Getting back in balance

Henry Minztberg Illustration by Jack D.
Illustration by Jack D.

Henry Mintzberg is a man who believes that the key to prosperity, however one defines it, lies in creating the right balance. An internationally renowned academic and author on business and management, Mintzberg applies this philosophy of balance to his own life. “I spend my public life dealing with organizations and my private life escaping from them,” he explains on his website. For more than four decades, Mintzberg has been a professor at McGill University in Montreal, Quebec, where he is currently the Cleghorn Professor of Management Studies at the university’s Desautels Faculty of Management.

A prolific writer – he has written more than 150 articles and 15 books – Mintzberg is considered one fo the most thoughtful, provocative and critical thinkers on management. And, from an economics perspective, he asserts that our global economies are out of balance and tilted too much in favour of the private sector. The result is an unsustainable path gripped by political paralysis. The answer? Mintzberg calls for a radical renewal that brings the public, private and plural sectors – the latter representing non-governmental organizations and member-owned businesses with each other. This, he argues, will lead to responsible business, respected government and robust, interactive communities. Corporate Knights first interviewed Mintzberg in 2009. Below is an excerpt from a more recent chat that took place in the fall:

CK: When you say you believe in something because it’s impossible, what do you mean by that? What inspires that?

MINTZBERG: All change seems impossible, but once accomplished it’s the state you’re no longer in that seems impossible. You can look back and say, how did we ever tolerate that? How did the Americans ever tolerate an electoral college and how could they have tolerated the process by which a minority of voters can put someone in office?

CK: You’re working on a new book, to be released this year, that hits on topics such as balancing society, radical renewal, and moving beyond the left, right and centre. Can you give us some insights into what your core thinking is with this new work?

MINTZBERG: What I’m arguing is that since 1989, after the fall of the communist regime, the assumption was that capitalism had triumphed. I think that was a mistake. I think that balance had triumphed in the sense that we (the western world) were roughly in balance and that the eastern European countries were totally out of balance on the side of the public sector. Because we misinterpreted that, we are now swinging out of balance in the private sector – that is, cutting regulation, reducing taxes on the wealthy, the amount of tax increases in regressive taxation like sales tax. So we’ve swung out of balance and what I’m saying is a balanced society leads to responsible businesses, respected governments and robust communities, or what I call the plural sector.

CK: What is the role of large corporations in this rebalancing?

MINTZBERG: I don’t think companies are going to solve this problem. Responsible corporations will not make up for irresponsible corporations. There are too many irresponsible corporations. I applaud the responsible corporations but green retailing is not going to make up for greedy drilling. So social responsibility contributes and it’s important, but it’s not going to be the starting point or the main point. On the other hand, I think it comes in once plural-sector organizations, through social initiatives, show the way. So what you have today are thousands of fascinating social initiatives all over the world based on microfinancing. These didn’t confront banking, they went around it. They created a way for people who couldn’t get loans to get loans. That’s an example of social initiative. Once that starts happening – and you see this with microfinancing – then the regular banks can say maybe we can do that, too. You get responsible reforms.

CK: I guess this is a bit of a loaded question, but would you say financial capitalism has been more parasitic than symbiotic with respect to the planet and society?

MINTZBERG: Unbalanced, probably yes. I’m not sure the word parasitic is the right word, but yes. My vocabulary is to compare exploring corporations with exploiting corporations. Exploiting and parasitic mean the same thing. Apple would be a classic example of an exploring corporation that contributes enormously and in fascinating ways and does extremely well, although it also does its share of exploiting in certain respects. But there are too many exploiting corporations.

CK: There are some global initiatives, led by big corporations, which are aiming for the highest common denominator policies – i.e., policy changes that lead to market rewards for responsible leaders and increase market costs for the laggards. What do you think of this approach?

MINTZBERG: It sounds fine. But there are a couple of things. One is that the smaller companies behaving responsibly may not get the publicity that the bigger companies would get, so they may be at a disadvantage in that perspective. The other thing is that you can build up goodwill and blow it in an instant with a new mercenary chief executive who starts exploiting. Delta Air Lines was revered years ago for the treatment of their employees and look what happened? The trouble with working for a company today is that no matter how good it is, like Johnson & Johnson, you don’t know if some new mercenary is going to take over and just kill it in a year or two. It happens so often these days with executive bonuses and stock market forces.

CK: This seems a pretty good reason to improve the rules of the game – to rebalance, as you might say.

MINTZBERG: Right now it seems to me that it pays to be good. The trouble is that it also pays to be bad. You can make a lot of money being bad, and by bad I mean the letter of the law. Bear in mind, too, the company may be destroyed in the long run by irresponsible behaviour. But the chief executives are walking out with massive bonuses before that happens. So it pays the chief executive to be bad, but it doesn’t pay the corporation in the long run.

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