Why the new entrepreneurial citizen must learn from the past to account for an uncertain world
by Paolo Quattrone

People tend to forget, but words have a history.

‘Society’ – as philosopher, anthropologist and sociologist Bruno Latour reminds us – combines the Latin socius (an ally or companion) with ‘-ties’. It’s about how we as individuals bind ourselves to one another to form communities.

But the way we govern and understand ‘socie-ties’ – be they states, public or private institutions – has not escaped our modern obsession with interpreting the world around us through calculation.

Whether through financial figures, electoral polls or reality show audience votes, we’ve come to believe we can simplify anything with supposedly objective data.

In this drive to manage corporations, states and communities by numbers, we have come to believe incentives, metrics and other forms of numerical data can capture what are otherwise irreducible complexities.

We no longer ask questions like: Why did that happen? What can’t we know? What are the risks? What could go wrong?

This search for certainty has made us falsely believe that by maximising shareholder value we can pursue the common good, but we’ve forgotten this ‘common good’ is always in a state of flux.  It depends on the evolving links between political, social, moral and environmental concerns which should be debated, not measured.

However, the greatest casualty of this world which praises numbers as sacred is ‘rationality.’ In our drive for certainty, we’ve forgotten its true meaning.

For many, it will be common knowledge the term originated from the Latin ratio. But what’s perhaps less understood is that it not only meant ‘reason’ but also ‘account’ and ‘proportion’.

Because for an account to be rational, it must also seek proportionality – i.e. it must establish a proportionate relationship between members of a community and seek to reconcile opposites.

By the 16th Century, the Jesuits had already developed a simple system to achieve this. Their colleges’ cash boxes had two keys – one held by the procurator (the equivalent of today’s CFO) the other held by the rector (in today’s terms, the CEO).

Only by talking to each other and mediating competing interests could they open the cash box and appropriate funds as agreed.

For them, looking at financial numbers was a pragmatic means to interrogate non-financial issues, to seek the common good, which by definition, could not be defined once and for all but needed to be continuously negotiated.

Accounting was the material practice to allow this negotiation and guarantee the search for an impossible balance between interests purposefully designed to be in opposition and in tension.

Why the micro-lecture on the etymology of accounting in a post on entrepreneurial citizenship?

The make-up of word ‘entrepreneur’ reminds us that a good business person is always between (entre) not only different ventures but also ‘in between’ competing concerns that today can range from geopolitical issues to pressing matters of inequality.

Not only do entrepreneurs have to be citizens of a community and be able to navigate organising logics (industrial, civic, polity, market).  However, they must also ‘speak’ several languages (economic, political, technical, social), to communicate with complex audiences and act as cultural mediators between the business and the civic dimension of managerial actions.

For centuries, accounting has been the tool entrepreneurs have looked to, to help them operate in this middle ground. It’s how they’ve mitigated concerns between economic and social tensions of their actions.

It is also in today’s entrepreneurial explosion where I see the greatest opportunity to rediscover the lost meaning of society and rationalism.

Entrepreneurial citizens will have to be more socially aware than before, and ready to embrace a new form of governance that goes behind and beyond the numbers to really properly understand how business impacts, and can benefit us all.

It is time for this new breed of entrepreneurs to embrace uncertainty and use data to build on it rather than seeking to control and reduce it.

However, first we must accept that while rational choices may be impossible to make, reasonable judgements remain in our reach. Something which is only achievable once we appreciate the ties that bind societies together, and the challenges they create and which we have to mediate.

Developing the right intellectual and ethical framework to allow this change in attitude is important, and it’s essential we also give entrepreneurs the tools to navigate it.

With the rise in big data, we now have a powerful instrument to draw on limitless sources of information to develop statistical models that know us better than we can know ourselves.

Of course, this runs a very real risk of assuming certainty and accuracy can guarantee us an un-messy future. A belief which may in some cases force people, and algorithms, to make wrong decisions and at a faster speed.

However, it also gives us a significant chance to increase the scope of our interpretive power, and restore judgement to our decision making to tackle the growing global challenges we face, as a community.

We just have to remember the meaning behind our words.

 

About the author:

Paolo Quattrone is Professor and Chair of Accounting, Governance and Social innovation at the University of Edinburgh where he is also leading  a project to establish a new interdisciplinary institute to train ‘entrepreneurial citizens’ in collaboration with industry, government and the broader civic community. He has worked and conducted research at the universities in Madrid, Manchester, Oxford, Palermo and Stanford.