Fourteen: Operating in a Panic
Commercial organizations are subject to a great deal more scrutiny than ever before - the mass media reports their activities to the public constantly and the financial press keeps investors well informed of their performance. While the concept of transparency seems like a good idea, it places enormous stress on organizational management.
In essence, minor problems that would previously been unnoticed now become public-relations events, spinning up a sense of panic and urgency that never before existed - and the result is not good by any means. It's well known and well documented that people do not make the best decisions in a crisis situation - they seize upon the first idea without thinking it through, act irrationally so that they have the appearance and sense of "doing something," and generally the outcome is far worse than if they had applied calm and rational thinking and taken a slower and more measured response to solving the problem.
He mentions Heidegger's concept of "thrown-ness" in which an individual feels he has no control over his own existence because he is constantly subjected to external pressures that demand that he do their bidding. This is the exact situation in which many CEOs find themselves in the present day: they cannot plan for the sustenance and healthy growth of their organizations because they are constantly "putting out fires" that were set by others - who sometimes set the fires so that they can call attention to them.
The Preference for Tradition
People, in general, are much more inclined to stick to what they know rather than undertake the risk to try something new that has the potential to be even more successful. There's a certain comfort in a familiar routine and the perception that past results will be repeated if past procedures are followed. And in many instances, this turns out to be true, which reinforces the notion that they should keep doing what they are doing rather than attempt something different.
As consumers, they purchase the same products and brands to serve the same needs and in spite of their verbal fascination with novelty tend to stick to the well-worn path. And as professionals, in any act of production to earn revenue, they likewise follow established procedures rather than branch out. And as managers and executives, they coach their people in the same manner.
For this reason, companies tend to be fond of procedures and policies that prevent deviating from established procedures. What they did yesterday was adequate and created results that were good enough to earn enough profit to keep the firm sustainable, or at least slow the degradation that occurs naturally over time.
Companies are in that way can be likened to historical amusement parks, where actors do things the way they were done in the distant past rather than taking a more efficient and modern approach. And make no mistake: their procedures are historical. A procedure is generally not created or institutionalized until it has proven itself to be sustainable - by which time technology and markets have already evolved.
Once an adequate procedure has been institutionalized, it is defended until a crisis occurs. The craftsman who produces simple products by hand shuns the use of newfangled machinery other producers who make use of it exceed his quality and undercut his prices to the point that his existing practices are not competitive - and even then, he will often wait until he is in a financial crisis, on the verge of bankruptcy, before he will consider changing his production processes or getting out of the business. Often, this occurs too late.
The very same behavior occurs in corporations, particularly during financial downturns when risk aversion runs highest: board members and senior executives cling to the past rather than looking to the future, seeing tradition as proven and safe and innovation as unproven and risky. And in the end, they fail.
The author presents a few examples of companies that made exactly that mistake - and in many instances they recognized that smaller firms were stealing their market share, but dismissed them as petty and insignificant, their business models as reckless and unsustainable, until they found themselves unable to compete. Psychologically, this is simply an act of self-delusion.
Meaningful Existences
The author refers to psychologist Viktor Frankl, whose "existential analysis" maintains that once their basic survival needs are met, people seek to lead "meaningful" lives. That is, they seek to have a purpose in life that leads them to set certain goals for themselves, and these goals drive their actions. However, most people do not clearly define their purpose in life, but have only a vague sense of what they want to accomplish.
The desire to pursue a purpose presupposes freedom of choice: a person who merely does what others demand is not self-actualized. One must make an independent choice and proactively pursue goals in order to feel their life has meaning. Freedom, however, also includes the ability to make bad choices and delude oneself, as well as the freedom to meander aimlessly through an unsatisfactory existence that seems devoid of purpose or meaning.
The author speaks briefly about "the meaning of the moment," in which people make superficial decisions about their present choices without reference to a coherent overall plan. The simply do what feels right from one moment to the next, such that they feel overwhelmed and constantly busy, but that their lives are going nowhere.
The same thing occurs in organizations: the decision-makers who define the meaning and goals for an organization can either lay out and pursue a thought-out plan, or simply react in the moment to whatever strikes their fancy. Those who lay out plans tend to achieve them, whereas those that do not tend to be aimless and misguided - they are able to sustain their operations, but fail to make progress toward a goal, simply because their goals are undefined or poorly defined.
(EN: Another problem is in the misconception of specific goals as being unimportant. It is presumed that an organization's mission must be vague and abstract - but where the mission is vague, there is no clear path to achieve it.)
There's mention of the dot-com crash, which occurred because there was a high level of excitement about new technology, but no clear sense of how to create a sustainable operation. It was assumed that if you provide a service that does something "cool," then it would attract a large number of users and that you would somehow make money from them - but without a specific plan for making revenue from the traffic, a lot of users simply meant a lot of expenses. So when these firms burned through their venture capital, they collapsed for lack of income. This is what happens when goals are not well considered.
Another great example is NASA, which tends to go boom and bust in regular cycles. For a while, there is a high interest in exploring space - going to the Moon, exploring the surface or Mars, and mapping distant galaxies. Billions of dollars are spent, tasks are accomplished, but eventually it is realized that all of this does mankind no good whatsoever, so space exploration falls out of fashion for a few decades. There is the sense that NASA accomplishes great and wondrous things, but the things it achieves have no practical benefit, aside of entertainment value.
There is also a brief bit about crisis management: organizations whose sole purpose seems to be to survive in a hostile world that is constantly threatening their existence. Doing what it takes to remain solvent is not the same as having a purpose - it is instead a prerequisite. The basic survival needs of a person (or organization) must be met before they begin chasing after a higher purpose, which brings us right back to Maslow.