From Souls to Systems ... and back again?
The Leadership Challenge, 2025-style - part 2
On the very first day of 2025 I put up a post that informed you, dear reader, that some hypotheses for my Leadership Challenge, 2025-style thread would be “coming up shortly”. Well, here they are.
Hypothesis 1 posits a view of the way people will work if left to, so to speak, sort themselves out. Specifically, it hypothesizes that they will:
A) clarify the scope of what they find themselves dealing with,
B) approach the task by taking small steps,
C) tend to be naturally constructive and try to avoid conflict in the process.
Hypothesis 2 has to do with the way people in working environments view the local environment. Specifically, they will:
A) be concerned about their own personal future,
B) be concerned about the the future of their children and others close to them,
C) be concerned about the direct and indirect effects of any fallings-out that might occur.
Hypothesis 3 relates directly to whatever engagement mode is used and the communications arising from the choice. Specifically:
A) at some point, people will react against ever-more-top-down imposed Systems,
B) so far as leadership is concerned, overwrought systems provoke leaders to, consciously or subconsciously, act in stereotypical ways including the prioritization of their own positions,
C) individually, people want to contribute their ideas but overwrought systems can make them feel there is no place for them to do so.
With those hypotheses in mind, let me start to sketch in some background.
If you follow my autobiographical ‘fragments’ you may already know that I spent the early 1960s (for me, those crucially formative years from around 14 to 19 years of age) in Market Harborough, a town in the English East Midlands.
It was a happy time and I have kept connections with the town ever since. One point of contact is an online channel devoted to the history of the town where, very recently, one post in particular caught my attention. Written by Kenneth William Nichols and referring to the mid-20th century, it included this:
So much choice in those days. If you didn’t get on with the boss or you hated doing the job you just walked out and tried something different. Vacancies were everywhere and the bigger employers had social clubs, and work was viewed so differently it was like being in one big family. People looked after each other on the shop floor, you were valued and lifelong friendships developed both at work and socially. So much pride and skill went into manufacturing by everyone and respect for those in charge was never in doubt.1
A rose-tinted view of the past? Perhaps a little, but it aligns fairly well with my own recollections of the time.
In his social media post Mr Nichols also lists some of the local employers of the time, company names such as Symington’s (I worked there during school holidays!), Dainite Rubber, Tungsten Batteries, Harbilt Construction, Loom’s Shoe Components and more.
Image above: A page from the August 1965 issue of Symington’s Works Magazine. The 40+ page magazine was typical of the kind of publication companies produced at the time: including information about the firm, its people, recreations & sports and more besides.
The point of this is that, at that time, I reckon just about every town the length and breadth of the UK would have been able to reel off a list of local employers and would have had a reasonably similar view of the working world.
All of which means, of course, that it was a different world - a very different world.
So, here’s a question …
Thinking about the changes from the 20th century working world to the 21st century working world, is there anything that might help us tackle elements that currently may not be working to best advantage? In particular, what happens if we think about leadership modes and performance?
A Big Issue behind all of this is what I’ve previously christened ‘GO!’ - an acronym for Global Outsourcing!
In the 1990s, the West threw itself headlong into deindustrialization and when, in 2001, China was admitted to the World Trade Organization (WTO), the pace of change was ratcheted up still further.
It was all down to the availability of new technology and a bunch of quick-win opportunities thus enabled. Digitalization gave us new ways of working. No longer was it necessary for an enterprise to keep all of its functions in close proximity with one another. Manufacture on one side of the world … run sales and marketing on the other side of the world … no problem.
Nor was it any longer necessary for an enterprise to keep all of its functions under its own, direct control. Rather, why not outsource to specific service providers to leverage their expertise in whatever skill sets are required?
The net result of all of this was, on the one hand, corporate fragmentation, and, on the other hand, corporate standardization. Which is to say, the functions of enterprises were fragmented across the globe, but the processes used by these distributed organizations became ever more standardized - a trend that was accelerated after sanctification in the name of ‘best practice’.
As an aside, let me just make the point that this helps explain the fundamental flaw in the mantra that “diversity is our strength” - at least in the way that the aphorism is generally deployed.
The fact is, if you mix things together they tend to homogenize. That enfant terrible, Renaud Camus, has put it beautifully, if forcefully:
I am … referring to profit and the search for profit, on the one hand the purely managerial conception of the world and the management of the human park (Sloterdijk), economism, financialization, Davos, and davocracy, this administration of the world by Great Financiers, banks, multinationals, robots, business, Big Tech; and, on the other, antiracism or, more specifically, the second antiracism, the one that is no longer, like the first, the necessary and eminently moral protection of a few threatened races, but the hatred of all, the pseudo-scientific negation of their existence and the desire to eradicate them, to suppress all differences between them, to merge them. And not just races but now also sexes and, while it is at it, nations, cultures, civilizations - all that separates and distinguishes, all that lends itself to discrimination, all that harms the mass production of the new man, of Nutella-man, of surimi-humanity, of Undifferentiated Human Material (UHM), infinitely exchangeable, spreadable at will, a paste without lumps or clots …2
Well, that told ‘em!
Nonetheless, none of the above points seemed to merit much thought or discussion back when the GO! project started. What was broadcast within Western business community was the assertion that outsourcing was justified and efficient courtesy of two main factors:
It enabled enterprises to achieve large cost savings which would result in better value for customers. (“And, psst, don’t say it too loudly but there’s a bonus tucked in there. Nudge, nudge, wink, wink, know what I mean?”)
It was enabled by a range of startling new and developing resources that provided phenomenal process power and assurance - the digitalization referred to earlier.
These points lead us into the world according to sociologist Niklas Luhmann (1927-1988). Here’s a snippet from an Aargh! post from nearly two years ago:
German sociologist Niklas Luhmann came up with what strikes most people as a startling premise: it is more helpful to think of society in terms of a series of systems rather than simply collections of human beings. That’s a heck of a simplification on my part but I think it communicates the general idea. So, what are these systems? They relate to various key functions that ‘shape’ our societies. Examples of function-systems are economy, politics, law, education, sports and mass media.
There’s more about Luhmann’s theory in that earlier post but, here, I want just to state its essence, and that has been brilliantly done, in my opinion, by an academic who has written extensively on Luhmann’s works - Hans-Georg Moeller.
To his book title Luhmann Explained3, Moeller added a sub-head. It’s just four words but it absolutely captures the essence:
From Souls to Systems.
Putting it crudely, the function-system concept requires us to jettison our primary focus on individual people and give far greater priority, and authority, to function systems - particularly, in this instance, the economic function-system.
Which, of course, raises the question, is that really a good idea?
So, was the headlong GO! sprint of Global Outsourcing sensible even in terms of the limited thinking that was used at the time, or might it have been wiser had we paused for consideration of some of the likely broad outcomes? For instance:
Will labor cost savings be sustainable over time, or will wage rates in the ‘new’ places of business simply rise to where they would anyway have been?
In the meantime, what will be the impact on those in Western societies who are ejected from the workforce?
What are the implications for local (national) security - particularly insofar as food, energy, technology and even defence are affected?
… and overall …
What are the likely outcomes for Western societies qua societies and qua the individuals who make up those societies?
The bit that did get thought about - and, indeed, helped switch on the turbocharger - was how the private sector might help and support governments through the provision of services. This, subsequently labelled The Third Way (‘beyond left and right’), ‘reinforced the belief that a middle way could be found between the market and the state’. And, at the time, the 1990s and 2000s, this was more than enough to get the turbocharger up and running.
Not least, management consultancies were hyper-enthusiastic proponents of this activity. Of course they were - outsourcing was a goldmine for them.
From the early days of the World Wide Web, consulting firms positioned themselves as sages of the digital era, offering advice to governments on IT procurement and management. From the 1990s, firms that had originally started out as computing developers, such as IBM, focused efforts on IT consulting, securing large contracts for digital government advice. In the decade before 2002, IBM’s total revenue grew by 26 per cent from $64.5 billion to $81.2 billion, but during the same period services revenue at the company grew by 492 per cent from $7.4 billion to $36.4 billion. By 2006, around two-thirds of all spending on consultants in the UK public sector was estimated to be for IT systems consultants, with the largest contractors being IBM, LogicaCMG, Accenture, PA Consulting and Capgemini.4
To be clear, nothing of what I have said here is leading up to an “Oh, let’s go back to the way things were in the good old days” conclusion. I fully accept that technological progress is inevitable, and brings with it a lot of good outcomes. As I wrote in a recent post, “to say that we must control the technology is a flat earth statement, uttered by the technologically illiterate.”
But that does not stop us from considering ways in which we may inadvertently be deploying or using new technologies in ways that are - how shall we say? - sub-optimal.
And, as we know from the work of Jonathan Haidt and others …
… there definitely are areas where ‘the online world’, as it has initially evolved, can be damaging to human development and performance, particularly when those humans are young.
So, to my mind, this raises the question, are there any other areas of digitalization-based damage to humans that, up until now, we might not have recognized or only barely glimpsed?
That’s the crux of the issue that I’m setting out to address, and the Leadership Challenge, 2025-style is my way-in to the investigation thereof. It seems to me to be urgent in terms of the protection of human sanity, particularly at a point where we are entering yet another new world - one where AI moves centre stage.
I hypothesize that this all relates, somehow or other, to the ‘Souls to Systems’ stampede and quandary. Have we gone too far, too fast in the Systems direction? Are we, in that process, consciously or unconsciously, overriding some fundamental human behaviors that are not only of enormous value to us but are actually parts of - if this is not a contradiction in terms - the human operating system that keeps our souls intact.
There is a light available to us to help interrogate this matter, and keep us all a little more sane. It comes from the thinking of cognitive scientist, Dr Olaf Hermans. So, next time, I’ll introduce some of the basic tenets of his ‘R’ - Relational Meta-cognition.
Thanks for reading.
Image at top: Shutterstock
Kenneth William Nichols, Market Harborough in Old Pictures, Facebook (09 January 2025)
Renaud Camus. The Deep Murmur (2024)
Hans-Goerg Moeller. Luhmann Explained: From Souls to Systems (2006)
Mariana Mazzucato, Rosie Collington. The Big Con (2023)