Challenge of the abstract

Since money became the normal medium of exchange, financials have led the critical thinking process.  Tangibles like income growths have made sense, while anything more abstract is considered impractical. With numerous financial downturns, realization dawns that to ignore abstract processes is to overlook their strong motivational forces.

The error in financial thinking, authors perceive, has been in carrying forward assumptions – e.g., assuming the words ‘strategy’ and ‘plan’ to be synonymous. The difference they hold is that ‘plan’ concerns with mission statements, goals, and budgets, while ‘strategy’ should necessarily investigate the multiple factors causing environmental change. In other words, the former depend on standard received wisdom, and the latter is often called upon to break new ground.

Rumelt writes:

A real strategy is neither a document nor a forecast but rather an overall approach based on a diagnosis of a challenge. The most important element of a strategy is a coherent viewpoint about the forces at work, not a plan. Discerning the significance of these events is harder than recounting them.

He further illustrates the faulty thinking:

In the 1990s, for instance, IBM’s basic model of layering options and peripherals atop an integrated line of mainframe computers began to fail. Demand for computing was up, but IBM’s way of providing it was down. Likewise, newspapers are now in crisis as the Internet grabs their readers and ads. Demand for information and analysis is increasing, but traditional publishing vehicles have difficulty making money from it.

Businesses suffer from their short-term definitions of normalcy going south. Fact is the characteristics of normal transforms with time, and strategy should include most if not all its new possibilities. After every crisis, a new normal invariably arises to represent reality, different from what has gone before.

Davis writes:

The new normal will be shaped by a confluence of powerful forces—some arising directly from the financial crisis and some that were at work long before it began.

He also points out that increases in the number of college graduates, and the entry of women into the workforce have boosted incomes in the past few decades. He regards both these factors as one-time influences that are spent forces today.

Thinking along the lines of standard received wisdom fosters perceptions of the future as extensions of the past. End result: crisis. That means reality has undergone change, but perceptions remain entrenched in the past to render responses to challenges incohesive. The appropriate thinking strategy for the future, must factor in possible directions of change, to make sense in the future.

I rather believe that the greater fault in the utilitarian mode of thinking is to evaluate individual worth in monetary terms. People have become comfortable with the bottomline of money ruling all transactions. They audit others in cost-benefit terms as well, although factually, the diverse people issues that are thus left unresolved contribute more to business failure than do the numbers.

Further, human motivations are more complex and unpredictable than volatile markets may be. Now, it may be that education and employment for women have become commonplace enough to lose significance as contributing factors in financial circles. But in the abstract emotional mind, their effects may be in transition to influence behaviour at a later time.

For instance, in the more orthodox regions of the world, men have social worth as breadwinners; women as homemakers have none. The feminine gender brought up to forebear, have traditionally appeased the male ego in social equations. They have been diffident in interactions, overcome with embarrassment in public conflicts with men.

The tacit social expectation is of continuance of the conditioned behaviour. Even in matters as trivial as standing in a queue, men of the region tend to routinely cut in ahead of women, banking on their learned aversion to making a scene or drawing public attention to themselves.

Although various Parliaments invoke legislations to support the weaker gender, these measures appear to merely showcase the benevolent patronage of women. In India, for instance, a bill to reserve a third of Parliamentary seats for women has been introduced. Political parties are under duress to field women candidates, and their leaders promote the candidature their own female relatives for the posts. The obvious intent is to retain governing control as puppeteer behind the scenes.

Women in these societies need to confront head on the social learning of their second-class citizenship. The point is women’s attitudes to work and relationships are yet evolving from thinking about assertiveness to acting upon it. In small strident measures, the educated and employed fractions have begun to question men taking for granted the social inequality. We may expect the emergence of a new trend when the silent majority absorbs this need for change.

In the more liberal Western nations, political leaders are also prone to utilizing gimmicks to centralize power. Reporting on party plans to raise female electoral support in UK, Street Porter writes:

Yvette Cooper, with her new no-nonsense hairdo, won plenty of coverage for her speech at the Labour Conference last week and was even referred to as a potential new leader - you can hear Labour spin doctors hard at work promoting this fantasy scenario, which is as likely as her husband Ed Balls running my local yoga centre … Cameron says he plans to increase the number of women in key posts in his team. A recently leaked policy document written by existing advisers was full of laughable suggestions about how to win our votes. A drinks party at No. 10 to celebrate successful females in business? How patronising is that!?

She writes further: 

Justine Thornton (a successful barrister) is now reduced to being touted like a handbag on the arm of hubbie Ed Miliband, styled in a non-controversial High-Street frock, and forced to endure the ghastly ritual of the 'Conference kiss' in the full glare of the media. Ed even gets his cleaning lady to wash the family car. Cameron is no better. When he held a barbecue for President Obama in Downing Street, the macho men cooked the meat while Sam Cam was reduced to dishing out the salad! 

Financial analysts call for change in the thinking process as essential to prevent further financial crises. Human factor analysts need to advocate the same, because the strategy with humans seems to remain in continuity with attitudes of a bygone era. In issues of gender and culture, historical stereotypes and prejudices are readily invoked in place of actually understanding the present. 

However, although it seems absurd to apply financial terms to people issues, there is one notable exception. Housewives, who live with more inequality than others precisely because no remuneration is involved in their social contributions, need this evaluation. These women have also learned to devalue their own worth. They tend to say they do nothing when asked about their occupation, although unpaid and unappreciated, they carry the brunt of responsibility for managing the household and raising the children.

Luhabe, a woman entrepreneur from South Africa, recommends that stay-at-home moms should be given 10% of their husbands' earnings at the least, so that the choice to be a housewife is not not made with resentment.

As Curnow quotes her view:

"And money is the currency that we use to define value of a contribution to the world, so why shouldn't we do the same for the work of bringing up children, which I think is probably the most important contribution that the world should be valuing." 

This idea would definitely resonate with all women around the world saddled with marital and familial responsibilities! Traditionally, the homemaker earns little respect and appreciation for the caring services they freely dispense around the clock. In having to pay up, husbands, and etc., would be compelled to value woman’s work by the same standards they value their own.

Dominant social groups continue to think, plan and act in the same old ways expecting to prolong the status quo advantageous to them.  In this process, to either recycle stereotypes or to perceive people as commodities becomes habit hard to break.

Factors thought to be insignificant in finance, may be highly significant in the emotional world of people. In discounting this fact, the understanding of reality remains skewed. The thinking about people needs to change drastically, and be distinct from financial thought, because the abstract challenges of Diversity are far too formidable to ignore.

References for this post:

1. Curnow, Robyn. “Why women need a 'mommy's salary'” cnn.com. CNN. October 13, 2011.  
2. Davis, Ian. “The new normal” mckinseyquarterly.com. McKinsey Quarterly. MARCH 2009. 
3. Rumelt, Richard P. “Strategy in a ‘structural break’” mckinseyquarterly.com. McKinsey Quarterly. DECEMBER 2008. 
4. Street Porter, Janet. “Women don't want fluffy gimmicks - we want power!” dailymail.co.uk. Mail Online. 3^rd October 2011.