Speaker A Third presentation is by Harold Solas. And he's been a board member of the society these last five years and very interested in this. And I'd like to introduce my colleague and friend and co chair of this conference, Harold Solas.
Speaker B The videos we saw sorry. There was a sequence by Ian McDonald in which he told the following story. There was a CEO who had been doing ro in his company, and he had a dinner meeting with director of Social Services of the community. And this director tells him the charges for domestic violence have dropped to almost zero. What happened? What did you do? You may have missed this. I did miss it the first time. But isn't that impressive? I mean, something happened in this company which was training. It was about structure and managerial processes and leadership practices and so on and on. And something happened that made the lives of these people come together in such a way that they stopped beating up their wives. Now, isn't that a stimulating thought? Isn't that impressive? Is it scientific truth? Well, no, maybe not yet, but is it a stimulating idea? Wow. Okay, so the title of this presentations is Genes Plus Loss, which is not my phrase. It is Elliot's. That's a phrase he used all the time in one of his last book, which is The Life of Behavior of Living Organisms. And the three speakers in this last plenary did not make any previous coordination. I find it very interesting to find out that we have some interesting degree of convergence on concepts and also on examples. This is this theory of felt fair pay that Elliot had. Once Elliot told me, this is an aspect of my work that nobody asks me about. They don't ask him for seminars. They don't ask questions. He pointed his finger at me and said, you don't ask me. So I wondered why. And I don't have the full answer. But this idea is so contradictory. This relates to something John said just now about economic science. This is so contradictory with our usual way to understand how wealth is created and what drives people to create wealth that it's hard to take in. Is it? Okay, let me go on. These are some reflections by Elliot Jacks. In a personal email, you can see what his thinking is about economics. John mentioned something about, is economics a science? Well, he says, there's a factual record, there's a factual phenomenon about what people think is fair distribution of wealth, and the standard economy has no recognition whatever of this kind of phenomenon. And this is another very interesting reflection. He says, well, economics and management and disciplines we deal with have been trained to make their own science. Well, the only possible science is in behavioral science, such as physics and chemistry are the basic science for engineering. This is a phrase I picked up from Argentine economist in the presentation which says that economics is based on the homo economicus. And this is what Marcia Sandev Nobel Prize has to say about this. And Andrew spoke about Eunus and changing the world. Well, I participated during four years in one of these programs of small loans for entrepreneurs. And partly I did it because I was interesting in fighting poverty, and also partly because I thought, hey, this guy developed a system for bringing out the best in people. He has something common with Elliot Jacks. This was an awfully interesting experience. And this is what Eunice has to say. Current economics is all wrong. We have to start again from the beginning. How do you do this? Did Elliot develop this? No, he didn't. But he sure has some powerful ideas about this. And this is an interesting reflection by Gelbraith Senior on the future of economics. He says, the future of economics is in understanding the workings of the firms of organizations. If economy is going to have any significance whatever in the future, it will lay in the structure of bureaucrates and delegation. How about that? And this is one bridge. This is something about Ro and economics, now about life on Earth. We are fairly familiar with this eight work strata in two orders of complexity with four replicating mental processes. So this is very interesting, and we work with this all the time. But Elliot went much further. This unfolds up and down and covers all forms of life on Earth and all developmental stages of human beings. And this is a very interesting thing. It's possible to observe and to classify that all insects are cumulative processors, and all single cell organisms are declarative processors, and all hunting animals are serial processors, and that some species, such as chimpanzees and elephants and dolphins and lions are parallel processors. Interesting thing. It's one species, one form of processing. And what about humans? Well, suddenly they fan out into we use eight, but there are more. How many more, we don't know. So this would support the hypothesis that Stratification is inherent to this human species, that is as inherent to the human species as speech or the Bible condition. Lots to say about hierarchies and lots to say about what leadership is. In this view, leadership is a uniquely human phenomenon. And this is well known Albert Einstein's reflection. He says, as we do things, as we make larger social groupings, the problems that are created cannot be solved at the same problems at which they were originated. So we have an ever increasing demand for higher level talent. Elliott works helps enormously to understand and categorize this kind of phenomenon. Now, about this genes plus loss, there's a concept by Chilean biologist Umberto Maturana, which I find extremely stimulating. He calls it the genetic phenotype. And basically, he says this if you have the full genoma of any living species, you would still not know what that species is like. Why is that? Because you need to know both the genoma and the way of life of the species. Why is this? Because the same genetic endowment can support numberless possible ontological developments. Very stimulating. And this dovetails beautifully with Eliot's thinking. He says, instinctive constraints that are ingrained in all other living species are much weaker in humans, so law takes the place of them. By law, I mean what Eliot calls constructive constraints. He discusses liberty, says, what is liberty? Is it opposed to constraints? That's where our first thinking and then we say, well, but if you really want to speak liberty, then we have to take constraints into account. And during the third stage, the only way to speak about liberty is to speak about constructive constraints. And here's one thought. Arrow theory could be considered as a theory of constructive constraints for working human organizations. Okay, so what's the underlying thought in this? The underlying thought is that humankind can and should construct itself and that this could be done on scientific basis. Now, how's that for a stimulating idea? We wonder why requisite organization is not more widely applied and why people don't understand it and so on. Well, not easy. I mean, something as tremendously practical as Penicillin took an awful long time, in a meandering way, before it became a useful social resource. And this is what Elliot had to say about people who didn't understand or didn't accept requisite organization. Now, I heard this from Jax in 1997, and at that time I thought, what the hell is this guy talking about? What is this? And over the years, I have come to understand that this is absolutely crucial, and he's true. And this is the theme of one of his latest book, which is Social Power and the CEO. This is true. Now, we talk about social responsibility of enterprise. Now, what is social responsibility? Is it about paying taxes? And is it about abiding by the law? And is it about promoting culture? Is it about charitable contributions and so on and on? No, it's not about that. All that is fine, but that is just the foundation. The true social responsibility of business is about good practices. It's about structure. It's about measuring roles. It's about managerial practices. It's about HR systems and so on and on. The way I understand it no, not the way I understand it. The way Elliot understood it is this is social responsibility. Well, accountability hierarchies are not just contraptions that we invent in order to solve practical problems. They're essential to the human condition. And as we said, as I mentioned before, and also Andrew did, one of the things we ran against is the current economical paradigm. Well, we had a discussion on incentives and this kind of thing. Well, this relates to this. When we use an incentive scheme, what kind of underlying assumptions on the economy support that? And some people will never get it. This is something that Ken Craddock said about Deming. He said about 2% get it, and some never will. Now, Jerry, the other day you made me look stupid because I said that can we envision a time when a CEO who does not use proper systems may face negative social consensus and even go to jail? So your reply made it sound like I was saying what we need is tough loss to keep those bastards in line. Well, that's not what I was saying. What I was saying is I refer to legislation because I understand that as the ultimate expression of social consensus. Now, this last objective, if I may call it that way, is certainly something that nobody in this room will say. Certainly not. I in my late 60s. But is it possible to think of this as a future possibility? Well, I don't know, but I find it greatly stimulating. Finally, a quotation from Elliot that I am going to read. Will we be able to learn how to extend our magnificent discovery of science and scientific method to the way we order? How we can live together in peace and plenty with mutual trust and perhaps a sparkling of love? Let us square shoulders and have a try. Thank you.
Speaker A Thank you very much. That's the end of our formal conference program on the subject this last few minutes. We were scheduled to be at lunch in about 15 minutes. Um, I want to tell a little story.