Losing it, Big Time

Bernie Ebbers goes crazy for shower curtains, John Thain thinks it’s entirely reasonable to spend a million dollars on doing up his office while laying off people whose lives haven’t been cushioned by the same level of riches that he has accumulated, Madoff convinces himself that it’s ok to call up friends asking for a bailout, putting their wealth at risk in order to dig himself out of a bottomless pit. You have to wonder what is going on in the minds of these people that enables them to justify it to themselves.

There is a school of thought in psychology known as constructivism, which casts some ordered light on the subject. Jean Piaget (best known for his work on child development) explained how the processes of accommodation and assimilation enable individuals to construct new knowledge from their experiences. This enables them to change their perceptions to better fit the world around them. This can work in a positive direction, but clearly in these cases we see how the absence of sufficient exposure to most peoples’ world distorts their sense of what is ‘normal’, rendering them incapable of understanding why so many are incredulous at their insatiable appetite for material one upmanship.

The British psychologist and writer Oliver James quotes some interesting stats showing how with increasing income inequality the level of emotional stress in society goes up, so these individuals may just be symptoms of a wider malaise, but surely still accountable in some way. Maybe we should, as Maureen Dowd says, ‘Bring on the shackles. Let the show trials begin’, or perhaps we can use psychology to avert similar problems in future. We should insist on our senior executives spending regular periods of time living and working with normal or disadvantaged people in order to keep them in touch with the real world. Maybe they should also spend time in their sales departments as regular sales folk, to remind them just how hard it is to generate the million dollars of profit that they just spent on some foible.

If in doubt, change the structure

Announcing some personnel changes today,
"The company [Dell] said the moves were part of an effort to reorganize the company around global market segments. Dell said it was reorganizing three of its four major product segments — large corporations, small and medium-size businesses, and other institutions like government — into global entities. The company said the change would allow faster development and deployment of standardized products across the world.
The company’s fourth major product group, which focuses on the consumer market, already operates globally."

Assuredly, this must have followed much deliberation and analysis, but it may also reflect the common response in business to changes in conditions: when in doubt, change the structure. If you look around the world of business, you can find any number of structural permutations, and you would probably find that there is little or no correlation between structure and success at a sector level. What does this tell us? I think we can deduce that:
- Structure is personal - it responds to a CEO's personal predispositions and the company's specific business and sociological needs at a point in time (so benchmarking probably isn't going to get you very far)
- Any given structure is less important than the act of changing structures which refocuses attention on what is being done and how (so maybe minor changes can be as effective as major disruptions?)
- The way you organize is more about the capacity and capabilities of your resources than because any given structure is particularly right (so focus on building capacity and capabilities more than on perfecting your structures).

In what will be a tough year for most companies, it may make sense to focus on multiple tweaks rather than big disruptive change and paying more attention to what our leaders are doing rather than what they are controlling.