Polity of Certainty or Polity of Doubt?

It is a striking phenomenon that we human beings have a strong penchant for supposing we comprehend things, sometimes even how the whole world functions. We have opinions on most things, and if not, are quite fast in formulating one if so prompted. Indeed, it seems to be almost expected of us socially to have such ready-made opinions on just about everything. This fact is ever again driven home to me during political discussions, debates and elections. Each participant – if spectator, analyst or candidate - has his or her own take of the state of affairs, what the problems “really” are and what “exactly” needs to be done to solve them.

What conceit – if not sheer lunacy – however, to think things are so simple! The complexity of the world (including all political process) is thus, that no human being - citizen, politician or think-tank - can hope to grasp it all, make reliable predictions, or make proud declarations as to how to “solve” this or that problem, yes, if you only listen or elect me, this and that will happen. How refreshing (yet utterly unrealistic) it would be if a pundit, CEO or candidate would openly proclaim, “Frankly, I don’t fully understand this whole mess we are in and while I’ve got my hunches and inclinations, at the end of the day I simply don’t know for sure how to get us out of it. But we’re in this together and together we will stumble about as best we can, making judicious use of that which we can and do understand and using common sense as best we can. But predictions and promises? That I cannot and will not give you!”

Human existence is never a straightforward plan that simply awaits to be implemented. The trouble, however, is that while our limited, or “bounded”, human rationality is a fact, it is also a fact, as numerous empirical studies have shown, that perhaps the single most important trait of a “successful” leader is that he or she is decisive in his or her decisions, sticks with them and avoids signaling any form of doubt once the decision has been made. This has deep psychological – and even evolutionary – reasons, hailing from a still more primitive, precarious world setting than our 21^st century reality presents us with. But therein lies the fundamental dilemma of any leader – above all a political one, repeatedly forced to make predictions and pledges. It is in essence one between honesty and utility.

Or does one in fact really need to choose between the two? Can one indeed be humble enough so as to be honest, while still confident and decisive enough so as to be effective as a leader?

While certainly not self-evident, I think the answer is yes. One can be decisive and confident also in acknowledged uncertainty. It simply requires an attitude that eschews what our current “achievement culture” (and perhaps even innate biological inclinations) seems disposed to undercut. But it is perhaps homo sapiens’ most remarkable asset to be able to rise – at least at times - beyond our predominant evolutionary tendencies and the social prescriptions they give rise to. And thus I shall close these considerations with the following entreat: dare to be humble, dare to be confident and dare to be bold!

Manuel Heer Dawson

Escape the City

In 2009 two Ernst & Young consultants, Rob Symington und Dom Jackman, quit their jobs and established an online job platform. There is nothing particularly exciting about this. The interesting thing is: it is called “Escape the City”, and is designed for young people who did everything right: school, university, a career with one of the big banks or consultancies of the City of London, but still felt that something is wrong.

“Escape the City” is a platform for highly qualified young people who want to escape the clichés of a successful career and an important job. It has been created by Symington and Jackman for people who are looking for meaningful jobs that make a real difference, not only to their lives, but to the world. As of March 2012, the platform has almost 60’000 registered members.

The success of this idea is so evident that the two young Englishmen expanded their business to New York where they obviously were welcomed with open arms. The NY subsidiary of “Escape the City” now ranked the most unpopular investment banks of Wallstreet. JP Morgan Chase, Goldman Sachs and Morgan Stanley are “top”. But also some of the famous European Names such as UBS, Credit Suisse, Deutsche Bank and Barclays rank among the “top ten”.

So what about the rhetoric of many of these organizations when it comes to claiming to be employer of choice for the most talented people? Is it the truth or just a short sighted self-deception? Difficult to tell. But one thing is clear: More and more young and talented people are no longer satisfied by fast careers, big salaries and fancy job titles. They want to make a difference, and they want meaningful jobs.

Many people these days are frustrated with respect to what we could have learned from the crisis. It seems like companies are going back to business as usual: New financial “products” find their way to the market, executive compensation increases, and reaches pre-crisis levels. Sometimes I’m frustrated too, and I’m afraid that many practices will continue or change only marginally. But “Escape the City” is a sign of hope to me: It seems that there are a growing number of young people who have a different vision, a different idea and a different notion of a good and meaningful life.

Talking about leadership of the 21^st century, I think these are the ones we need as future leaders. They are neither dreamers nor altruists. Quite the contrary: They are realists and they think for themselves. All they want is to live in a better world, where the quality of life is more important than the quantity of money.

Christoph Weber-Berg

Tradition as a source of innovation?

At first sight, tradition is not a genuine source of innovation and dynamism. However, the Jura region, one of the most peripheral areas of Switzerland, has a long tradition in watch making, and is one of the most dynamic regions of the country. What might be the reason? A few thoughts on leadership, innovation, stakeholder-networks and tradition.

The news: According to a Credit Suisse study, the Jura, one of the peripheral, rural areas of Switzerland, ranks among the top 5 of the most dynamic regions of our country http://snipurl.com/22lul1s.

Switzerland is often associated with banks, chocolate, cheese and watches. Among the respective industries, the watch making industry is the most dynamic presently. The Swatch-Group, mother of many world famous brands, is growing rapidly, and presenting new record-breaking results. Growth comes from all regions of the world, and from all customer segments.

But not only the great market dominator, also many smaller Swiss watch brands are very successful and dynamic. Many – or almost all of them – are located in a peripheral area of Switzerland, where no one would expect dynamic global industries. Some of the most delicate, complicated and sought-after pieces are handcrafted to highest precision standards by dedicated people with very specific skills and knowledge in the region of the Jura mountains.

Asked for the reasons of success, one of their answers is that there is no other place in the world, where so many people have had the knowledge and tradition of watchmaking for such a long time. In many towns and villages, watches have been made for more than 200 years.

Tradition may be a source of success, just as much as it may be the reason for lethargy. So the question is how tradition can contribute to success. Tradition is a form of sharing knowledge, not only today, but also through generations. It is a form of sharing knowledge in a way that cannot be replicated by the most sophisticated software. Tradition expands the stakeholder network to the dimension of time.

In the case of watchmaking in the Jura, tradition is the success-critical intangible asset of a whole region. It preserves supra-individual inspirational resources that condense to creativity and even to innovation if the right people are brought together, to follow the same vision.

In the 1970ies and early 80ies, when cheap Japanese quartz watches conquered the global markets, the Swiss watchmaking industry almost disappeared. The watchmaking companies of the Jura regions lost their license to innovate, as well as their license to compete, and people lost their jobs. But most obviously, knowledge, tradition and specific skills survived. When Nicolas Hayek, the founder of the Swatch Group reanimated the Swiss watch industry from its coma, he could rely on what I previously called the “supra-individual inspirational resources”.

Hayek was the core of condensation for the resurrection of a whole industry, and a whole region. Of course, he was a visionary leader. But visionary and charismatic individual leadership is not the whole story. Leadership flourishes on the foundations, and out of a specific culture and tradition, of shared knowledge. It emerges within a stakeholder network that reaches out not only in space, but also in time.

Tradition, culture – “supra-individual inspirational resources” – may trigger leadership, innovation and dynamics with people, in regions where no one would expect them.

Christoph Weber-Berg

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One piece of chocolate now or two pieces of chocolate later?

In the aftermath of the recent economic crisis, much has been debated about its potential causes and the lessons learned. However, it seems to me that neither from the causes nor the lessons as a starting point, a significant and generally accepted foundation emerged that could now lead the way out of this precarious situation and prevent us from future economic failure or misbehavior. Except for the obvious and the unhelpful, such post-fact evaluations leave us still wondering when the next crisis is going to happen and what it might look like.

In a recently published paper, Thomas Donaldson (2012) illuminates potential causes for the crisis from the angle of business ethics and leadership. In doing so, he also sheds a valuable light on some of the lessons that must be learned. Donaldson puts forward an argument for the ethics story behind the crisis and submits that among its causes can also be found three ethical roots: ‘Paying the peril’, ‘The normalization of questionable behavior’ and ‘Tech-shock’.

Without going to much into detail on these ethical roots that indeed go beyond the obvious and unhelpful, I came across a central aspect that is common to all of them to a certain extent – the dilemma between short-term profit and long-term value. Whether it is on an individual level, where an investment banker gambles on a ten percent annual risk of disaster in order to reap a big bonus; or on an institutional level, where banks pay salaries and bonuses to managers for actions today, even though the firm’s rewards or penalties for those actions happen tomorrow; or on an industry level, where practices become accepted that enrich the short term only to impoverish the long term, the dilemma is ever-present.

Thinking of these matters, I was reminded of an insightful TV report about the human ability to make time-dependent decisions. A simple experimental design was set up; children at the age of about 4 years were given a piece of chocolate and told that if they won’t eat it during the next 5 minutes, they get another one. The outcomes were equally amusing as astounding: except for some rebels for which the single piece seemed too tempting, the majority either managed to run down the clock without touching the chocolate (in which case they usually tried to distract themselves) or they tried to cheat, i.e., tasting the chocolate and then putting it back before the investigator returns in the hope of getting away with it. Apparently, the ability to trade individual short-term satisfaction for a future bonanza, which is by the way also found among certain animals, starts to evolve at around 3 to 4 years of age – one of the behavioral scientists explained.

Although, this straightforward comparison might tempt us to argue that the bad ethics, which led to the recent financial crisis, is occasionally part of our nature, it also and more significantly emphasizes the importance of setting appropriate incentive structures to encourage good ethics and placing more weight on collective rather than individual value. Because the most important question that remains is at what age the ability to trade individual short-term profit against future collective prosperity starts to evolve?

Marc Moser

Donaldson, T. (2012): Three Ethical Roots of the Economic Crisis. Journal of Business Ethics, vol. 106, no. 1, pp. 5-8.