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.

Regulations or More Moral Minds: Which Way to go concerning Global Issues?

In comments about the global economy we often can read that we need responsible capitalism today but not new regulations. But what is meant by a responsible capitalism without new regulations? One often heard answer is that such capitalism can be established through a change of mind towards more moral thinking. But it is rather unlikely that this change of mind would be so fundamental and action-guiding that the global problems, which for example became obvious with the financial crisis, can be solved in this way alone.

Let us do a short analysis of the global situation: Today there are many issues that know no boundaries (transboundary), such as the global financial crisis, climate change, migration, trade etc. The territorially bound nation-states can’t solve these issues on their own. Therefore, in the world of international relations where anarchy still rules (the monopoly of power is still on the level of the nation state: there is no ‘world-government’ or state over the nation-state) states often come together to coordinate activities and cooperate concerning global issues. But cooperation between states is insufficient today. In the concept of “global governance” of political science not only state-actors but also stakeholders from the societal sectors of business and civil society are considered to be important political actors in contributing to solutions of transboundary or global issues.

Such new global governance systems exist already (e.g. Climate-Conferences, WTO, ILO, ISO14000 or private regulation-standards in different consumer-goods industries like e.g. ETI [Ethical Trade Initiative] etc.). Although they vary widely as to the specific issues, structure, actor participation and success, there is no other way in a politically still anarchic but globalised world to try to solve global issues.

Of course, it is difficult to bring together the relevant stakeholders of an issue and it is even more difficult to achieve a constructive dialogue, cooperation and meaningful coordination among them. It is already a significant success when regulatory designs can be established and when implementation and evaluation of effectiveness of the rules is seriously done. And it is also obvious that a certain change of mind is a precondition to bring the stakeholders together. These components are all parts of building-up global institutions, and regulatory designs are one integral part thereof.

But, to propagate the development of highly skilled moral competencies of humankind which make regulations unnecessary may indeed be a noble demand but won’t work in reality. Moreover, to let a global issue drift around in an anarchic environment without trying to manage it actively is simply irresponsible. There is no way to circumvent the building-up of global institutions including regulations. On the national level states have also established rules to solve issues, i.e. to provide common goods (e.g. protecting property rights, legal certainty).

Global institutions have not the aim to restrict individual rights or freedom but to provide common goods (e.g. protection of property rights, clean air). Of course, to fight the right of the stronger, which identifies the anarchic space, it is necessary to reduce the possibilities of powerful actors to exhaust certain individual freedoms by power exclusively for their private gains and at the costs of all others. Regulatory designs thus help to provide common goods by aiming to substitute the rule of the jungle through a ‘rule of regulation’. In this way, also innovative individual freedom can be protected from anarchic arbitrariness. The building up of global institutions, based on stakeholder cooperation establishing regulatory designs, is unavoidable for a responsible handling and solving of global issues. Another question, of course – not considered here – is the democratic legitimacy of such global institutions.

Claude Meier

The blame game

Have you ever noticed how efficient people or organizations are in identifying their stakeholder relations when it comes to being blamed for a specific behavior in the context of a negatively framed issue? A striking example is BP’s public communication regarding the disastrous oil spill in the Gulf of Mexico. Although assuming more or less the responsibility for the leaking wellhead’s consequences, BP continuously emphasized that deepwater oil drilling depends on cooperation between various business partners. In this regard BP frequently pointed out that the oil-drilling rig “Deepwater Horizon” was operated by offshore drilling contractor Transocean; that the oil-companies Anadarko and Mitsui are co-owners of the leaking well; that Halliburton cemented the leaking seal of the wellhead; that the oil service provider Cameron delivered the failing blow-out preventer; and that the responsible US supervisory authority did regular inspections on BP’s rented drilling rigs. It seems that being blamed for various failures leading to the oil spill in the Gulf of Mexico, BP’s communication provided the public, at least partly, with the company’s stakeholder relationships regarding the controversial issue of deepwater oil drilling.
Interestingly, in the case of success people and organizations do not mention their stakeholder relationships in the same way as they do when being blamed for failure. Indeed, employees and customers are frequently recognized as being important for organizations’ positive results, but has BP ever mentioned Transocean or Halliburton during the years of (financial) success? It would clearly add to the quality of stakeholder relationships, if an organization not only recognizes its stakeholder network in the case of being blamed, but also when it comes to the dissemination of mutually created value. 

A second example describes an issue in many countries, including Switzerland: violence between sport fans. After the abandonment of a soccer game between two teams in Zurich due to fighting scenes among rival fan groups, the affected stakeholders blamed each other for being responsible. The rival fan groups accused each other for having triggered the clash; the people accountable in the different soccer clubs blamed each other for not taking positive influence on their own fan groups; the Swiss Soccer League blamed the hosting soccer club for not providing adequate security arrangements; the hosting soccer club blamed the municipality for not getting sufficient resources to guarantee the safety of the game’s spectators; and finally almost all of the issue’s stakeholder groups blamed the police for not sufficiently demonstrating presence in the stadium. Again, this sort of “blame communication” by the different actors revealed quite exhaustively the involved stakeholder network. However, I am wondering if I have ever heard a positive mention of the police from a Swiss soccer club’s official in the case of success...
The two examples mentioned above show that being blamed often forces people or organizations to defend themselves and, therefore, leads to blaming other stakeholders in the context of a negative issue. However, recognizing the different actors in a stakeholder network can also take place in the context of success and the corresponding dissemination of mutual created value. This behavior can be appreciated as taking on responsibility, not only in the case of failure, but also in times of success. Indeed, recognizing stakeholders in the case of success may prevent organizations of being overly blamed in the case of failure.

Child labor along the Mekong

Since a week I and my husband are on a cruise on the Mekong River, having started in Siem Reap, Cambodia where we visited the amazing Angkor Wat temples. On this cruise we have the chance to see rural villages in Cambodia and Vietnam, all villages which just started to establish relations with this cruise line, owned in part by a man from Switzerland. The basic set-up is that passengers can walk through the villages and in return these villages get financial support from the cruise line. During the visits there is always a local guide to accompany us – first from Cambodia and now from Vietnam.

Just today we visited Binh Thanh Island near the Vietnamese town Sadec. In this village, we could see how rice mats were made by local women. Some of these women looked very young. Our guide told us that some of them worked there already for a long time. She especially pointed out a girl which according to her was already thus employed for six years.

When I pointed out that this was a child labor issue, our guide failed to acknowledge my objection to this practice. She indicated that the girl still went to school every day for four hours. What she failed to comprehend, however, was that such a work setup would impact her school performance as she would be tired in class, not have enough time to do her homework – and, not have enough time to play with other children. As this type of work is only done by women, it also impacts the equality of opportunity between men and women, or rather, boys and girls. These girls will benefit from less education than their male counterparts, which will impact their future work opportunities and scope of personal development. Moreover, this imbalance will make these girls in the future more dependent on their families and husbands.

My objection to this work setup really astonished my tour guide – even though she was a woman herself. As I returned to the ship I reported the incident to the manager of the ship who was not aware of this situation. The cruise line how has the opportunity to induce change.

The fact of the matter is that most such villages are very unexposed to the outside world and nobody really knows what is going on there. Due to the fact that these villages profit directly from the tourist tours from this cruise line, however, there is now an opportunity to give a voice to these young girls by negotiating with the leaders of the villages to refrain from child labor. Moreover, the cruise line has the opportunity to train the local guides so that they are aware and sensitive to these kinds of issues. Actions by the cruise line such as this one would help offering these girls the same starting conditions in life as the boys have in these villages.

Sybille Sachs

 The Class Room as an Advertising Zone

The newspaper “Sonntag” published last weekend an article on Apple’s marketing strategy at schools (http://snipurl.com/227ahrp). And sure enough, Apple knows how to promote its products.

Apple has got a 70.4 percent share of the market at Swiss schools. But it seems that the company’s goal is to have an even stronger monopolistic role in this very important market. To reach its aim Apple launches new marketing projects. Its marketing strategy focuses on the teachers. “Apple Distinguished Educators” (ADEs) is a worldwide community of visionary educators whose goal is to make a difference in the future of education. ADEs teach students, share their expertise with other educators and advise Apple on the realities of integrating technology into learning environments (http://snipurl.com/227apep). One has to admit that this idea is a great example of stakeholder involvement in the development and innovation of products. Educators have to apply for being a member of this worldwide community. Already 28 Swiss teachers have got the honor to be ADEs.

Additionally the Education-Team at Apple Switzerland is implementing the global “Apple Professional Development Program”. It should complement the offers of the University of Teacher Education in information and communication technology (ICT). Teachers teach teachers how to use Apple products in the class room.

Furthermore regional training centers are built, a pilot project allocates iPads for schools and Apple is developing school books in all four national languages for iPads. Apple pursuits a pretty offensive marketing strategy, but also Microsoft tries to bind schools to its products, what already caused differences with the Swiss government (http://snipurl.com/227b86u).

These examples show that the education market is very important for tech companies and therefore highly competitive. As education is part of the public sector the companies role in this area should be controversially discussed.

The critical aspects of the mentioned marketing strategies are multifarious.

Both enterprises try to consolidate their market position by their campaigns at schools. As the knowhow of using technology is very important for nowadays education and schools only have limited financial resources, these “public-private partnerships” are actually important. But the problem is that these examples aren’t real public-private partnerships. And so we have to ask ourselves who gains more profit out of these collaborations.

As this kind of products and especially the brand behind the product have got an emotional component and want to influence the attitude to life, it becomes very important for the companies to win young customers. Therefore the campaigns at schools are part of a very clever marketing strategy. But do we want ad men to teach our children? Or shouldn’t class rooms rather be commercial-free?!

If the public reacts skeptical on companies that sponsor professorships, then Apple’s behavior has to provoke skeptic too. The given examples raise the issue of independency of the educators or institutions to a certain extent. Teachers who simultaneously operate as Apple-ambassadors will find themselves in a conflict of interest. But independent education is one of the most important aspects for the development of knowledge.

Sustainable solutions are important to reduce our dependency on these companies. We should care about the sustainable education at our schools and not about sustainable volume of sales for Apple and Co.

Sabrina Stucki