Blagojevich: Why Wilfred Brown's Ideas Still Work

Forrest Christian Managing, Theory, Wilfred Brown 7 Comments

“The combination of arrogance and stupidity that would prompt him to continue in these types of behaviors is just stunning,” Dr. [Kent Redfield, a professor of political science at the University of Illinois at Springfield,] said . “There’s no feedback loop or reality check.” [source]

If you haven’t been following it, Illinois Governor Rob Blagojevich (known widely as “Blago”) has been arrested by the United States Depart of Justice. He stands accused of, among a laundry list of corruption charges, trying to sell the U.S. senate seat that President-elect Obama has vacated. Illinois law says that the Governor has sole discretion in this, and he wanted to make some money off of it.
It sounds completely insane. It’s like he couldn’t resist the charge to more corruption, even though he has been under investigation by the Feds for years.

Mike Jacobs, a Democratic state senator and former friend of the governor, suggested that Mr. Blagojevich may have lost his grip on reality.

“I’m not sure he’s playing with a full deck anymore,”

Illinois is long known for being a state only passed in corruption by places like Haiti and Italy. George Ryan, the previous governor, is doing time for a similar laundry list of corruption charges. It is so bad in the state that the Feds have made a permanent job out of finding them. And this has been a Republican administration with strongly political use of the Dept. of Justice.

Look, this is why I say all the time that you need to have a system that checks and balances your CEO. Jaques’s RO formulation goes a long way because it insists on managerial accountability for the results of a manager’s subordinates. But that falls apart when trying to protect the organization from someone who is willing to engage in completely amoral behaviour (someone with no sense of guilt) to achieve the results. There is some balance in the Manager-Once-Removed (your manager’s manager) having to spend at least some time each year with you. But if the sociopathic manager is producing big results, it’s going to be a hard sell that he or she is a nutcase who is ruining the company. The values of business in America at least mean that management will value the person willing to make those “hard calls” and who can “deliver results” in tough markets. Sociopaths are very effective in business when they have a high intelligence.

That’s the problem with using Jaques’s RO as it stands. He eliminated the truly revolutionary form that Brown used at Glacier (and which predated Jaques’s arrival): the veto-empowered representational body. These “works councils” differed greatly from what most were. They developed the power, devolved from Brown as Chairman and Managing Director, of veto over changes to policy. It was a complex set of relationships and rules, to be sure, that developed over years of negotiations and fights. It’s not simplistic any more than Jaques’s RO is simplistic. But it recognizes something that Jaques ignored: that people are evil and need to be checked. Perhaps it’s a foreign concept to a Canadian but deep in the cultural DNA of a Scot.

I have referred to it as the Presbyterian Model of Management and still think it fits. Scottish history created a religious social form that is very different from the English model. It built on the Reformed model from Calvin but extended it with more suspiciousness. Suspicious of Leaders, suspicious of parishioners. Everything needed to be checked.

That’s certainly true in today’s massive corporation where no one can understand everything. If you understand the business, you rarely understand the financial instrument being used to finance it or the underlying technologies keeping your company afloat. Things have always been complex. They are now Masters-level complex as different silos have “level-shifted up”.

Of course, checks and balances won’t help where the entire culture is built on corruption. Illinois politics have long been known as a place of “grease” and the use of government’s resources for personal gain. Or at least surcease.

So here’s a suggestion that comes out of the current financial bailouts: why not declare a new Reconstruction on Illinois as hopelessly corrupt, sending in Federals to run everything until that date when they can run it themselves? Think of it as an Iraqi invasion within the nation.

Comments 7

  1. I’m not sure one can design a system any better than the one currently in place. We could argue that the checks and balances in Illinois are effective insofar as the governor is being called to task for his corrupt behavior. Governing systems and the highest levels in organizational structures are only governed by constituents and shareholders in addition to regulatory processes. The fundamental problem is the model upon which capitalism is contructed. This model promotes corruption and rewards greed. Many governments and corporations in their current existence have no connection to a broader societal purpose and benevolent societal values.

    What is occuring in Illinois is only symptomatic of the broader pervasive cancer that plagues global economics.

  2. Post

    Yeah, I’m not arguing for changes to Illinois. It’s essentially a corrupt culture. Illinois’s problems are probably symptomatic of the broader cancer, but it’s also a good bit its own problem. “Honest graft” works only when it is tolerated and within certain limits, as George Washington Plunkitt described at length in his interviews. Blago crossed the line from “honest graft” to “pure self-interest”, and many observers from Chicago’s political world have been shocked.

    I agree that a new system wouldn’t work because the culture is not supportive of it. Greed is inherent to the animal part of humanity. Some cultures do better than others at controlling it, and certainly American culture rewards greedy behaviors. Illinois, because of the recent spate of corruption convictions (over the last 15 years), demonstrates what happens when you try to dig out corruption: you often end up with self-serving reformists who are worse than the ones you got rid of. Regime change is a dangerous thing.

    I’ve argued elsewhere this week that the Feds should declare “regime change” and occupy it until such time as the state is capable of governing itself. A kind of internal “Operation Flatland Freedom”.

  3. Hi. A number of points, but since I have just drunk a large quantity of rioja in Barcelona, I anticipate that they will not read easily!

    Firstly, as a Scot, I understand the argument about the Brown ethics. At one level, Scots are groomed not to trust anyone. And, if we do trust someone in one area of their life, that does not make them trustworthy in all areas. As Presbyterians, there is a general acceptance that we are all sinners, and status and role do not affect that; in Scotland or Illinois. This may have been part of the Wilfred Brown recipe and may have made him more challenging. and examining.

    Obviously, Elliott Jaques had a different background. He was a Kleinian psychotherapist, and practised as a psychotherapist for most of the time that he was consulting at Wilfred Brown’s company.

    Apart from this values difference (arguably Freud versus Calvin), there is the prime difference in accountability. Brown actually HAD to make the Glacier Metal Company work throughout the WWII – it was mission critical to the British war effort. So negative experience of the performance of self and colleagues would have been ‘real’ rather than ‘observed’.

    Also, like most educated Scots ( although he went to an English public school), from his teenage years Brown was political. He was a ‘Constitutionalist’ and even offered himself for parliament in that short lived political party. Later on, he became a Lord and was appointed a minister of the Labour Government; so, probably, he saw life as being about ‘politics’ and the balance of power. This was not the balance of power of a bad mother or a dysfunctional father or a jealous sibling, rather that of forces for ‘good and evil’ and the institutional structures that represent them.

    So, Wilfred Brown, might have recognised that he was a potential carrier of evil as well as good, and surrendered his absolute autonomy to his Works Council.

    Can the US, and the regulatory authorities learn anything from this? Well, only if they learn that being successful is no indication that something moral has been done; that takes further and deeper scrutiny. Only if they accept that, as a rule, scrutiny and the willing acceptance of it is a true signal of a desire to be honest. And this will show in the systems that folk develop or refuse to develop.

    It may not be a good example, and my involvement makes it evidentially suspect, but I read everything in the Glacier Papers before I set up GasForce Ltd. GasForce was set up so that the chairman and the directors of GasForce could be sacked by the workers (who were also the shareholders) within 21 days. Consequentially, the board stayed honest – (the first mistake led to a director leaving the company; there were no more mistakes!) – and the commercial results were spectacular – 1800% improvement in shareholder value in six years, with a doubling of employees. Wilfred Brown’s approach can take much of the credit. As for the Elliott Jaques contribution, we used the Billis and Rowbotham approach to Levels of Work and tried to eliminate the paranoiagenic systems, like overtime and expenses fiddles.

    A totally different point is that we need to get a handle on the ‘values’ of business again. Ayn Rand wrote about industrial leaders, but not based on any experience.

    My suggestion is that we all revisit the work of Jane Jacobs and her amazing book…Systems of Survival.

    Oh, and by the way, most auditors only audit up to level three. At best, this gives a commentary on the health of the current system. Can the Feds do better?

  4. I was believing that it was what I drunk and not what Jack drunk that was influencing ny perception of his script until I ran into Ayn Rand. No one could possibly ever decide that she had anything of any merit to offer democracy or capitalism. Her advocation for capitalism was far too Darwinian to have any relevance in a benovolent society.

    I suggest the best observation is the one that indicated that Brown had to make Glacier work in support of the war effort. In fact the purpose was one that was compelling not only to Brown but to the entire free democratic world. Significant increases in output were observed during WWII in all manufaturing sectors that were rallied in support of saving the free world from tyranny. Unfortunately today’s society is either not that patriotic, or that naive, as the case may be.

    The problem with organizations, and the broader society at large, today is they lack purpose. They are apathetic. They just don’t care. This pervasive condition exists because society feels it is not cared for, neither individually nor collectively. What is most alarming is that we are even apathetic to the sons and daughters of the free world being killed in the present wars that are being fought in the names of God and humanity.

    When the common folk are empowered the result is, as observed, beyond compelling.

  5. Al,
    A response to the Ayn Rand comments .Of course it is imprudent of a Scot to make comments about an “alien” culture.
    And, in particular, you were correct to remark on my comment about Ayn Rand; – this was a badly worded comment that I should have expanded on rather then just drop in.
    My position is that Rand’s Positivism provides a platform for the selfish acceptance of greed. This may be most misused by the folk who think that their own success and happiness is a “right”. And that seems to include a host of business leaders. For me, the ascendancy of Ayn Rand’s Positivism is one of the great problems of modern society, particularly for the Anglo-Saxon mindset that holds sway in the US, UK and parts of northern Europe. The current financial crisis was inevitable and will reoccur while leaders believe that the introduction of force or anything that reduces their freedom (e.g. regulation) is essentially evil. Also, it seems to me that, Rand’s views on the right of a man to be “happy” give an echo to the Independence Declaration of the US founding fathers on the “Rights” to pursue happiness. Perhaps, this echo of such an important Declaration makes her philosophy particularly attractive to the US.

    The founding fathers gave a lot of thought on how to construct their approach to maintaining democracy. They clearly recognised that corruption was likely and tried to minimise the opportunity for it to be successful. It seems to me critical that they related the Life, Liberty and Happiness rights to the relationship with their Creator.
    “a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.
    We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”


    PS A special apology to the memory of Dr Jaques, who was psychoanalyst rather than a therapist.

  6. Post

    The Declaration’s “pursuit of happiness” has been much debated, even within constitutional case law. Jefferson does not seem to have elaborated, and our Declaration has a strange non-legal status. I’m pretty sure thought that the Founders did not intention what Rand would later describe. (I’m writing this as a one-time registered Libertarian Party member and Reason subscriber who has fallen from the way.)

    Positivism still enjoys a strong following among serious young people in America because The Fountainhead is given out by the thousands each year to high school students by Randians. But I do not think that they fully understand what Rand was trying to say. Rand has to be understood in context, and within the context of collectivism and socialism her points are salient.

    These are a struggle for us: the Group vs. the Individual. The truth is, as Warren Kinston shows, they can never be resolved. They must exist in tension.

    And this is something that what I call the Presbyterian Model does.

    I’ve got to think about this. There is a lot here to consider. Perhaps during this time of Christian celebration I should take a few days and elucidate these issues tied to reformation practices and Christianity.

  7. Freedom is only achieved within structure.

    With respect to the group versus the individual I would argue the opposite (as I generally do). No group exists as anything more than a collection of like minded individuals. Without respecting the individual belief that binds the group together there is no respect for the group.

    Christianity is merely another example of this and one that can be as destructive as it can be constructive. The common idividual beliefs of christianity are what binds it together; the belief that Jesus Christ was the son of God, the belief that he will come again to judge the living and the dead, the belief in the christian trilogy. At the risk of inciting the unpopular I will agrue they are all false beliefs and that christians, in their quest to order society and to garner their own power and satisfy their own greed, contreived this false belief of the prophet being inseparable from the Creator. It is agreed that Christ was the son of God as you and I are equally the sons and daughters of God. Christ, however, was a mortal like you and I and a prophet and he neither ascended into heaven in his full human mortal form nor will he ever return to judge the living and the dead.

    The dilemma with organized religions is they tend to worhip the prophets and not God. This is the case with Christians and Muslims as well as other less invasive religions. The result of the specialized interests of these prophetic religions can be observed in Afghanistan where radical muslims are continuing the holy war that began 15 centuries ago because organized religions of that day and time would not accept the enlightenment of the prophet Muhammad.

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