The Central Intelligence Agency (CIA) is known as 'The Company', which does seem to be an appropriate soubriquet for an organisation that appears to engender devotion and loyalty among its employees.
This emotional commitment to the CIA was demonstrated in a recent BBC radio programme in which current and ex-employees were interviewed at an annual convention<br>
Many other companies could be envious of the commitment of its employees to the business. In the case of the CIA the phrase "our employees are our most important asset" may be true for the spooks' business, but is it appropriate for most other businesses? Remember, many of these spooks would be strangers to each other, merely connected by service to 'Company' and country.
In the foyer of the former London offices of the investment bank Merrill Lynch was the slogan "our employees are our most valuable asset", carved in stone.
However, the senior management appeared to instead, mistakenly, value the products of financial innovation (Credit Default Swaps (CDSs) and Collateralized Debt Obligations (CDOs), among others) as their most valuable asset in the lead up to the credit crunch of 2007.
In 2008, Merrill Lynch had to be rescued by being taken over by the Bank of America, a deal partly brokered by the US Federal Reserve. Consequently, a lot of their former most valuable assets were given their 'pink slips' (redundancy).
Merrill Lynch's London headquarters
Valuing your employees in many businesses is important, but it does depend on sector, market, magnitude of value-added and - perhaps most importantly - whether they are customer facing.
In some of these activities the relationship between employees and customers is almost symbiotic. For example, in many services, employees are both an input and output, particularly in health and education.
This fact is often overlooked in the spurious debates about productivity in the public sector. Yet these services have been bedevilled by the worst kind of managerialism and fantasies about imposing (often discarded) private sector disciplines on employees for whom work is a vocation.
The heroic attempts of some, notably ICT, companies, notwithstanding, the old joke about work in the Communist countries of Central and Eastern Europe still appears to hold: '”they pretend to pay us and we pretend to work”.
It alienation that is at the heart of darkness of organisational instability. Managing this potential internal instability becomes a significant challenge when combined with external, particularly, political instability.
In Paul Seabright's book The Company of Strangers: A Natural History of Economic Life, his argument rest on four pillars of reason which address potential internal and external instability of organizations:
- the unplanned but sophisticated coordination of modern industrial societies is a remarkable fact that needs an explanation. Nothing in our species' biological evolution has shown us to have any talent or taste for dealing with strangers.
- this explanation is to be found in the presence of institutions that make human beings willing to treat strangers as honorary friends.
- when human beings come together in the mas,s the unintended consequences are sometimes startlingly impressive, sometimes very troubling.
- that the very talents for cooperation and rational reflection that could provide solutions to our most urgent problems are also the source of our species'' terrifying capacity for organized violence between groups.
His thesis points to the paradoxical instability of economic and social life of marrying individual psyche with the imperative of maintaining co-operative relationships. Political instability comes out of Seabright's fourth pillar of wisdom.
The bounty of nature is a shared resource for mankind, whose guardianship is at the centre of the rise of environmental sustainability. Yet, many of the world's natural resources are located in areas of political instability or where geopolitical ambition outweighs rational economic decision-making.
The concern to make the Earth's husbandry more sustainable has been accompanied by the return of Czarist Economics.
That is, the exploitation of monopoly rents by large global mining companies whose writ often extends into the management of local politics. This is a heady brew whose ingredients are potentially explosive.
Dwight Eisenhower meets with John Foster Dulles
What can businesses do about managing political instability? Well, they could call in the Company to manage local politics. But, past history provides unpromising evidence. In the 1950s, the CIA was headed by Allen Dulles, brother of the Eisenhower Administration's Secretary of State, John Foster Dulles. Allen was on the board of trustees of the United Fruit Company, for whom the CIA-sponsored coups in Latin America were beneficial to their interests.
The later interventions in Angola tended to increase instability rather then promote stability.
These examples point to the problem of managing risk and uncertainty. The economist Frank Knight showed that a set of probabilities could be assigned to events based on past evidence to manage risk.
Uncertainty is explicitly recognised but no probability can be allocated and for Keynes the past is a poor guide to the future. Thus, managing the outcomes of political instability, businesses are in the realm of uncertainty reinforcing Keynes's view that:
'Knowing that our own individual judgment is worthless, we endeavour to fall back on the judgement of the rest of the world which is perhaps better informed. That is, we endeavour to conform with the behaviour of the majority or the average. The psychology of a society of individuals each of whom is endeavouring to copy the others leads to what we may strictly term a conventional judgment.'
Conventional judgement can thus be a poor tool for managing unexpected events because uncertainty makes us feel uncomfortable.
However, investing in the company of strangers - whether employees or places - may be a starting point in creating conditions for greater internal and external stability for business organisations, and their contribution to society. It may just be the starting point for ignoring the alien in us all.