17 Feb

Measuring Relationships: a route to competitive advantage and reduced risk

Mervyn King

This article originally appeared as a blog on the International Integrated Reporting Council website. It is reposted with permission from the International integrated Reporting Council.

Corporate failures and scandals often have deep relational roots. So too does success, for the essence of any business is to invite people into relationship as investors, customers, employees or suppliers and to make such relationships more valuable. Yet, as the authors of The Relational Lens recently published by Cambridge University Press point out, these relationships are too often like dark matter – the fabric of the universe that passes unseen.

As a global leader on corporate governance and reporting I have advocated since 1994 that in its decision making process a board needs to take account of the legitimate and reasonable needs, interests and expectations (NIE’s) of its primary stakeholders.

Either management must have an ongoing communication with stakeholders or a Corporate Stakeholder Relationship Officer (CSRO) should do so. The CSRO informs management of the stakeholders’ NIE’s and does a written report to the board on the quality of the relationships.  At every board meeting there should be an agenda item “Stakeholder relationships.”  This will result in the board having an oversight which is informed in regard to managements’ proposals on strategy.

The Salz Review into Barclays, the National Commission on the BP Deepwater Horizon Oil Spill, the Inquiry into the death of Victoria Climbie (a major UK public service failure), or indeed the reviews into almost any corporate failure show that weaknesses in relationships between the company and its stakeholders are readily identified after things have gone wrong. But would Volkswagen or Deutsche Bank have landed in their current situations if their internal and external stakeholder relationships had been better founded and managed?  Could the many corporate disasters, of which Enron, Lehmans, Cendant, Worldcom, HealthSouth, Tyco, Qwest Communications, Toshiba, BP and Arthur Andersen are just some of a long litany, have been avoided by a more systematic management of stakeholder relationships?

Restoring confidence in corporate, political and other institutions will require more than clever PR. It requires systematic measurement and reporting on the quality of relationships with all major stakeholders so that companies can take specific steps to address the key issues seriously.

Andy Haldane, Chief Economist at the Bank of England puts it this way in his comments on The Relational Lens: “There is widening acceptance that organizations – large and small, public and private, commercial and charitable – may be failing to meet the needs of their societal stakeholders. This has, in some cases, caused a rupturing of trust, a loss of social licence. This book … equips companies with the tools to begin the slow process of rebuilding trust, relationship by relationship.”

In corporate reporting on social and relational capital, companies have too often resorted simply to recording their CSR spend. With integrated thinking and embedding sustainability issues into a company’s business strategy CSR has become yesterday’s thinking.

The lack of available quantitative measures is perhaps the main reason why the boards of companies, as well as executives and managers, invest so little monetary, temporal and other resources into understanding, managing and measuring relationships with their stakeholders.

A way forward is shown by the new book by John Ashcroft and his colleagues, based on over 20 years of measuring relationships within and between organizations across the public and private sectors, as well as in different parts of the world. They demonstrate persuasively that all relationships operate in 5 domains – communication, time, information, power and purpose. Using these 5 domains will aid the CSRO in carrying out their mandate.

This approach identifies whether the conditions for effective relationships are being put in place and identifying perceptions gaps around the effectiveness of such measures. Looking at the preconditions for relationships serves as a way to assess a leading indicator of risk, focuses on the relational building blocks of such outcomes as trust, accountability or loyalty, identifies the factors that can be managed and changed, as well as enabling more constructive and effective dialogue about the issues identified.

All that makes this book timely, especially for the corporate world.

Here is the framework, here are the tools and the case studies to enable companies to give stakeholder relationships the kind of detailed and systematic attention which will bring an informed understanding to a board about a company’s social capital, and help bridge the divide between financial and social capitals.

‘The Relational Lens: Understanding, Managing and Measuring Stakeholder Relationships’ was published by Cambridge University Press in October 2016. A video of the launch can be found at Relational Analytics.

Author: Professor Mervyn King SC, Chairman, International Integrated Reporting Council

Photo: Mervyn King by Sveriges Kommunikatörer on Flickr.

11 Nov

The Relationship of Relationships to Productivity

productivity

Connecting the Dots

Economist Paul Mills gave a remarkable speech at the annual conference of the Relational Thinking Network in Cambridge at the end of September. He examined a range of subjects, offering “relational solutions” to global financial instability.

It was fascinating to see the connections made between seemingly unrelated matters, showing that our current economic model is geared towards proliferating and exacerbating the pains of ordinary people suffering at the hands of an inherently flawed and unjust economic system.

In his talk, Paul connected the dots on a range of topics – the housing market, household debt, wage stagnation, income inequality, structural flaws in the banking model, corporate structure, the implication (and responsibility of) limited liability, taxation, the intergenerational crisis, and so on. Against each of the key areas, some relationally grounded solutions were briefly explored. Several days later, the implications of all that are still sinking in.

The most surprising fact however, lay tucked away in a one of the presentation slides:

“the declining rate of productivity growth”

Productivity Growth

Why is this significant? Because growth in productivity can be regarded as one essential factor which could help to dig us out of the current global economic doldrums.

I later learned I wasn’t the only one to have picked up on it. While discussing the day’s events over a drink at the pub, several of us mentioned our surprise at the notion of declining productivity growth which we all assumed was at an all-time high, given the age of technological proliferation in which we are living.

I had asked Paul about this during the coffee break and he explained that “most of the low hanging fruit” of technological innovation had already been “picked”, and that what lay next on the technological horizon was costlier progress in areas such as energy and transport – requiring far greater infrastructural investments.

My Experiences

This is where I got to thinking and to connecting what Paul had said to my personal experiences as a business consultant working in the relational field, and helping organisations to achieve growth in the three domains of culture, profit and social impact.

My experience has been that individual and team performance is underpinned by engagement and motivation. We know from numerous polls (Gallup, KPMG, Deloitte etc.) that workplace engagement is roughly stagnant around 35-40%. That means ~60% of the average workforce are either actively dis-engaged or only passively engaged – with immense and perhaps obvious implications for individual productivity and company performance. My experience (and the research bears this out) has also been that engaged people represent more productive (as well as happier) people. My experience has also been that good relationships lie at the very heart of well-functioning teams and thus are critical to engagement and productivity. This is the common thread of all facets of the Relational movement, that relationships underpin healthier, happier, more productive people and societies.

In other words, we may be overlooking our greatest opportunity for growth in productivity. Instead of looking to technology alone to fuel growth in productivity, is it time we reversed the equation and looked to relationships to fuel productivity and technological growth?

Consider the invention of smartphones. No doubt, these are an outstanding technological innovation with immensely positive implications for growth in productivity. Yet, that growth in productivity, can (and has) been turned on its head when the use of that technology overtakes its intended optimum: overuse of a smartphone can cause chronic back and neck pain, especially in the cervical spine due to the lengths of time we hold it in positions which are un-ergonomic. Lengthy exposure to the electro-magnetic fields that it emits are considered by many to be harmful to health and can deplete energy. One only has to do a quick Google search to learn about the detrimental impact of smartphone overuse on face-to-face relationships, even marriages. Smartphone overuse has also been linked to sleep deprivation, depression, anxiety and several other disorders. Thus, our relationship to technology can not only serve to increase our productivity, but it can also threaten and undermine our productivity!

My point is this. The next phase of growth in productivity should come from deeper engagement with ourselves and our contexts; with our friends, class mates, families, colleagues and the strangers we have the opportunity of meeting.

The Relational Lens

Thankfully the relational model offers a clear pathway for doing this through the Relational Health Audit – a tool designed to assess the health of key business relationships and for developing those relationships to increase engagement and productivity. The 5 dimensions or pillars of successful relationships are:

  1. Directness – the nature and style of communication
  2. Continuity – the degree to which a relationship shares a common thread of past, present and future
  3. Commonality – the degree to which a relationship shares common goals
  4. Parity – the balance of power in a relationship
  5. Multiplexity – the variance in the contexts within which you know or have known someone

The tool measures the perception of relationships in respect of the above dimensions and the difference in perception is where the gold dust lies. As Rob Loe pointed out during his talk on the Relational Schools project at the Cambridge conference: “perception is reality”. Thus, understanding and comparing individual perceptions of a relationship provides the essential first step to understanding its strength. The differences in perception provide the areas of focus for exploration and they in turn give rise to the powerful interventions which can be applied to improve a relationship.

So while we continue to navigate the treacherous waters of global financial instability, we can start to make strides in a positive direction by expanding our relational lens to increase engagement, productivity and the raft of other associated benefits in the workplace. Perhaps a return to solid relationships will be our greatest weapon in the battle to return to long term financial and social stability.

Nashak Billimoria
Founder, BeUnlimited
http://www.be-unlimited.org/

07 Jul

Inventing the Individual – Book review

Individualism - People

Individualism and the near global preoccupation with the self and the interests of the self is increasingly becoming the norm everywhere.

This norm is an abnormality. It is destroying the foundations of what makes life meaningful, and long lasting human relations and fulfilment possible. From time immemorial humanity has been characterized by the idea of community and commonality. This ancient norm is perhaps wired into our human genes, and correctly defines a key aspect of what truly makes us human. The rise of the solitary individual, and ‘the lonely crowd’, is a paradox that has been the focus of many studies. The English poet John Donne immortalized the powerful message that:

No man is an island,
Entire of itself,
Every man is a piece of the continent,
A part of the main …
If a clod be washed away by the sea,
Europe is the less.

Any man’s death diminishes me,
Because I am involved in mankind,
And therefore never send to know for whom the bell tolls;
It tolls for thee.

Larry Siedentop’s book, Inventing the Individual – the Origins of Western Liberalism, demonstrates that Individualism has not always been an essential part of the Anglo-American/European ethos or of non-Western, non-European societies either. It is a new invention which arose at a certain point in the history of these societies. This development was however, progressive, eventually preferring an “association of individuals rather than an association of families” (p129).

Central to Siedentop’s argument is the pivotal role played by the medieval Church. He pays special attention to the rise of monasticism and the teachings of the Church fathers and intellectuals, such as Bonaventure, Thomas Aquinas, Dons Scotus, William of Occam and Augustine, among others. He discusses, for example, the role played by Augustine who in his Confessions (an extended prayer) focuses on “the inwardness of the individual … a sphere of dialogue, of conversation with God” (p104). By Augustine privileging prayer and grace, thus “Inventing the Individual – in the sense of acknowledging the equality of humans in the face of their maker…” (p105), Siedentop argues, he laid the foundation for “ … the demolition of ancient rationalism. The patriarchal family, the aristocratic society underlying the polis, the cosmos as a hierarchy of ends and purposes: all these became suspect and vulnerable without its support” (p104).

The European renaissance and reformation created the context for a further development and understanding of these ideas. Christian belief in the special place of prayer and grace, in the equality of souls and in moral equality before God are then seen to be the mother of Western Liberalism, together with its radical notions of human liberty, equality and fraternity.

The new secularism, and the future of these ideas cut off and without reference to their original Christian cradle and context, poses a present and real danger. The runaway contemporary naked individualism, the glaring inequalities and lack of respect one for the other, the diminishing freedoms everywhere – these are perhaps a sign of this danger. So, too, is the unconscionable greed, excessive love of money and power, at the expense of loving and empowering human relations. Siedentop very powerfully reminds us of this. To his fellow Westerners he concludes “If we in the West do not understand the moral depth of our own tradition, how can we hope to shape the conversation of mankind?” (p363).

Review of Larry Siedentop, Inventing the Individual – The Origins of Western Liberalism (Penguin, 2015).
Dr Aloo Mojola Visiting Professor in Translation Studies, Philosophy and Biblical Studies at St Paul’s  University, Limuru, Kenya.

RTN is neutral politically, and is not a religious organisation. On this website we publish articles and opinion pieces that align with our values (link to values statement on the website) but the author’s views are his own.

23 Jun

Orlando: How our Ideology is Killing us

Donald_Trump_and_Hillary_Clinton_during_United_States_presidential_election_2016 2

By Robert Hall – 

He who knows only his own side of the case knows little of that.
John Stuart Mill

Orlando now joins San Bernardino, Paris, Fort Hood and many others. Attempts to understand these atrocities focus on the ideology and theology of the killers – issues around ISIS, radical Islam, and hate crimes. But those issues beg a bigger question. How have our own ideology and theology immobilized our ability to respond? We lament that the enemy does not change their ideology while we steadfastly hold on to ours, leaving us unable to act. In light of that old adage, “It’s not what happens to you, but what you do about it” – we are failing.

It is our country’s own ideological divide that makes many of today’s headlines. Presidential candidate Donald Trump accuses President Obama of stupidity, indifference or “something else.” Obama goes on a tirade denouncing Trump’s statement about Muslims. Trump retorts that Obama is angrier at him than at the Orlando shooter. Our gravest risk is not that terrorism will destroy us but that it will provoke us to destroy ourselves.

We keep asking: When are we going to wake up and take action about – fill-in-the-blank. For some the blank is filled in by stricter gun laws, limits on immigration, more effective mental health programs, or more aggressive police or military action. But as a nation we are immobilized by the depth of our disagreement. Our response is heightened worry, but not heightened action.

Our inability to agree on a holistic, strategic response means that we eventually become a part of the problem – but at least it is a part we can do something about. We have met the enemy and it is not just guns, bad guys, ineffectual military efforts or dysfunctional mental health system. The enemy is also us and our broken relationships that prevent constructive engagement and thus constructive solutions on behalf of future innocent victims. The first one or two incidents – shame on the perpetrator. The last ten, shame on them AND on us and our disabled relationships.

We may not be able to control “them” but what to do about “us”? That should be a different story but it requires leadership.

It is time for leaders and followers to stop asking: How do I convert others to think like me? The more constructive question is: What about your ideology or theology would you be willing to repurpose in order to reach a shared solution that would save lives and save our Union? What would you be willing to concede, not by forfeiting your personal beliefs, but in support of a shared higher-purpose solution for the country.

Until leaders and followers humble ourselves regarding our own imperfect beliefs, we will remain stuck. Let me suggest three keys for thinking more relationally about ideology.

Recognize broken relationships as our greatest long-term risk.
No matter how you disdain violence, loss of innocent lives, and any opposition you consider the enemy – ISIS, gun lobby, religious extremism, immigration policies – we are stuck unless we come together enough to craft solutions.

Years ago General Peter Pace, then Chairman of the Joint Chiefs of Staff commented on the sectarian violence in the midst of the Iraq war:

“If the Iraqi people as a whole decided today that, in my words now, they love their children more than they hate their neighbors…this could come to a quick conclusion.”

If we could decide we love those future people who will be gunned down and blown up more than we hate our fellow citizen’s solutions, that would be the starting point.

Place relationships at the center of ideology and theology. The preamble to the U.S. constitution begins with these words: “We the People of the United States, in Order to form a more perfect Union…”. Our Constitution – the supreme law of the land – seeks union. As a nation of individuals with diverse backgrounds, beliefs, and needs – the founding hope was union and relationship as the best means to serve and benefit from our diversity.

Theologically, we all have beliefs, be they faith-based or secular. I am a Christian and since that is the largest group in this country, let’s start there. In Matthew 22 Christ was asked what is the greatest commandment. His answer was relationship: Love your God with all your heart mind and soul and love your neighbor as yourself. Then he added: All the law and all prophets hang on these. The Bible is the supreme law of Christianity and Christ described the law as a means to a higher purpose – relationship.

To disagree is human. To deploy our differences as weapons trained on each other is self-destructive. Making productive relationships our highest priority is crucial to creating broader, more holistic strategic solutions.

Sacrifice for the purpose of relationship. Sacrifice is the acid test of commitment. If productive relationships represent higher purpose, we must be willing to sacrifice some of our favored ideology if we are to reach common ground with those who have their own favored ideology. Remember John F. Kennedy’s famous question: “Ask not what your country can do for you, but ask what you can do for your country.” Said differently, ask not what you can get others to do for your belief, ask what you can do to “sacrifice” for shared belief that increases safety for all. Assault rifles, immigration policy, more invasive law enforcement — it is a fool’s errand to ask others to sacrifice what they hold sacred if we are unwilling to also. The arrogance of our self-righteousness is daunting – I am righteous and of God and thou art an evil idiot. It is the ideology we disdain in our enemies and it must cheer the hearts of those who would kill us to see its disabling effect on us.

Our enemy’s beliefs and connected actions threaten our safety and our way of life. Our failure to connect our beliefs to the higher purpose of constructive relationships blocks our attempts to respond with holistic, strategic action. It is time to Relationship-up!

This was originally published on 17/06/2016 by the Huffington Post and has been re-published here with the author’s permission.

09 Jun

Relationships and Mental Health

Daughter and father

The Mental Health Foundation have released an excellent report, which you can read here, which sets out further evidence that investing in relationships is at least as important to our health and wellbeing as not smoking. Their argument, like that of Relational Thinking Network, is that  both as a society and as individuals we need urgently to prioritise relationships and tackle the barriers to forming them.

The importance of relationships for health

Looking at a range of evidence, the authors show that people who are more socially connected to family, friends, or their community are happier, physically healthier and live longer than people who are less well connected.

Indeed, a review of 148 studies concluded that:

the influence of social relationships on the risk of death are comparable with well-established risk factors for mortality such as smoking and alcohol consumption and exceed the influence of other risk factors such as physical inactivity and obesity.

They make reference to a longitudinal Harvard study, that began in 1938 and published in the 2012 book ‘Triumphs of Experience’, that found that that relationships are the most important factors for health and happiness.

Factors causing relationship problems

The report discusses a number of inter-related factors that negatively affect relationships. For example:

  • Moving away from one’s hometown, family and friends can have a very real impact on our relationships. Moving means having to adapt to a new physical and social environment. Studies suggest that one of the biggest challenges facing individuals when they move is building relationships and connecting with others.
  • Social media and other online technologies have many positives. However, the report notes that almost half of internet uses in the UK reported that the internet had not increased their contact with friends or family who had moved away.

Indeed, while they have increase our sense of belonging, online relationships cannot replace our offline relationships.

The neurochemical response that occurs during face-to-face interactions contributes to our sense of connection, understanding and ultimately wellbeing. In other words, face-to-face communication still matters.

  • Bullying can have a negative effect on people’s health. Conversely a positive experience at school, particularly with teachers, can “act as a buffer and help protect young people during this difficult time.” This is something that Relational Schools has been researching on.
  • Loneliness and isolation are a significant issue for older people. See an earlier blog post we wrote about this here.

Actions to be taken

The report ends by calling, as the Relational Thinking Network has done, for “a sea change in thinking”. We need to not only recognise the importance of relationships, (which we instinctively do), but that we take an active approach in the way we build and maintain relationships, and to tackle the barriers that prevents strong relationships from being built.

 

28 Apr

The rise of the machines: the risks of robots in financial markets

rise of the machines

Introduction

The title of this article is borrowed, in part, from the third instalment of the Terminator movie franchise, released in 2003. The movie tells the story of a robot that returns to the year 2018 from a post-apocalyptic world with intent to destroy humanity’s ability to stand in the way of a future ruled by hostile machines by taking control of world’s computer systems. Far fetched? Perhaps, but there are some interesting similarities to that storyline with what researchers and market watchers are starting to observe looking at the gyrations taking place across the world’s financial markets over the past few years.

‘Flash’ Crashes

In May 2010, all the key US market indices experienced a massive collapse and then a swing to recovery, close to previous levels, in little more than half an hour. All this happened in the early hours of the morning before the trading floor was even open. The Dow Jones in particular experienced a loss of 1000 points in just a few minutes, equating to trillions of dollars in value. In 2013, a similar crash was experienced on the Singapore exchange that lost nearly US$7 billion in market capitalisation over 3 days. More recently in August 2015, another flash crash took place in the US with another 1000+ point drop precipitated by sell-offs in China and index drops in Europe prior to the opening on trade in the US. Major stock markets are not the only ones affected. At the start of 2016, Bloomberg reported on the flash crash of a 10% drop in the value of the South African Rand in the matter of minutes of one morning.

There is a lot of speculation as to the causes behind these changes from highly publicised examples of individual rogue traders all the way through to the panic-induced retail investor. As debates have evolved and research has discovered, there is an increasingly common denominator starting to emerge. A CNBC report from January 2016 recognises the US trading regulator CFTC’s (Commodity Futures Trading Commission) findings that “One of the key connections is the rapid placement and withdrawal of trading orders that lies at the core of high frequency trading (HTF)…this activity was at least significantly responsible for order imbalances in the derivatives market, which in turn affected the stock market.”

The Rise of the Machines

So where are the evil robots? The same CNBC report goes onto point out: “These crashes are caused by institutional trading from exchange traded funds (ETFs) and HFT. They are not caused by mums and dads trading because mums and dads simply do not act in such a coordinated fashion in such a short timeframe. Mums and dads also do not have the leverage to shift markets in this way within 30 minutes or an hour. That power lies in the hands of large-scale derivative traders.”

Large scale derivative trading is an increasingly automated process. Traders, ultimately human decision-makers, develop and instruct automated systems to make decisions on their behalf in times, places and frequencies that would not be humanly possible. Powerful institutions equipped with the capital, skills, information and infrastructure seek and extract return across global capital markets. As has been identified, the losers in this war are the retail investor and those institutions that are unable to compete with the sophistication and speed that these powerful robots have at their disposal.

It is not the robots that are evil, it’s the set of rules and algorithms that determine their behaviour to buy or sell that are the real problem. These rules do not apply discretion beyond what they are coded to do. Scarily, they are able learn by these rules and market movements to serve their masters for effectively and efficiently in future. Unsurprisingly, it’s the masters of the machines that stand accountable.

A relational view on robotic trading

The world’s financial markets are a clear example how relationships between nations, regions, industries and asset classes can impact each other through complex interconnections. Robotic trading is a mechanical attempt to identify these connections and derive an information advantage in a market to deliver financial return by trading assets based on rule-based assumptions. Essentially, this mechanical process looks to transform the observed dynamics of a relationship into a tradable transaction for gain for those who command it.

The unsettling reality is that investigators and researchers still do not know to what extent robotrading affects the world’s markets because of the pervasiveness of systems and the herding effect that they induce when it comes to other institutional investors trying to follow the lead of their more sophisticated peers. What is clear though, is that there are casualties in the process. Mums and dads do not have the speed and information to make decisions like robots do, but there still remain many millions of families across the world that invest their savings into markets to pay for school fees, retirement and rainy days. Attempting to make sense of market information so skewed by machines can be a fearful and potentially fruitless pursuit.

Colin Habberton is CEO of PayProp Capital in Stellenbosch in South Africa. Before that he was CEO of the GivenGain Foundation South Africa (GGFSA).

14 Apr

‘Big government’ anti-relational? Not when it comes to income inequality!

Goldfish income inequality for RTN website

Over the last decade, research on well-being has increased exponentially. While the main focus of economists is on the relationship between well-being and GDP per capita, they are becoming increasingly aware of the role of income inequality. This is an important topic for relational thinking as well, since income inequality is closely related to social cohesion and trust within a society. While relational research often focuses on interpersonal relationships directly, the structure and organization of societies and their economies can be a major source of stress. The impact of poverty is widely understood, yet income inequality can put relationships under a similar kind of pressure. Much is still unknown about how inequality affects well-being and what can be done about it. This blog aims to give a first glance at ongoing research on the matter, from a relational perspective.

When discussing income inequality, we should first ask ourselves what do we mean, and why is it worth to be studied? A classic approach is to look at absolute income differences within a country. Yet, as humans are social beings whose well-being depends on interaction and comparison with others, it is relative income inequality that social scientists should be most concerned about. A commonly used measure is the Gini-coefficient, a complex mathematical function that unfortunately tends to overestimate inequality between incomes in the middle of the distribution. Due to the nonlinear nature of income inequality, a better alternative is to look at the % of national income that is earned by the richest 10% of the population of a country. For European countries this number ranges from about 24% in Denmark, up to more than 40% in the UK. This means that on average one third of all income in a country goes to 10% of the population, leaving two thirds to the remaining 90% . This may not sound very alarming. Yet a similar pattern can be seen within the 90% group. In the end, high inequality means that a relatively large group is left with relatively little income. Several researchers have argued that the current level of inequality causes polarization of societies, as different income groups tend to become isolated from one another through consumption patterns, education, and even residential areas. When inequality is furthermore perceived as a sign of unfairness, it can pose a serious threat to social cohesion and mutual trust, even further deteriorating relationships.

Closer investigation of the matter shows that while perceptions of inequality are important, countries with higher levels of income inequality have lower average life satisfaction irrespective of cultural differences. This is especially true for countries with relatively high standards of living, and the relationship is causal. The question is then what causes income inequality, and can it be influenced without major distortions to the functioning of the economy. Ideally, productivity should determine one’s income. Productivity can however not be directly observed, while differences between supply and demand of labor may lead to unequal bargaining positions. Thus, market structure and government institutions have a major impact on the distribution of income. More formally, these are called the degree of economic freedom of a country. As an indicator, economic freedom is usually divided into five sub-indices, being size of government (consisting of government expenditures and fiscal policy), the quality of the legal system, sound money, free trade, and the degree of regulation of capital, labor, and credit markets. Of these sub-indices, tax policies and low regulation have a strong and very significant impact on income inequality. As suggested by Piketty (2014), a country’s tax structure has an important signal function regarding what kind of earning system and income distribution are acceptable to a society. In addition, government regulation of an economy strengthens the bargaining position of the weak and poor and offers them protection against abuse of power. In addition to its potential direct positive impact, this leads to more equal outcomes, strengthening both work and family relationships.

What does this mean for relational thinking? While a lot of things can be left to the responsibility of local communities, sound macroeconomic structures are essential to contain income inequality, strengthening these communities and supporting healthy relationships. Thus, how paradoxical it may sound, ‘big government’ is not always such a bad idea!

Bjorn Lous is a second-year PhD-student at Tilburg University, studying the relationship between economic freedom, income inequality and life satisfaction.

24 Mar

The Toughest Testing Ground – Relational Risk and Peace

Peace

War zones and regions of inter-community tension and civic unrest are, almost by definition, high in Relational Risk. But how does Relational Risk help us not only understand instability but also find solutions in places like Ireland?

Watch below to see Pádraig Ó Tuama speak powerfully on relationships and peace. Pádraig is the Corrymeela Community leader and brings interests in poetry, language, theology and conflict to his work. You can find out more about Pádraig here.

Image: Peace (By Tessi on Flickr)

17 Mar

Debating India

Debating India

The Following is a review, written by Prabhu Guptara, of Debating India, by Bhikhu Parekh, (Oxford University Press, 2015, ISBN:  0-19-806045-9).

Relational themes are touched by most of the twelve essays in this outstanding book by a distinguished scholar who is now Emeritus Professor of Political Science at the University of Westminster as well as Emeritus Professor at the University of Hull, a Member of the House of Lords, and one of the Relational Thinking Network’s own Patrons.

However, three of the essays focus exclusively on relational themes.

First, Parekh’s imaginary debate between Osama bin Laden and Gandhi, conducted through correspondence:  The initial letter by bin Laden is couched in terms of an appeal to Gandhi to support bin Laden’s cause, putting forward the case for bin Laden’s approach to Islamic Jihad.  Interestingly, bin Laden comes across as someone who is neither mad nor murderous – nor an irrational person “devoid of decency and good sense, with whom no dialogue is possible”.  Gandhi responds fully and frankly.  Osama bin Laden’s retort is again responded to by Gandhi.

Though there are only two letters here from each of them, the upshot is to persuade readers that genuine dialogue is possible even between such diametrically opposed parties and traditions of thought, if each party practices, in the dialogue, what we in the Relational Thinking movement call “parity” – that is, if each appreciates what they accept as valid in the other point of view, and responds honestly.  Gandhi, for instance, accepts bin Laden’s critique of the contemporary West, but unhesitatingly puts forward the view that bin Laden attacks European imperialism “not because you are against imperialism but because (European imperialism) ended Muslim imperialism, and you attack Americans because they are preventing you from reviving (Muslim imperialism).   An imperialist yourself, your attacks on the imperialist designs of others sound hollow and hypocritical and convince no one”.  Moreover, Gandhi’s offers to bin Laden the seminal thought that he has “no patience, no plan of social and religious regeneration, no desire to deal with the deeper causes of (Muslim) social decay”.

Parekh concludes the imagined correspondence between the two by observing that it “is easy to imagine…how their dialogue would proceed.  Deep and irresoluble differences between them would remain in several areas.  (However, dialogue) with the likes of bin Laden is both possible and necessary…. (Such dialogue) can do much to improve mutual understanding, resolve some differences, build trust, and detoxicate the intellectual and political climate so necessary for the ordinary political processes to operate”.

Parekh’s point is relevant not just to the tensions and violence between Islamic militants and the West, but also to the internecine struggles between fanatical Islamists and ordinary Muslims, as well as between fanatical Hindutvans and normal Hindus in India.

Whether, at the end of the day, dialogue with people such as bin Laden will result in any reduction of violence on their part is not clear. I wonder whether Gandhi’s two attempts at dialogue with Hitler failed because Hitler lacked Indian traditions of debate?  Or would such attempts at dialogue have succeeded if they had been undertaken much earlier in Hitler’s career?  Perhaps “dialogue” alone is too thin for such purposes, as it succeeds in providing, at best, what we Relationists call “directness”; and that needs to be enriched by increased “commonality” and “multiplexity” – a process that was enabled by systematic and wide-ranging research, in the Newick Park Initiative (http://www.jubilee-centre.org/history-newick-park-initiative-jeremy-ive) which is what succeeded in defusing at least some of the potential violence surrounding the end of apartheid in South Africa.

Second, Parekh’s essay “Friendship in classical Indian thought”:  he points out that the conditions in which friendships can arise and flourish “do not obtain in all societies, and hence friendship is not a universal phenomenon”.  So the essay asks whether “Indian thinkers identified a form of relationship broadly analogous to that of friendship as we generally understand it” and, if so, “how they analysed its nature and structure, and what value they placed on it”.

He picks, for particular examination, the two great epics, the Mahabharata and the Ramayana. Taking his orientation from the contrast between anthropocentric/ theocentric views of the world dominant in the West, and the cosmocentric view of most Indian thinkers, he writes: “For (Indians), the natural world was an internally articulated and ordered whole whose constituents were all its ‘co-tenants’ enjoying the right to exist and avail themselves of its resources.  Human beings therefore had a duty of friendliness and goodwill towards each other as well as other orders of being” – meaning flora and fauna.

The question that arises is how this philosophy of universal goodwill produced something as oppressive and inhuman as the caste system and, even today, does not see the contradiction between universal goodwill and casteism.  Not only that, this philosophy of universal goodwill seems to have taken little interest in even attempting to seek any explanation for the rise of the contradiction, or for the existence of that contradiction for centuries.

Is it possible that ‘universal goodwill’ functions, then, as a comforter, which distracts from recognition of the reality of the ‘universal ill-will’ that is maintained by the caste system?

In any case, Parekh concludes that, for classical Indian thought, friendship “is one of the noblest of human relationships offering joy, love, security, and all else that makes human life rich and full”; that while Indian traditions are “rich in … detailed exploration of the different forms and dilemmas of friendship…it is poorly theorized” by Indian traditions; that Indian traditions do not “give as much importance to the bonding of heads as to that of hearts; that, in Indian thought, “friendship does not seem to play the kind of epistemological role that it does in some other traditions”; and that it is surprising that “there has so far been no systematic study” of Indian traditions regarding friendship.

That is indeed surprising, since my own childhood experiences of friendships in India contrast so much with friendships that I see among my children in the West.  For example, Indian friendships are in the nature of an emotional contract which cannot gradually slacken and starve, but can only be broken with a rather sharp gesture accompanied by verbal statement to that effect.  At least in Punjabi, there is even a word (“kutti”) for the breaking of a friendship.

Third, the essay on “Ambedkar and the Pursuit of Fraternity”:  Ambedkar is best known as the Father of the Indian Constitution, through which he tried to institutionalise the pursuit of equality and fraternity in India. The Huguenot ideals of “liberty, equality, and fraternity” (later kidnapped by the French Revolution) are well known throughout the world, and it is worthwhile reflecting briefly on the similarities and differences between these notions and some of those that are essential to Relational Thinking.

“Liberty” does not loom large in the Relational Thinking vocabulary, primarily because in the Relationist view, liberty needs to be balanced by responsibility, and contemporary culture overemphasises liberty; by contrast, we Relationists probably under-emphasise liberty in our effort to bring responsibility back into some semblance of balance.

Incidentally, the notion of liberty by itself did not mean much to Ambedkar either. In his view, “liberty” needed to be grasped as two different entities: “political independence” (e.g. from the British, which is what Gandhi and the rest of the Indian elite were obsessed with); and “social liberation” (from caste-based oppression, from which the vast majority of India’s population still suffer) which was Ambedkar’s focus.

From those brief remarks on “liberty”, let me move on to “equality” – which is a legal notion, to do with one’s relative status in the eyes of the law.  That contrasts with the Relational concept of “parity”, which is an inter-personal dynamic, to do with each party’s use of power to enable the best win-win environment for both parties.

Further, if we move on to the notion of “fraternity”, could it not be argued that that is rather like “good relationship”?  Well, “fraternity” is an inspiring vision or goal which remains rather abstract, unless fleshed out by detailed thinking covering many areas of life, society, economics and politics – of the kind that is provided by Relational Thinking.

Now, to the gist of Ambedkar’s work towards these goals or values, which Parekh puts well:

Unlike classical Indian thinkers, Ambedkar did ask why Hindus never protested against or even felt embarrassed by the practice of untouchability.  In his view, it was primarily because of their commitment to the doctrine of karma with its concomitant belief that one’s situation in this life is due to one’s sins or virtues in previous lives.

Such beliefs are also why India lacks what Ambedkar called a “public conscience” or “public spirit”.

So much is this the case that “Hindu society” cannot exist, because there can be no “society” in the absence of shared sympathies: “In India people are treated with contempt, yet it does not sicken an Indian with disgust, rouse his sense of justice and fair play, … his humanity does not rise in protest at what is going on around him” as Ambedkar himself put it or, as Parekh puts it: “Being entrenched within a way of thinking that reduce(s) human beings to their membership of particular castes, Hindus could not see untouchables as human beings like them, let alone as fellow members of a shared community.  Not surprisingly, they rarely took interest in, let alone campaigned against their degrading and inhuman status”.

For Ambedkar, eradication of untouchability “involved nothing less than a social revolution, a radical restructuring of the very foundations of Hindu society….(through) relentless struggle, an uncompromising, determined, organized … movement by untouchables with a view to acquiring political power, the key to all social progress”.

Since Ambedkar failed to achieve this, and failed even to create a political party of any longevity, he focused on “using the institutions of the state to create an egalitarian and casteless society”.  Ambedkar knew that this was not going to be easy, “because of a deep tension at the very heart of the Indian polity”.  The Constitution, framed principally by Ambedkar, committed India to the great ideals of liberty, equality and fraternity, but these are largely absent in its daily life.  As a result, state and society pull in opposite directions.

That contradiction could only be resolved, in Ambedkar’s view, by “the state dominating and systematically shaping society in the desired direction.  Since the objectives of the state are alien to Indian society, they could only be realized if the state was led by a determined Westernized elite.  If the state became a hostage to society as was the case for centuries in premodern India, or was led by men and women with no commitment to these objectives as in colonial India, Ambedkar saw no hope for the country”.   Parekh expresses no clear view regarding whether Narendra Modi’s election as Prime Minister portends the capture of the state by a party with no commitment to the values of the Indian Constitution – and therefore whether the Indian State is at present hostage to traditional Indian society.  Perhaps the manuscript of the book was sent to the press well before the shape of the actions of the current government became clear.

To return to Ambedkar’s strategy: the question raised by it is whether fraternity can ever be an institutional objective, let alone an institutional achievement.  He saw, of course, that fraternity was impossible without equality, and so he lowered his sights to using the Constitution and related legislative mechanisms to achieve at least political equality, without which social equality and fraternity have no hope of emerging.

The question Parekh does not ask is:  why did Ambedkar fail to rouse the majority of the country to exert themselves to achieve the self-evidently beneficial goals of fraternity and equality?  Could it be that emotional appeals successfully inspire those who are emotionally-inclined so that they are prepared to make enormous sacrifices?  However, for those who are inclined to be less emotional, such appeals to overarching goals need to be supplemented with a comprehensive programme consisting nevertheless of actions of varying shapes and sizes to suit people in different circumstances (a programme such as is developed by the Relational Thinking movement)?

In any case, as Parekh points out “the idea of fraternity is neglected in much of modern, especially liberal, political theory”.  He lays out and assesses Ambedkar’s signal contributions to that, as well as his enormous contributions to the making of modern India.

I wish I had the time and space to explore here the rest of essays in this collection, which are on other fascinating themes such as the choice of the National Symbols of India, the debates between Gandhi and Tagore, Einstein on Gandhi’s non-violence, Gandhi and inter-religious dialogue, the unfortunate narrowing of the perception of Gandhi’s philosophy to non-violence, the question of India’s National Philosophy, and reflections on the successes and failures of democratic politics in India.  Each of these has relational resonances.  I’m sure the Relational Thinking Network would welcome wider discussion and debate not only about the matters I have raised in this review, but also about other matters in Lord Parekh’s richly multifaceted book.

Prabhu Guptara is an executive member of the board of Relational Analytics.

11 Mar

Smart(ish) Phone

iPhone

Much to the amusement of my Android colleagues, my gleaming iPhone failed me last week.  The display started to click off unexpectedly in the middle of sending an email or checking my calendar. Everything else about the phone still worked.  Calls continued to come through, apps were still running in the background but without the screen, I could not respond to or affect anything.  I was left powerless.

With some know-how and the right kit, the guys in the Apple store narrowed the problem down to a loose connection within a few minutes and service was quickly restored.

Organisations depend on relationships, much as a piece of tech relies on a whole series of connections.  It’s a given that relationships are inextricably wired into our operations, though perhaps we rarely think about it.  Imagine trying to achieve anything without the necessary human connections in place.  And yet organisations often find themselves with a blank screen, struggling to understand, steer or develop all that is going on in the background.

For me, my iPhone is largely a black box, the interplay of the components remaining mostly mysterious and hidden.  For many managers (even as components in the system), organisational relationships can also be a bit of a black box.

With diagnostics and some technical expertise, the phone was restored to its designed purpose. Likewise, insight into relational dynamics leads to a more smoothly running organisation – restoration of full potential if you like.

A case in point is Google’s three-year quest to build the perfect team by investigating the elements that best predicted effectiveness. They found that group norms of relational things such as interpersonal trust and mutual respect outstripped patterns of personality types and leadership styles. The lead researcher, Julia Rozovsky, observed that “Just having data that proves to people that these things are worth paying attention to sometimes is the most important step in getting them to actually pay attention. Don’t underestimate the power of giving people a common platform and operating language.”

Dr Will Sopwith is a co-founder and Director at Renuma, who help organisations measure and improve their corporate relationships.

Photo: iPhone (by Claudio Schwarz on Flickr)