Leadership trends LO12736

Joe Katzman (kat@pathcom.com)
Sun, 02 Mar 1997 13:57:53 -0500

Replying to LO12718 --


> We can talk all we want about learning organizations but if the profit
> motive is ruling -- which it does in most companies -- then only a
> threat to survival will cause the leadership to change.

The profit motive rules in corporations about 60% of the time. Another 30%
is politics. In either case, a threat to survival is indeed the most
likely source of an impetus to change. That has less to do with the profit
motive than human nature.

Much of the work of LO change leaders is working within the remaining 10%
to warp and dissolve the 30%. I don't see any conflict between the profit
motive and being an organization where learning is valued, and would in
fact argue that unless bottom-line impacts result from knowledge
initiatives, you're on the wrong track and need to rethink your


> Anyway -- I figure sooner or later there
> will be a white collar revolution -- which I also said on the radio! A
> friend told me about a month later that he heard Tom Peters say the same
> thing -- he must have been listening to my radio show!

This revolution may occur, but it may not take the form you expect. My
guess is that this will be a "quiet revolution," characterized more by
natural selection rather than a real "storm the barricades" revolt.

Threats to survival come in many forms. Inability to recruit and keep
talented individuals is one of them, and it's becoming more important as
the importance of organizational knowledge rises. Silicon Valley is, as
usual, the canary in the coal mine here. Ad agencies are another good
place to look for this dynamic, and consulting firms are waking up to this
in a hurry.

For more background on the topic of retaining and keeping knowledge
workers, take a look at the January archives on the web site, which has a
discussion thread on that very subject.


I think we need to be a bit careful in analyzing start-up ventures. Yes,
you're right - many are narrowly focused and involve very tough demands on
the participants. This is inevitable. As start-ups, they must be so
focused until they have a product and are off the ground as a stable
entity (in a well-managed company, this will happen before the IPO).

Still, this can be taken to excessive levels, especially if employees do
not stand to benefit from the IPO. Abuse of this nature is not a profit
motive, but a personal wealth motive. The old fashioned term is avarice,
and there is a very important distinction. Profit is organizational and
intended to be balanced, and avarice is personal and by its nature a
departure from the golden mean. A profit motive must take into account not
only present profitability, but future profitability. Avarice, or the
placing of one's personal benefit above one's stewardship
responsibilities, is inherently myopic. Whether by an IPO-seeking
entrepreneur or a multi-national CEO with large stock options, it is a
corruption of the managerial ethic, not an example of it.

Back to your IPO example. If I'm working in that start-up and have no
stock options, exploitative behaviour means I'm gone if another
opportunity comes up. I haven't been given any payoff for this focus, so
why play?

If I do have stock options I'm waiting for the IPO too, and then
reassessing if things don't begin to change a bit. That may mean
fully-supporting the removal of the entrepreneur from a management role
down the road, or it may mean cashing in my chips and leaving.

Defection of talent = instability = lower value and even difficulty in
getting to the IPO. Do you want 40% of a large pie or 100% of a small pie
(or even nothing)? Some people will always choose the latter course. Some
of us will always choose not to work for them any more.

Joe Katzman kat@pathcom.com
"The more you know, the more you can imagine."


Joe Katzman <kat@pathcom.com>

Learning-org -- An Internet Dialog on Learning Organizations For info: <rkarash@karash.com> -or- <http://world.std.com/~lo/>