06 March 2007

Transform Self or Transform Society?

"We have become the tools of our tools," Ralph Waldo Emerson wrote some 150 years ago.

Think about the various ways in which we subordinate our goals to the goals of our tools - the institutions like bank, corporations, and nations that, presumably, are mere tools for humanity. People go through hell because of odd religious beliefs, suffer financial stress after banks give them money, and miss out on profitable opportunities because of work commitments.

One of my beliefs is that we're on the verge of a new economy, a social revolution. The Industrial Revolution did at least two things: it transformed that era's dominant institution (the nation-state of absolute monarchs) and it helped society overcome the limit of capital. Banks, bond and stock markets, and factories were all social inventions designed to overcome the limit to progress - capital - and their explosion in popularity defined the Industrial Revolution.

In the last century, another economy emerged. This Information Age transformed society's dominant institution (the financial market of robber barons) and overcame the limit of knowledge workers. The modern university, information technology and the modern corporation were all social inventions designed to overcome the limit to progress - knowledge workers - and their explosion in popularity defined the Information Age.

The new economy will not be designed to overcome the limit of land, capital, or knowledge work. Rather, it will be designed to overcome the limit of entrepreneurship. It will transform today's dominant institution - the corporation.

What is entrepreneurship? It is the act of social invention, of institutionalizing a source of value for the community. Steve Jobs and Henry Ford are entrepreneurs; less obviously, so was Thomas Jefferson and Martin Luther. They are to organizations what inventors are to products.

One element of entrepreneurship rarely commented upon is the relationship of the entrepreneur to the institution. Most of us conform our selves to the institutions in which we find ourselves; an entrepreneur founds an institution that they conform to the entrepreneur.

The economy of the last century was defined by the popularization of knowledge work. Think of the explosion in the levels of education from 1900 to 2000. In 1900, only a small fraction of the American population between the age of 13 and 17 was engaged in formal education; by 2000, only a small fraction was not engaged in formal education. Imagine a similar increase in entrepreneurship during the next fifty years.

The economy of this century will be defined by the popularization of entrepreneurship.

One consequence is the transformation of what it means to become better. Efforts to change the self - self-help, "becoming a better person," and realizing one's potential -- will themselves be fundamentally changed. Instead of working to conform the self to society, we'll be conforming society to our selves. I don't believe it is possible to overstate the implications of this shift.

Western Civilization has been defined by amazing institutions and the role of the individual has been to conform to those institutions. We are called up on to be good Christians by the Church, good citizens by the nation-state, fiscally responsible by the bank, and good employees by the corporation.

What if the average person were shaping institutions to realize his or her potential rather than conforming to institutions?

3 comments:

Life Hiker said...

OK, Ron. You are a really bright guy, but you've kinda lost me on this one. I need examples to get the point.

"Shaping institutions to realize my potential" sounds good. I assume there is going to be a "market" that appreciates how I want to shape my potential - a market internal or external to the institution. True?

Will institutions perhaps become more attuned to the potential of their employees and shape themselves to maximize on the potential of their "human factors"?

Have some talented individuals already forced institutions to create new environments in order to retain these people?

Will this "shaping" of institutions be done by many people, even "average people", or are you thinking more of those people with whatever extraordinary talent?

I'm very curious.

Norman said...

"Have some talented individuals already forced institutions to create new environments in order to retain these people?"

=> Henry Ford invented the assembly line to deal with the constraint of not enough skilled craftsmen

"Instead of working to conform the self to society, we'll be conforming society to our selves. I don't believe it is possible to overstate the implications of this shift."

=> I think this is especially true if we think of large organizations as societies. As the current generation of knowledge workers retires, and is replaced by the much smaller population of younger knowledge workers, they are going to drive organizations towards a "requisite" structure which not only recognizes that people have different cognitive abilities, it, by design, strives to ensure each individual is employed in a way that allows them to work at their full potential.

=> The book "Social Power & the CEO" does a good job of opening up the implications of this possible future course. "Human Capability" presents the research data that underlies the thinking behind what's needed to create a requisite organization.

Ron Davison said...

LH and Norman,

A post is coming (later today?) to address your questions. Examples will follow - both examples from the past and the future.