What is a Business?

WHAT IS A BUSINESS

Machine or ecosystem? We say one thing, nature says another.

I remember meeting Tom Brennan, one of the co-founders of the Green Garage, a number of years ago. Not long into our conversation, Tom gave me a foundational insight into sustainable business thinking: a business is a living thing, not an inanimate object, like a machine. This insight is antithetical to the way many of us think. The mainstream view, whether we’re even conscious of it, is that of business as a machine – at least this is how we act. 

We draw-up business plans then realize – perhaps within moments of execution – that things are not working out. We create organizational charts that map who does what, and then notice streams of work are not getting done, either because the persons who are supposed to the work do not understand their roles, or are too busy doing other things. We engender businesses with a level of organizational complexity we neither comprehend, nor control. If the business was a machine, we’d turn the key, and voila, things would get done. Alas, this is not the case, and it’s because people are not machines. Buildings, desks, pencils, computers and the objects that spit-out parts are machines. Human beings are living organisms, the most complex of all organisms on Earth. One of the aspects of being so complex is that human beings do not necessarily behave in predictable ways. 

Business as Ecosystem

Today, we often hear the word “ecosystem” mentioned within the business context. The American Heritage Dictionary defines ecosystem, “an ecological community that together with its environment functions as a unit.” Further, ecology, which is used in the definition, is “the science of the relationships between organisms and their environments.” Therefore, to call a business an ecosystem, based on these definitions, is valid, and more importantly, it’s better than thinking of a business as a machine.

As an “ecological community”, a business is “together with its environment” and “functions as a unit.” This is a logical conclusion drawn from viewing a business as an ecosystem. Another important concept of “business as ecosystem” is that of the relationship “between organisms and their environments.” Here, the term relationship must not be overlooked. It is the relationships that are of utmost concern, and in the case of a living environment, the relationships ought to support life, not lead to death. As human beings, we rely on the health of the natural environment for our survival. Businesses function within this environment, not just the local environment, but the whole of the global environment. The greatest threat to our survival as a species (a threat that leads to death) is rooted in the way in which we are inclined to overlook the relationships a business has to the natural environment, of which each of us is a part. We are living organisms who are dependent on each other and the whole of the Earth system – the global environment. 

Mode of Production

From the time homo sapiens emerged onto the scene, some 120,000 to 150,000 years ago, we were challenged with meeting the needs of the “functioning unit” (think of the tribe or community). The production of the necessities of communal life, such as arrow heads, baskets, huts and so forth, had to be organized in some fashion or another. Back then, as today, some model for organizing the production of goods had to be applied. In today’s globalized economy, that model is what we broadly refer to as capitalism.

Capitalism represents a relatively complex school of thought, and like all schools of thought, it has a point of emergence. In other words, there is a point in human history wherein capitalism did not exist. Perhaps more importantly – not unlike all schools of thought – capitalism emerged from what preceded it and embodies elements of that which preceded it. Capitalism is, in many respects, a recapitulation of the master-slave and feudal systems from which it emerged. Put more precisely, capitalism “subsumed” the master-slave and feudal systems. 

Although many would argue that capitalist practices emerged in the West prior to the 1500’s, historians generally peg capitalism’s birth sometime in this century. Adam Smith, who wrote in the 1700’s, is credited with giving capitalism its first systemic treatment. Of course, there’s a whole group of thinkers from roughly the same period – Locke, Hobbes, Bentham and others – who contributed to the philosophies of liberalism, which provide capitalism with its back drop.

So, what is capitalism? Simply put, it is a framework for the mode of production and, in essence, separates the worker from the means of production. Prior to capitalism’s taking hold, the worker and the means of production were one: The blacksmith owned the tools, the furnace, the anvil and various accouterments necessary for production. To keep things simple, under capitalism the concept of “business owner” emerged.  Workers were now dependent on business owners – those who owned the building and all the tools – to provide wages in exchange for their labor power. 

Capitalism’s emergence coincided with the Industrial Revolution and the birth of the factory system, which combined, led to an explosion in productive capacities. Whether capitalism begot the Industrial Revolution is something I believe is debatable. The contributions of Gutenberg’s printing press, Bacon’s thoughts on science and Newton’s physics were – I believe – far more influential than capitalism as a mode of production. In other words, I place more credence in the human desire to create, than I do in a system that simply defines the mode of production. To suggest the Industrial Revolution would not have happened had it not been for capitalism is, in my estimation, a stretch. There are, of course, many who would be quite rankled by this suggestion. 

Today, capitalism has been globalized. The devotees of capitalism will argue that capitalism ought to be upheld because it drives innovation and has led to far-reaching elevations in human standards of living. The problem is that these benefits have come at an exceedingly high cost, a cost accountants call “externalities”. They include environmental destruction, degraded human health, under-utilized human labor and a host of other problems. These are the tremendous wastes that go along with capitalism’s mode of production. As Naomi Klein points out in, This Changes Everything, global climatic change, and the destruction of the Earth system have their origins in the capitalist mode of production. 

Why would this be so? The answer is quite simple: Capitalism, as the mode of production, is discontinuous with the environment in which it functions.

Not “Together with the Environment”

Based on what we established earlier, businesses are best thought of as ecosystems. Businesses, in the capitalist system are an integral participant in the mode of production (i.e., businesses function to organize what work will get done). Yet, to what extent do business leaders consider the ways in which the business’s operations maintain a healthy relationship with the natural environment, which includes the organisms – the human beings– who make-up the community in which the business operates, as well as the community who work for the business? 

Although this is changing – at least we’re hearing a lot of noise about it – the simple answer is not enough. This is because, under global capitalism, and the precepts of neoliberalism (i.e., the notion that market forces make the best decisions) we are seeing grotesque aggregation of wealth and power. And if the small numbers of those who’ve aggregated all of this power and wealth do not understand the depth and “wickedness” of the problems we face, it’s not likely they’ll be inclined to do anything about them. 

Consider the Koch brothers, who’ve invested “tens of millions of dollars into groups that deny climate science or work to block greenhouse gas cuts.”  While David Koch may no longer be with us, that the Koch organization, a private firm now controlled by brother Charles, has the power to promote an alternate reality that negatively affects public policy is a manifestation of the capitalist system. It should also come as no surprise that at least a number of the folks who lead and control businesses likely ascribe to bizarre conspiracy theories.

According to a February 12th Voice of America article about the January 6th siege on the US Capitol, “… researchers at the University of Chicago have concluded that the majority of the rioters were not members of far-right groups but ‘normal’ Trump supporters — part of his political base. Among them were doctors, lawyers, architects and business owners.” 

Another sobering reality is this: According to the Small Business Administration, just 0.01% of all US businesses in the private sector employ 52.7%, or 66.7M private sector employees. The other 99.9% of US businesses registered in the private sector employ the other 47.3% of the workers. This means just 30,000 business employ more than 50% of the private sector workers, while the rest work for a staggering 30.7M businesses – that’s more than a 1,000-fold difference! The point is that more than 50% of the private sector workforce is beholden to the thinking of a comparatively few number of people – some of whom may even believe in the tooth fairy.

There’s a Better Way

What’s the answer? For this we turn to Dr. Richard Wolff, who’s work as a Marxian economist points to a fairly simple answer: democratize the workplace.

Sometime ago, I worked for a paint manufacturing operation and had responsibility for quality systems. I worked with a fellow named Dave, who was responsible for production operations. Dave brought with him a background in Toyota Production System (TPS). By the time I started working with Dave, I’d already spent nearly twenty years in the paint business. For the first time in my career, I saw what applying TPS looked like in a paint plant. To suggest Dave was a pioneer is an understatement. 

The most important thing Dave taught me about an effective TPS is the primacy of listening to, and acting upon the voice of those who do the work. In other words, management must have a verifiable process for giving the worker a say in things – in the way work gets done. This notion is not unique to TPS: It has deep roots. Yet, for the most part, we’ve seen little movement toward giving workers an effective say in what a business does. Put more bluntly: The workplace is far from being democratic. 

That giving the worker say in what a business does remains largely overlooked in our day should not come as a surprise. In this system, a system begets the likes of a Jeff Bezos, who commands more wealth “than the GDP of most countries in the world”, the emphasis is placed, not on the worker, but on those who control the business. 

Under capitalism, the power resides in those who control the capital; these are the owners – the shareholders – and the owners’ agents, the managers. Not unlike Dave, some owners and managers have become enlightened: They are leveraging the energy that resides in the minds and hearts of the worker and are using this energy to build better businesses. These businesses have healthier relationships with the organisms that make-up the business. Yet, this enlightenment is far from pervasive, precisely because this system places such emphasis on the business entrepreneur – the owner – and sees this person as some sort of Ubermencsh.

What is one thing a business leader – an owner or manager – could do to advance a more democratically run business? Install a suggestion box and build a process that ensures what’s put in the suggestion box sees the light of day. What does this mean? It means placing emphasis, not just on what goes-on in the rarified air of the board room, or wherever the manager or owner sits and contemplates what comes next, but on what the voice of the worker has to say. It means reading the stuff in the suggestion box and meeting regularly with workers to discuss what’s being suggested and how these suggestions could be made real within the business. 

If we accept the idea that a business is an ecosystem comprised of living, conscious human beings, then we must accept the notion that there is more to what the people who do the work have to offer, beyond simply completing tasks. This implies that as human beings, with the capacity to think, those who work for a business ought to have some say in the direction of that business – what the business does and how it does it. 

By bringing democratic decision-making processes into a business, we ensure decision making is not left to relatively few, or just one person. Is bringing democracy into a business a perfect answer? It’s not, but engaging workers in decisioning making is an embodiment of the business as ecosystem. It recognizes the business is a living thing, one endowed with the collective consciousness of a community of people: those who spend much of their waking hours contributing to the work of the business.

While there are no guarantees, giving voice to the collective consciousness of a business may just have a greater impact on solving the wicked problems we face.  

As a stretch on where this could go, imagine a chemical company owned and run by the workers. Decisions about the direction of this business would be made through radically democratic processes. In this imaginary scenario, scientists have found that one of the company’s products is suspected of causing cancer, and throughout the years, a number of the company’s workers have died of this particular cancer. Do you think this business would continue to produce this product? It’s an interesting question, and while there are no guarantees as to the answer, there’s a much greater chance the question would not be simply overlooked, or “externalized”.

Democratizing the workplace is not easy, but then again, nothing worth having is ever easy. But it represents a manifestation of what is true: A business is an ecosystem with living, thinking, caring human beings who have something to say about what a business does.

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