Philosophers in the boardroom: Insights from theory on practice

Last weekend, London Business School hosted the 7th Sumantra Ghoshal Conference – an annual event where business school academics focus on what they consider to be ‘managerially relevant research’. For those who didn’t make it, here is a brief insight into some of the themes and thoughts that emerged.

‘The smell of the place’

Perhaps the most enduring speech Ghoshal ever gave was at the World Economic Forum in Davos, in which he encouraged managers worldwide to change the context they create for their employees, something he referred to as ‘the smell of the place’. He illustrated his point by comparing the fatigue of downtown Calcutta in the summer with the forest of Fontainebleau in spring:

“Go to the forest in Fontainebleau with the firm desire to have a leisurely walk, and you can’t… the moment you enter the forest, there is something about the crispness of the air, about the smell of the trees in Spring, you want to jog or catch a branch or DO something… Most large companies have created downtown Calcutta inside themselves”

At a time when corporate life was derided in popular culture, in films such as Office Space (1999) for example, Ghoshal posed an important question: If individuals are not at fault for companies displaying poor work ethic and thus poor performance, how do we then change the context in which they work? How do we create Fontainebleau forest inside companies? While he picked up on the faults of management in creating a ‘smell’ of constraint, compliance and control, he also laid much of the blame at the feet of business schools in attempting to teach management as a science.

Seven years after his passing, I wonder what he would have made of the weekend’s discussions, which in his honour, were an attempt to legitimize the role of business schools in promoting good management practices and their relevance to business, government and society.

Why do academics exist?

The question at the heart of many of the presentations seemed to be why do academics exist? And though plenty of ideas were put forward, each seemed to converge on a single answer: to ask the right question

Any fool can give an answer, but by asking the right question, Ghoshal planted a seed in the minds of the business leaders who attended Davos that year, one which encouraged them to think about the culture they create for their employees. But in my mind, the illustration that followed missed a crucial point. His description of Fontainebleau forest captured the environment in which he, as a Professor at INSEAD was privileged enough to work in, where he could put his mind to the philosophy of business, towards developing new theory. While he criticised managers for creating downtown Calcutta within organisations, he seemed to overlook that this is in fact a reality they face day to day, one that is busy, fractious and exhausting.

Facing the problem of ‘cognitive overload’, senior managers invariably risk making poor decisions, creating a ‘fool’s paradise’ around themselves and (as one academic noted) experiencing intense loneliness in times of tough decisions.

The only practitioner in the conference room – whose first sentence went ‘everyone here is wearing a tuxedo and I’m the guy wearing brown shoes’ – used the analogy of academics (teachers) in the coaching box, watching players (managers) from the stands. Yet, this is really describing the manager’s position, designing tactics for their organisation enacted by teams. In fact, it might be better argued (as another footnote on Plato), that academics fulfill the role best explicated in the allegory of the cave. They occupy a privileged position from which they can perceive the ‘true form of reality’, whereas the prisoners (managers?) see only shadows.

Of course, this is a somewhat anachronistic, (not to mention self-aggrandising) way of looking at the role of the ‘philosopher’, and so perhaps a more tangible way of describing the academic process is William Shutz’s idea that academics take an unexamined world, which is simple on the surface but complex in nature, and seek to understand it through rigorous observation until we reach a state of ‘profound simplicity’, which is then shared and propagated.


Managerially relevant vs. managerially useful

In this pursuit of ‘truth’, academics create a complex world around hypothetical organisations, which they attempt to capture by deploying sophisticated models. In this way, we run the risk of tackling managerially relevant questions that cease to be managerially useful. After all, once stripped of the daily ‘chuff chuff’, the problems encountered in the practitioner’s world are relatively simple compared to the ones we tackle, insofar as they are executing the day to day routines of the company.

Often much of what we produce in our papers is criticised as ‘anti’-managerial – long studies and abstract concepts which require a process of thinking slow. The ultimate danger we face is therefore believing the complex world we create in our models is in fact the reality for senior managers. Practitioners turn to academic insights when they face big decisions. However, these decisions are made in the context of just one company, and for learnings to become relevant to other managers, the role of the academic is to ask interesting questions and present answers that are devoid of context.

Naturally, this becomes difficult when empirical analysis is derived from a single case study or organisational setting. Hence the long list of boundary conditions we include in our ‘implications for practice’. But perhaps it is here that management consultants play an important role – business schools help to provide them with a vocabulary, a set of tools and sometimes new ways of thinking, not to mention new recruits (the number of MBA students who go on to work in consulting roles is testament to this).

My biggest takeaway from a conference intent on justifying the relevance of our research, was in fact how conscious we are, as management scholars about what value we create for our customers, not to mention the self-depracating view with which we approach the question. Jim March illustrated this point when he said: “I am not now, nor ever have been relevant” – coming from an academic who was ranked second after Peter Drucker in a survey carried out among practitioners asking whose research they perceived as most relevant to practice.

The conclusion of the conference seemed to be that to stay relevant, we must, when theorising about organisations, ask the same question posed by Jim March, who would ask from his research, almost obsessively … what is this a case of? Where can we attribute this model or theory in practice? And in getting there heed Ghoshal’s advice, to ‘look at the phenomena with authenticity, respect, curiosity, speculation, and the occasional journalistic privileges’.

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