Society of performing organization
“By their fruits ye shall know them.”
Society in all developed countries has become a society of organizations in which most, if not all, social tasks are being done in and by an organization. Organizations do not exist for their own sake. They are means: each society’s organ for the discharge of one social task. The organization’s goal is a specific contribution to individual and society. The test of its performance, unlike that of a biological organism, therefore, always lies outside itself. This means that we must know what “performance” means for this or that institution.
Each institution will be the stronger the more clearly it defines its objectives. It will be more effective the more yardsticks and measurements there are against which its performance can be appraised. It will be more legitimate the more strictly it bases authority on justification by performance. “By their fruits ye shall know them” – this might well be the fundamental constitutional principle of the new pluralist society of institutions.
The purpose of society
Society is only meaningful if its purpose and ideals make sense in terms of the individual’s purposes and ideals.
For the individual there is no society unless he has social status and function. There must be a definite functional relationship between individual life and group life. For the individual without function and status, society is irrational, incalculable, and shapeless. The “rootless” individual, the outcast – for absence of social function and status casts a man from the society of his fellows – sees no society. He sees only demoniac forces, half sensible, half meaningless, half in light and half in darkness, but never predictable. They decide about his life and his livelihood without the possibility of interference on his part, indeed without the possibility of his understanding them. He is like a blindfolded man in a strange room playing game of which he does not know the rules.
Nature of man and society
Every organized society is built upon a concept of the nature of man and of his function and place in society.
Whatever its truth as a picture of human nature, this concept always gives a true picture of the nature of the society, which recognizes and identifies itself with it. It symbolizes the fundamental tents and beliefs of society by showing the sphere of human activity, which it regards as socially decisive and supreme. The concept of man as “economic animal” is the true symbol of societies of bourgeois capitalism and of Marxist socialism, which see in the free exercise of man’s economic activity the means toward the realization of their aims. Economic satisfactions alone appear socially important and relevant. Economic positions, economic privileges, and economic rights are those for which man works.
Profit’s function
Today’s profitable business will become tomorrow’s white elephant.
Joseph Schumpeter insisted that innovation is the very essence of economics and most certainly of a modern economy. Schumpeter’s Theory of Economic Development makes profit fulfill an economic function. In the economy of change and innovation, a profit, in contrast to Karl Marx’s theory, is not a “surplus value” stolen from the workers. On the contrary, it is the only source of jobs for workers and of labor income. The theory of economic development shows that no one except the innovator makes a genuine “profit”; and the innovator’s profit is always quite short-lived.
But innovation, in Schumpeter’s famous phrase, is also “creative destruction.” It makes obsolete yesterday’s capital equipment and capital investment. The more an economy progresses, the more capital formation will it therefore need. Thus, what the classical economist – or the accountant or the stock exchange – considers “profit” is a genuine cost, the cost of staying in business, the cost of a future in which nothing is predictable except that today’s profitable business will become tomorrow’s white elephant.
Feedback: key to continuous learning
To know one’s strengths, to know how to improve them, and to know what one cannot do – are the keys to continuous learning.
Whenever a Jesuit priest or a Calvinist pastor does anything of significance (for instance, making a key decision), he is expected to write down what results he anticipates. Nine months later, he then feeds back from the actual results to these anticipations. This very soon shows him what he did well and what his strengths are. It also shows him what he has to learn and what habits he has to change. Finally it shows him what he is not gifted for and cannot do well. I have followed this method myself, now for fifty years. It brings out what one’s strengths are and this is the most important thing an individual can know about himself or herself. It brings out where improvement is needed and what kind of improvement is needed. Finally, it brings out what an individual cannot do and therefore should not even try to do. To know one’s strengths, to know how to improve them, and to know what one cannot do they are the keys to continuous learning.
Reinvent yourself
Knowledge people must take responsibility for their own development and placement.
In today’s society and organizations, people work increasingly with knowledge, rather than with skill. Knowledge and skill differ in a fundamental characteristic skills change very, very slowly. Knowledge, however, changes itself. It makes itself obsolete, and very rapidly. A knowledge worker becomes obsolescent if he or she does not go back to school every three or four years.
This not only means that the equipment of learning, of knowledge, of skill, of experience that one acquires early is not sufficient for our present life time and working time. People change over such a long time span. They become different persons with different needs, different abilities, different perspectives, and, therefore, with a need to “revitalize.” If you talk of fifty years of working life and this, I think, is going to be increasingly the norm you have to reinvent yourself. You have to make something different out yourself, rather than just find a new supply of energy.