Four Hands - Transcript of presentation given for the Hopper Institute for Good Management

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.