In 1981, the Business Roundtable, a grouping of the chief executives of America’s leading companies, issued their “Statement on Corporate Responsibility.”

The shareholder must receive a good return but the legitimate concerns of other constituencies (customers, employees, communities, suppliers and society at large) also must have the appropriate attention. . . . [Leading managers] believe that enlightened consideration … will best serve the interest of [the] shareholders.

In 1997, the Business Roundtable issued another statement, entitled “Statement of Corporate Governance.” This one, about “Shareholder Value”, reversed the previous one, claiming that the paramount duty of management and boards of directors is to the corporations’ stockholders. It explained:

The notion that the board must somehow balance the interests of stockholders against the interests of other stakeholders fundamentally misconstrues the role of directors. It is, moreover, an unworkable notion because it would leave the board with no criteria for resolving conflicts between the interest of stockholders and of other stakeholders or among different groups of stakeholders.

No criteria indeed—except judgment! Somehow, between 1981 and 1997, America’s most prominent CEOs lost their capacity for judgment. If you want to understand what has been behind the problems of the American economy since then, here you have it, right from the horses’ mouths. (See http://www.mintzberg.org/enterprise.)

In 2009, Jack Welch, America’s superstar CEO (of General Electric, from 1981-2001), declared famously that “On the face of it, shareholder value is the dumbest idea in the world.” But wait a minute Jack: you were a member of the Roundtable that issued that 1997 statement. In fact I have been told that you championed it (although this I cannot confirm, and you are presumably not telling).[1]

In any event, thank you Jack for your dumbest statement–after the damage was done, and continues to be done. Thank you on behalf of all the employees who were either “downsized” or shifted to lower wages, in the name of “productivity” (and so helped to bring on Donald Trump). Thank you on behalf of all the customers who have had to put up with appalling services and lousy products at higher prices since that 1997 statement. Thank you on behalf of all the decent companies that were destroyed so that a few CEOs could run off with “shareholder value.”

Where has all the judgment gone?

© Henry Mintzberg 2016. Originally posted on mintzberg.org/blog, 31 March 2016.

About the author:

Henry Mintzberg, Cleghorn Professor of Management Studies at McGill University, is the author of Rebalancing Society, and a weekly TWOG.

[1] Three years later, in 2012, the Business Roundtable issued this third, lame statement: “[I]t is the responsibility of the corporation to deal with its employees, customers, suppliers, and other constituencies in a fair and equitable manner and to  exemplify the highest standards of corporate citizenship.”

Business Roundtable. (1981, October). Statement on Corporate Responsibility. No longer on site

Business Roundtable. (1997, September). Statement of Corporate Governance..

Business Roundtable. (2012, March). Principles of Corporate Governance.

Some people don’t get the idea of the plural sector, perhaps because it has been so marginalized by the great debates over left versus right—private sector markets versus public sector governments. Where to put the plural sector, comprising all these community-based and other associations that are neither public nor private? NGOs, clubs, churches, unions, mass movements, social initiatives, and so on? Wolfgang Műller, Chief of Operations of the City of Vienna, who had read my book about Rebalancing Society, got the idea—in principle. Then he experienced it in action.

I met Wolfgang last Wednesday when he organized a workshop I did with his colleagues at the City of Vienna, before I attended the Global Drucker Forum in that city. He recounted a story about how this understanding in principle suddenly became an understanding in practice. I asked him to write his story down.

WM:  On Friday September 4, I was sitting in my office in Vienna City Hall when I learned on twitter that refugees from Syria and Afghanistan, some with children, had decided to walk the several hundred kilometers from Budapest to the border of Austria, determined to get to Germany, their land of hope.

Suddenly, within hours, Vienna’s train stations became organized as hubs for thousands of refugees—buses in, trains out. In such a situation medical care, food, and overnight shelter had to be organized, usually in association with NGOs such as the Red Cross.

While my staff was coordinating the crisis management network, I needed to get a hands-on impression of what was happening. I went to the new central station, where I saw all kinds of people helping with translation, providing medical aid, and distributing blankets, clothing, and food. Among them was a group wearing shirts emblazoned with “Sikh Help Austria”; they were dishing out warm meals from big pots that they had brought.

Something truly amazing had happened. Citizens young and old, some the children of immigrants or themselves earlier immigrants, decided to take action. They asked themselves what in Henry’s book is called “the Irene question”—“What can I do?”—and here they found an answer. Using social media, they organized themselves into a sort of citizens’ start up, dedicated to helping the refugees. They called it The Train of Hope (@trainofhope).

Here are some statistics: 180,000 meals were served in September alone, by 350 volunteers every day, including about 5,000 warm meals by Sikh Help Austria. (These statistics are from what could be called the management accounting “department” of that Train of Hope! Even that sprung up, as if from nowhere.)

Now, when The Train of Hope asks via social media for bread or bananas, the items usually appear within the hour: hundreds of kilos. Social media entries are updated regularly and the posts are now followed avidly by about 300,000 Austrians.

At first, we in the city administration were very surprised. But then we realized that this was not uncoordinated. It was a highly professional, high speed performance. That is when it dawned on us that here was the self-organizing plural sector in action. So we in the city administration decided to give The Train of Hope all the technical support it might need, including background support on call. We then invited The Train of Hope to join the city’s crisis management network, an offer that was accepted. I am delighted to report that this cooperation has continued to perform consistently well, with no end date yet clear.

This is a PPP of a different kind: a public-plural-partnership, agile and flexible—sharing the governing of a crisis. Why Not? Isn’t this smart government? Much has been written about the sharing economy. But this is not like sharing lodging, as in Airbnb. It is about sharing concern, and help, and hope.

I am passionate about my work for the city of Vienna, and I feel privileged to be part of these very special events. Thanks to The Train of Hope, and the contribution of plural sector as a whole, I am now even more positive and optimistic about our future. If you are near Vienna, just go and take a look.

HM: I went on to the conference the following two days. On Friday, Wolfgang sent me his email with the story. I read it late that evening. My alarm was to ring in time to get me to my plane the next morning, but I woke up earlier. What to do with the extra time? Of course: just go and take a look.

It was quiet in the station at 8 am. (Turns out that it is now cleared in the evenings so that every refugee has an overnight bed.) But I was able to walk through where several people were still there, some in family groups, many sleeping, while other young men were talking together, killing time. I asked one family if I could take a photo but a young man waved me off.

Outside, clothing and supplies were stacked up neatly in tents. I saw a rough sign that read “Refugees Welcome.”  Nearby was a plastic sheet meant to be a door. I went in: this turned out to be the volunteers’ area. A woman at a desk asked “Do you want to help?” “I’m sorry, I can’t”, I said, “I have a plane to catch.” But then I realized that I too had an answer to the Irene question: “We’re writing a blog about this.” About hope.

About the authors:

© Henry Mintzberg and Wolfgang Müller 2015. The opinions and views expressed in this article are those of the authors, and do not necessarily reflect those of the institutions to which they are affiliated.

Social media certainly connects us to whoever is on the other end of the line, and so extends our social networks in amazing ways. But this can come at the expense of deeper personal relationships. When it feels like we’re up-to-date on our friends’ lives through Facebook or Instagram, we may become less likely to call them, much less meet up. Networks connect; communities care.

Marshall McLuhan wrote famously about the “global village,” created by new information technologies. But what kind of a village is this? In the traditional village, you chatted with your neighbor at the local market, face-to-face: this was the heart of community. When that neighbor’s barn burned down, you may all have pitched in to help rebuild it. Is crowdfunding in this global village quite the same? Like those fantasy-ridden love affairs on the internet, the communication remains untouched, and untouchable.

A century or two ago, the word community “seemed to connote a specific group of people, from a particular patch of earth, who knew and judged and kept an eye on one another, who shared habits and history and memories, and could at times be persuaded to act as a whole on behalf of a part.” In contrast, the word has now become fashionable to describe what are really networks, as in the “business community”—”people with common interests [but] not common values, history, or memory.”

Does this matter for managing in the digital age, even for dealing with our global problems? It sure does. In a 2012 New York Times column, Thomas Friedman reported asking an Egyptian friend about the protest movements in that country: “Facebook really helped people to communicate, but not to collaborate,” he replied. Friedman added that “at their worst, [social media sites] can become addictive substitutes for real action.” That is why, while the larger social movements, as in Cairo’s Tahrir Square or on Wall Street, may raise consciousness about the need for renewal in society, it is the smaller social initiatives, usually developed by small groups in communities, that do much of the renewing.

At the organizational level, as I have written frequently, effective companies function as communities of human beings, not collections of human resources. Of course, all companies need robust networks, to communicate among their parts as well as to connect to the outside world. And this applies especially to their managers: networking and communicating, even for its own sake let alone for decision-making, is a major component of every manager’s job. But far more crucial is the need for collaboration, and that requires a strong sense of community in the organization.

We tend to make a great fuss about leadership these days, but communityship is more important. The great leaders create, enhance, and support a sense of community in their organizations, and that requires hands-on management. Hence managers have get beyond their individual leadership, to recognize the collective nature of effective enterprise.

Especially for operating around the globe, electronic communication has become essential. But the heart of enterprise remains rooted in personal collaborative relationships, albeit networked by the new information technologies. Thus, in localities and organizations, across societies and around the globe, beware of “networked individualism” where people communicate readily while struggling to collaborate.

The new digital technologies, wonderful as they are in enhancing communication, can have a negative effect on collaboration unless they are carefully managed. An electronic device puts us in touch with a keyboard, that’s all.

About the author:

Henry Mintzberg, Cleghorn Professor of Management Studies at McGill University, is the author of Rebalancing Society, and a weekly TWOG.

There is, however, one evident change in recent times that is influencing the practice of managing: the new digital technologies, which have dramatically increased speed and volume in the transmission of information. Have their impacts on managing been likewise dramatic?

My answer is yes and no. No, because these technologies mainly reinforce the very characteristics that have long prevailed in managerial work. But yes, because this very fact may mean that the practice of managing is being driven over the edge.

What are these characteristics of managing? As I discuss in Simply Managing (and also observed long ago in The Nature of Managerial Work), managing is hectic: it is fast-paced, high-pressured, and frequently interrupted. In the words of one chief executive, managing is “one damn thing after another.” This is an action-oriented job. It is also significantly communicative: managers do a lot of talking and listening. Traditionally this has meant the job is mostly oral. And managing has generally been lateral as well as hierarchical: research has found that managers spend at least as much time with people outside their units as with those inside. Observe some managers as I did for the recent book (from a head nurse to a corporate CEO, in settings from a bank to a refugee camp), and you will likely see pretty much all of this. Does this suggest that there is a lot of bad managing out there? Not at all. It describes normal managing—inevitable managing.

Now let’s enter the digital age: how does it affect these characteristics of managing? Niels Bohr reportedly quipped that “prediction is very difficult, especially about the future.” So let’s focus on the present, and the innovations in communications technology that managers have been most eager to embrace, particularly email

One thing seems certain: the ability to be in communication instantly with people anywhere increases the pace and pressure of managing, and likely the interruptions as well. But don’t be fooled. I found in my original research, long before anyone heard the words “you’ve got mail!”, that many managers choose to be interrupted. The new technologies bolster this. No one forces any manager to check messages the moment they arrive. And how many require the immediate replies they get? One CEO told an interviewer: “You can never escape. You can’t go anywhere to contemplate, or think.” Well of course you can. You can go anywhere you please.

Internet connectivity has hardly reduced the managerial orientation to action – and the disinclination to engage in reflection. Quite the contrary: everything has to be fast, fast, now, now. How ironic that heavier reliance on information technology, technically removed from the action (picture the manager facing a screen), would exacerbate the action orientation of managing. With all those electrons flying about, the hyperactivity gets worse, not better. (Check your messages Sunday night; your boss has probably called a meeting for Monday morning.)

Of course, more time gazing at the screen and tapping away at the keyboard means less time spent talking and listening. There are only so many hours in every day. Yes, 24. But text-based vehicles like email are thin – limited to the poverty of words alone. There is no tone of voice to hear, no gestures to see, no presence to feel. Managing can be about interpreting and using these as much as it is about the comprehension of content. On the telephone, people laugh, interrupt, grunt; in meetings, they nod in agreement or nod off in distraction. Effective managers pick up on such clues. With e-mail, you don’t quite know how someone has reacted until the reply comes back, and even then you cannot be sure if the words were carefully chosen or sent in haste. I once met a senior governmental official who boasted that he kept in touch with his staff by email early every morning. In touch with a keyboard perhaps, but his staff?

Finally, the new communications technologies, and in particular the social media, certainly push the lateral tendencies of managing further by making it easier to establish new contacts and keep “in touch” with existing ones. It has always been true that the people who report to a manager are few and fixed compared with that manager’s network of external contacts. Today, thanks to these media, it is exponentially more true. And so managers’ own reports may be getting less of their time—in quality as well as quantity.

As usual, the devil of these new technologies can be found in the details. Changes of degree can have profound effects, amounting to changes of kind. When hectic becomes frenetic, managers lose it and become a menace to what is around them. The Internet, by giving the illusion of control, may in fact be robbing many managers of control over their own work.

The characteristics of managing described at the outset are normal only within limits. Exceed them, and the practice of management can become dysfunctional. Put differently, this digital age may be driving much management practice over the edge, making it too remote and too superficial.

Perhaps the ultimately connected manager has become disconnected from what matters. Might therefore the new technologies be destroying the practice of managing itself, and thus impoverishing our organizations, and societies? We don’t yet know—there is more inclination to glorify new technologies than to investigate them. But look around you—at a colleague who burned out, at a boss who drives everyone crazy, at yourself and the kids you may rarely see. And then consider this:  are these tools augmenting our best qualities or our worst?  Each of us, manager or not, can be mesmerized by them, and so let them manage us. Or we can understand their dangers as well as their delights, and so manage them.

About the author:

Henry Mintzberg, Cleghorn Professor of Management Studies at McGill University, is the author of Rebalancing Society, and a weekly TWOG.