Politicians would universally fail as businessmen. They'd be more worried that I haven't included businesswomen in my opening sentence than worry about what business means. Politicians' customers are their electorate. What they sell is popularity. Their currency is votes and their mission is to promise Nirvana within a world of mirrors. What they can't do is build and sustain a growing economy (a business) because they are measured on short-term deliverables by people who all want as much as they can get, for the least personal cost and risk, but who nonetheless believe they have a right to wealth and welfare. Promise the people 'change and prosperity' (assuming your hairstyle is appealing), and you'll get into power - until you inevitably fail to deliver it and then the next bloke has a go. That is why successful businesses aren't democracies and turkeys don't vote for Christmas - although if they realised their species' survival depended on it, they probably should. That's the point. How do you get turkeys to vote for Christmas or Thanks Giving, without which they revert to being excessively large and tasteless chickens that no-one would buy?
Unfortunately there is only one way to do it democratically. Lie to them about Christmas - Hitler and Mao's solution. The political alternative is to prevent them from voting - Gaddafi and Saddam's solution. Both strategies worked, to a point. The problem, quite simply, is democracy. Everyone wants a welfare state, retirement at 50, jobs for every kid and massive state pensions - but you pay for it with taxes on what you earn, and on what you spend with what's left. And since all the things we want cost increasing amounts of money, we need to earn increasing amounts of money to pay for them (increasing taxes means we've less left to buy stuff, so businesses suffer which means we earn even less money). So there is only one way it works. We must sell more things to more people for more profit - while everyone else is trying to do the same. So you need to drive costs down by using cheaper resources (including people), and more efficient processes. The trouble is that this always takes longer than political cycles, is immensely unpredictable, so you need to encourage risk-taking, and you need to make the end-game worth winning, despite the pain involved in reaching it.
But 'the people' don't understand the difference between Nirvana and a real world. And most importantly of all, everyone is greedy and thinks the world works like a lottery or horse-race. Take a punt, win or lose. But greed as a driving force only works to build economies when you let it run its course, unfettered by worries about popularity, in a 'free market', and for long enough to enable evolution to define what can survive and what can't. Free markets respect the difference between 'building and hanging onto a customer base' (sustainability), and 'winning revenue without a strategy to keep the business alive after the sale' (transient popularity). For example, a company might spend money to run an ad campaign or launch a new product. Everyone feels excited when the ad or new product looks great. Lots of congratulatory memos from CEOs etc. In a politician's world, that's it. Job done. However, in the world of a free market, it's the customers, or lack of them, who decide whether spending that money was a good idea or not.
I hope you have been watching Twenty Twelve - an excellent BBC series parodying the management team assigned to make the Olympics a success - part government, part business, total chaos. Very funny... and probably not far off reality. One of the characters is the Head of Sustainability. She's a gloriously incompetent character who gets in the way of everyone and everything. Whenever a decision is made, there's a sigh of relief when it is decided that it is also acceptable to the Head of Sustainability. The point being that it is never the objective to make anything sustainable, the objective is to make the two weeks of the Olympics a politician's (and organising committee's) success. But from the point of view of the people paying for it (the UK taxpayers and the sponsors), the real measure of success for the Olympics will be what it provides after the athletes have gone home. Admittedly this might include 'good feelings towards the UK' and therefore confidence in our economy (so the hope is that foreigners will invest their greed in our islands), but four short years before the Olympics were held in China, they were held in Greece. Hmm.
So what should we look for in our leaders? Popularity or sustainability? Of course it's sustainability. And the characteristics of those business leaders are people who make focused, practical decisions which work for the long-term benefit of employees, shareholders and customers - in one happy growing co-operative. I think it was Richard Branson who was once asked "Which is more important - your customers, your investors, or your staff?". He replied "My staff". The interviewer retorted "Surely your customers who endure your less-than-perfect products and services and who pay for your staff are more important. And what about the people who make it all possible by lending you money and invest in your ability to give them a return? Why are your staff more important than all of them?". To which Branson replied "Happy staff deliver great products and services, which keeps my customers happy, which in turn keeps my investors happy".
So what makes happy staff? One soon learns in business that it's not about paying them lots of money. Of course a bigger pay cheque provides bigger smiles than a small one (and you attract better people in the first place), but the biggest and most sustained smiles (yes sustainability applies to people too) come from a recognition of achievement - and not just a pat on the back from bosses and colleagues, but far more importantly, from individuals patting themselves on the back. Knowing that they've exceeded their expectations for themselves is the biggest winner of the lot. Self-respect and pride. So why is Pride one of the 7 Deadly Sins?! Odd paradox, don't you think?
It boils down to what you are taking pride in, and how sustainable it is. The sin of pride is defined in Wikipedia as:
A desire to be more important or attractive than others, failing to acknowledge the good work of others, and excessive love of self. Dante's definition was "love of self perverted to hatred and contempt for one's neighbour."
The opposite virtue for the sin of Pride is Humility. So how can we take pride in our achievements and accomplishments whilst retaining humility? How can we encourage our politicians and business leaders to provide an environment where we can encourage and reward pride, but in a way that values compassion for others and humility above personal enrichment? It's not a perfect answer, but perhaps we can start by taking more pride in the achievements of others, including making money, instead of jumping to those other deadly sins of Envy and blaming success on Gluttony. If we want our economies to start growing again, then it's only going to happen if we accept that making money is not something to be derided and even blamed for the troubles we're in, but celebrated as a virtuous ambition achieved from taking risks, hard work, innovation and, if Richard Branson is right, helping others to take pride in their work.
Unfortunately there is only one way to do it democratically. Lie to them about Christmas - Hitler and Mao's solution. The political alternative is to prevent them from voting - Gaddafi and Saddam's solution. Both strategies worked, to a point. The problem, quite simply, is democracy. Everyone wants a welfare state, retirement at 50, jobs for every kid and massive state pensions - but you pay for it with taxes on what you earn, and on what you spend with what's left. And since all the things we want cost increasing amounts of money, we need to earn increasing amounts of money to pay for them (increasing taxes means we've less left to buy stuff, so businesses suffer which means we earn even less money). So there is only one way it works. We must sell more things to more people for more profit - while everyone else is trying to do the same. So you need to drive costs down by using cheaper resources (including people), and more efficient processes. The trouble is that this always takes longer than political cycles, is immensely unpredictable, so you need to encourage risk-taking, and you need to make the end-game worth winning, despite the pain involved in reaching it.
But 'the people' don't understand the difference between Nirvana and a real world. And most importantly of all, everyone is greedy and thinks the world works like a lottery or horse-race. Take a punt, win or lose. But greed as a driving force only works to build economies when you let it run its course, unfettered by worries about popularity, in a 'free market', and for long enough to enable evolution to define what can survive and what can't. Free markets respect the difference between 'building and hanging onto a customer base' (sustainability), and 'winning revenue without a strategy to keep the business alive after the sale' (transient popularity). For example, a company might spend money to run an ad campaign or launch a new product. Everyone feels excited when the ad or new product looks great. Lots of congratulatory memos from CEOs etc. In a politician's world, that's it. Job done. However, in the world of a free market, it's the customers, or lack of them, who decide whether spending that money was a good idea or not.
I hope you have been watching Twenty Twelve - an excellent BBC series parodying the management team assigned to make the Olympics a success - part government, part business, total chaos. Very funny... and probably not far off reality. One of the characters is the Head of Sustainability. She's a gloriously incompetent character who gets in the way of everyone and everything. Whenever a decision is made, there's a sigh of relief when it is decided that it is also acceptable to the Head of Sustainability. The point being that it is never the objective to make anything sustainable, the objective is to make the two weeks of the Olympics a politician's (and organising committee's) success. But from the point of view of the people paying for it (the UK taxpayers and the sponsors), the real measure of success for the Olympics will be what it provides after the athletes have gone home. Admittedly this might include 'good feelings towards the UK' and therefore confidence in our economy (so the hope is that foreigners will invest their greed in our islands), but four short years before the Olympics were held in China, they were held in Greece. Hmm.
So what should we look for in our leaders? Popularity or sustainability? Of course it's sustainability. And the characteristics of those business leaders are people who make focused, practical decisions which work for the long-term benefit of employees, shareholders and customers - in one happy growing co-operative. I think it was Richard Branson who was once asked "Which is more important - your customers, your investors, or your staff?". He replied "My staff". The interviewer retorted "Surely your customers who endure your less-than-perfect products and services and who pay for your staff are more important. And what about the people who make it all possible by lending you money and invest in your ability to give them a return? Why are your staff more important than all of them?". To which Branson replied "Happy staff deliver great products and services, which keeps my customers happy, which in turn keeps my investors happy".
So what makes happy staff? One soon learns in business that it's not about paying them lots of money. Of course a bigger pay cheque provides bigger smiles than a small one (and you attract better people in the first place), but the biggest and most sustained smiles (yes sustainability applies to people too) come from a recognition of achievement - and not just a pat on the back from bosses and colleagues, but far more importantly, from individuals patting themselves on the back. Knowing that they've exceeded their expectations for themselves is the biggest winner of the lot. Self-respect and pride. So why is Pride one of the 7 Deadly Sins?! Odd paradox, don't you think?
It boils down to what you are taking pride in, and how sustainable it is. The sin of pride is defined in Wikipedia as:
A desire to be more important or attractive than others, failing to acknowledge the good work of others, and excessive love of self. Dante's definition was "love of self perverted to hatred and contempt for one's neighbour."
The opposite virtue for the sin of Pride is Humility. So how can we take pride in our achievements and accomplishments whilst retaining humility? How can we encourage our politicians and business leaders to provide an environment where we can encourage and reward pride, but in a way that values compassion for others and humility above personal enrichment? It's not a perfect answer, but perhaps we can start by taking more pride in the achievements of others, including making money, instead of jumping to those other deadly sins of Envy and blaming success on Gluttony. If we want our economies to start growing again, then it's only going to happen if we accept that making money is not something to be derided and even blamed for the troubles we're in, but celebrated as a virtuous ambition achieved from taking risks, hard work, innovation and, if Richard Branson is right, helping others to take pride in their work.
So pride doesn't come before a fall, as the saying goes (Proverbs 16:18), if it's encouraged in others it comes before a rise... in living standards for all.
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