A Business Decision is an Exercise in Humanity

Decision Making Purpose Business Theory

We all like to be successful. Being successful in business makes us feel fantastic. We want more success in life as a general rule. Because of this we tend to try and do more of what made us successful. But when we repeat what we gave us success yesterday, we make ourselves less successful tomorrow.

This is because one outcome of success in some way makes the actions we took to get there obsolete. Success changes the timeline. Success changes our possibility set. At each success we should get into the habit of looking at the world with a different set of eyes. Because the world is different: we just changed it.

But we’re not likely to use those different eyes. We’ll think that if we do more of what we did to create a local success then we’ll create a systemic success. We also don't tend to welcome disconfirming views, even if they’re our own. So we will focus our attention on repeating the techniques we've already used. In the short term this isn't a problem. Our time-to-comprehend is always longer than we think.

It takes a lot of effort to bed personal change in such that we overhaul our short-term operating system. But in the long term it becomes a real problem. In the business world we build all sorts of support services around what made us successful. We will call such things best practice and discourage variation. Before we know it the weight of inertia built up around these techniques becomes large enough to discourage any attempt at change.

The eminent historian Arnold Toynbee had a great term for this: ‘idolisation of an ephemeral technique’. The idea is that a civilisation can settle on a particular technique and hold onto it so long it contributes to their downfall. Think of the French use of heavy cavalry in Agincourt and Poitiers after their original defeat at the hands of English archers at Crecy. When we hold onto these techniques past the short time when they were genuinely decisive, we create the basis for failure. This is partly what happened around the GFC. Continued and unquestioning application of business techniques contributed to a headlong rush over the cliff.

The point is that if we’re seeking to build a business for the future we need to keep reviewing what we did to give us a chance of reaching the future. To do otherwise is irresponsible in terms of the hopes and expectations others have of our success. Because if we’re going to create something lasting then we need other people. We can’t do this sort of things by ourselves. Which means other people will want to buy what we’re selling. And to do justice to that commitment means we must keep re-evaluating what we’re doing in context of what we’re trying to achieve for the world.

I've rattled on about the danger of putting too much faith in long term planning in previous posts. It’s a similar case with vision, mission and purpose. These are not things you do once, print onto posters and stick up onto walls. They need to be looked at every year. They needn't be colossal exercises. They do need to be regular. They don’t need to be mandatory nor do they need to get everyone’s input. Not everyone is interested in getting involved. But they do need to be visible, accessible and transparent.

Most importantly they need to be ego free in terms of senior leaders thinking they need to get out in front of the crowd with a slick powerpoint and rousing speech.

This is why having a good theory of your business is important. Holding an idea of what you’re doing as you move along your timeline will help you understand what your business actually is and where it’s likely to go. Our world is networked and distant change last year becomes this years inescapable business reality.

As the workforce changes around us so does our collective understanding of why things are happening. And the why changes the how and what. You might remain in the same vertical, sell the same products and services to the same demographic and still find that the fundamental reason for your business being in business changes year on year.

Looking at what the business is likely to do in a year or so is one thing. This is an extension of business rules and the existing artefacts of business. Barring cataclysm there shouldn't be too much of a dislocation in operations. It’s an entirely different question when you ask what your business should be. This now becomes a case of prescriptive reasoning, which creates all sorts of problems for people.

It is reasonable to assume that few in the existing business will have a high appetite for thinking this through. It is also reasonable to assume that few people will have that combination of creativity and discipline to do so. This is because in our current era of business we haven’t hired for such a combination.

What our business should be introduces a moral element that leaves many in business uncomfortable. In the good old days business professionals could comfortably do their work having removed the moral element out of their work. It no longer acceptable to take social and moral considerations out of what we do and for this we should be eternally grateful.

The first rule of my business is be the best human you can be. The extent to which we have become comfortable eliminating the moral element from business is reflected in that common phrase ‘it’s a business decision’.

Beware this phrase. A business decision is something you 'do' that puts an idea into operation to achieve a particular business objective. In the sense we tend to use it, a 'business decision' is just a specific way where I chose to be an asshole. It was easier for me that way and I justified it by referencing a hard nosed vision of what a good businessperson is.

The rule should be ‘all business is people business’. So a business decision is a people decision. And a people decision is a reflection of who I am as a person. Therefore a business decision is an exercise in humanity.

Be the best human you can be.