Limits of social responsibility
“It is not enough for business to do well; it must also do good.” But in order to “do good,” a business must first “do well.”
Whenever a business has disregarded the limitation of economic performance and has assumed social responsibilities that it could not support economically, it has soon gotten into trouble.
Union carbide was not socially responsible when it put its into Vienna, West Virginia, to alleviate unemployment there. It was, in fact, irresponsible. The plant was marginal to begin with. The process was obsolescent. At best the plant could barely keep its head above water. And this, inevitably, meant a plant unable to take on social responsibility, even for its own impacts. Because the plant was uneconomical to begin with, Union Carbide resisted so long all demands to clean it up. This particular demand could not have been foreseen in the late 1940s, when concern with jobs far outweighed any for the environment. But demands of some kind can always be expected. To do something out of social responsibility that is economically irrational and untenable is therefore never responsible. It is sentimental. The result is always greater damage.
Management is indispensable
Whoever makes two blades of grass grow where only one grew before deserves better of mankind than any speculative philosopher or metaphysical system builder.
Management will remain a basic and dominant institution perhaps as long as Western civilization itself survives. For management is not only founded in the nature of the modern industrial system and in the needs of modern business enterprise, to which an industrial system must entrust its productive resources, both human and material. Management also expresses the basic beliefs of modern Western society. It expresses the belief in the possibility of controlling man’s livelihood through the systematic organization of economic resources. It expresses the belief that economic change can be made in to the most powerful engine for human betterment and social justice – that, as Jonathan Swift first overstated it three hundred year ago, whoever makes two blades of grass grow where only one grew before deserves better of mankind than any speculative philosopher or metaphysical system builder.
Management – which is the organ of society specifically charged with making of resources productive, that is, with the responsibility for organized economic advance – therefore reflects the basic spirit of the modern age. It is, in fact, indispensable, and this explains why, once begotten, it grew so fast and with so little opposition.
Integrating the economic and social
It is this absence of a functioning industrial society, able to integrate our industrial reality that underlies the crises of our times.
Man in this social and political existence must have a functioning society just as he must have air to breath in his biological existence. However, the fact that man has to have a society does not necessarily mean that he has it. Nobody calls the mass of unorganized, panicky, stampeding humanity in a shipwreck a “society.” There is no society, though there are human beings in a group. Actually, the panic is directly due to the break-down of a society; and the only way to overcome it is by restoring a society with social values, social discipline, social power, and social relationships.
Social life cannot function without a society; but it is conceivable that it does not function at all. The evidence of the last twenty-five years of Western civilization hardly entitles us to say that our social life functioned so well as to make out a prima-facie case of the existence of a functioning society.
Identifying the future
The important thing is to identify the “future that has already happened.”
Futurists always measure their batting average by counting how many things they have predicted that have come true. They never count how many important things come true that they did not predict. Everything a forecaster predicts may come to pass. Yet, he may not have seen the most meaningful of the emergent realities or, worse still, may not have paid attention to them. There is no way to avoid this irrelevancy in forecasting, for the important and distinctive are always the result of changes in values, perception, and goals, that is, in things that one can divine but not forecast.
But the most important work of the executive is to identify the changes that have already happened. The important challenge in society, economics, politics, is to exploit the changes that have already occurred and to use them as opportunities. The important thing is to identify the “future that has already happened” – and to develop a methodology for perceiving and analyzing these changes. A good deal of this methodology is incorporated in my 1985 book Innovation and Entrepreneurship, which shows how one systematically looks to the changes in society, in demographics, in meaning, in science and technology, as opportunities to make the future.
Organizational inertia
All organizations need a discipline that makes them face up to reality.
All organizations need to know that virtually no program or activity will perform effectively for a long time without modification and redesign. Eventually every activity becomes obsolete. Among organizations that ignore this fact, the worst offender if government. Indeed, the inability to stop doing anything is the central disease of government and a major reason why government today is sick. Hospitals and universities are only a little better than government in getting rid of yesterday.
Businessmen are just as sentimental about yesterday as bureaucrats. They are just as likely to respond to the failure of a product or program by doubling the efforts invested in it. But they are, fortunately, unable to indulge freely in their predilections. They stand under an objective discipline, the discipline of the market. They have an objective outside measurement, profitability. And so they are forced to slough off the unsuccessful and unproductive sooner or later. In other organizations – government, hospitals, the military, and so on � economics is only a restraint.
All organizations must be capable of change. We need concepts and measurements that give to other kinds of organizations what the market test and profitability yardstick give to business. Those tests and yardsticks will be quite different.
Abandonment
There is nothing as difficult and as expensive, but also nothing as futile, as trying to keep a corpse from stinking.
Effective executives know that they have to get many things done effectively. Therefore, they concentrate. And the first rule for the concentration of executive effort is to slough off the past that has ceased to be productive. The first-class resources, especially those scarce resources of human strength, are immediately pulled out and put to work on the opportunities of tomorrow. If leaders are unable to slough off yesterday, to abandon yesterday, they simply will not be able to create tomorrow.
Without systematic and purposeful abandonment, an organization will be overtaken by events. It will squander its best resources on things it should never have been doing or should no longer do. As a result, it will lack the resources, especially capable people, needed to exploit the opportunities that arise. Far too few businesses are willing to slough of yesterday, and as a result, far too few have resources available for tomorrow.