The first two installments in this series have dealt with the uses and misuses of history at the global, national and community levels. This is not the normal cruising altitude for these articles, and in this final piece, the focus returns to its usual location: the uses of history “on the ground” in organizations. It tries to answer the question: how can business, non-profit and government managers use history to strengthen their organizations?
Mark Twain once said, “The past may not repeat itself, but it sure does rhyme.” We all use our recollections of the past to react to what is happening now. When recession hits, we think about what we did the last time and try to use that information to plan our actions. “We’ve seen this before.” We mostly accept Twain’s view that there is a more or less cyclical rhythm to things.
Is this a useful way to think for the leader or manager of a government agency, a non-profit organization or a business? The immediate answer is “yes,” simply because it involves thinking about where we want to go as opposed to getting up every morning and doing the same thing that we did yesterday.
Beyond that, cyclical thinking becomes more problematic. Everything isn’t cyclical. Some things are moving in a long-term direction that requires a different set of assumptions and actions. Here is an example. Like many people, I have these financial guys who manage my retirement account. They have a purely cyclical view of the world. The market goes up and the market goes down. The only straight line assumption that they make is that the long-term direction is up. And they can point to history to prove their point. Sort of. This history is mostly based on the period after World War II, a period of extraordinary prosperity. It ignores long down periods in the nineteenth century and even views the Great Depression as ancient history. Well maybe not-so-ancient anymore.
So a useful starting point in running anything is to ask: are there clear cycles, and what are they? In particular, are there cycles that affect our organization and that seem to occur in periods of ten years or less? For example, non-profit organizations are susceptible to economic downturns in ways that are somewhat different from for-profit businesses. Losses of income can come from unexpected sources and can carve out bigger chunks of a budget very quickly. Many non-profits that depend on foundations, corporate funding, individual donors or government contracts have had this experience in the past two years. Understanding these cycles of recurring downturns can help organizations take some preventive action, such as setting up a small rainy day fund or eliminating non-essential expenditures, to cushion these cycles.
Another useful approach is to use simple tools for understanding external changes that are affecting us. For example, if we look back over the past three to five years, what has changed in our business? What new or growing trends are we experiencing? What big events have occurred, and do they seem to be recurring? What do these trends and events mean for our core activities?
There are also simple tools for using history internally. What are we most proud of, and what do we wish we were doing differently? Have these things changed in recent years? What do our customers, clients or stakeholders think of us? How do we know what they think? Have these things changed in recent years?
It is also useful to understand the life-cycle of our organization. Newer organizations tend to be more energetic, less formal, have lots of overlapping roles and tasks and typically a single leader. As time passes, they become more formal (bureaucratized), with lots of departments, titles and managers. They also become very rule driven. But – a critical “but” – the rules are often ignored because powerful cultural norms have taken hold. Some of these norms are positive, others negative. In declining organizations, these norms almost always include indifference, complacency and arrogance.
Taken individually, each of these three is a serious danger signal. Taken as a group, they are the kiss of death. General Motors was not brought down by high health care costs. It failed because of a longstanding pattern of arrogance and complacency. To see evidence of these norms, all you had to do was look at GM vehicles or listen to the statements of the company’s leaders.
I once worked on improving the operations of a large hospital. When I asked the head of the nursing department why managers and staff members were not sent for in-service education, I was told that “we are the leaders, others come to us to learn.” In reality, because of this arrogance, the nursing service was 20 years behind the field, and the hospital almost lost its accreditation because of it. Like the leaders of General Motors, this group was dragged out the door believing that they had been screwed or were victims of uncontrollable forces.
So, at the organizational and individual level, the single most useful “lesson” from history may come from a quote from history. Herodotus: “All arrogance will reap a harvest rich in tears. God calls men to a heavy reckoning for overweening pride.” The only real problem with this quote is that arrogant people in pivotal leadership roles are often able to leave the harvest of tears for others.
The challenge is to be aware of what is happening and gauge the harm that is being done. This is where understanding our own history and the lessons of history can be most valuable. It starts with asking the right questions and then meeting a basic requirement of history: being truthful in our answers.