Quality of Life (Video 7 minutes)
Our problems with business, government, and the environment should provoke rarely asked questions. For example, should the purpose of a business be to make money, to please customers, or much, much more? Should most business legal structures now be obsolete? Should unpaid work have value? What is work anyway? For that matter, what are the responsibilities of a citizen of any society? (Americans have a Bill of Rights, but no bill of responsibilities.) Should a society educate its citizens to fulfill those responsibilities? (We often think of education as just developing skills to get a job.)
I propose that the purpose of a society is to improve quality of all life, now and far into the future. Given that purpose, the mission of any work organization within that society should further quality of life. Whether the organization is for-profit, non-profit, or government is an artificial classification from our capitalist roots and tax laws. Perhaps we can do much better by imagining a different framework of thought.
So what’s quality of life, now and in the future? First, life has to continue – to survive. But since human life depends on all other life, much other life is essential to us. After all, everything we eat was once alive. Therefore we must stop environmental overuse and abuse that degrades or endangers essential life, which raises the question of what life is essential. Of course, we’d like to improve the quality of human lives – physical health and life satisfaction. But life satisfaction is tricky. We want what we don’t need, need what we don’t want, and confuse ourselves by assuming that we are rational.
Of course, none of this makes sense to those who live by business models in an economy structured by transactional codes, and relationships are secondary. Every organization must take in at least as much money as it spends – the “law of the business model.” Schools, churches, non-profits, and informal organizations – all are subject to it. Most dreams can only be realized if they can be monetized. Thus constricted mentally, it’s easy to assume that we depend on money, not nature.
Monetary performance of all organizations is measured presuming that each one stands alone. This fallacy goads us to “outsource” social and environmental responsibilities. This cuts costs – but just to our unit. A common example is hiring contract workers to escape paying social security and health premiums. Maybe our profits rise; maybe we cut prices. But social and environmental needs remain untended. We may grasp this, but shrug that we are trapped in the system – its tax laws, budgets, and competitive pressures, so we do what we gotta do. If mesmerized by maximizing profit, we may never sense how this system screws all of us – and the environment besides.
Has this system become a mass delusion? Partnering and collaboration have become popular management topics, but the financial system can’t shake its short-term focus. Most C-Suite managers detest the Wall Street quarterly earnings game – the icon of short-termism working against long-term investment and fairness to all stakeholders. More generally, the urge to deliver compound annual earnings growth nudges us to grow indefinitely. Deeper than that are financial measurements pegged to fragmented, independent work units. They distort what can happen if these units form relationship-linked circular economies (i.e. landfill remains each unit’s lowest cost “solution”).
We are nearing the end of the current system’s usefulness. It stimulates us to consume more and more, and perhaps to indulge in convenience to excess. It equates quality of life with high consumption, while overconsumption diminishes quality of life – all life. The system promotes mass-market commodity races – more stuff to more people, faster and faster – high growth ad infinitum. Worry about consequences later when we have more money. The Precautionary Principle, long-term caution, gets short shrift.
To avoid commodity hell, smart companies seek high margin niche markets to customers that can afford them. Another kind of niche market is de facto forced payment, as from people addicted to a drug. Rare and unusual are business models that factor in the quality of all life.
And quality of life should not be conflated with more toys and more convenience. It’s our total life satisfaction, not a tradable commodity.
Some legal structures for business governance absolve work organizations from primarily serving ownership. An old one is the member-owned Co-Op. Another is Employee Stock Ownership Plans (ESOPs). And the Benefit Corporation (B-Corp) is promising. However, to be effective, both Co-Ops and ESOPs have to be rooted deeper in human values than legal constructs. Leaders stuck in profit maximization mind maps game the legalities, setting up ESOPs just for tax advantages, for instance.
Dedication to quality of life for all stakeholders, including the environment is no small change in worldview. It counteracts a human tendency that has existed for millennia. All larger agricultural societies millennia ago were run by elites, well or poorly, and often they fought among themselves, while consigning a majority of people to manual labor, often as slaves. A big, educated middle class is a phenomenon of the industrial age need for basically literate workers. By comparison with plantation societies, today’s imbalance between the 1% and the 99% does not seem so horrible in human terms; however, this social construct seems fatally inadequate to deal with our common environmental perils. How do we do that? On a scale that will be effective?
Business model and governance issues are evident in the quandaries of software-centered companies intent on disrupting the existing system through the “sharing economy.” Uber and Airbnb are the biggest, best-known examples. Both are taking flak. Both rely on controlling service-connecting software while outsourcing the capital and service work to others. Critics have pounced on whether this is fair to those providing the services and to the communities in which they operate. Neither Uber nor Airbnb are full stakeholder business models.
Software has evolved into an industry in which open-source is common. Teamwork is necessary to create superior software effective for the purpose. Consequently sharing economy software startups have revisited the structures of Co-Op and ESOP, relearning old lessons. (The industry calls this type of software a “platform cooperative;” the software should structure and promote cooperation. A ride-sharing service is an “e-hail.”)
However, some platform cooperatives are dedicated to more inclusive, broader social and environmental objectives. Software start ups have re-discovered that borrowing old legal structures is not enough. Of course, Co-Op or ESOP structures must be well thought out, but essential is that participants sustain their dedication to one-for-all-and all-for-one. Given that in time human politics can easily erode this feeling, this dedication has to be special and consistently reinforced.
Both software platform cooperatives and co-ops with an environmentally centered mission have had similar experiences. Fairness issues dominate core mission. Assuring fairness consumes their time.
The biggest ESOP flop in history, United Airlines, illustrates how not to behave. That ESOP dissolved when United entered bankruptcy in 2002. Earlier, United was rolling in cash, but the parties kept behaving like management and labor. When things got tough, they fought. ESOP “employees” went strike against themselves. (United was not the first ESOP to do that). Personal experience with a credit union is that as it grew, it evolved to run much like any other mid-sized financial institution, sharp eyes on the bottom line, but with unusually strong “employee empowerment.” Only the members on the board sustained interest in its governance. Deep involvement chews up time, so members wanted beneficial service without fussing with credit union operations.
Somehow we have to break the mentality that thinking is just for the elite, and the rest of us only follow protocol. Our social and environmental problems are too severe for an organizational system that worked in the Industry 1.0 era, foundered in the Industry 2.0 era of lean and quality, and has little promise in an Industry 10.0 era dealing with issues more complex and comprehensive than funneling money to executives and owners.
As can be seen from the history of Co-Ops and ESOPs, mere transition of Industry 2.0 structures is insufficient. Guided by a real spirit of collaboration, structural forms will be invented. The organization has to be more of a network, with final responsibility at the local “doing “ level. For example, work units in a locality or region would be responsible for long term environmental health in their zone – and for not passing on potential problems to zones far away. And of course, the umbrella objective is to improve quality of all life in that zone – human life and other life.
There is modern precedent for this. For example, how is disaster response organized when they function well? Local units are responsible for their areas. They can work together on wide-area disasters, and when needed, units from far away can assist a locality that is hard hit. Utility crews deployed out of area are an example.
Compared with today’s behemoth corporations and government bureaucracies, these would be highly educated, highly trained, flexible local work groups. They would draw on expertise from many sources – a big network. But they must be responsible for quality of life in their zones.
Strange as it may seem, this is a high-tech, interconnected version of old tribal organizations. Small isolated communities, or tribes are about as egalitarian as society gets. Their mission is self-evident: perpetuate quality of all life in that community, so obvious that we hardly remark it. Cheating cannot be flagrant or prolonged because within the community everyone’s actions are pretty visible. Furthermore, the objective is not to grow, not to consume more and more, but to observe limits and preserve tribal quality of life – and to enjoy that life, too. But tribes weren’t perfect; they warred with each other, and some observed practices that are appalling to most moderns.
Likewise all citizens of a locality must shoulder some degree of responsibility for the common good, even children who are learning how. That is, local work units become Vigorous Learning Organizations linked to other Vigorous Learning Organizations. “Vigorous” means that they learn quickly by experience; they are not just “book learners.” They translate abstract, general policy into reality, abjuring detailed regulations that can’t cover every situation.
Deep specialists become advisors more than direct action people. Generalists at the action points have to integrate experts’ knowledge into what is actually done, and a lot there is to integrate: human health, local conditions, biohazards, advancing technology, financial possibilities, environmental conditions, and on and on – all changing. Technology to enable this is coming on quickly. Many software platform cooperatives foresee this, even devising software to “crowd interpret” data after running it through artificial intelligence wringers.
But the key for local Vigorous Learning Organizations is a mission to improve quality of all life. That guides the questions they ask and the direction and scope of their learning.
Any shift in this direction is very different from consumption-based transactional societies. Right now they seem to have little direction except to keep going. Many of the plebes have lost confidence in their elites and experts, as seems evident in recent political uproar. Socialism versus capitalism arguments largely neglect the problems.
Old “solutions” don’t seem promising. Ideas for a new economy that can adapt to our environmental realities have been proposed for decades. More keep coming, but all have a quandary: comprehensive implementation. All authors are beginning to agree on two things. First, the major ideas to develop localized circular material flows are generally known, but actually converting from make-and-discard is a hopeless tangle without strong social resolve that it must be done. Second, to form this resolve we must displace faith in unlimited expansion with new ideals.
But how can we convert new ideals into doable practices at the ground level by real, fallible people? Some proposals stick with macro public policy proposals. Others venture into novel practices at the ground level. A big chasm divides these two approaches.
“Think global; act local” is an old catchphrase that captures what is needed. Unlike our ancestors, technology today can, for instance, poison life at a remote distance. We have to abide by the Precautionary Principle, and innovate much more thoughtfully. This is a deeper responsibility than mankind has ever assumed before. That’s why we need Vigorous Learning Organizations.