Slowing Down Can Increase Productivity and Happiness, Part 1

Posted July 7th, 2014 in Articles, Blogs by admin

Today’s hectic, fast paced and overstimulated world can create a work and lifestyle of hurriedness, busyness, multitasking and workaholism, all aimed at increasing productivity and life satisfaction. Yet, there’s compelling evidence that slowing down can actually improve productivity and increase happiness.

I’m sure many of you share my experience of going on vacation for relaxation. Our pace slows down, we usually feel more calm and relaxed, and we take a much needed respite from our fast pace of life and its responsibilities.Time slows down.Yet, when we return from work, that calm, slower pace disappears and we’re back on the hamster wheel.

Myths About “More And Faster”

While it is conventional wisdom in the workplace and management reinforces the “more is better” “and faster is better” approach to work, the assumptions are not supported by research. Let’s look at these myths:

Myth 1: More hours of work make you more productive.

We now equate busyness and overwork with productivity but the two are not the same. In the same way, we’ve equated “seat time” –that is time workers spend in their seats at their desks or in meetings–as equivalent to productive work. It may be the reverse. In a New York Times article, “Let’s Be Less Productive,” author Tim Jackson defines productivity as “the amount of output delivered per hour of work in the economy.” Jackson’s view underscores the perception that productivity in all its forms is measured in terms of money and time. Jackson goes on to say, “time is money…We’ve become conditioned by the language of efficiency.”

Sara Robinson, writing an insightful article in Salon magazine, on the issue of overwork, “Bring Back the 40-hour Work Week,” says “150 years of research proves that long hours at work will kill profits, productivity and employees.” Yet, for most of the 20th century, the broad consensus among American business leaders was that working people more than 40 hours a week was “stupid, wasteful, dangerous and expensive—and the most telling sign of dangerously incompetent management,” Robinson argues. Citing the work of Tom Walker of the Work Less Institute’s Prosperity Covenant, “That output does not rise or fall in direct proportion to the number of hours worked is a lesson that seemingly has to be learned each generation.”

A Business Roundtable study found that after just eight 60-hour weeks the fall-off in productivity is so marked that the average team would have actually gotten just as much done and been better off if they’d just stuck to a 40-hour week all along. And at 70-or 80- hour weeks, the fall-off happens ever faster; at 80 hours, the break-even point is reached in just three weeks.

Myth 2: Being Busy Improves Productivity And Happiness

“If you live in America in the 21st century you’ve probably had to listen to a lot of people tell you how busy they are. It’s become the default response when you ask anyone how they’re doing,” contends Tim Kreider in his article, “The Busy Trap,” in the New York Times. He says often this is said as a boast, “disguised as a complaint,” but often these same people complain about being dead tired and exhausted.

U.S.A. Today published a multi-year poll to determine how people perceived time and their own busyness. It found that in each consecutive year since 1987, people reported that they are busier than the year before, with 69 % responding that they were either “busy,” or “very busy,” with only 8 % responding that they were “not very busy.”

I work as an executive coach and advisor to many senior executives and professionals. Almost without exception they either complain or observe that they can “barely keep up,” or “have no time for vacations,” or to do things for fun, and that their families often suffer. The result is often that they are overstressed and overworked, but tell me there is no choice—the job requires it. Telling people you are really busy has become some kind of a badge of courage, and people who are not so busy are looked down upon.

Even children today are overscheduled. Today’s adolescents and teens are overtaxed and overburdened and stressed to a degree that was once seen only in child psychiatric patients, according to an analysis of research spanning five decades by Jean Twenge, PhD, a psychology professor at San Diego State University.

Alvin Rosenfeld, M.D., a child psychiatrist and author of The Over-Scheduled Child: Avoiding the Hyper-Parenting Trap, “Overscheduling our children is not only a widespread phenomenon, it’s how we parent today,” he says. “Parents feel remiss that they’re not being good parents if their kids aren’t in all kinds of activities. Children are under pressure to achieve, to be competitive. I know sixth-graders who are already working on their resumes so they’ll have an edge when they apply for college.”

Tim Kreider argues that overly busy people are busy because “of their own ambition or drive or anxiety, because they’re addicted to busyness and read what they might have to face in its absence…They feel anxious and guilty when they aren’t either working or doing something to promote their work.” He says that busyness serves as a kind of “existential reassurance, a hedge against emptiness.” For busy people’s lives cannot possibly be “silly or trivial or meaningless” if they are completely booked with activities, and “in demand every hour of the day.” Krieder contends that our culture has assumed a value position that idleness or doing nothing is a bad thing. But “idleness is not just a vacation, an indulgence or a vice,” he says, “it is as indispensable to the brain as vitamin D is to the body, and deprived of it we suffer a mental affliction as disfiguring as rickets.”

Increasingly, management in organizations are concerned about productivity and regularly assess employee engagement levels. But the problem with this approach is that engagement is associated with “seat time.” A study by Julian Birkinshaw at the London Business School and author of Becoming A Better Boss shows in his research that many employees are engaged in tasks to keep busy rather than focusing on priority work, and managers measure busyness levels rather than results.

Myth 3: Multi-tasking increases productivity.

This is another workplace and lifestyle myth that is perpetuated despite evidence to the contrary. First, let’s start by defining what we mean when we use the term multitasking. It can mean performing two or more tasks simultaneously, or it can also involve switching back and forth from one thing to another. Multitasking can also involve performing a number of tasks in rapid succession.

In order to determine the impact of multitasking, psychologists asked study participants to switch tasks and then measured how much time was lost by switching. In one study conducted by Robert Rogers and Stephen Monsell, participants were slower when they had to switch tasks than when they repeated the same task. Another study conducted by Joshua Rubinstein, Jeffrey Evans and David Meyer found that participants lost significant amounts of time as they switched between multiple tasks and lost even more time as the tasks became increasingly complex.

In the brain, multitasking is managed by what are known as mental executive functions. These executive functions control and manage other cognitive processes and determine how, when and in what order certain tasks are performed. According to researchers Meyer, Evans and Rubinstein, there are two stages to the executive control process. The first stage is known as “goal shifting” (deciding to do one thing instead of another) and the second is known as “role activation” (changing from the rules for the previous task to rules for the new task). Switching between these may only add a time cost of just a few tenths of a second, but this can start to add up when people begin switching back and forth repeatedly. This might not be that big of a deal in some cases, such as when you are folding laundry and watching television at the same time. However, if you are in a situation where safety or productivity are important, such as when you are driving a car in heavy traffic, even small amounts of time can prove critical. Meyer suggests that productivity can be reduced by as much as 40 percent by the mental blocks created when people switch tasks.

Myth 4: Time is fixed and the same for everyone.

To be most effective, leaders must move beyond time management to time mastery. Time managers are reliant on clocks and calendars; time masters develop an intuitive sense of timing. Time managers see time as a fixed, rigid constant; time masters view it as relative and malleable. Time masters have what John Clemens and Scott Dalrymple, call the critical skill of “temporal intelligence.”

Based on more than four years of research, “Time Mastery” includes dozens of examples of leaders whose temporal intelligence has helped them achieve business breakthroughs at organizations such as GE, 3M, Staples, and Dell. Readers will learn to develop six time-mastery behaviors, including how to: treat time as a continuous “”flow”” of peak experience; set the rhythm of their organization; look beyond the moment and encourage long-term, strategic thinking; and use time as an energizing principle that drives improvement. With intriguing examples from sports, science, history, and the performing arts, as well as business, “Time Mastery” takes a fascinating, in-depth look at a surprising new leadership skill.

According to neuroscientific research highlighted by Inc. Magazine, how the brain perceives time passing determines whether our days feel luxuriously long, or short and harried — and it’s something that we have a certain level of control over. By paying attention and actively noticing new things, we can slow time down.

The 2011 New Yorker profile of David Eagleman, a neuroscientist who studies time perception and calls time a “rubbery thing” that changes based on mental engagement. The more detailed the memory, the longer the moment seems to last. “This explains why we think that time speeds up when we grow older,'”Eagleman said “why childhood summers seem to go on forever, while old age slips by while we’re dozing. The more familiar the world becomes, the less information your brain writes down, and the more quickly time seems to pass.”

British journalist Claudia Hammond echoed the idea that the amount of input our brain is receiving at any given moment can create a “time warp.” An Elle review of her new book, “Time Warped: Unlocking the Mysteries of Time Perception,” explained: “Humans seem to process the world in three-second increments (the duration of a handshake, the length of the annoying sound computers make when they start up, and the periodic rhythm of speech), and we develop a sense for how those increments sync with clock time. Time can warp when our brain receives much more or less input than usual in a three-second span. (For example, time slows down when you are about to crash your car, but you can easily lose a whole day watching things on YouTube.)”

One study from the Journal of Consumer Psychology suggests that the more attention we pay to an event, the longer the interval of time feels. Another study from the Journal of the Association for Psychological Science had similar findings.

Myth 5: Quick decisions are better than slow decisions.

How many leaders struggle with decision-making? They know it’s a key measure of their effectiveness — in fact, many of the leaders I work with say the best bosses they ever had were “decisive.”

What exactly do they mean? One dictionary says “decisive” people make decisions “quickly and effectively.” Another says “quickly and surely.” Still another says “quickly and confidently.” Notice what they have in common. Decisive people, the dictionaries say, make decisions quickly.

In their book, Decisive: How to Make Better Choices in Life and Work, brothers and academics Chip (of Stanford Graduate School of Business) and Dan Heath (of Duke) explore how to eliminate biases and improve the quality of our decisions. One of the biggest decision-making mistakes they tackle is our tendency not to waffle but to decide too quickly. Stanford’s Re:Think newsletter explains that the authors devote a considerable portion of the book to the idea of widening your options, advice that may seem at odds with the very definition of decision making.

If decision making is the process of zeroing in on the best choice, why would you widen your array of choices? The reason, [Chip] Heath explains, is our tendency to get quickly locked into one alternative. We ask ourselves, for example, whether we should fire an underperforming worker–as if to do or not to do is the only choice we have. But when you stop to think of other options–one of the authors’ many tips is to imagine that your current options are vanishing–you’ll often discover an answer that’s better than what you had been pondering. (Could you move your employee to a role he’s more suited for? Or give him a mentor to improve his performance?) Heath cites research showing that people who had considered even one additional alternative did six times better than those who had considered only a single option.

The goal, in other words, isn’t to go fast and eliminate options. It’s to slow down and add them. So how do you accomplish this? The key, the authors say, is taking the time to gather information and alternatives. Using devil’s advocates, asking people who have solved similar problems, gathering relevant statistics, and soliciting the advice of friends and family members can all help.

The Heath brothers aren’t the only people warning leaders not to be seduced by quick decision making, of course. Nobel laureate Daniel Kahneman wrote a whole best-selling book on the limitations of quick thinking called, appropriately, Thinking, Fast and Slow. If you haven’t picked it up yet, it’s well worth a read in full and is packed with examples of how our knee-jerk decision-making machinery can lead us astray, as well as techniques to short-circuit bias. But for the quick-and-dirty summary, look to Harvard Business Review, which offers this article on one technique, the premortem, and another article by Kahneman himself outlining the basics of why quick decision making is often bad decision making.


So, if there is considerable evidence to show that our assumptions about “more and faster is better” may be more myth than reality in terms of being more productive and happier, what are the strategies for slowing down.

Part 2 of this article forthcoming will address that question.

The Male Identity Crisis And The Decline of Fatherhood

Posted July 7th, 2014 in Articles, Blogs by admin

America is rapidly becoming a fatherless society, or perhaps more accurately, an absentee father society. The importance and influence of fathers in families has been in significant decline since the Industrial Revolution and is now reaching critical proportions.

As Alexander Mitscherlich argues in Society Without A Father, there has been a “progressive loss of the father’s authority and diminution of his power in the family and over the family.”

“If present trends continue, writes David Popenoe, a professor of sociology at Rutgers University, “the percentage of American children living apart from their biological fathers will reach 50% by the next century.” He argues “this massive erosion of fatherhood contributes mightily to many of the major social problems of our time…Fatherless children have a risk factor of two to three times that of fathered children for a wide range of negative outcomes, including dropping out of high school, giving birth as a teenager and becoming a juvenile delinquent.”

According to David Blankenhorn, author of Fatherless America, chair of the National Fatherhood Initiative and founder/president of the Institute for American Values, organization, and research conducted by Popenoe and scores of other researchers:

  • Approximately 30% of all American children are born into single-parent homes, and for the black community, that figure is 68%;
  • Fatherless children are at a dramatically greater risk of drug and alcohol abuse, mental illness, suicide, poor educational performance, teen pregnancy, and criminality, according to the U.S. Department of Health and Human Services, National Center for Health Statistics.
  • Over half of all children living with a single mother are living in poverty, a rate 5 to 6 times that of kids living with both parents;
  • Child abuse is significantly more likely to occur in single parent homes than in intact families;
  • 63% of youth suicides are from fatherless homes according to the U.S. Bureau of the Census;
  • 72% of adolescent murderers grew up without fathers. 60% of America’s rapists grew up the same way according to a study by D. Cornell (et al.), in Behavioral Sciences and the Law;
  • 63% of 1500 CEOs and human resource directors said it was not reasonable for a father to take a leave after the birth of a child;
  • 71% of all high school dropouts come from fatherless homes according to the National Principals Association Report on the State of High Schools;
  • 80% of rapists motivated with displaced anger come from fatherless homes according to a report in Criminal Justice & Behavior;
  • In single-mother families in the U.S. about 66% of young children live in poverty;
  • 90% of all homeless and runaway children are from fatherless homes;
  • Children from low-income, two-parent families outperform students from high-income, single-parent homes. Almost twice as many high achievers come from two-parent homes as one-parent homes according to a study by the Charles F. Kettering Foundation.
  • 85% of all children that exhibit behavioral disorders come from fatherless homes according to a study by the Center for Disease Control;
  • Of all violent crimes against women committed by intimates about 65% were committed by either boy-friends or ex-husbands, compared with 9 % by husbands;
  • Girls living with non-natal fathers (boyfriends and stepfathers) are at higher risk for sexual abuse than girls living with natal fathers;
  • Daughters of single mothers are 53% more likely to marry as teenagers, 111% more likely to have children as teenagers, 164% more likely to have a premarital birth and 92% more likely to dissolve their own marriages.
  • A large survey conducted in the late 1980s found that about 20% of divorced fathers had not seen his children in the past year, and that fewer than 50% saw their children more than a few times a year.
  • Juvenile crime, the majority of which is committed by males, has increased six-fold since 1992;
  • In a longitudinal study of 1,197 fourth-grade students, researchers observed “greater levels of aggression in boys from mother-only households than from boys in mother-father households,” according to a study published in the Journal of Abnormal Child Psychology.
  • The Scholastic Aptitude Test scores have declined more than 70 points in the past two decades; children in single-parent families tend to score lower on standardized tests and to receive lower grades in school according to a Congressional Research Service Report.

Blankenhorn argues that America is facing not just the loss of fathers, but also the erosion of the ideal of fatherhood. Few people doubt the fundamental importance of mothers, Popenoe comments, but increasingly the question of whether fathers are really necessary is being raised and said by many to be a merely a social role that others-mothers, partners, stepfathers, uncles and aunts, and grandparents -can play.

“The scale of marital breakdowns in the West since 1960 has no historical precedent that I know of,” says Lawrence Tone, a noted Princeton University family historian, “There has been nothing like it for the last 2,000 years, and probably longer.” Consider what has happened to children. Most estimates are that only about 50% of the children born during the 1970-84 “baby bust” period will still live with their natural parents by age 17-a staggering drop from nearly 80%.

Despite current interest in father involvement in families, an extremely large proportion of family research focuses on mothers and children. Health care agencies and other organizations exclude fathers, often unwittingly. Starting with pregnancy and labor and delivery most appointments are set up for mothers and held at times when fathers work. The same is true for most pediatric visits. School records and files in family service organizations often have the child’s and mother’s name on the label, and not the father’s. In most family agency buildings, the walls are typically pastel colors, the pictures on the wall are of mothers, flowers and babies, the magazines in the waiting room are for women and the staff is predominantly female. In most welfare offices, fathers are not invited to case planning meetings, and when a home visitor is greeted at the door by a man, she often asks to speak with the mother. Given these scenarios, fathers are likely to get the message that they are invisible or irrelevant to their children’s welfare, unless it involves financial support.

Popenoe and others have examined the role of fathers in raising children and found there are significant differences than that for mothers. For example, an often-overlooked dimension of fathering is play. From their children’s birth through adolescence, fathers tend to emphasize play more than caretaking. The play is both physically stimulating and exciting. It frequently resembles an apprenticeship or teaching relationships, and emphasizes often teamwork and competitive testing of abilities. The way fathers play affects everything from the management of emotions to intelligence and academic achievement. It is particularly important in promoting the essential virtue of self-control.

A committee assembled by the Board of Children and Families of the National Research Council, concluded “children learn critical lessons about how to recognize and deal with highly charged emotions in the content of playing with their fathers. Fathers, in effect, give children practice in regulating their own emotions and recognizing others’ emotional clues.”

At play and in other realms, fathers tend to stress competition, challenge, initiative, risk taking and independence. Mothers, as caretakers, stress emotional security and personal safety. Father’s involvement seems to be linked to improved quantitative and verbal skills, improved problem-solving ability and higher academic achievement for children. Men also have a vital role to play in promoting cooperation and other “soft” virtues. Involved fathers, it turns out according to one 26 year longitudinal research study may be of special importance for the development of empathy in children.

Family life-marriage and child rearing-is a civilizing force for men. It encourages them to develop prudence, cooperativeness, honesty, trust, self-sacrifice and other habits that can lead to success as an economic provider by setting a good example.

Mark Finn and Karen Henwood, writing about the issue of masculinity and fatherhood, in the British Journal of Social Psychology, argue that the traditional view of masculinity, with its focus on power, aggression, economic security, and “maleness”, and the emerging new view of fatherhood, which incorporates many aspects of motherhood is a source of struggle for many men who become fathers.

In a study of fatherhood in popular TV sitcoms, Timothy Allen Pehlke and his colleagues concluded that fathers are generally shown to be relatively immature, unhelpful and incapable of taking care of themselves in comparison with other family members. In addition, the researchers found that fathers often served as the butt of family members’ jokes. All of these characterizations, while the intention may be humor, depicted fathers as being socially incompetent and objects of derision.

In a study of depictions of fathers in the best selling children’s picture books, researcher Suzanne M. Flannery Quinn concluded that of the 200 books analyzed, there were only 24 books where the father appears alone, and only 35 books where mother and father appear together. The author concludes, “because fathers are not present or prominent in a large number of these books, readers are given only a narrow set of images and ideas from which they can construct an understanding of the cultural expectations of fatherhood and what I means to be a father.”

It seems to me that the issue of the decline of fatherhood and the problem of the male identity crisis are inextricably intertwined.

In my Psychology Today article, Our male identity crisis: What will happen to men?, I said, “In a post-modern world lacking clear-cut borders and distinctions, it has been difficult to know what it means to be a man and even harder to feel good about being one. The many boundaries of a gendered world built around the opposition of work and family-production versus reproduction, competition versus cooperation, hard vs. soft-have been blurred, and men are groping in the dark for their identity.”

Overwhelmingly, the portrayal of men and the male identity in contemporary western societies is mostly negative. Men today are extensively demonized, marginalized and objectified, in a way reminiscent of what happened to women. The issue of the male identity is of crucial importance because males are falling behind in school, committing more suicides and crimes, dying younger and being treated for conditions such as ADHD more than females. There has also been a loss of fatherhood in society as artificial insemination by anonymous donors is on the rise. Further, medical experiments have shown that male sperm can now be grown artificially in a laboratory. There has been a rise in divorce rates where in most cases, child custody is granted to mothers. Continuous negative portrayal of men in the media, along with the feminization of men and loss of fatherhood in society, has caused confusion and frustration in younger generation males, as they do not have a specific role model and are less able to define their role in society.

From once being seen as successful breadwinners, heads of families and being respected leaders, men today are the butt of jokes in the popular media. A Canadian research group, Nathanson and Young, conducted research on the changing role of men and media and concluded that widely popular TV programs such as The Simpsons present the father character, Homer, as lazy, chauvinistic, irresponsible, and stupid and his son, Bart, as mischievous, rude and cruel to his sister. By comparison, the mother and daughter are presented as thoughtful, considerate and mild-natured. The majority of TV shows and advertisements present men as stupid buffoons, or aggressive evil tyrants or insensitive and shallow “studs” for women’s pleasure.

According to J.R. Macnamara, in the book, Media and the Male Identity: The Making and Remaking of Men, less than 20% of media profiles reflected positive themes for men. Violent crimes, including murder, assault, and armed robberies accounted for over 55% of all media reporting of male activities. Macnamara says that over 30% of all discussion in the media of male sexuality was in relation to pedophilia, and males’ heterosexuality associated with masculinity is seen as violent, aggressive and dominating. Men are frequently shown in TV shows and movies as lacking in commitment in relationships and are shown as frequently cheating on women. And with increasing frequency, women are shown on TV shows and movies as being independent single mothers, not needing a man.

Guy Garcia, author of The Decline of Men: How The American Male is Tuning Out, Giving Up and Flipping Off His Future, argues that many men bemoan a “fragmentation of male identity,” in which husbands are asked to take on unaccustomed familial roles such as child care and housework, while wives bring in the bigger paychecks. “Women really have become the dominant gender,” says Garcia, “what concerns me is that guys are rapidly falling behind. Women are becoming better educated than men, earning more than men, and, generally speaking, not needing men at all. Meanwhile, as a group, men are losing their way.”

“The crisis of fatherhood, then is ultimately a cultural crisis, a sharp decline in the traditional sense of communal responsibly, ” contends Popenoe; “It therefore follows that to rescue the rescue the endangered institution of fatherhood, we must regain our sense of community.”

So as we annually celebrate Father’s Day, and reflect on it’s importance to social stability, more men in our culture need to find their male identity and commit to the central importance of fatherhood.

Why We Need A Revolution In How We Do Business And Work

Posted July 7th, 2014 in Articles, Blogs by admin

From multiple perspectives, traditional business models and management practices are in deep trouble, and it has nothing to do with the recent economic downturn. There are three reasons why this is true.

Reason 1: Rising Income Inequality.

The Pew Foundation study, reported in theNew York Times, concluded, “The chance that children of the poor or middle class will climb up the income ladder, has not changed significantly over the last three decades.” The Economist’ special report, Inequality in America, concluded, “The fruits of productivity gains have been skewed towards the highest earners and towards companies whose profits have reached record levels as a share of GDP.” I addressed the issue of income inequality in two previous articles in Psychology Today, “How Income Inequality is Damaging Our Social Structure,” and “Will Income Inequality Cause Class Warfare?”

Kentaro Toyama, writing in The Atlantic, argues, is “inequality grows naturally from unfettered capitalism…If free market capitalism works so well for every income level, why have so many people seen income pass them by with capitalism working more efficiently than ever before?”

One possible reason is a moral foundation of capitalism—meritocracy. The term meritocracy is defined as a society that rewards those who show talent and competence as demonstrated by past actions or competitive performance. This concept is often interwoven with the widely accepted belief in the “self-made man” or “rags to riches” story. An OECD report concludes the only way to achieve fairness in a meritocracy is to provide more equal opportunities for everyone, not just the wealthy or privileged.

There is a clear connection between the alarming increase in income inequality and the prevailing paradigm of free market capitalism.

Nobel Prize winning economist Joseph Stiglitz’s book, The Price Of Inequality: How Today’s Divided Society Endangers Our Future, provides an insightful analysis of the problem of income inequality. Stiglitz argues free market capitalism isn’t working the way it was supposed to, for it is neither efficient nor stable. He also says that political systems are unfair, which compounds the problem. Stiglitz contends “We are no longer country of opportunity and that even our long-vaunted rule of law and system of justice have been compromised.”

Stiglitz echoes Toyama’s perspective: “America has always thought of itself as a land of equal opportunity…[it is] now a myth reinforced by anecdotes and stories, but not supported by the data. The chances of an American citizen making his way from the bottom to the top are less than those of citizens in other industrialized countries.” Stiglitz says there is a corresponding myth—rags to riches in three generations—that once a person reaches the top they have to continue to work hard to stay there or their descendants will move down. The reality is that children of wealthy people usually remain at the top.

Who is to blame? Stiglitz casts a wide net but zeroes in on Wall Street. He says “Capitalism seems to have changed the people who were ensnared by it.” Much of what has happened can only be described by the words “moral deprivation.” What’s the solution? Stiglitiz, like many other expert observers, advocates policies that move toward a redistribution of wealth, not as an ideological solution, but as a practical one that will serve all in society and strengthen the economy.

The best selling book in the world currently is French economist Thomas Piketty’s Capital In The 21st Century, which is a deep and thorough examination of economic inequality. Piketty outlines at great length the growth of capital (ie., wealth) and its concentration in the hands of the 1% and how increasingly wealth is inherited, not created or distributed anew. The big idea of Capital in the Twenty-First Century is that we haven’t just gone back to nineteenth-century levels of income inequality, we’re also on a path back to “patrimonial capitalism,” in which the commanding heights of the economy are controlled not by talented individuals but by family dynasties. His proposal to solve the income inequality issue is a progressive global wealth tax.

Robert Reich, an economist and former White House advisor, argues “if prosperity were more widely shared, we’d have faster growth. The rules are now designed to entrench and enhance the wealth of a few at the top and keep almost everyone else comparatively poor and economically insecure.” Reich argues that if we want to reduce the savage inequalities and insecurities that are now undermining our economy and democracy, we shouldn’t be deterred by the myth of the “free market.”

Reason 2: Obsolete Business Models.

Some people argue then, that today’s business organizations are oligarchies, created and strengthened by an unrestrained free market system. The Western world has adopted the concept and set of principles that govern them should be democratic which includes the consent of the governed. But since the rise of Western capitalism businesses operated on primarily a non-democratic basis. While businesses are owned by shareholders or owners, they are subject only to the laws of the jurisdiction in which they operate, but are not subject to the will of employees or their customers. In this way, it can be argued that most business organizations are like oligarchies.

Like our faith in a clearly broken system of free market capitalism, our theories and practices of management no longer work in today’s world. The problem is that, currently capital is downed in a speculative game. Most business organizations are geared toward wealth creation for financial markets not the improvement of life on this planet.

At the macro level, the “real economy” –that of the global exchange of products and services—has become poor man’s economy, representing less than 3% of the total amount of foreign exchange transactions

The endless emphasis on employee engagement is the narrow focus of efforts at organizational transformation. But for what purpose? What outcome? To be more productive? By producing more material things? At what social and environmental cost?

Roger Martin Dean of the Rotman School of Management argues in his book, Fixing The Game: “We must shift the focus of companies back to the customer away from shareholder value. The shift necessitates a fundamental change in our prevailing theory…that the singular goal of the corporation should be shareholder value maximization. Instead, companies should place the customers at the center of the firm.”

The corporate world needs to be redesigned to make it much more networked, interconnected, open, egalitarian, non-hierarchical, agile, transparent and empowering. Luis Suerez argues “The future of work is to freelance within organizations—choose your task, assemble to work, and then dissolve.” Many discussions about the future of work revolve around the need for more fluidity and freedom in the way work is done. But why do we continue to consider work as a separate entity from life? Isn’t each worker also a customer and a networked individual in a hyper-connected world.? And if we stop seeing work as separate from life, then we must see the notion of “worker” as also not being separate from management.

Business is now becoming a social enterprise. The Altimeter Group states, “Organizations moving into the “Business as Social” phase are driven by a vision that articulates how social media and digital overall improves customer and employee relationships and experiences.” Ann Marie McEwan, writing in her book, Smart Working-Crating the Next Wave, argues “Connected companies are not hierarchies, fractured into unthinking, functional parts, but holarchies : complex systems in which each part is also a fully-functional whole in its own right. A holarchy is a different kind of template than the modern, multidivisional organization.”

David Gray, in his book, The Connected Company says to be able to adapt both to customers’ changing needs and to competitive pressure, organizations should adopt a decentralized cooperative model and build strategic ad hoc “alliances.” This model is very similar to the Italian industry, which is dominated by small (less than 100 employees), family owned businesses that cluster for opportunities.

To understand customers fully, companies need to integrate them into their processes, make them integral part of the business ecosystem, and make them the part of the stakeholder system. Organizations in the new economy will not only have to be agile, tied to customers’ needs, but have to deal with dissolving boundaries, orchestrate resources they won’t own anymore through influence rather than control, according to Ranjay Gulati and David Kletter, authors of Shrinking Core: Expanding Periphery: The Relational Architecture of High Performing Organizations.

Michael Brenner, writing in Forbes, regarding the future of business identified 99 startling trends some of which are:

  • More than 40% of the companies at the top of the Fortune 500 in the year 2000 were no longer there in 2010.
  • There are now more mobile-connected devices on earth than there are people.
  • 73% of people could not care if most name brands disappeared from their lives.
  • More than 70% of the customers surveyed believe small businesses are more concerned about their needs than large companies.
  • Only 7% of Gen Y employees work for a Fortune 500 company
  • 90% of all internet traffic in 2017 will be video
  • Hot new marketable skills for the future are jobs such as specialists in making transitions in life and work; experts in creating chaos in organizations for change; ethicists and philosophers to replace the HR function.

Nilofer Merchant, writing in the Harvard Business Review Blog, argues that the current and developing Social Era is the new context in which traditional strategy is dead. In the industrial era, organizations become more powerful by being bigger; in the Social Era, companies can also be powerful by working with others. Merchant says “While the industrial era was about making a lot of stuff and convincing enough buyers to consume it, the Social Era is about the power of communities, of collaboration and co-creation.

In the industrial era, power was from holding what we valued closed and separate; in the Social Era, there is another framework for how ee engage one another—an open one.” Companies cannot survive let alone prosper without recognizing that Social as a phenomenon can allow us to redefine our organizations to be inherently more fast, fluid and flexible by its very design, contends Merchant. Not by doing a little more, or sliming down a little, or by doing a few things a bit faster. Not by tweaking their way into the future.

Reason 3: Dysfunctional Management Practices.

While the old free market capitalism business model focused are shareholder value is becoming dysfunctional, so too are the management practices imbedded in this paradigm.

Gary Hamel, writing for the Harvard Business Review, calls for a new era of management thinking: “Equipping organizations to tackle the future would require a management revolution no less momentous than the one that spawned modern industry…executives and experts must admit that they’ve reached the Limits of Management 1.0—the industrial age paradigm built atop the principles of standardization, specialization, hierarchy, control and primacy of shareholder interests…they must cultivate, rather than repress, their dissatisfaction with the status quo…Why should so many people work in uninspiring companies? Why should the first impulse of mangers be to avoid the responsibilities of citizenship rather than to embrace them?”

Geoffrey James writing in the Business Insider, identified 7 terrible management fads that just won’t die, illustrative of the current broken model of business and management. These practices are:

  • The idea of “best practices.” It’s a false assumption that what worked well for one company is transferrable to another. Also best practice awards are like the Academy Awards—recognition for past performance.
  • Six Sigma. The practice of awarding people with different colored “belts” based on their expertise in Six Sigma methodology. The result is a hierarch of “belted” experts who go around advising people how to do their work, with little documented actual improvement in performance.
  • Business Process Engineering. James says this is another euphemism for downsizing and layoffs.
  • Matrix management. This means organizations group people with similar skills together for project assignments. The result is often endless turf wars and conflicts with multiple layers of management.
  • Management by consensus. In theory this means important decisions are made with the agreement of everyone in the group. Since everyone has a say in the decisions, anyone can veto any decision. As a result, usually only innocuous decisions which support the status wquo are made. The difficult decisions are avoided.
  • Core competence. In theory this means focusing on one thing the company does well. The reality is that most people in the organization are not self-aware enough to know what they are really good at. And the company rests on its laurels from the past, and stops innovating.
  • Management by objectives. Simply described it means you define expectations or goals so management and employees agree and compare an employee’s performance with the goal/objective. However, in reality this turns into a paper work nightmare. The process of planning and evaluation takes more effort than the work itself. And the process doesn’t allow for sudden unexpected events or developments.

Steve Denning contends what we know about management is wrong. He says “We are in fact at the beginning of set of gigantic changes in society, in which everything we do is being re-invented-how we live, how we work, how we play, how we communicate, even how we think and how we feel. At the heart of these changes is of course the Internet and its related technologies.” Much of what we thought or knew about the economy doesn’t make sense anymore, despite the nightly news reviews fo the ups and downs of economic life, complete with statistics,, says Denning. There is no such thing as “the economy” anymore.

There are two economies going at “different speeds and on different trajectories. One economy is what Denning calls the Traditional Economy inherited from the 20th century—a world of factories, command-and-control, huge hierarchies churning out masses of products and services through a maze of delivery systems and huge capital investments in getting consumers to buy through sales campaigns and advertising. Although this economy is huge, it is declining, Denning contends. It doesn’t create new jobs, it is not agile and it is becoming increasingly inefficient and lacks innovation. And this economy is finding it increasingly more difficult to make profits. Denning concludes this economy has no future.

The other economy Denning descries is the Creative Economy—one of continuous innovation and transformation. This is an economy of entrepreneurs whose focus is delivery to customers things and services “better, faster, cheaper, smaller, more convenient and more personalized.” It is an economy focused on value and flexibility. It requires an empathetic connection to customers. In this economy the focus is shifted from the seller to the buyer. While this economy is smaller, says Denning; it is highly profitable and it is the economy of the future.

The kind of management required for the second economy is very different than the first economy. For one thing management cares about the environment and cares for people, Denning contends.

Management practices for the second economy will shift the goals of the organization, the structure of work, values and how people communicate. Denning summarizes these practices as:

  • A shift from an inward-looking goal of making money and maximizing shareholder value to an outward-looking goal of profitably delighting customers.
  • A shift from managers controlling individuals to a world where the manger’s role is enabling collaboration among self-organizing teams and networks.
  • A shift from coordinating work by a bureaucracy to a world where work is coordinated with customers, networks and ecosystems.
  • A shift from a single-minded preoccupation with efficiency and predictability to an embrace of values of transparency and sustainability.
  • A shift from top-down directives to multi-directional connections.

Clearly the current free market business model is no longer serving society well, and income inequality will retard not advance economic prosperity. Tied to that reality is recognition that traditional management practices no longer work. The world has changed and the social nature of our world will require substantial changes to create a new economy.