The following is the transcript for the presentation 'Four Hands -Building on the story of The Puritan Gift' produced for presentation to the Hopper Institute for Good Management. Accompanying slides can be found here: http://www.slideshare.net/StuartMMills/four-hands-building-upon-the-story-of-the-puritan-gift
Four Hands – Building on the story of The Puritan Gift
When I was asked to give a presentation on The
Puritan Gift I didn’t really know what I should say. That’s not because the
book isn’t informative, on the contrary; it’s because by the end of the book
you’ve been told a very simple and compelling story that really I couldn’t do
justice. So instead I’m going to present something a little bit original,
drawing off of ideas and quotes presented in The Puritan Gift to build a
model that I think can be applied quite broadly.
I call it Four Hands, and I’m going to use it to
demonstrate a few things. I’m going to look at individuals and what motivates
them as well as innovation and how it can create communities; we’re going to
think about the collective purpose of communities, and how the community works
with The Individual. Finally, I’m going to bring in some political economy,
Adam Smith, and a Founding Father.
So what is Four Hands? Well it’s a model – not a
scientific one – of how individuals and organisations interact to achieve
goals.
Of course every model needs a starting point, which I
tentatively call the hand that feeds. It’s a bit of a forced name, but it
articulates the key premise behind the first hand.
The hand that feeds is the starting point of our model
and on the most basic level it assumes this – the goal of a person is to
survive. It is a criticism of economics that it assumes people are rational,
but I’m going to go out on a limb and say desire for continued existence is a
reasonable expectation of your average person.
In a ‘trapped on a desert island’ scenario the hand
that feeds is literally concerned with survival – there’s no point thinking
about how great your future beachside mansion is going to be if you’re dead. In
the more realistic scenario it can be about corporate survival or financial
survival – are you under threat of losing your job or falling behind on your
bills?
It’s helpful to consider the hand that feeds as the
‘struggle’ which inspires enterprise. From a business perspective, the hand
that feeds could simply be a gap that an entrepreneur spots in the market.
If the hand that feeds is the starting point of the
model, the divine hand is the end. Drawing directly on The Puritan Gift,
we’re now considering what the Puritan’s goal – ‘to establish a Kingdom of
Heaven on Earth.’ – means.
You could take this literally, in which case I think
the Puritan’s were setting their sights pretty high, or less literally – to
establish a more efficient, possibly pious society? Either way, what we’re
looking at here is a long-term communal goal. This is the divine hand at play.
To give you an example; firstly, the Puritan’s
establish a community with the intention to survive and colonise the new world.
This is the hand that feeds. Provided this is met, their goals then shift to
fulfil their debts on Earth – their debts to England – and ultimately to build
the Kingdom of Heaven on Earth. It’s important to note that all of these goals
– to survive, to profit, to prosper – could not have been achieved by an
individual alone.
If we look at Adam Smith’s line, ‘glow over the
horizon’ we can see this sentiment being reinforced – that some goals
transcend the individual and only become attainable as a collective.
It’s interesting to consider Eliot’s quote, ‘things
are not so ill with you and me… is half owing to those who lived… a hidden life’,
essentially saying the community, you and me, benefit from the efforts of those
that came before us. This reinforces the idea of the Divine Hand being communal
but also, ‘hidden lives’ – this is a long-term goal which is again
bigger than the individual.
Here’s another example just to illustrate that this
idea. I’m not really into football but sports teams are great examples to look
at. In the team there are 11 players who are actually doing the day to day
work, making the many short-term decisions that have to be made. We could think
of them as the individuals whose enterprise is inspired from their struggle –
though I hesitate to say ‘footballer’ and ‘struggle’ in the same sentence.
They’re the entrepreneurs, the innovators, the desperate island dwellers.
Then we have the football club. This is the company
that is built around the efforts of the individuals. We might want to think of
them as the institutions first established by the settling Puritan’s – farmers,
fisherman, builders etc. They’re entities that exist with the individuals and
have short-term goals, but also set long-term goals, i.e. fulfil contracts,
make a profit, win the league.
Finally, we have the football fans – the community –
who don’t necessarily play on the football pitch nor work for the football club
but they benefit from and contribute towards the long-term goal of the club
indirectly. They attend games and provide moral support; similarly think of a
carpenter constructing a boat for a fishing company. Though the carpenter
doesn’t directly profit from the long-term goal of the fisherman, which may be
to make profit, the carpenter indirectly profits from there being an ample,
cheap supply of food. Equally, though the fans aren’t actually on the pitch
playing the game, they benefit from the long-term success of the team they
support.
It is important to remember individuals do exist
however. The subtitle of The Puritan Gift is after all ‘reclaiming
the American Dream…,’ and there are a lot of parallels to be found between
the Kingdom of Heaven on Earth and the American Dream, mainly that they both
talk about achieving better things through hard work.
So let’s consider Smiles, who equates the pursuit of
heavenly ideals to the self-concerned individual, i.e. the Kingdom of Heaven
becomes individualistically the American Dream. This is important because we
can kind of consider the Kingdom of Heaven on Earth as the aggregate of
individual pursuits, which brings us nicely onto Adam Smith whose famous
invisible hand equates the American Dream, i.e. individual pursuit, as having ‘a
net benefit for all’, bringing us back to the communal goal, the Kingdom of
Heaven on Earth.
Finally, before I move on some questions that are
interesting to consider. MacCulloch’s take on pluralism said that capitalism is
made up of many things that already existed within society and therefore is a
by-product of social structure, the most crucial one he argued is religion.
This leads to the question does there have to be a conscious structure in place
for a societal goal to exist?
I’ve also asked is the zeitgeist of a community the
same/similar to a societal goal, the implication being if it is can we change a
societal goal? That maybe has some interesting implications in political
theory?
Next we have the aforementioned invisible hand of Adam
Smith. This is really where we’re beginning to see the model forming with the
hand that feeds being the starting point, the divine hand being the end and the
invisible hand linking the two.
This idea comes about from two places; firstly,
Smith’s net benefit for all hypothesis, i.e. the end point of individualistic
pursuit should benefit everyone somewhat, which is what I earlier talked about
with football fans indirectly benefiting from team success.
Secondly we have Cotton with a great quote, ‘it is
a disgrace to a good workman not to look at his work,’ saying that good
work should receive acknowledgement, i.e. should receive some benefit. Again,
individualism moves us towards the divine hand.
Also consider the message upon Benjamin Franklin’s
epitaph, saying – in much fancier words – that nothing is perfect and we must
always allow others to improve on things. I take this to mean be an individual
and certainly be innovative, but do not ignore the contribution of the
community.
The final hand is the visible hand; what
Chandler described as the ‘substitution of “administrative co-ordination” for
“market co-ordination”’, which solves the aforementioned problem by saying
individuals who work together operate more efficiently – coordinate the market
– and therefore will be more successful in achieving their goals. It’s also
debatable this will make their short-term goals more aligned.
Ultimately this coalescence of individuals will
distribute resources more efficiently and will work towards the divine hand
much more successfully. They will not just be ‘individually coordinated’, they
will be communally coordinated.
To conclude, Four Hands demonstrates the importance of
allowing individuals to exist within communities. I think this is crucial in a
business structure as it should allow greater innovation and communication of
ideas throughout the organisation.
Secondly Four Hands allows managers to see the
perspective of their staff better, i.e. they can see the survival point their
staff occupy and the place their staff want to go. The implication of this is
closer and more meaningful management of staff.
Finally, Four Hands illustrates the inefficiency of
inter-community fighting and the benefits of community coordination. Therefore,
Four Hands should encourage clear communication of long-term goals throughout
an organisation. Individuals can then coordinate their efforts and skills
rather than pursue individual goals and be less efficient.
These ideas I’ve just discussed relate directly back
to key concepts discussed in the Puritan Gift; knowing who is in charge and
what the organisation does, respecting and valuing the domain knowledge of
individuals; and having effective lines of communication throughout the whole
organisation.