for example, teaching or the legal profession) and the pace of innovation is increasing exponentially, which means that our capacity to cope with change is outpaced by change itself. So, in Naughton’s words, “the life-chances of a lot of human beings could be undermined or destroyed.”
The key thought underlying all this is that the consequences of these developments are not deterministic. Under the neo-liberal view of the world, the implementation of technological change is construed almost as a natural process that will follow its own unfolding. In reality, this means the decisions are left in the hands of business leaders. A politics of organisation would challenge the right of owners of capital to dictate peoples life chances so fundamentally. How society responds to the changes brought about by technology, or indeed manages how they will happen, could be a matter of political choice.
If and when the public wake up to such challenges, and the opportunities that a politics of organisation could bring, there will be a weight of expectation on business leaders. Unless organisations are able to respond to public aspirations, their ability to operate with societal consent will diminish.
These tensions are already apparent. The endorsement in the election of the Tories in England may have signalled that the public are reconciled to constraints on public spending. But the fragmentation of opinion across the UK and, in particular, the strong vote for the anti-austerity message of the SNP suggest the absence of consent for the continuation of unmitigated neo-liberalism. If the challenge seems to be to reconcile the reality of a smaller state with the public’s desire for greater social cohesion, this can only be addressed by putting on the political agenda the role organisations play in society. And by organisations themselves stepping up to play a constructive and inclusive role in how our society develops.
Image courtesy Chris.