Ian Choo
Through the lens of knowledge
The economy of today needs new answers. Peter Drucker, the management guru, once said that economics today “is largely still the house that Keynes built”. During every financial crisis – including this one – we scour the books of the classical philosophers and try to find answers to our problems, even though the contexts may have evolved and made those solutions unsuitable for use.
This economy we find ourselves in is driven by the capital of knowledge. It is an odd form of capital that is hard to quantify: indeed, knowledge is the only form of capital we know that when given away, multiplies in quantity. This is far from the form of capitalism and economics observed by Marx and Smith: today’s economy is not merely about a question of scarcity.
Yet the economic system remains one that demands efficiency, and the theories of management (not least from Drucker) that have been a contributing factor to making things “cheaper, better and faster”. But Drucker’s management theories also incorporate an aspect that may be surprising.
Management, said Peter Drucker, is a “social technology”, a “liberal art” which deals with “action and its application, and its test are its results”. The latter definition may not surprise you, but it is really the former terms that need re-reading. Indeed, “social” is not a word that is intuitively linked to economics and management: but any organisation is a social hardware that requires the software of management to properly function.
But management does not just extend to the organisation. Indeed, Drucker extended his theories of management in his later years to the individual, including a phrase called “managing oneself”: making one efficient in a world of excessive speed and information. He also outlined basic questions that everyone needed to answer in managing oneself:
- What are my strengths?
- How do I perform?
- What are my values?
- Where do I belong?
- What should I contribute?
It is worth noting that the answers to these questions are not found in a vacuum, but rather through an iterative process of engagement with others through work by and in organisations. In other words, the answers to making oneself more efficient can only be figured out through a social process.
In his widely acclaimed book “Creating a World Without Poverty: Social Business and the Future of Capitalism“, Nobel Prize winner Dr. Mohamed Yunus crafts an alternative dimension of capitalism called the “social business”. Such a business, says Yunus, would be built as a business consistent with the fundamental rules of the marketplace, but run for social objectives.
He rightfully points out in his book that if you are able to able to allow for a wider view of human nature as underpinning organisations with a myriad of human intentions, one would observe that in that organisations that are financially sustainable, but primarily mission-driven rather than profit-driven, can engage in mutually reinforcing relationships for the benefit – rather than the bane – of the entire economic ecosystem.
Social businesses have flourished around the world, in some cases driven by large corporations themselves with the technologies that have made them profitable. Veolia Water, for instance, has invested in a project to provide commercial-quality water in Bangladesh. Overall, since Drucker popularised the term “Corporate Social Responsibility” in the mid-20th century, there has been ample evidence surfacing of a general convergence between the spheres of government, corporations and the social sectors – toward what Jeremy Rifkin calls an “empathic civilisation” in which individuals and groups recognise that they are mutually dependent.
All this is underpinned by what we already know that knowledge – the inexhaustible resource – is the key factor of production for the 21st century. When applied with new dimensions of human intention, knowledge has the potential for far more productive and social value.
There is also significant evidence that this trend is extending beyond just social business as a new distinct species of organisations – large corporations such as Nestle and Cargill have articulately adopted “Creating Shared Value” as their overriding mission as chronicled by Michael Porter and Mark Kramer in their seminal work of the same name.
While the classical philosophers and economists may have viewed human nature as self-interested, bitterly destructive individuals who fight for scarce resources, the knowledge-driven economy requires a different mindset. It is more about understanding one’s place in the complex interactions of the marketplace between a variety of shareholders. And this is where Drucker’s suggestion of managing oneself comes in. Echoing Socrates, “Know thyself… and learn to become who you are”.
—
Photo courtesy of iGen Tribe. Edited by Owen Tan.
