Long live Europe, trend 2: organisations will be founded on trust

In recent years, males with megalomaniac ambitions have formed absurd conglomerates which require likewise absurd controls for their management. The tops of fantasy organisations that collapsed, carrying names thought up by advertising agencies (in the Netherlands InHolland, Amarantis and Vestia), invariably were made up solely of men. They took typical male risks and created fantasy worlds under the pretence of a free market, which were not rooted in the mission of their corporations.
Likewise, males lead the virtual economy, which threatens to destabilise the entire world. We urgently need people who ‘have a focus on the well-being of the company or organisation as a whole’, i.e. women. And please no more alpha males driven by greed and the need to be admired.

We can now dismiss as male narrow-mindedness the mere idea that tasks like education, housing, law making and policing would be better performed in large organisations. Financing might be easier; but problems of governance easily offset that advantage. ‘Lack of control’ was the verdict in subsequent crises, from criminal deception by Parmalat and Enron, to the bubble on the American real estate market and speculation with derivatives at Vestia. But in a hostile environment, control always fails: in spite of the tightest of controls, no jail in the world has ever become drugs-free.

A job can offer much more than a wage
There is a long-standing painful gap between the appeal that the workplace makes on the loyalty of its people, and the shark mentality at the top. Human Resource Management intends to surface the best in the employees. HRM rightfully starts from the idea that employment is not a zero-sum game. Employment would be a zero-sum game if people from top to bottom would receive a fair wage for their work, as a compensation for their hardship; advantages for company and employee would even out. But in such a relationship, the employee would benefit by cutting edges, which in turn would require inspection and control from the boss. And indeed, controls from short-sighted managers increase greatly, using social media, infringement on privacy e.g. by abuse of medical records, and data-mining. This is a serious threat to employees’ loyalty.

But if you like your job and you invest in it wholeheartedly, you receive much more than a wage: joy, fulfilment, friendships, and a contribution to the formation of your identity. Nothing wrong with that: many individuals would long for such a fulfilment, and a large number of people would not be able to work in another way. There is no need for time control (the boss would even discourage you in installing such a scheme); the manager only judges quality and quantity of your production. But then, this work ethic is in stark contrast with the bonus culture at the top, and in particular with the official motivation for it: that people will perform better precisely because of better remuneration (i.e. zero sum at the top).

Not easily reconcilable
Bonus culture and its motivation are propelled by an American system in which shareholders hold the power, implying that maximisation of shareholder value would be the ultimate goal of management. Because shareholders promote managers which are supposed to be particularly good at this, they call into existence a caste of self-important managers. As remunerations for top management have gone through the roof during the past decade, this has stirred up opposition. Within companies the contrast between management and the common employee is beginning to grind; youngsters faced with growing youth unemployment raise the question what these top-income people actually contributed to society.

Management of organisations is totally different when people are motivated by their work’s content, as opposed to motivation by money. The first calls for management by trust, the other for management by distrust, two approaches which are not easily reconcilable. Distrust requires project administration and time control, in general input controls. Trust requires output control, primarily a judgment on the quality of the work.

Steering, an obsession
Distrust as an organisational principle increasingly falls short of requirements because of failing controls, while the stakes are getting higher, from American subprime mortgages to acceptance of Greece in the Euro. We find a parallel in criminal law: tighter controls – severer punishments, a model which has been perfected ad absurdum in the United States, causing great societal disruption.

Distrust and control as organisational principles have outgrown themselves for yet another reason: they are too expensive. ‘Steering’ becomes an obsession and a fleeting goal. As an organisation grows bigger and consists of an increasing number of layers, control costs rise disproportionately. Large hospitals install ever more planning, trying to maximise utilisation of expensive equipment. But meanwhile the planning organisation might be more expensive than the device – a question that is never addressed. Education had to be ‘managed’ more tightly in the past few decades, because of lack of faith in the man or woman in the classroom, and it almost collapsed under the weight of it. In the Netherlands, the police force has exploded. Since 1994 budget has increased by 120%, much more than the workforce (44%), whereas the percentage of solved crimes has hardly risen (from 18 to 22%). The categories ‘management and overhead’ and ‘support’ now add up to 45% of the workforce.

Trust is a necessary ingredient of economic growth
Already in 1995 Francis Fukuyama, in his book ‘Trust’, argued that trust is a necessary ingredient of economic growth. Since then, greedy managers and corporations have undermined the level of trust in economic life (and hence also destroyed economic potential). Fortunately, a counter movement is surfacing. The most responsible corporations try to counteract speculation with their shares: they still want to exist in ten years’ time, and try to attract shareholders with the same long-term perspective. Some CEO’s even mitigate their income, in order not to discourage their employees. The number of people with an intrinsic motivation for their work is on the rise (this correlates with education level); they can only be managed on a trust basis. Self-managed teams, in which participants have a joint responsibility for their end product, do not always succeed, but they are more successful in proportion to the share of better educated people in the team.

Innovation, an absolute prerequisite for our continent (see later), would even hardly exist without a trust basis: innovators need an incubation time, during which they appear to do ‘nothing’, but which they need for their ideas to ripen. The growing movement of corporate social responsibility also stresses the intrinsic motivation at work. It is invaluable when an organisation is based on trust. It eases management, and increases output, notably on the side of quality.

This article consists of the following paragraphs:
Does the future look grim?
Trend 1. Women will take the lead
Trend 2. Organisations will be founded on trust
Trend 3. New social networks are on the rise
Trend 4. Sustainability as a common goal
Trend 5. Decentralisation of industry in a biobased society
Trend 6. Small-scale energy systems
Trend 7. Europe was, is and will remain one of the most important producers of scientific knowledge in the world
Conclusion: think global, act local

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