We should all be awe-inspired by the Wright brothers; the two men from Dayton, Ohio who discovered the principles of controlled flight. At that time, contemporary aviation pioneers such as the German Otto Lilienthal were successful at gliding; exchanging altitude for forward movement. The success of their aircraft was literally dependent upon the whim of the wind, which eventually cost Lilienthal his life.
Because the control issue seemed an insurmountable challenge, designers concentrated on creating a stable platform with self-righting properties similar to that of a sail boat. They firmly believed that control features could be added successfully later; they did not recognize the ability to control an aircraft’s attitude and direction as an integral part of aircraft design.
Success Assured
The Wright brothers on the other hand, were not effaced by the inherently instable nature of aircraft. From their experience as bicycle makers, they assumed that stability would come from people interacting with those machines. When people are provided with a control mechanism that they themselves can operate, they can change directions, and counteract against shifting winds and variable wind speeds and thus maintain balance.
The Wright’s integral approach to discovering the principles of flight was rather scientific. They set out to discover the secrets of lift first, then control and last but not least propulsion. Therefore, a control system or the ability to change direction and thereby maintain balance became an integral part of aircraft design.
Once they mastered the principles regarding lift and control, they calculated the maximum weight of the propulsion system and the minimum thrust it should deliver. On December 15th, 1903, two days before the historic date that proved man capable of controlled flight, they measured the thrust while on the ground and the engine and propellers exceeded the minimum requirement. That night they sent home a telegraph message that read “Success Assured”. They simply knew they couldn’t fail!
Lessons for Management Education
A business is a system; a collection of component parts that operates and interacts according to specific theories, laws and principles, ranging from economics to sociology, physics, philosophy and psychology, for the realization of a common purpose. Every component has to work in concert with each other in order to realize that compelling vision. Vision is the reason or driving force behind the founding of a business. Consequently, businesses with different visions pursue different missions, which require a system with a different purpose.
Therefore, and this is important, systems deliver only the results for which they were designed and built. This means that if you are not satisfied with the results that it produces, you should look at the system in its entirety rather than individual employees. Furthermore, the success of a system is greatly dependent on how it is implemented, maintained and managed. The design, building, implementing, maintaining and managing of systems is known as GOVERNANCE.
Business governance is the control mechanism by means of which the realization of a compelling vision of service to others is guaranteed, notwithstanding variations in the business system’s capacity and work-load or its surrounding market-conditions.
Current Dominant Business Paradigm
There are distinct and easily recognizable patterns among curricula of business education -from under graduate-, graduate- and post graduate degrees to seminars and lectures- and the content of seminars, books, magazine articles and the agenda of business coaching. These patterns show great similarities with the level of thinking of early aviation pioneers, who pursued a balanced and stable platform that required minimal interaction with its operators. These pioneers were more interested in building a flying machine than discovering the principles of controlled, sustained and manned flight.
The most obvious pattern is that every business system is believed to have the same purpose; making money. Since the actual printing of money is restricted to the Federal Reserve Bank, all other businesses must earn their money in exchange for goods and services. The nature of the goods and services produced and delivered by each individual business must therefore be reflected in the purpose of its proprietary business system. If you are not in the money printing business, then the purpose of your business system must be something else than making money. The difference between “making” money and “earning” money is not a matter of semantics because purpose is the ultimate benchmark for strategic decision-making. You want your decisions to work with the system rather than against it.
Another pattern is that of familiarizing ourselves with a business by breaking up the whole into separate areas of expertise or silos of specialized knowledge. This level of thinking believes that optimizing individual silos of specialized knowledge independently of each other will optimize a business’ overall ability of making money. When this line of thinking is pushed to the extreme, one must conclude that selling the business and investing the proceeds is the most efficient allocation of resources with the best Return on Investment. There are many entrepreneurs who have chosen this build-to-sell model as their exit strategy.
Where the Rubber Meets the Road
The above paradigm has served business leaders well in making money. However, this comes at a great expense; products and services had to be standardized, differentiating features had to be dropped, competing value propositions have converged, people had to be fired in order to preserve profitability, jobs had to be automated and/or outsourced over seas in order to compete on price, our technological know how is given away to countries like China on whom we depend for our manufacturing needs, etc. etc.
Looking at many of those businesses, I see a great resemblance with the flying machines of old; they lack the inherent capability of changing direction mid-course or keeping their balance in turbulent environments. No wonder because those businesses were not created on the principles of business governance but on that of making money.
Nonetheless, many industry groups and independent service providers want you to believe that they can help you become agile; adding a control mechanism to a business system specifically designed for straight and level, low human interaction, high diddle diddle, straight down the middle operation. However, if a CEO does not believe in people using their own judgment for interacting with the system and thus providing balance and agility, then no real change will ever take place.
It’s no secret that CEOs, Boards of Directors and shareholders are dissatisfied with the current direction of many businesses. They demand change; to stop doing what you have been doing up until now. However, changing direction is always preceded by a change in one’s current level of thinking; a paradigm shift from silo management to business governance.
Paradigm Shift
Back to Wilbur and Orville Wright. What made them different from their contemporaries? Why did these bicycle mechanics succeed where much better qualified experts failed? They had a different level of thinking! Their obsession was to proof that man was capable of flight and to that end, they set out to discover the principles of flight; lift, control, propulsion. In the process, they built a flying machine. And ever since, aircraft have been built in many different shapes and sizes, serving a wide variety of purposes, but they are all based on the same principles of aviation. Control or governance has to be designed and built right into the system itself. If flying is the result of applying the principles of flight, then earning money is the result of applying the principles of business governance.
These principles of business governance are no secrets. Many CEOs are applying them every day with great success. Although they might use different names, they pursue the same interest: the guarantee of realizing a compelling vision of service to others, notwithstanding variations in the business system’s capacity and work-load or its surrounding market-conditions.
Time and again, these successful CEOs will tell you how they discovered their method of controlling the business in good and bad economic times, but it was never because of what they learned in business school! And that’s why CEOs have to keep re-inventing the wheel!
I want to change that. Let’s teach business governance to current and future CEOs!