Index

A Systems View

Follies and Remedies in High Places

Bruce Buchanan

Most of us imagine that somewhere there are leaders who grasp "the big picture," who understand and may even be able to deal with the larger issues which affect us but which are mostly beyond our ken. We are led to expect such understanding in those who present themselves as qualified by character, knowledge and skills to take on the special responsibilities of political leadership.

Clear judgment by the public is difficult, and there is a lot of evidence that the skills involved in acquiring power are not the same as those required for wise policy-making and governance. In industry the need for research and development (R&D) has long been recognized as a requirement for success. However with respect to the operations of governments there has been relatively little progress. We are locked into systems devised for bygone ages, our potential for freedom greatly limited by the inertia of currently vested interests.

In a recent speech,1 Prime Minister Jean Chrétien extolled the virtues of Canadian parliamentary democracy over the US congressional system. He said: "Our parliamentary system is one where parties run as a team, with a leader, where the team and the leader then work together, throughout a mandate, to fulfill parliamentary commitments." Chrétien boasted that this was superior to the US system "where there is no party discipline, which is afflicted by political games and ideological tests, leading to a real democratic deficit."

This was not a good time to be extolling the virtues of our parliamentary system. Pressured by public opinion and an internal revolt within caucus, Chrétien has now announced his resignation. Yet, at least for many months, the public has no way of exercising its will. In effect there is no obvious way to confirm the superiority of the Canadian way, in which the future of the prime ministership is determined in secret caucus debate and backroom party meetings and in which the country is condemned to a year and a half of uncertainty as the Prime Minister struggles to maintain his power.

Of course there is also evidence of inadequacies in the US system. And the point which deserves attention is that both these historic systems, the products of great minds and leaders of their day, are now, after more than two centuries, wanting in many respects. Our progress does not lie in scoring points by comparing historical structures. Our need is to learn from difficulties and perhaps improve upon what we have been given. So let us not be distracted from the more important questions by policy debates designed to inflate the legacy of a party or leader.

We have had a litany of problems at corporate levels in both the US and Canada which have raised questions about government proprieties in both countries. Of course we need the protections afforded by auditors and institutional watchdogs. But dedicated efforts to root out evil-doers can never be enough to build a positive and equitable prosperity. Even an inspired vision of higher values and goals is not enough. Also required is attention to the problems and processes needed to manage complexity, a kind of R&D program for governance capable of giving effect to the many useful ideas and initiatives now becoming available.

We need to undertake seriously the long and arduous but vital tasks involved in rethinking traditional assumptions, rules and limitations. We have new kinds of problems, of scope and dimensions which would have astounded our forefathers (and indeed astound and confuse many people today). Science in general, and our deepening understanding of human organization in particular, have progressed with gathering speed in recent years. We now have available fundamentally new ideas about governance, and we need to draw upon these. Because of the complexities involved a simple prescriptive approach is bound to fail, and we need a more adequate R&D effort undertaken as the prime task of the 21st century for a responsible government in any country.

Nature Knows no NAFTA

For example, the management thinker Shann Turnbull2 describes what he terms "Network governance." He points out that the laws of organization and governance found in nature can be used to identify the limitations of "free markets" and traditional hierarchies, help explain many unexpected failures of both public and private companies, and point to new possibilities.

Turnbull writes: "Network governance allows social forces and competitive policy ideas to improve the economy, efficiency and effectiveness of the public or private sector. The design rules used to establish stakeholder controlled network organizations (such as VISA International and others) are shown to follow deeper criteria identified by the science of governance (also known as cybernetics)."

Public or private organizations that follow principles at odds with fundamental laws of nature cannot succeed. Hierarchies of command and control, insofar as these function to maintain the power of ruling elites, need to be replaced with "network governance" which provides a basis for institutions to become self-governing. In the absence of healthy fundamentals, no more than the appearance of sound governance is possible, and then not for long.

The Narrow Pursuit of Personal Power

The common problems shared by most public and private enterprises arise from inadequacies inescapable for those engaged in the narrow pursuit of personal power. These problems and inadequacies include: the limited capacities of human beings to manage complexity; failure to utilize nature’s checks and balances; and that monopoly of power which leads on to loss of integrity and to corruption.

Moreover, as Turnbull points out, all viable businesses by definition must become financially self-sustaining. For this reason, strategic stakeholders will include the employees, clients and suppliers on whom all organizations depend for their existence and survival, but once viability is established need not include financiers.

A well-known example of a company governed by a stakeholder network is the credit card organization, VISA International Inc. This organization has multiple boards of directors within a single legal entity, none of which can be considered superior or inferior, as each has irrevocable authority and autonomy over its own geographic or functional areas. VISA has proved that an innovative network architecture can be successful against the most intense competition.

As VISA founder Dee Hock has written:3 "Industrial Age hierarchical command and control pyramids of power, whether political, social, education or commercial, were aberrations of the Industrial Age, antithetical to the human spirit, destructive of the biosphere and structurally contrary to the whole history and methods of physical and biological evolution. They were not only archaic and increasingly irrelevant, they were a public menace." Similar insights have been arrived at by researchers in the field of artificial intelligence.4

In short there is now becoming established a "science of corporate governance" for managing complexities at the highest levels of organization. Policy and planning proposals which fail to meet rational criteria of this kind will be found inadequate, no matter what their political appeal, for they will be unable to sustain effective, efficient and economic operations in a democratic state. Political parties whose competence falls below the standards the public now has every right to expect will increasingly be seen as primitive holdovers from a prior age – indeed as threats to current societal well being. And, as we have seen, ways to a more responsible political future are now possible for those who would be effective leaders.

Bruce Buchanan

1. Ibbitson, J. "Timing is poor for comparing party systems." The Globe and Mail, Aug. 23/02, p. A7.

2. Turnbull, Shann (2002). "A New Way to Govern." New Economics Foundation, papers.ssrn.com/sol3/papers.cfm?abstract_id=310263.

3. Hock, Dee (1999). The Chaordic Organization. Berrett-Koehler.

4. "Life and Complexity." The Economist, Jan. 4/02, p. 92.