Photo: Juggzy Malone
As cries continue for Gordon Brown to apologise for flawed financial leadership over the past ten years, and for ex-CEOs of the heavily indebted banks to pay in some way (usually financial) for the state in which they’ve left their previously profitable companies, it’s worth bearing in mind that it’s not just individuals but the system that’s at fault.
As Ruth Sutherland wrote in the Observer recently:
“The crunch is not a Manichean battle between good and evil, or a narrative of hubris and nemesis. It is the result of an intellectual failure on a grand scale – the wrong-headed belief that markets are efficient and rational – coupled with a web of self-congratulatory and self-interested links between financiers and politicians.”
Sutherland talks about the “dangerous group-think of the Bush/Blair years”. She makes so many excellent points that it’s probably best you just click through to the article, but the one that resonates most is that above: “the web of self-congratulatory and self-interested links”.
In short, the bankers gave the politicians thousands of new jobs, a surge in tax revenues and the economic feel good factor; in return, the politicians gave the bankers influence (eg: Sir Ronald Cohen, both advisor and donor to New Labour) and knighthoods (eg, Sir Alan Greenspan who “hilariously” as Ruth Sutherland points out was knighted in 2002 for his “contribution to global economic stability”).
As Sutherland points out, any economist worth his salt and therefore qualified to criticise had usually been offered a lucrative position on the board of an investment bank, so a conflict of interest was inevitable. Clever.
What’s the best way to beat this group-think? Sutherland suggests a re-introduction of the checking process that used to be performed by civil servants (“in more sober times”):
“One simple practice the financial world could adopt is the idea in post-Iraq intelligence circles of an official devil’s advocate to check and challenge policy.”
And the implications for business?
When Bill Gates hired Robert Scoble in 2003 as a “technical evangelist” and producer the Channel 9 video division, probably the last thing he expected was that Scoble was going to start criticising his employer in public.
By the time Scoble left Microsoft in June 2006, his blog, Scobleizer, was one of the most popular in the tech world with millions of hits every month.
Via his blog, Scoble was openly critical of Microsoft; one example was in January 2006 when Microsoft shut down a Chinese researcher’s MSN blog because it was critical of the Chinese government:
“The behavior of my company in this instance is not right…Guys over at MSN: sorry, I don’t agree with your being used as a state-run thug.”
He also blogged freely about his love of Apple Computer and admiration for Google.
Gates let the blog run because he realised the importance of dissent. The fact he let Scoble criticize actually made Microsoft look good.
As a journalist for Forbes.com wrote at the time of Scoble’s departure:
“One man has shown how a blog, plain-spoken and irreverent in its tone, could be a tool to significantly help soften the monopolistic bullying image of a corporate giant like Microsoft.”
We are now coming to the double bluff endgame: it’s not so much the bad press, as how you handle it. As Clay Shirky pointed out in his recent talk at the LSE, consumers are becoming media-savvy: Barack Obama’s campaign was not harmed so much as bolstered by the deluge of media tributes to him: some well-done, some badly-executed. The American public knew that Obama was not directly responsible for these tributes, and it knew not to blame him directly for them.
The importance of allowing all voices to flourish: however critical, however inept, cannot be over-stated. Trying to stamp such comments out, or cover them up, is like using a garden hose to fight a forest fire. And these voices are worth listening to, because one day they might even come up with some solutions that could be of interest (see the we20 project for one such example). Rather than worry about having friends in high places, maybe it’s time we all started cultivating friends in different places.