Brexit: Crisis and Opportunity – Nothing Lasts Unless Incessantly Renewed
by David Hurst

Multilayered complex systems are stable when the large and/or slow processes govern through constraint the smaller, faster ones. Sudden change can take place when agents at a lower level escape the restrictions of agents higher in the system, disrupting the whole. This principle applies to all complex systems from golf swings to management organizations and political structures.

 

The Founding Fathers ensured that this was the case in the structure of the American government when they wisely arranged the different branches of government in a systems hierarchy of constraint. The House of Representatives is elected every two years, Presidents every four years, the Senate every six years (on staggered terms) and the Supreme Court is appointed for life. The intent was to create a stable system of checks and balances that could handle only modest change and would not be subject to sudden radical movements. For similar reasons, James Madison favoured representative democracy and rule by experts over direct democracy and rule by faction. There are analogous, if less engineered, hierarchies of constraint in dual-house – elected and appointed – parliamentary systems. The role of the ‘upper’ house is to reconsider and modify the occasionally impulsive actions coming to it from below.

 

From a systems perspective, when British Prime Minister David Cameron agreed to a referendum on whether to remain with or leave the European Union, he was risking that a small, fast system might escape the constraints of representative democracy and the sovereignty of Parliament. It has escaped, and the result is crisis and chaos. Some say it is the end of the Post-World War II political dispensation. Perhaps, but it is also an opportunity for both Britain and the EU.

 

The Waning Narrative of the European Union

 

Three years ago I gave a presentation to the International Forum on the Future of Europe in Vilnius, Lithuania. In it, I suggested that the problem with the EU was that it had lost its narrative. I used an ecological perspective to show how the EU had been born in the aftermath of the Second European Thirty Year War (1914-1945) as a passionate movement to avoid further conflict among the nations of Europe. After initial success, greatly aided by the rebuilding of Europe’s shattered infrastructure, it became a series of increasingly ambitious economic and political projects. In that process, however, like all successful institutions, it became much larger, more calculative, rule-driven and bureaucratic. The stories told by expert economists and bureaucrats are rarely compelling and, as the original narrative waned, means became ends-in-themselves.

 

Economic attachments are fragile. We may work for money, but we live for the story. An ecological perspective suggested that any “buy-in” would be temporary at best and that the resulting tepid commitment would fluctuate with the EU’s economic fortunes. This is particularly the case if economic gains are spread unevenly and significant segments of the population feel left out and ignored. The result was widespread Euroscepticism that, as Nigel Farage, then the leader of Britain’s United Kingdom Independence Party (UKIP) proclaimed, was all about national identity.  The Brexit Referendum became a contest between technicians favouring the status quo and populists promising a return of a Little England narrative. The story won: it usually does.

 

With Crisis Comes Opportunity 

 

“Never let a good crisis go to waste” is an aphorism often attributed to Winston Churchill but never sourced. The idea probably comes from Chinese Taoist philosophy and its use of natural analogies to understand stability and change. Crisis plays a pivotal role in the renewal of ecosystems. Wind and fire, flood and pestilence clear away old growth in mature forests and open up patches, where there is equal access to water and light. Here young organisms, fueled by nutrients from a recycled past, can flourish and renew the system.

 

In Britain, it seems likely that the old political party arrangements no longer reflect the new divisions in the electorate. The Conservatives are badly split, and left-wing Labour Party has been called a “walking ghost”. It performed poorly in the referendum, with many of its members ignoring its call to “Remain”. There is now a contest for its leadership. So the Brexit crisis may act as a catalyst for the reform and reconfiguration of Britain’s political parties, something that would be extraordinarily difficult to do in regular times.  By the time this new configuration has gone to the polls for a new mandate it is possible that the whole Brexit concept will be so completely muddled that a crisis-induced, reformed EU may accept some version of Bremain.

 

In the EU, it is time for its leaders to reflect upon the entire project. Those with direct experience of World War II are nearly gone and with their passing, the founding narratives of the EU become second-hand memories. The administrative integration of the EU’s members needs to be slowed and even rolled back, a direction to which Angela Merkel seems sympathetic. The creation of the Euro was a bold but premature move, freezing the system when it still needed significant wiggle room. Attention should be on strengthening European identity through new narratives and the creation of compelling experiences that build and maintain them. You can only fight old stories with new narratives. It will not be easy. The late historian Tony Judt stated the challenge well in his paradoxical thesis that Europe has been able to rebuild itself politically and economically only by forgetting the past, but that it can define itself morally and culturally only by remembering it. Perhaps it is time to start the process again with the generations born since 1945.

 

Management Lessons from the Brexit Moment

 

What can managers learn from the Brexit moment? Stability is a relative matter, and nature teaches us that great stability is often achieved at the cost of a system’s resilience. The resulting structures are hard but brittle. Authoritarian organizations are like this. Resilient systems need to flex and flow, not by trashing hierarchy – that is a recipe for chaos – but by minimizing the number of levels and designing the constraints to ensure that there is discretionary space at every level in which to act and to innovate. The Toyota Production System (TPS) comes to mind. Toyota is a highly bureaucratic organization, but the TPS creates spaces in which everyone at every level can act to take advantage of opportunities that appear only at that level of granularity. The military equivalent is auftragstaktik, so-called “mission command”. It is a form of directed opportunism that encourages initiative in all ranks. Unfortunately, it is not a one-time affair but a fundamental philosophy that has to be faithfully followed. As organizations grow in scale, enabling hierarchies of constraint continually threaten to morph into coercive hierarchies of control, closing out the spaces for discretion and judgement and stifling entrepreneurship and innovation.

 

The bottom line is that with crisis comes opportunity and, as Charles de Gaulle remarked of the French Army in 1942, “Nothing lasts unless it is incessantly renewed…”

 

About the author:

David K. Hurst is a management author, educator, and consultant. His latest book is The New Ecology of Leadership: Business Mastery in a Chaotic World (Columbia University Press 2012).