In business, nothing is more important than Trust. No company can prosper without Trust between management and employees, among colleagues and partners, and between the organization and the outside world. Trust is the strongest foundation for customer loyalty, staff motivation and market confidence. This book brings Trust out of the realm of ideals and the reveals that it isn't just a virtue, but an economic necessity, especially for a company operating in today's turbulent markets. The author explodes a number of dangerous myths about Trust: that it is no more than a feel-good factor, that it has to be earned, and that Trust is fine but control is better. He shows that the mistrust prevalent in many corporations can incur huge commercial costs, and explains the quickest and most direct ways for a company to win Trust. Reinhard Sprenger is a passionate advocate of putting Trust into action in the way companies are run. As he shows management rhetoric is one thing; genuine, deep-seated and widespread Trust quite another. In the end, real Trust will do more for a company's security than any security measure, exert control more effectively than any control system, and create more value than any value-creation programme.
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Sprenger, Reinhard K.
The Best Way To Manage
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Copyright © 2007. Campus Verlag GmbH
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E-Book ISBN: 978-3-593-40427-1
“I will now put down my weapons. Then we can talk to each other.”
Chief Inspector Stephan Derrick from the popular German detective series Derrick
Do you trust your staff? Do your staff trust you? How do you know? (My trust is limited, you see.) Do you trust your boss? In what way? Does he keep you informed? Does he refrain from looking over your shoulder all the time? Or is it just that he hasn’t fired you? Or were you thinking of all these things at the same time?
In this book, I advocate trust. I argue for more trust between superiors and staff and between colleagues and partners. I make the case for trusting trust and mistrusting mistrust. I can see the difficulties inherent in trusting people, but I also know that the advantages of a culture of trust outweigh the disadvantages. Trust is safer than any safety measure. Trust is a more effective control than any control system. Trust creates more value than any valuecreation initiative.
Before I begin to explain my case, I’d like to give a brief explanation of the background to this book. In a way, it represents the culmination of a train of thought and writing.
In my 1991 book Mythos Motivation [The Motivation Myth], I described the mechanism of bonus systems and incentives as institutionalized mistrust. “I don’t believe you are willing to work!” “I don’t regard you as a partner capable of entering into an agreement!” These messages take people’s motivation and throw it back in their faces. This is why so many management systems fail; they are really saying “I don’t trust you!”
|8|Later, in Das Prinzip Selbstverantwortung [The Self-Confidence Principle], published in 1995, I introduced a constructive alternative. The focus here was the member of staff himself: the quality of his state of mind as he goes to work in the morning, his self-motivation and commitment. What do people need in order to work in a committed way on their own initiative? I looked at self-management as an inner attitude that facilitates a high level of performance on a long-term basis. The final chapter of the book outlined the concept of credibility, thereby describing an aspect of trust but without making it the central theme.
Then, in 2000, came Aufstand des Individuums [Revolt of the Individual]. Here I highlighted the major structural shortcomings in companies that hinder the success factors for the future: commitment, innovation and entrepreneurial spirit. In the second part of the book, under the heading “The individualizing company,” I presented a management concept in which I repeatedly touched on the issue of trust as the basis for effective co-operation, although I never treated it directly as a subject.
After the book was published, I couldn’t let go of trust. I sensed that something of great importance hadn’t yet been said, and that new territory was waiting for me. You may find this irritating; after all, the term “trust” has been bandied around in management for a long time. Indeed, I don’t know any business manager who doesn’t consider trust to be the most important factor in staff management. I don’t know any speaker who doesn’t preach trust as the key to a value-oriented corporate culture. I don’t know of any serious book on management that doesn’t look at the potential economic benefits of trust. And yet I have never met anyone who has explained to me what trust is.
It was Alan Fox in 1974 who proclaimed the “high-trust culture |9|” to be a competitive advantage. Not much has happened since then, not least because although Fox mentions trust as an explanation for co-operative behaviour, he doesn’t treat it as a phenomenon that itself needs to be explained. It is used as explanans (the thing that gives an explanation) but not as explanandum (the thing to be explained). And these two have about as much in common as pecans and canned peas.
In companies, trust remains a word that puts the person to whom it is said (who evidently does not trust) in a very bad light: vain, smug and fishing for compliments. Trust is most frequently invoked when something important isn’t working in the company. It is usually senior managers who broach the subject from on high in a demanding way: people ought to and they should, and if they don’t, then….
This apart, it is only the new idealistic literature that deals with trust. We find material about trust everywhere. It can no longer be heard, read and taken seriously in the traditional sense; instead it surrounds us like a fog of exhaust fumes. This material doesn’t try to bring about agreement by means of an argument. Instead it presumes agreement by using the term “trust” as a formula for consensus. People consign all their hopes and longings to this linguistic passe-partout. Open your mouth and swallow! We have understood, it’s just the spoilsports who don’t really want to do it. Such optimistic appeals are not wrong, just meaningless. Few books and articles that mention trust in the title get beyond moralistic murmurings, demands for transparency and a pointless “It would be great if…” In short, a lot of hot air printed on paper.
So what is trust? Is it a feeling? A moral stance? A quaint idea from the good old days? A trendy term from corporate phraseology? A problem-solving cliché? A rhetorical trick that clever people use as a smokescreen for their power plays? An article of faith? |10|A weasel word that follows us around in our working life like flies following a cow?
Not even the academic disciplines offer us a reliable shoulder to lean on. There hasn’t yet been any agreement on a common definition of trust. And yet I have been helped by other people’s works, which I mention in the bibliography. Without Tanja Ripperger’s excellent dissertation, I wouldn’t have been able to write this book in the way I did. The anthology published by Martin Hartmann and Claus Offe, as well as Niklas Luhmann’s monograph – for a long time the only one that existed – have left unmistakable traces.
We can see the yawning gulf between the need for trust and the rhetoric about it on the one hand, and real action on the other. Putting conviction into practice just doesn’t happen. Is this because management only pays lip service to trust? Or are the inherent difficulties to blame? Can nothing be done? Is trust always to be the unattainable holy grail?
If you are a manager from the old school, you might reply “Trust? It’s a load of hot air. Facts and data, that’s what I need. Don’t talk to me about gut feelings. It doesn’t get us anywhere.” Trust stands there like a chapel between two skyscrapers. It lacks rationality. It has overtones of home, closeness and co-operation, and promises security and something beyond the present, but offers no tangible economic benefit. It defies common sense: too naïve, too mysterious, too nostalgic.
But what if it turned out that some goods that are necessary in business could be won only through trust? What if future economic survival depended on these goods? What if trust could be proved to be a hard factor, one that pays off? Not an entry on the balance sheet or a financial performance figure, but something that plays an important role in the whole company and affects its |11|operating result? Wouldn’t we be stupid to ignore it?
Trust is fascinating because it is linked to so many aspects of commercial life: agreement, reciprocity, co-operation, contracts, management, speed, innovation, reliability and commitment. And it is one of the main management tools in a company, alongside power and money. This is precisely where my reflections begin. In real life, trust starts where there is no substitute for it. Let’s take a closer look. Everyone can see that power and money no longer work in the way they did for decades. The economic framework has changed. Structural changes have weakened power and money as management instruments of flexible organizations with a decentralized structure. In any case, they were only the result of failed trust. We didn’t resort to these methods until we were let down.
So I am going to explain why trust is the subject of the future. Globalized fast markets, flexible working patterns, virtual forms of organization – this is the way the economy seems to be going. For many companies, it is already a reality. That’s why the need for trust has increased dramatically. On the other hand, it is these very conditions that pose a massive threat to trust in business life. The old and commonly held view of trust, which is based on the assumption that the circumstances of life will remain constant, must inevitably be invalidated by modern business conditions. We are now seeing a difference whose consequences we haven’t even begun to understand. The philosopher Peter Sloterdijk says that tomorrow’s society is condemned to trust.
There is another factor: the most important distinction in modern business is no longer between labour and capital, or between entrepreneur and consumer, or between state and market – that’s all nineteenth-century stuff. No, the most important distinction is between creditors and debtors: what a creditor believes of a debtor and what this belief costs. The taker asks himself: “Am I |12|prepared to get into debt because I trust my productivity?” The giver asks: “Do I trust that the money will come back?” Trust is thus at the core of the modern economy. You don’t need any great powers of prediction to see this: trust will be the dominant management theme in the decades to come. I shall therefore be enthusiastic in putting forward the theory that there is only one approach to explaining economic success: the degree of lived trust.
Only after making such an assessment shall I deal with the term “trust” itself. What is trust? What lies behind it? Is trust something irrational, something fundamentally good? Is it a moral concept, or, perhaps better, a term that has moral resonance for many people? This is where we enter a minefield of half-truths, misunderstandings and intellectual dead-ends. I will try to resolve these issues.
My second section is intended for those readers who are not just interested in trust in the everyday practical sense, but also keen to understand the power and limits of the concept. The practical people among you can safely skip it; I hope the theoreticians will excuse the brevity.
The third section is devoted to the practice of trust. How does the trust mechanism operate? What can you do as a manager to create trust? Which institutional conditions promote the development of trust? Which hinder it? In defiance to popular opinion, I will demonstrate that trust is not something to be built up slowly and indirectly as though it were an unintended by-product, but can be secured quickly and directly.
The title Trust: The best way to manage has a threefold message: trust is the first thing (and in a sense the only thing) that is truly decisive in a company; second, it is the basis of staff management; and third, it leads to values that are only revealed when it comes into operation.
|13|You may have noticed that I have been treating trust as an instrumental value. I don’t doubt that trust is valuable for its own sake. However, my concern is to remove trust from the romantic sphere and place it at the centre of a rational corporate policy that convinces as many people as possible. I advocate a trust that is calculable, that calculates, and that is worth while. A trust that is profitable – and by now the subject will be settled for some of you. A well-meaning person jumps up and says “Calculated trust? Engineering trust? How is that going to work? Trust doesn’t thrive in the cold-store of economic profit maximization! How can you apprehend trust without making it disappear? And anyway, trust might sound cosy, but it’s also naïve. It’s nice to be a trustworthy person, but it’s also very risky. As a philosophy of life, it leads to the morgue. You trust some people more, and some less. The reason why is not so important. Either trust is there or it isn’t. What more is there to be said?”
That’s as may be, but my intention here is to establish trust in a reasonable way. In particular, I want to deal with the economic mechanism behind the façade of trust. This is no easy task. The subject is full of paradoxes and ambiguities. There are no easy answers, no how-to checklists. Then again, if the subject hadn’t been so elusive, I wouldn’t have had to go to such trouble to investigate it. And beware: trust is a serious matter. The amused smile about the follies of internal company machinations seems to me to be out of place here. That’s why I’ve resisted the temptation to engage in pointless provocation.
In the first part, my account makes some issues appear clearer and simpler than they really are on closer examination. The reasons for this are methodological: when I compare trust and mistrust, I am outlining the concept against a background that makes the contours recognizable. Taken to the extreme, any argument or |14|stance becomes dangerous. This might apply especially to the subject of trust. The issue is one of degree. That’s all I am concerned with.
When you read this book, many of you may find questions arising in your mind again and again: “Yes, but if ....” (I’ve had the same experience myself.) You may run scenarios through your mind and counter arguments with your own personal experiences. I can only ask you to bear with me, especially if you are a manager. After all, I have written this book primarily for you. In the end it is up to you whether you have the determination to tackle what is unfamiliar.
An airport lounge in Vienna. I’m waiting for a return flight to Düsseldorf. Outside it’s getting dark. That ineffable end-of-the-day atmosphere is seeping through the huge windows into the neon-lit room. A man is sitting opposite me. At about 7 p.m., he starts making telephone calls. The conversations all seem to go the same way. They are the usual calls checking the state of affairs. How are things going with that customer? What’s happening with that project? Why has so-and-so not replied yet? What’s happening tomorrow?
When he had gone through the whole list of calls, we started talking. I expressed my amazement that he was still making business calls so late. He said it was early, and he sometimes phoned people much later. He explained he made a point of having a brief chat with his staff every evening to see how his various projects were going. He wanted to be sure that everything was OK, especially with people who were working on difficult jobs.
At first I was impressed by his dedication to the job and loyalty to the company. Even after a long and hard day, he was still prepared to talk to his staff. And apparently they were also prepared to talk to their boss at 7 p.m. Amazing! But then doubts crept in. Could it be that he only made these telephone calls because he didn’t trust his staff? Could it be that he brought his mistrust into their living rooms because he didn’t trust them to ring him if they needed to talk to someone?
A CEO whose company publicly has identified trust as one of its five key values addresses the person leading the discussion in a determined way and says “It is a matter of urgent necessity that we do more to address the subject of trust. It is lacking everywhere.” There are nods of agreement among the other members of the board. The presenter waits a moment. Then he asks “And you? Do you trust each other?”
At the 55th Annual Conference of German Business Managers (Deutscher Betriebswirtschaftertag) in September 2001 in Berlin, people agreed: in the long run it is intangibles that increase corporate value. These intangibles include knowledge, talent, brand and (relevant to all three) trust. It was said that trust has never been as valuable as it is today.
Trust is now a very high priority. Financial markets demand it because trust in management is reflected in a company’s share price. Newspapers tell us that trust is the only thing that can help build confidence in economic development. A journalist questions whether we can trust politicians. Opinion researchers want to know which politicians inspire the most confidence.
Trust is invoked, desired and demanded everywhere. Why?
Because it is lacking. People talk about trust when it is missing. It is conspicuous by its absence. People aren’t exaggerating when they say that the more talk there is about trust, the worse the situation. When the subject of trust breaks the surface, it’s an unmistakable sign of crisis.
Something is not quite right when a board of directors appeals for trust from the staff: “…and that is why I am asking for your trust, especially in these difficult times.” Or a bank uses the advertising slogan “Trust is the key to everything.” There is something |17|dubious about discussing trust. It can evidently only be experienced as something lost or broken. That’s why it is easier to explain why we mistrust someone than to say why we trust them.
In companies, trust is ostensibly the most important factor in co-operation. Yet it is frequently the rarest thing too. When asked about their management qualities, managers like to reply “I trust my staff.” At the same time, they wish they enjoyed more trust from their superiors. One level further up the hierarchy, the story is the same: people believe in their own ability to trust, but complain about a lack of trust from higher up. What’s going on? Is this merely a difference of perception?
The answer starts to emerge when one asks managers about their weak points. They often mention their perfectionism. They smile and admit they tend to intervene and declare issues to be matters for management. The idea is deeply internalized: “You always have to keep an eye on them!” These managers keep a constant eye on their staff and keep asking “Are they going to fulfil their role? Are they up to the job? Do they have enough experience to do what needs to be done?” One step lower down the hierarchy, such an attitude is interpreted as mistrust. The desire for more trust is born.
It is true that the division of tasks between staff in a company is inconceivable without a certain degree of trust in the continuity of other people’s actions and in their predictability, honesty and willingness to co-operate. To delegate, a manager has to trust a member of staff to carry out a task. But trust in a subordinate’s competence seems not to extend beyond the manager’s current field of monitoring. This is demonstrated by the obsession with controlling external workers. Information technology has made it possible to introduce new control mechanisms that operate over long distances, even where it has quickly become apparent that |18|they don’t really allow effective control. We now have all the technical means to work in a relaxed way wherever we are. Flexible, connected, supported, integrating all areas of competence – even if someone has a cold or is heavily pregnant. And remote management meets with resistance in most companies, with their old-fashioned work organization cloaked in a modern disguise: duty to attend, control systems, meeting rituals. Remote management becomes a cynical means of hidden control (H. Rust). The key problem is mistrust.
Even though people may seem proactive and decisive during discussions in the company corridors, they also seem inhibited and hesitant. The views they express, with their “synergies” and “learning organizations,” sound like exam answers that have been learnt by heart. It isn’t difficult to identify entire departments of mistrust that spend their time checking and monitoring people to see whether they are doing what they are supposed to be doing. Their managers are skilled in creating false alarms and putting their victims under constant nervous stress with forms and regulations. Staff, it would seem, are a hostile species who should be suspected, investigated and reduced to the lowest common denominator, for all their diversity.
Mistrust dominates both sides of the relationship: managers’ with staff, and staff’s with managers. Management doesn’t trust staff to make decisions in the company’s best interests. Staff greet management’s actions with cynicism because they don’t believe management is competent to take responsibility for long-term workable solutions to problems. They suspect that managers won’t keep to agreements, that they are less interested in the company’s interests than their own and that they are generally untrustworthy. For their part, managers suspect that staff dislike working and need to be pushed before they will work at all. Underneath all this |19|lies a fundamental belief that you can’t trust unfettered human nature. There is also horizontal mistrust, which is understandable under competitive conditions. Colleagues become opponents, and anything that depends on staff co-operating with each other doesn’t happen.
Ornaments of mistrust include: anonymity in inquiries; secretiveness about salaries; the flood of endorsements and memorandums (“Can you put that in writing for me?”); the institutionalized practice of returning delegated tasks to the person who delegates them; the narrow-minded obsession with measuring (“You can’t manage what you can’t measure”); and the boss who always says “Remember to copy me in on your e-mails.” And there are many more: the security measures people take before they make decisions; the habit of always playing it safe; the meetings that get bigger and bigger; the mounting productivity checks; the attendance time clock (now a time-monitoring computer program that cries out “I don’t trust you!” to a member of staff in the morning, but is disdainfully ignored by the heads of department); the pressure toward total control of communication.
Managers tell their staff they are only allowed to speak positively about the company in the outside world. They draw up function charts that specify in minute detail who can say what outside the company. They compel their staff always to use the same words at the beginning of a telephone conversation; they specify that the same content must always be presented in the same way. And then there is the secretary who despite repeated requests is refused permission to use a master key for the coffee machine. Instead of being able to fill whole jugs using the key, she has to press the button 120 times for 120 cups. In this age of genetic engineering, we won’t have long to wait before we see people having control chips implanted in them.
|20|These manifestations can become quite bizarre. A journalist called Eike Gebhardt told me he spent €2,000 on a flight from Stuttgart to Cairo via Düsseldorf, but it took four months for his radio station to reimburse him because it insisted on checking whether he was allowed to claim the customary €7 daily allowance for foreign assignments for this particular flight.
Mistrust sometimes appears as early as job interviews. Many interviewers adopt the approach of trying to get a lot out of the applicant in the shortest possible time. This sends the message “You are not important” to the applicant, and rests on the assumption that he is hiding something and trying to present himself as better than he actually is. Some people watch each other covertly and see deceitfulness in every utterance; they think others are trying to fool them, and look for something incongruous behind what is being claimed. The interviewee is suspected of embellishing his abilities; the interviewer is suspected of embellishing the company. Employment interviews are often a breeding ground for mistrust.
For many people, though, mistrust is at its height in the way working time is handled. There has been much debate in Germany about trust-based working time. The expression speaks volumes: it highlights the exceptional nature of the aspect of trust. Is there such a thing as “mistrust-based working time”? In 1972, Hewlett-Packard gave up recording employees’ working hours; its CEO, Lewis Platt, said that this step was based on faith in its staff. I don’t doubt Platt’s motive, but isn’t this a calculated cost? Everyone knows that time-recording systems are vulnerable to manipulation. Moreover, we need to ask ourselves whether a purely quantitative, time-based concept of work is realistic nowadays. Shouldn’t our thinking be geared more to output than input?
Quite a lot of companies have now tried to introduce trustbased working time. However, it frequently fails because of mutual |21|mistrust. Those at the top worry that costs might rise if time is no longer monitored, and complain “It’s always the same ones who work, and the same ones who take it easy.” Those at the bottom are afraid they will be treated unfairly and exploited at busy times if they can’t present the boss with their printed attendance certificate. Nothing gives. Mistrust is the poison that paralyses everything.
One board of directors has to give consent for a divisional manager to help out. Key service staff are monitored by video camera in order to reduce losses of metal parts. Audit-mania rules, with an excessive need for independent checking. A new director with a fresh attitude comes in, and is keen on dialogue – too much dialogue for some HR managers. They send a strictly confidential e-mail: “The HR managers for Europe have decided that all communication with the new director must take place via us. There is to be no direct contact.”
Many managers are obsessed with the idea that their staff want to deceive them. They install one system after another to prevent people getting away. Daily control procedures multiply. There are waves of reports with no measure or limit. You have to post your projects on the intranet on Monday so that central management has an overview. At the same time, small jobs that people used to deal with on the side are given the status of real projects. After the former IBM manager Dan Cerutti become a software entrepreneur, he said that in his old job he had been dealing with managers who assumed that no member of staff ever wanted to work. This mistrust was expressed in everything they did.
That’s the way it seems to be: a lot of companies are organizations of suspicion. Managers produce huge manuals out of mistrust, pinning down even the smallest role in the company. They don’t believe that people want to do good work. A deep-seated |22|insecurity, covered by a mask of rationality, makes managers into policemen patrolling a precinct. They have no trust in their staff’s self-imposed quality standards, and are reluctant to allow them to find their own ways of achieving objectives.
The ingrained habit of mistrust is clear from the things people say: “Everyone distrusts everyone in the factory.” “You can’t trust anyone an inch here.” “Every movement is monitored.” “Honesty is naïvety here.” “It’s dangerous to express an opinion.” The CSM – career-shortening move – is soon reached. A foreign CEO isn’t trusted (“He doesn’t even speak our language and he’ll probably be off again soon”).
Credibility is lacking everywhere you look. The company’s information policy is met with great scepticism, as are financial projections, HR policy and plans for restructuring: “People aren’t putting their cards on the table.” “The company magazine is pure propaganda.” There is a yawning gap between speech and action: “I’m disappointed by management’s decisions, which are being reversed just six months later.” “The policy here seems to be ‘who cares what I said yesterday.’” “Today it’ll be like this, and tomorrow it’ll be like that.” And trust doesn’t exactly increase when people notice the discrepancy between petty economizing measures and authorization policies on the one hand and the enormous amounts paid to top management on the other.
Many people have had enough of the increase in regulations and mechanisms for checking and justifying actions. They see all this red tape as a hindrance to their actual work: “Too much bureaucracy,” “Mounting floods of paperwork,” “Filling in forms for everything,” “More and more administrative work that adds absolutely no value.” “Working by predetermined procedures regardless of whether it makes sense or not.” “You notice straight away that something isn’t right.” Occasions for mistrust occur |23|constantly. People are being deceitful almost the whole time, as nearly every official communication seems to suggest.
A study of the state of the chemical industry (Kiefer et al. 2001) found an acute lack of trust: “Not one of the replies gave any indication of a trusting relationship with senior management.” Indeed, staff seemed incredibly alienated from them: “What is the management up to?” “I don’t believe they care about the company’s interests. They are pursuing their careers at the expense of the company.” The study established that not all negative feelings make people tend to withdraw. In terms of consequences for the company; mistrust must be clearly distinguished from other negative feelings such as anger, worry and disappointment. Everyday irritations are blamed on the company, but don’t affect people’s performance of their personal tasks. Mistrust, on the other hand, leads to inner withdrawal both from the company and from the employee’s own work. Someone who lacks trust is less prepared to engage himself in the company and the job and to remain in the company and the job.
There are many sayings in circulation that rationalize the obsession with monitoring and control: trust is good but control is better; trust must be earned; opportunities create thieves. The more serious, intellectual managers often develop brilliant rhetoric to justify mistrust. Disconcerting stories are frequently told about breaches of trust, deception and malicious conduct. The grave consequences of a breach of trust are illustrated in numerous examples: the billions lost by Barings Bank in 1995 thanks to the broker Nicholas Leeson; the damage done to the Sumitomo Bank in 1996 by Yasuo Hamanaka, the head of copper trading. In 1999, Electrolux Deutschland incurred a loss of DM55 million because of unauthorized forward exchange transactions carried out by a member of staff. The names |24|Schneider, Flowtex, Swissair, ABB and Enron stand for incompetence, greed and in some cases criminal acts. The new global markets are turning out to be a cautionary tale of adventurous valuation and accounting methods whose main purpose is to pull the wool over investors’ eyes.
But the pendulum has swung too far. Companies have paid too much attention to risk limitation. The situation has been turned upside down. Normally, reasons are required for mistrust but not for trust. People don’t ask “Why do you trust me?” In companies it is the other way around: mistrust doesn’t need any reason, but trust does. This is especially true when something has gone wrong – and of course something will always go wrong. Many companies have gone a long way toward the regulation end of the spectrum. Then the security fanatics come to power. Mistrust becomes the norm. When that happens, trust becomes a sin.
Let’s take a look at the structural background. The economy doesn’t seem to be concerned with trust. Economic behaviour (profit maximization, developing competitive strategies, exploiting information) seems to positively exclude it. A survey of literature on business management shows that economic intelligence is geared to the second-hand car model – the model of maximum mistrust.
We have reached the limits of this paradigm. The prolongation capability (a concept from biological evolution) is used up. No further growth is possible within the current mode of thought. Economic success is already fragile. A small change in environmental conditions frequently brings about a drastic decline in prolongation capacity. Many companies are held in an invisible prison. Red tape, rigid administration procedures and mushrooming regulations prevent any emergence of business dynamism. The |25|walls and bars of this prison are the basic assumptions about the economy and human behaviour.
It is becoming ever clearer that the big old instruments of control – power and money – are no longer adequate to co-ordinate human activity in companies, especially in an information society and in fast-operating markets. More and more situations arise that can’t be managed. We’re talking about things that can’t be forced. Success with intangible assets can no longer be achieved where there is too much control. Anything that depends on the willingness of staff to co-operate with each other can’t be controlled directly. Control ceases to work; trust has to supplement the old means of management, and increasingly to replace them. Trust is becoming the key factor in successful company management.
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