David K. Hurst: Managing People-as-Ends and Not People-as-Means

what does it mean to manage people as ends and not as means what managerial behavior does that imply how exactly does it help your business grow david hurst has the insights this is the economics for entrepreneurs podcast entrepreneurs are economic heroes they improve others lives with preferred products and services innovation and value we offer you the knowledge and tools to make your entrepreneurial journey a successful one by building a beautiful business now here's your host hunter hastings hey hunter hastings here a listener asked us recently about our point of view about managing people in a medium-sized fast drawing firm specifically this listener raised some issues around the different experiences of people in different roles in the firm frontline workers middle management process managers and executives are the terms blue collar and white collar still applicable i'm not sure but it's that kind of issue a midsize firm that has multiple functions like manufacturing distribution and marketing and has its own administrative functions like accounting in hr can be a place with a lot of different lived experiences how do you get everyone to buy into the mission and the purpose in the same way and to the same degree with the same level of commitment for this question we turn to our good friend david k hurst he's lived these management issues in his role as an executive in the steel industry navigating through turbulent times and i might add managing from turbulence to a smooth result after that he embarked upon an intellectual journey of discovery to understand why there are turbulent management cycles in some firms how is it possible to go from turbulent to smooth and why different ways of managing coexist why there are what he calls tensions between the two and how those tensions might be resolved does austrian thinking play a role here well david not an austrian economist but an avid learner has discovered hayek while on his intellectual journey and hayek's thinking about the interplay between and within complex systems the individual order and the social order that there are tensions between them that are never fully resolved and yet emergence can result that yields an outcome where everyone can be comfortable recognizing that they have to make some adaptations as individuals to reap the benefits offered by membership of the group david has authored a model of management to which he gives the title management in a field of tensions there's a cyclical element in how the tensions play out some sometimes favoring what he calls the soft humanistic side of management where we austrians tend to live and sometimes demanding a shift to the hard scientific side of planning and data and calculation and goal setting both sides have to live together the tension is never resolved as regular listeners know every week we provide an infographic or a tool or a process map relevant to the episodes that we hope is useful for entrepreneurs and managers this week will provide the graphic depiction of david's management in a field of tensions model and he'll refer to it during the podcast so if you'd like to retrieve it from the internet as you are listening you can do so at mises.org e4e pod or at hunterhastings.com david k hurst is a prominent speaker writer and management educator mostly as a business guy he was executive vice president of a large north american industrial distributor with over over a billion dollars in sales employing sixteen hundred people and was part of the senior management team that saved the organization from bankruptcy during a severe business recession and turned it to profitability and growth he has an mba in finance and a ba in psychology and he serves as adjunct professor at the university of regina's graduate school of business he's a harvard business review author and a contributing editor to the business magazine strategy plus business david welcome back to economics for entrepreneurs thank you so much hunter very good to be here again well it's good to have you back and we had a lot of uh very high praise for the the recent uh podcast that we produced together and one of the reasons to uh continue that conversation among the many is that we had an inquiry for one of our listeners on the subject of managing a diverse set of employees this was in a medium-sized business but the mix of employees included uh blue collar if that's still a term the people working on the front line and at uh at the business there were white collar people and say marketing and other areas their executives doing strategy and planning and so on and the question was about the different considerations that arise when you're managing and trying to motivate that kind of a varied group and that made me think of your model you call managing in a field of tensions and uh we've been discussing it a little bit before we started the podcast but um i'd like you to describe the model why you use the term the field of tensions and just for people listening the the model is available on our key takeaways page for the podcast so you can you can follow along as we talk about some of this but give us the the basic thinking behind the model if you would please david uh well thanks uh so much hunter you have to understand that this model is the most recent station i've reached on a journey and the journey began with my experience nearly 40 years ago in a leveraged buyout that went spectacularly wrong when we were taken over by a um a leveraged buyout artist uh and took on so much debt that we went insolvent but not bankrupt because we owed the bank so much money they couldn't actually call the loan and over the next four years we learned more about managing than i had learned in a lifetime and we broke through a mirror to get behind the looking glass you might say to a topsy-turvy world where if you were weak you were strong if you knew a lot you were actually ignorant and you had to learn and that experience set me on an intellectual journey trying to understand this amazing experience which was very successful we came out of the mess after four years with the company totally refinanced with new shareholders and a completely revitalized management group and i set about thinking about how this had happened i i wrote an article based on taoist philosophy yin yang philosophy that got published in the harvard business review and we mentioned it last time uh it was called boxes and bubbles and effective management and uh from there i got into ecology and understanding how forests have to burn to renew or get attacked by insects in order to renew that destruction is part of creation and from there i got into more sophisticated theories complex adaptive systems complexity theory and more recent attempts to make sense of these complex phenomena that we humans are and the problems we face so this is a very high level abstraction and i went up this ladder because frankly the academics of the business schools have failed to do this and we talked a bit about the flaws in the business school education last time and how they got stuck in a 1950s conception of what science was about and tried to turn management into a management science in that mold and that has been a spectacular failure at least as far as practitioners are concerned by the academics of course it's led to a boom in academic journals and they they write for each other and most of their articles frankly are unintelligible to practicing managers so this is a very high level and it's management in a field of tensions the whole notion is that we're not born static awaiting motivation i try not to use the word motivate anymore the fact is we are born alive and struggling we are motivated as part of being alive and we are continually living with two major concerns the one on the right hand side of the diagram is uh what do i need and how do i get it i need food i need water and so on and on the left are what i've called existential concerns which is all about my identity and the identity of the group i belong to uh who are we why do we matter and this tension is absolutely critical there's continual tension between these two uh kinds of requirements which cannot be reduced to each other this immediately of course crushes the assumptions of neoclassical economics which is always always about a hierarchy of needs that you can order your preferences and they're stable obviously this can't that kind of assumption makes no sense in a field of tensions and as such this assumption i believe is is very close to where the austrian economists are coming from and certainly where friedrich hayek who has really been my guide in this area was coming from these tensions between the hard scientific treating people as objects to be motivated because objects are static and they need motivation and and people as subjects people as ends in themselves people to be cultivated and grown to find their own identity meet their own potential to fulfill their mission of why are they here in space and time for this brief period of our lives it's all about finding meaning if you will it's very much based on values and story because narrative that's how we make sense of who we are it's the story we tell about ourselves and when great crises happen like the pandemic or if you have a disruption in a relationship the shock is to your narrative it's to your story that the person you thought you were has is no longer viable and you're going to have to find another another story another identity and a story that embraces the crisis and sees it as an opportunity for renewal as an opportunity for continual growth and and so the the infinity loop with its long slow solid line on the front and the rapid dotted line on the back is this concept of an ecological balance between these tensions everybody talks about balance but nobody really elaborates on on what it means because we immediately think of a of a teeter-totter a newtonian scale one goes up the other goes down this uh framework suggests an ecological balance of long periods of growth and development on the front interspersed with moments of crisis when everything comes to a screeching halt and you are thrown back into chaos to find your way up the back loop to a new identity to a new story a new narrative and of course as a species that's where we are at the moment with this pandemic that all the comfortable assumptions of how we could continue growing uh without you know problems that uh all our comfortable hard scientific assumptions our measurement of prosperity through gross domestic product uh and an increase in wages all this came to a screeching halt and all of a sudden uh nature says uh not so quick you've disturbed the equilibrium you've got too close to the wild areas where these viruses live and here they come to remind you that nature bats lost and so this is a timely uh and it gets your attention i mean it's not a question of uh thinking your way into better ways of action as we discussed last time is we are actually acting our way into better ways of thinking uh initially we had to take the most successful countries uh took draconian top down uh dictats to close the economy down to stop the community essentially from functioning and now we're opening up on an experimental basis and we're seeing what works well you know do masks work or don't they work initially we thought they didn't now we think they do maybe there's a vaccine and everything will go back to the way it was before but that doesn't seem extremely likely there's going to be something but whether it's 100 effective and whether it's just one shot and and of course there are other bugs hanging around and and so you know once again our minds are concentrating wonderfully and we are on the back loop headed up towards a new concept of who we are as humans and what it what world are we living in we're living in a world that is alive and changing all the time and reacts and responds to our efforts to to live in it david hirst is illuminating the management challenge of growing teams and numbers of employees and focusing them on the mission our austrian entrepreneurial journey online course illuminates every stage of the entrepreneurial business for every entrepreneur founder owner manager or someone being managed find it at e4epod.com journey that's the letter e the number four the letter e p o d dot com slash journey and now back to david well let me let me step down one level and the abstraction david that that's very helpful i think as as context i'd love to talk about people as ends versus people as means as a way of managers entrepreneurs and business owners to think about the challenge of of uh managing their organizations let's say i'm sure you'll you'll find the right words for us but but let's just look at that one particular element people as ands people as means tell us about that uh thanks well once again we have to contrast it with where we are at the moment or have been historically is that typically in general and on average business has looked particularly in in america has looked as its people as means they are means to production we've looked at them through an economic lens as human resources and that's like material resources and financial resources they are means to our ends and our ends are given by outside its maximized shareholder value or that's what it has been or maybe it's uh stakeholder value which is the new mantra uh but that's the way historically we have looked at them now at this time once again in in the crisis we're reminded that people have another requirement which is that you know they may work for money but they live for story and if we look as what has happened politically and the support that the current president has had it's basically from people who lost their story who lost have lost their identity of who they were and i mentioned last time you know if you were three generations in the furniture industry around high point north carolina you knew who you were you had a stable job you had a stable role and that was your identity and when those went to china yes the consumers at large got a better deal they got cheaper furniture but the people around high point north carolina and in the steel industry in ohio and in all the other industries which were affected by these these moves and it's not just the move to china of course it's it's mainly uh technology i know in the steel industry i think uh we need one tenth of the workers that we needed when i was in the steel industry you know 40 50 years ago it's it's it really has changed dramatically but whether it's the advance of technology or actual movements on the world stage a whole group of people have lost their story and as i say we may work for money but we live for story and if we lose our story if we lose our sense of who we are we become suicidal we become addicted and we will do anything and support anyone who says i'll give you your story back i'll bring us you back the way we were of course it may be an illusion but it's extremely powerful extremely powerful and so we can see this playing out on the political stage and i think the same thing is playing out at at the business level in fact businesses uh and i'm thinking of a business like costco for instance costco's business model is you know it was an innovation and and and so on but i don't see many people copying it what is difficult to copy in the costco model is the way they treat their people and the way when you go into a costco store the people are concerned they care about you when you ask them where would i find this they will put you put their work aside and say you know let me show you uh and that's not that's imp i would say almost impossible to duplicate it's very difficult to come up and to replicate that i can copy their business model but i can't copy their people who are treated as ends in themselves so this is a new way of thinking and people as ends as well as people as means and obviously it's a tension it's sometimes you have to treat them as means i mean if uh if you're in a cash crunch and you need to cut costs you may well need to uh reduce the workforce in some way now there are various ways of doing it and uh i won't go into those at the moment but there's no doubt you know that's you need a fast response to uh to a fast-breaking crisis but in that principle it would apply to all levels in an organization the the frontline employees the middle management the executives everybody uh lives by story and and we can motive i shouldn't use that word we can uh give them a good working uh context opportunity to tell their story opportunities to tell their story absolutely this model applies at many different levels the the the epitome of systems thinking is that it is a multi-level perspective and the notion is that you are crying trying to create a space at every level in your organization where there's room for people to live and embellish and create their story find their identity uh and and at the upper levels of course it's uh it'll be a a bigger space uh but at the lower levels it'll be a smaller space in space and time but nevertheless it's unique to them because only they have that fine-grained perspective i think i mentioned yeah the cusco example would be i am able in my own space to create a one-on-one relationship with that customer ask me a question and take them and and treat them in a individual fashion and thus express myself as about actually absolutely absolutely and and that somebody at the end of the day or the end of the week or the end of the month whatever the time period is will come to see to me and say what are you hearing on the shop floor what are you hearing uh from the customers and they'll say well they were really upset when we removed this product and replaced it with that or they really missed this one that we've discontinued you know once again each perspective is unique to go back to the steel distribution business which is you know where most of my experience was it's it's with us our steel is not different from anybody else's frankly the only way we can make decent margins in what the economists call a commodity business is to add knowledge to it how do you add knowledge to it well it's because it's a very fine-grained kind of knowledge last time i talked about the truck drivers and their ability when they deliver our steel to our customers to assess how busy the customers are whether our competitors trucks are in their yard what products they're carrying and also to develop a relationship with the yard boss so we can get our steel taken off before anybody else's now that doesn't sound like a big deal but when you've got all your truck drivers working in this space which we've created for them when they come back from their their drive and you know they've started at four in the morning and so they're going to finish you know by noon at the latest but when they come back they will gather around and uh maybe somebody uh higher up the chain will come into their coffee room or whatever it is and say okay folks what's happening and uh one truck driver will say well i saw a new truck a new competitive truck there and another one will say yeah i saw it too in my customers and and you've got an early warning system that's going to appear long before it shows up in any data because it's at the fine grained level and now your truck driver is no longer uh a means to an end just a steerer of of of a truck but actually an intelligence gathering person who is alive to what's going on around them looking for clues and they are part of the big story so this is it we have to start with their stories what's their story and and by the same token ask yourself what's the story that reflects this organization at its best and typically you will find it is a fine grain story it's a story about the time we screwed up on delivery and the heroic efforts of our truck driver or uh salesperson or desk clerk to to remedy it and the lengths they went to fedex i remember used to uh you know tell a story to illustrate their values that their packages have to get through at all costs and there was a float storm and somebody very junior on their own initiative hired a helicopter to deliver this key package and and this story was the essence of fedex at its best and every organization has those good stories they also have of course you know tell us about us at our worst and you can get those stories of of horror shows and screw-ups and and those can be taken apart and say well what went wrong here or why was this good how do we replicate those conditions all over the place a quick note did you know that we provide supplemental materials for each podcast listening to and understanding the key takeaways from our expert guests helps you think better about building a more beautiful business taking direct action and implementing these strategies is when the real work begins take a concrete immediate step to implementing a better business model today by downloading the show notes and business tool we've created for this episode visit mises.org e4e pod that's m i s e s dot org slash e the number four e p pod and click on today's episode now back to our interview can you uh articulate some practical advice out of that david for our business owners and and managers how how do we get that started how do we get that narrative started i know a little bit about the history of costco and jim senegal who created the the culture if you like but just how do you do that well i i think the approaches are as as as varied as as the firms that depending on your context is going to be a different starting point you know when you ask management consultants will give us examples of firms that have changed they very rarely do that they give you exemplars so for instance some people will talk about wl gore and associate and the makers of gore-tex and their amazing culture and their flat organization and and they have what they call a lattice network as a way of organizing and and how they have something they call hierarchy on demand that there isn't a traditional hierarchical structure but they have this network of continual conversations going on and every now and then they need an executive decision and they will i think if it is a fishing net that that's lying flat on the ground and when they need an executive decision they just pick up the point in the net and just lift it a bit and there you've got a pyramid a hierarchy and you make an executive decision and then you let the net go and it's flat back on the ground again so they're keeping it flat only the hierarchy is there but it's in the background so it's this figure ground relationship that the egalitarian network is in the front and the hierarchy is there at the back it doesn't go away and once again this is the tension between the right hand structured hard scientific hierarchical point of view and the left hand side flat egalitarian uh everybody has an equal say point of view and and uh so it has to start at the top the stories they tell of people like uh uh w.l uh goran associates these are invariably uh firms that start off like jim senegal at costco with a charismatic founder a founder who who really believes in this bill gore who founded wl gore associates had worked in dupont for for many years and and and he noticed that the best conversations in dupont took place in the carpools they used to go to work together obviously this is back in the in the 40s and 50s it's a far cry from where we are today but he said why can't we get the atmosphere of the carpool where a bunch of colleagues go in together and they have great discussions in the car and then they get to work and now you're in the dupont hierarchy and they can't talk to each other and there's boxes and structures and vice presidents and assistant vice presidents when when dupont came up with the chemical the poly polyethylene compound that led to gore-tex dupont decided it was not a scalable product that they were interested in because they wanted products that grow to very large scale bill gore said i'll take it and he took it and ran his organization the way he'd always want to run an organization that is flat and so you get these wonderful stories and people go to look at wl go on associates and say my this is amazing but uh very few in fact i don't know of any try to emulate it because you're looking at something that's been cultivated and grown and you can't design and build it and that's of course exactly what friedrich hayek said he said just because an organization or an institution serves human purposes in a particular fine way doesn't mean it was designed in fact hayek says they emerged through the inter actions of of of millions of of humans certainly you know scores and hundreds and thousands of humans and don't imagine that you can then go ahead and design it and of course that was the theme of fatal conceit was that you know we can design we can we can make the world anew in in thomas paine's uh favorite quote uh and which you know ronald reagan himself was not beyond quoting but hayek said no no we can't make it in you we can create the conditions in which changes will take place desirable changes that will take place but essentially what you're creating is conditions for emergence and so we're back into the gardener again so to start it has to come i think from the top it depends once again some organizations in fact the first question you ask yourself is where is this happening already because some organizations they might i can remember i was dealing with a major multinational and uh i said you know where else where are you already seeing this kind of behavior which you want this this wonderful weave between the heart and the sock and they said well uh if we think really hard it's probably our hawaii branch and i said what is it that makes the hawaii branch so special and they said well it's not it's because it's a small branch and it's only got one guy at the top and so this person makes the trade-offs and weaves them together if you come into our larger branches you find that you split the responsibilities between two different people and they often turn out to be competitive with each other and so instead of cooperation within the organization you start to get competition and and that's hierarchy creates competition it creates elites it creates status differences and and we know how humans behave under those conditions they they they will they will be competitive and and uh go for status and so that's one of the first things uh once again going into a steel service center which we had acquired it was in um wisconsin actually and we'd acquired it from a single owner it was a private company uh he was an autocrat not to put too fine a point in it and i can remember going to one of the first company-wide meetings they'd ever had actually was a dinner and and uh you know a presentation from us the new owners and uh there was an executive table and i was expected as the incoming representative of the new owners to sit at that executive table and after about 10 minutes i said i don't want to sit here i would have gone sit with the other folks and i sat with the drivers who of course in all group themselves won one table and i sat with the sales folk who went all around the other and i moved around the room and that simple action speaks volumes once again it's it's it's behavior we trust not the language it's it's it's all about trying and it's it's a process it's a journey you start it wherever you are the best place to start is is where you're at in fact there's no other place you can start from is where you're at what am i going to do differently that's going to send a different message tomorrow and my going out with the truck drivers sends a message the truck driver comes back and you say oh you know and he says to his buddies you know that executive vp from canada he's okay he's human just like me and that's it it's this shared human quality that we're all struggling that we're all trying to make sense of our lives and ourselves at our different levels in our different spaces and times and it's that recognition which is absolutely key uh the realize of our shared humanity if you will for lack of a better reason you have said though david that smaller and private entrepreneurial firms may have an advantage they can they can stay closer to that humanistic side of the model and it's the big public corporations that tend to be dragged to the hard scientific side just is that right do you think they have an identity yeah i think that's absolutely uh right uh hunter in in the on the front loop that solid line and now i'm talking about application at the corporate level eventually they come up with a formula which allows them to scale everybody's interested in scaling and scaling requires specialization it requires hierarchy it requires structure and with that come all the issues of competition and status and power and drags you inexorably towards the right hand side which was power if you remember in the model that we talked about last week the other power trap and going public for me is is a critical catalyst for this the there is some evidence that uh small privately owned companies have several advantages and uh i have some examples here is that uh they're frugal in good times and bad they're always careful with the cash they're very have a very high bar for capital expenditure they're not necessarily driven by investment metrics and so on they try to not carry too much debt because debt gives the bankers power and they don't want that um they acquire fewer and smaller acquisitions so you're you're not betting the farm i mean you you know you look at the uh some of the acquisitions that hewlett-packard made which were uh you know i think one they one firm they paid 11 billion for and ended up writing off 10 billion within two years i mean just stunning uh stunning bad bits so fewer smaller acquisitions and also a surprising level of diversification because on the on the humanistic side on the left hand side of course it's all about people and people are people well obviously uh you know you can have issues when you go to other countries but uh people have a lot more in common across companies than the companies do they tend to be more international and they're better at retaining their talent inside they discourage careerism you know i mean once you get into a large company and and you have young people coming in as i was coming out of uh chicago school of business in in 1972 i was looking for a career path i was looking for somebody who will say uh look we'll develop you you know you're gonna have two years in this job and then if you're successful you can move on and then you'll get a promotion and and that was seen as you know the way to go and i mean i i must confess i found it uh very very attractive but for the corporation trying to become more humanistic this is not good because it's a highly disruptive of the community and it creates an incentive structure uh for individual managers to come in look good for two years and and then go off to their promotion leaving their successor with a disaster and we saw this particularly in canada with what we call our branch plant economy that we would these are uh branch plants of corporations like sunbeam and in fact all the fortune 500 and uh they would have american managers typically and sometimes canadians but on two-year cycles running through the uh their plants and and of course they they got there their job was to look good for two years so they get their next promotion and then away they'd go and of course when you're running it on a perpetual short-term focus like that you're going to get into trouble because you're going to run the plant and equipment and the people into the ground and that's what we found is that you know we had genius and then followed by an idiot and then another genius followed by another idiot and of course the geniuses were the ones who were picking up the pieces that the previous unfortunate had inherited from the previous genius and so there was a well-defined uh cycle and and once again you get into this in these large corporations large public corporations where there is an implicit contract with its management that we will give you a career path and you can rise to the top and earn the fabulous sums that ceo earn these days and and so it's very difficult to get out of that kind of cycle so is it possible for our entrepreneurs david to stay entirely on the soft humanistic side of the model throughout their their careers let's say i start a business and i i i manage it for 40 years and i'm very successful can i can i stay on that side or am i always going to be fighting the tensions that drag me over to the scientific side no it's it's a dance it's a dance uh all i'm saying is that as you grow in scale you are increasingly and the numbers are clear we maybe we mentioned this last i'm not sure the the number is about 150 people in one location uh 150 people in one location but preferably a single level because as soon as you've got vertical levels it creates communication differences but 150 people in one location on the same level you can manage interpersonally you can know everybody individually you can exchange stories you can you can get your arms around it as soon as you get bigger than that you're going to have to introduce some structure some specialization some hierarchy and if you're growing really fast you'll start hiring people for their technical ability not because their mindset to use the popular word necessarily fits in with your organization because it's a technical problem you need technical experts and and that'll solve your technical problems but it moves you a little bit to the right and then you need a head office specialization because we didn't have purchase orders before but now we're going to have purchase orders we didn't have a an hr department before but now we need hr to to handle the number of volume of people that we're hiring and and dealing with every day and so we need a few people in charge of that so before you know you've got 15 vice presidents and uh they're each structuring their own turf and you've got turf battles and turf wars and you move further to the right and further to and if the growth continues you continue to struggle you know you're going to you need more specialization and and more levels of hierarchy and and so scale is the major dimension on the vertical axis of the eco cycle at the at the ecological level so it's always a dance even even as a small 10 person organization i mean you you need some structure you know you need to control the cash uh you need to follow up and make sure you're getting paid by your customers uh you know that there's no credit control and and so on so it's always a tension between the two but it's much easier if you start off on the left and and then get pulled to the right rather than dealing with an existing organization which is already on the hard right in a power trap and trying to bring it back to the left that's extremely difficult right one one last question about the the model david on the soft humanistic side you have the word judgment and we austrians have a special relationship with that word judgment in the context of entrepreneurship we think that's what entrepreneurs do and we apply it in the sense of uh in the face of uncertainty where you don't know what's going to happen you don't have all the knowledge you nevertheless make a decision and you act and then you deal with the results of of that action so we see judgment as part of the engine of the entrepreneurial economy is that the way you are using it or is it slightly different in your model no absolutely absolutely there was an interesting uh article as i mentioned to you i'm involved with the drucker forum which is hell's an annual conference in vienna which unfortunately this year is going to be all digital but often it's personal but there's a recent article art that i can give you references for your for your listeners on on what aristotle called phronesis uh it's it's obviously a a greek word uh p h r o n e s i s and it means practical wisdom it is a grounded form of judgment it's the kind of decision making you default to when you don't have the data when you can't make the calculations when you have to make the best decision based on your experience and what you can glean from the people involved with the situation and that's exactly what it says judgment is the exercising of uh phronesis and it's used in times of surprise uncertainty and conflicting values when you know there's different values that have to be you know traded off or compromised or integrated in some way and so it's precisely those conditions surprise uncertainty conflicting values that's the almost the definition of the entrepreneur right and yeah and and that's where judgment comes into its own and and it's it's contrasted on the right hand side with calculation calculation says well we've got the data and once again getting back to friedrich hayek he says you never have the data there's never enough data you you might be able to come up with some general equations which give you an idea of the overall economy but you can never get the data needed to solve the all myriad fine-grained equations and of course in the entrepreneurial world that's even even truer you i mean the data never comes or when it does it's it's it's five years late yeah i mentioned i mentioned last time i think the story of uh the two stories of how honda got 50 of the north american motorcycle market and the one story is uh from the people who were there at the time and they tell a story of accident and surprise and uncertainty and conflicting values and and judgment which allowed them to be successful and the other story is from the boston consulting group and it's all about well they went down the learning curve and so on and it's all very elegant so it's all very plausible but there wasn't any data the data to make those learning curve decisions was only available five years after they got fifty percent of the market so the data is never there and if it is there it's not it's not on time know the key judgment is retrospective yes well it's it's it's you know the uh drucker's favorite philosopher soren kirk god said uh we live life forwards but we remember it backwards and and to remember it backwards is to abstract is to categorize uh to live life forward is to be on the ground in the moment in that time and so lessons abstracted from looking backward can't be applied right here right now you know by going from abstract to concrete they won't tell you what to do because it's it's you in this unique moment which has never happened before i say to managers each of you is in a unique situation your organization is unique and that's why it needs judgment you can you can get some ideas from others but they will never tell you what to do they will just increase your experience it's judgment based on experience yeah no that's uh it's a brilliant insight david i'm going to wrap it up there uh just for time reasons but thank you very much we will uh exhibit this management in a field of tensions model so that people can follow along as they listen hopefully um any readings you can send me i'll uh i'll link to them in the the key takeaways and then next time i will try and devise a good uh discussion guide around hayek and high sensory order and emergence as it might be applied in complexity theory and business i'll try and make it practical and uh because i know you're becoming a hayekian as you advance through your research well thank you hunter there's one thing that we did uh uh discussed possibly mentioning was a quote a quote from the dow de jing to end it yes philosophical time uh it goes like this learn from the people plan with the people begin with what they have build on what they know of the best leaders when their task is accomplished the people all remark we have done it ourselves beautiful i can't think of a higher praise for an effective entrepreneur than to leave his people with the feeling we have done it ourselves david thank you you always leave us with an awful lot to think about and to act upon it we appreciate it very much thank you it's a great pleasure hunter thank you so much for your invitation [Music] economics for entrepreneurs is a production of the mises institute to explore more content like this visit nesis.org that's m-i-s-e-s dot org for more from hunter hastings check out hunterhastings.com

Channel: misesmedia

Views: 611

Keywords: business, economics, entrepreneur, entrepreneurship, Austrian School, people, strategy, success, manage, Management, organization, framework, means, ends, Mises, interview, podcast, E4E, E4B

Id: wk0vgvSINrQ

Length: 52min 32sec (3152 seconds)

Published: Tue Oct 20 2020