In this posting I would like to contribute to the discussion of making sense of the current crisis in the financial sector as it has been taken up in recent postings by Chris Mowles and Karen Norman, and especially by Ralph Stacey in his recent book Complexity and Organizational Reality: Uncertainty and the need to rethink management after the collapse of investment capitalism. Specifically I would like to respond and add to Ralph’s argument that we need to rethink the nature of communication and social interaction if we are to get at core crisis of ethics, particularly as it has been emerging in Western thinking.
There is great deal of horror and astonishment being expressed about the greed, ruthlessness and lack of even any pretence of professionalism in the conduct of managers and leaders in the financial community. Chris Mowles mentions the reaction of the English Queen in his post. This reaction is in a sense surprising since the Windsors have been key figures in the shifting political and ethical culture of English society and the London business community and must have noticed and reflected to some degree on the radical changes of the last decades which they themselves will have experienced as an important stakeholder. Michael Lewis in his book The Big Short gives a detailed description of the almost complete lack of professionalism and ethics in the financial sector, focusing on Wall Street. But Lewis resorts to humor and a ‘cocktail party’ air of detachment from the events, presenting in detail the moves of those who, beginning in 2007 (or earlier) saw the crisis coming and began not to call for reform or appeal to reasserting basic values, but rather to bet against the doomsday scenario they perceived as inevitable and to amass sizable fortunes for themselves and their hedge fund investors.
The ethical crisis is grounded in the way we have formalized ethics and divorced it from everyday life. As a consequence this reduction of ethics to universalist and principled thought before action, actors, or perhaps better players, for instance in the financial sector, feel no responsibility for negotiating the ethics of the game as it now rapidly changes, with the emergence of new communication possibilities and innovative new technologies reshaping the politics of everyday interaction. To the contrary, one is deemed as rather stupid if not involved in gaming the system before newly emerging loopholes are discovered and perhaps brought under regulation. But the very political leaders who would be the ones to enact reforms are now moving quickly and easily between high level ministerial positions and the activism of receiving exceedingly high remuneration by lobbying for special interests, as has become evident in the long debate over health care in USA, the current scandal in the UK labor government over former ministers racing to take up lobbying jobs, and Schröder and Fischer in Germany moving immeditately not to the tedious politics of opposition but rather to lobbying positions after their tenure in government.
I would like to suggest that one factor in the crisis of ethics is that there is something especially about leadership which we have a hard time talking about; namely, that it is, as a matter of fact, if it could be separated from being embedded in the everyday politics in which it emerges, ethically ‘neutral’. Many authors, in major works on leadership, speak in introductory chapters, about this, but then quickly move on to basically looking at leadership as good in itself, as a ‘simple’ ideal. But of course one person’s freedom fighter is another’s terrorist. Gangster families also have leaders who plan, with those who recognize them as leaders, the best strategy for the survival of their organization. Bullies work together with those who subserviently recognize them to further the aims of their organizations. We need to think about how these ethics are embedded in the everyday political negotiations in our societies if we are going to seriously take up the crisis of business ethics.
A few stories of ethics
In a recent radio interview a woman at the point of retiring from being the Managing Director of a medium-sized German company was asked if, in the course of her leadership role over the years, she had had to be ruthless in making decisions. She responded in a voice of a very confident and reflective person that ‘of course I have been ruthless; that is the nature of doing business`. By chance very shortly after this I saw on an international finance news program an interview with an Asian CEO of a very successful new business. The man in his mid-forties came across as very lively, an entrepreneur who obviously enjoyed the adventure of doing business and conveyed a sense of fairness which made one easily think that working with him would entail participating in his contagious enthusiasm. Interestingly he was also, in somewhat different words, asked the same question as to whether he had been ruthless, and again he responded with the same ease of conscience that ‘of course I have. You cannot do business without being ruthless’.
If one wants to argue that the use of ‘ruthless’ here is nevertheless problematic, i.e. if the word is to retain any ethical sense at all, the question becomes: ‘What are these business leaders trying to get at in using this term?’. I want to argue that they resort to the use of the term ‘ruthless’ because they have no other language to speak of something that is very important about leadership. But before doing so, I would like to draw attention another story. It is the story Clint Eastwood tells, as director of the film Invictus, about a key event at the beginning of Nelson Mandela’s presidency of South Africa – his support of the national rugby team, the Springboks, in retaining their name and colors and his direct intervention with the captain of the team in preparing for and eventually winning the World Rugby Cup in South Africa, against all odds, in 1995. There is much talk of leadership in the film, and I mention Eastwood because this film is best considered with other films he has made to understand his broader concern with the theme of leadership. Invictus is a ‘happy-ending’, ‘feel-good’ film which might lead one to easily fall into a narrower view than what I think Eastwood is taking about leadership in his work, i.e. to reduce it to an idealization and myth located in the heroic individual and as being good in itself. This could also be argued by a narrow interpretation of Henley’s poem Invictus, which is presented as a mantra for Mandela during his time on Robin Island and which in the film he passes on to young captain of the Springboks. I want to take seriously the elements of the loneliness and struggle of the leader and the way in which it is connected to myths (‘whatever gods may be’) as expressed in Henley’s poem and which finds strong resonance in Mandela and Eastwood. But I want to connect this with the other themes of leadership Eastwood presents in this film and in his other recent films such as Gran Torino and A Perfect World.
Out of the night that covers me,
In the fell clutch of circumstance
Beyond this place of wrath and tears
It matters not how strait the gate,
I am the master of my fate:
William Ernest Henley (1849-1903)
Eastwood closely interweaves the theme a cult idealization of leadership to that of mutual processes of recognition and the emergence of personal and group identity, repeatedly emphasizing the forceful, potentially, perhaps even inevitably, violent, emotions that these processes can evoke/provoke. In Gran Torino he carefully relates the story of the emergence of a very unlikely candidate for a neighborhood leader in the figure of a recluse who ends up taking on the struggle of the Asian immigrants whom he had seen as destroying his world. It is in resistance to the violence of inclusion and exclusion, Eastwood’s third theme concerning leadership – also linked to the potential for idealization in Invictus, that processes of recognition lead to a new ‘world’, as in his film A Perfect World. Here he deals with how idealization first emerges in adolescence, linking it directly to processes of recognition The question I would like to take up in the following is the extent to which leadership as the close interweaving of themes of resistance, recognition and idealization is being taken up in management and organization discourses.
Linking resistance, recognition and idealization
The theme of idealization is of course dominant in management and leadership literature. We know it as vision and the personal mastery of the manager and leader – hence the easy reduction of the meaning of Henley’s poem and what Eastwood might be drawing attention to in his work. Whereas artforms such as poetry and film are able to easily evoke the embedded worlds in which leadership emerges, this has not been the case in academic discourse. The single aspect of idealization is easily isolated and, enshrouded in myth as such, becomes politically sterile, apart from our everyday experience. A curious and very interesting move to broaden this discussion has been the introduction, both in sociology and leadership thinking, of the concept of mētis, originating in Greek Mythology before the metaphysics of Plato and Aristotle, on which Western thinking has been established, even in counter-dependent paradigms, such as Nietzsche, Heidegger, negative dialectic, postmodernism, etc.
Mētis: Linking resistance to leadership
The introduction of mētis into academic discourse on management and leadership must be understood in the context of the discussion of another Greek concept, not from mythology but developed by Plato and Aristotle as a theory of knowing, that of phronesis, which is commonly translated as practical knowing, cleverness in the moment. This has been taken up widely in the last few decades in academic discourse, recently and notably by Bent Flyvbjerg in calling for phronetic social science in his book Making Social Science Matter, but has regrettably had little influence in shifting the dominant paradigm of simply idealizing leadership. Those now taking up the mythology of mētis want to draw attention to something that escapes the concept of phronesis. Notable are the works of James C. Scott and Stephen Toulmin who point to the movement of resistance in their understanding of mētis – in the informal versus the formal or the importance of those on the margin in contrast to those in center (the dominant paradigm). Following his work on Domination and the Arts of Resistance, Scott in his book Seeing like a State takes up mētis as “the nonconforming practice” which “is an indispensable condition for formal order”. Similarly Toulmin, who had been one on the pioneers in introducing the concept of phronesis into the discourse of sociology, in his book Return to Reason takes up mētis in terms of Michael Polanyi’s differentiation of tacit and explicit knowledge as a way of broadening our understanding of knowing. Toulmin is aware of the difficulty in taking up mythology: “If we have inarticulate, pretheoretical, or untheoretical experience, so be it”. He is fully aware that mētis is “at the pragmatic, non-verbal extreme”.
Why go to the extreme? I think that Scott and Toulmin are trying to get at aspects of what I think it is so difficult to talk about in leadership discourses. Mētis was reintroduced, after long obscurity, into academic discourse by two experts on Greek mythology, Marcel Détienne and Jean-Pierre Vernant. The English translation of mētis in their work is “cunning intelligence”. Toulmin does not shy from the negative connotations of the word cunning, insisting on a neutrality reminiscent of the kind of moral neutrality leadership theorists often refer to in the introductions to their work. I would argue that ‘cunning’ does get at the spontaneity of the risk-taking involved in leadership and points toward that which is difficult to talk about. But it is difficult because it has to do with controversies and vulnerabilities of the political context in which it is necessarily embedded. The neutrality only exists hypothetically or in fantasy. The reality is the conflictual and political, i.e. social context of any emerging leadership. Hence the danger in easily reducing the complexity of the subjectivity of modernity to mythology where the political is reduced to the fables of gods, e.g. Zeus swallowing his daughter mētis, who lives on in his stomach.
The cunning displayed by the traders, managers and leaders of the financial sector is destructive of society precisely because it idealizes and equates pocketing large sums of money as success and being on top of the world, but it is not the real world. I would nevertheless agree with Toulmin that cunning is a good translation of what mētis is about and that it is something we need to take seriously in trying to understand the role of resistance and its link to recognition and identity. I think that in this sense the two managers I mentioned as ‘owning up’ to being ruthless might have used the word cunning, based on this interpretation. They might also have responded that: “No, I have not been ruthless, but I have acted politically in the fullest sense of the word. I have taken responsibility for conflictual and tough decisions, resisting easier paths, in negotiating with those that recognize me and whom I recognize, in making concrete, i.e. functionalizing, every day and again and again, our ideals of what it means to be fair and ethical in a very rapidly changing world”.
The knack of leadership
Another translation of mētis which Toulmin takes up is ‘having a knack’. This offers a very different way of thinking about what in the normative rationalist paradigm is referred to as skills and competences. In the normative paradigm skills are easily reified, i.e. thought of as things located in a person which can be transferred in ‘training’ or by some other means. Acquiring a knack, on the other hand is in the doing and is first regarded, again, apart from any ethical considerations. The traders in the various financial ‘products’, e.g. derivatives, get the knack by simply getting in on the ‘action’, as well described by Michael Lewis, as mentioned above. Acquiring the knack is closely accompanied by a drive for more action and as such is a great threat to a society which is rapidly becoming more apathetic, politically passive, cynical (the humor of Michael Lewis), and easily manipulated by the media and single-issue propaganda.
Nevertheless I find ‘knack’ to also be a useful concept in pointing to the local and emergent character of what we have come to understand as skills. It draws attention to the fact what we have come to locate as a skill in individuals actually only exists and changes in the social interaction.
What we as the Complexity and Management Centre are reflecting on as complex responsive processes is a way of thinking of communication and social interaction which offers a way of talking about leadership differently. It articulates the radically political nature of our everyday lives in a way which is similar to and at the same time goes beyond the way in which Scott and Toulmin understand the notion of mētis. This is not to deny the inspiring energy of their work in drawing attention to the aspects of resistance and the informal/tacit as necessary to the formal/explicit. What is needed is more reflection on processes of resistance, recognition and idealization (visions) as interwoven and inseparable elements of the politics of everyday leadership.
To game the financial sector and at the same time completely ignore the resulting destruction of society and any political responsibility is ruthless. The question is how to move toward becoming a society in which such ruthlessness is quickly recognized as such and, in reforming political processes, made criminal where it is deemed necesssary. The watering-down of attempts at reform following the recent crisis and the quickness in bounce-back to business as usual, are far from encouraging.
A detailed argument, working out the relevance of the theory of complex responsive processes for management and leadership can be found in Ralph Stacey recent book which I mentioned above: Complexity and Organizational Reality: Uncertainty and the need to rethink management after the collapse of investment capitalism, Routledge, 2010).