Facts and feelings

Facts and Feelings

Joop de Vries
Director "Futures" Sociovision, Heidelberg, Germany

When leaders follow

"We are the People" (GDR, 1989)

One of the major shifts we are witnessing at present, concerns the relationship between people and their leaders and institutions. In democratic countries, "the people" are becoming society's driving force, more than ever before. Based on what they have seen and heard, and following their personal intuition, people let their political leaders know which is the way to go. They do so in elections but, more importantly, on an ongoing basis via interactive communication channels - in media and marketing, via email and internet, through surveys and opinion polls, in action groups and focus groups. The leaders in democratic countries cannot count on blank cheques that remain valid for any purpose until the next election. They have to explain and justify their actions. Leaders are expected to provide leadership and not relinquish their responsibility to focus groups or referenda, but they are also expected to lead where their followers are prepared to follow. "Spin doctors" may try and convince people to accept policies they do not like, but scepticism is growing. Across borders, people collectively sense that the world is changing. Macro-statistics do not provide the answers. As "the people" are becoming the main driving force, new measures and tools are needed to express change as they see it.

Personal perspectives

People see the world around them increasingly in their own perspective, not in terms of traditional models. They intuitively know that what matters most in life, cannot be caught in numbers. In addition, people feel less and less obliged to live up to expectations and adopt roles that have been assigned to them. They follow experts when they are in agreement, while increasingly claiming the right to be subjective, emotional, and intuitive. The result is a major development from quantitative towards qualitative reference points. This development is slow and gradual, but far-reaching. Political and business leaders can no longer restrict themselves to the yardsticks that they consider useful and rational, and that they are willing to accept. At work, people respond to the new management and information systems, but often in unexpected ways. As consumers, they welcome new products but they may be uneasy about the new marketing techniques. In politics, governments may pursue models with a proven track record, and still find that success on the ground eludes them. Where they succeed, it may have as much to do with personal chemistry and psychology as with action plans. People listen to what leaders say but also wonder why they say it, and why others don't. In the developed countries, many people find it difficult to decide whether the world is today a better place than a generation ago, or whether their children will have a better life than they had themselves. In every sphere of life, the final verdict increasingly reflects people's values and basic attitudes.

Society as a living organism

As people feel more confident about following their own intuition and judgement, the gap between people and their leaders will tend to grow. Diversity will increase, too, because different people see different facets of society, and have their own interpretations. Even when it seems that the facts speak for themselves, people are not convinced it is that simple. For example, unemployment in Germany, at more than 4 million, is far too high, but the informal economy, equivalent to 7 million full-time employed, is part of reality, too. The 35-hour working week is a brake on national performance, but shorter working hours trigger new working practices and modern factories could, in any case, be operational 50 or 150 hours per week. In several European countries, the pension system may be bound to collapse, but new pension schemes are already less generous, and the main question is how the various countries will muddle through. In Europe's ageing societies, massive immigration is needed to compensate for demographic change, but people know that, in real life, problems are not going to be resolved this way. Dependent on the context, we see work as a duty or as a right. Increases of GDP may correspond with improved 'quality of life', and hence success, as well as with crisis management and failure. We measure certain parameters because we can, rather than because they represent our true priorities. Many yardsticks no longer correspond with our main aspirations and concerns, but it is difficult to find alternatives. Society behaves increasingly as a living organism, rather than a mechanical device. There is less scope for managing society but also less need to do so. Solutions will come from resilience rather than blueprints. These subtle changes are a matter of perspective. Taken together, they amount to a shift of paradigm.

Business : words and actions

Business Systems

In the 1990s, we witnessed rapidly growing confidence in "systems" . Introducing the right systems was management's most powerful tool for steering an organisation and making it more productive. Integrated business systems made the same data instantaneously available throughout the organisation, reducing delays and mistakes. Incentive systems forced employees to align their personal objectives with those of the organisation. Selecting the right yardsticks for such systems enabled management to achieve its goals, be it maximising shareholder value or reducing waiting lists. Implicitly, the organisation's "human resources" could be used for whatever objective the organisation was pursuing, by focusing on the correct parameters. The man at the top was guided by his own incentive systems ; because he had all information at his finger tips, he could be held accountable for the organisation's overall performance. The model seemed clear and simple, and it was no surprise that the restructuring of business was followed by economic success.

Inherent conflicts of interests

The clear and simple solutions are increasingly under pressure. In business, too, we see a growing impact of the non-quantifiable dimensions, associated with people's opinions on legitimacy, fairness, governance, sustainability and many more. In order to survive, companies have to be productive and competitive, but in addition they are expected to pursue good governance, ethical behaviour, and social responsibility. These challenges would once have been considered mere irritants and not "the business of business", but they have now become 'make-or-break' issues. The pressure was further increased in recent years when the success models of the 1990s turned out to have serious flaws. They were too one-dimensional and could not handle the human factor. Major parts of the business world ascribe recent scandals not to inherent inconsistencies in the system but to a few "bad apples", that should be removed. Instead of recognising the dilemmas and conflicts of interest, they turn up the volume of corporate advertising and public relations. They cannot imagine that the success formulas of the 1990s should be put at risk by issues that are in essence qualitative and judgmental, and often subjective and emotional. However, the qualitative dimensions are becoming more important. New demands will have to be met, in response to societies that set their own agenda and select criteria from outside the traditional world of business.

"Human resources"

In the knowledge economy, the determining success factor will be how effectively individuals can be motivated and mobilised in the common interest. The management systems that triggered the rapid rise of productivity and efficiency in the 1990s, are having difficulties dealing with personal aspirations and principles. Organisations are faced with growing dilemmas. For example, sharply focused incentive systems make people work harder but also promote the "games people play". The same applies to performance ranking systems that are based on a few simple yardsticks, in the public sector as well as in the private sector. Business systems can align employees with shareholder value, but they cannot, at the same time, foster trust and social responsibility A sales force cannot maximise the bottom line and, at the same time, 'leave money on the table' for ethical reasons or to please customers. In all these areas, companies encounter unexpected and unintended side-effects. They find it difficult to ensure that everyone contributes what he does best, to maintain a collective memory, to train youngsters, to ensure that people share knowledge and trust the organisation. The systems show to the employees what is measured and what really matters. They do not speak the same language as public policy statements, and, intuitively, people know.

The customer is king?

In the market-place, too, current developments are raising questions. For example, in many sectors, profitable customers will receive ever more benefits and extras, whereas marginal customers are excluded from service or have to pay for it. This is fully in line with today's business logic, but it is a development that many people do not want, and it is not what organisations are saying in public. Marketing is playing a 'cat-and-mouse' game with the consumers. Consumers have to discover and unravel complex and ever-changing offers, - or accept a poor deal. It adds to the perception that companies are telling the truth but rarely the whole truth. Many consumers do not mind and consider this the price they pay for a continuing flow of interesting new products, but a growing minority is sceptical. They occasionally wonder whether purchasing new products or services is worth the hassle. As these consumers see it, the customer is not "king" but rather the company's opponent or its target. In spite of 'customer relations management' initiatives and a multitude of new services, this minority has potential to grow. These demanding consumers may be the ones who set the agenda for the future.

Managing aspirations and diversity

Diversity

If "the people" are developing into society's driving force, this does not imply all people. Nor are all employees affected by ambivalent incentives, or all consumers by scepticism about marketing techniques. Within the process of structural change, there are large differences between the various players. Socio-cultural research has identified groups of people that each have their own and very specific values, concerns and aspirations ( for example, Sociovision's "Sinus Milieux"). A few general observations can illustrate the point. In every society we find pragmatists, who are results-oriented and agree with whatever works best. To others in the population, this looks quite shallow. They feel that their lives are worthwhile only if they are appreciated by the people around them, in a community that is based on "give and take". Then we have groups who are fascinated by change, and who are curious to find out how they would cope in a very different world. These socio-cultural differences touch on every sphere of life, and it is interesting to note that the differences within Western nations exceed the differences between nations. Against this background, it is to be expected that cross-border movements are gaining in importance.

Dialogue

Regardless of appearances, different people can have very different motivations and aspirations in everything they do. In politics, surveys and focus groups show which policies will do well with which segments of the population. In marketing, companies explore aspirations and attitudes, before they decide for which groups of people they develop a new product or advertising campaign. In management, the diversity of values and aspirations is equally important. Decisions depend on how decision-makers see and interpret the world around them, and hence on their values and beliefs. In a team, it is essential to agree on the correct interpretation of the state of affairs. Dialogue can only develop if there is a common language, and if it is clear "where everybody is coming from". Assuming that the "people dimensions" become more important, in both business and politics, it is also important to explore why people are behaving the way they do, and to visualise the implicit assumptions on which their behaviour is based.

The balance between facts and feelings

The above developments are accelerated by globalisation and democratisation - pervasive forces that cross demarcation lines and weaken traditional hierarchies. Globalisation is not just a trade issue, but also the gradual world-wide convergence of concepts and values. Globalisation encourages people to see different perspectives, and to identify the right questions before they look for answers. Democratisation encourages them - as citizens, consumers and employees - to impose their own criteria and to challenge the top-down view of the world. It is essential to include these dimensions in the major decision-making processes. Particularly in the 1990s, we developed new instruments for systematically addressing the problems of the quantitative world. Now we need tools that can address the qualitative world of people-dimensions and diverse perspectives. Traditionally, we used "hard" facts for making "hard" policy decisions, and "soft" facts – if we accepted that these existed at all – for "soft" policies. Increasingly, we will need both for all major policies. Dialogue can only be built on a combination of "hard facts" and "soft facts". This requires (or rather, this will create); a new balance between numbers and opinions, between expertise and empathy, between facts and feelings.

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