There are two competing primary kinds of economic system in this world, Command Economies and Market Economies.
Command Economies function with a form of economics that is directed by a centralised government. Rules and regulations are imposed by this government to regulate the way in which goods and services are supplied.
Market Economics, are driven by just that.. the markets and Private Enterprise. There is little or no restriction imposed from any centralised governance, and the businesses are left to their own devices. The reasoning behind this system is that if the market wants a product it will be seen as a demand and thus supplied. Historically this form of economics has offered far more sustainable economic growth, and far more individual and business freedoms. This Private Enterprise System is effectively based on Capitalism and Competition.
In addition to this Private Enterprise system, there are also planned Economies where a centralised body decides on business ownership, profits and resource allocation. This is a version of Command Economics. One of the most famous forms of this economical policy is Communism which states that all property and business is owned equally by all (ie the State), and that a strong central government dictates what goods are supplied at what level and price.
In Marxist theory, “communism” denotes the final stage of human historical development in which the people rule both politically and economically.
There is another economic system called Socialism. Socialism is an economic system characterised by predominantly privately owned businesses, and the State owns and controls what is believed to be the most important industries for the nations needs such as fuel and telecommunications. The Governments are also responsible for a variety of ‘national need services’, such as transportation, waste removal, unemployment benefits, free national healthcare. In order to sustain these large state expenses, large income taxes are applied. This results in a particularly non-dynamic economy, as entrepreneurs are not incentivised to start businesses due to large parts of their profits being removed through Government taxes. Socialism is a combination of both Capitalism and Communism.
Many of todays economies are actually a mixture of both planned and market economies, and these are referred to as Mixed-Market Economies. Followers of Milton Friedman, will not agree with this form of economics, as they are true advocates of the Free Market theory and that markets will ultimately balance themselves out and offer the best and most fair situation for all.
In the UK, USA and around the world the Free Market System was introduced throughout the 1980’s and beyond. Gordon Brown introduced his ‘light touch policies’ throughout London’s Financial Sector as both London and New York competed for the top spot for The Global Financial Capital. However, as has been proven, this light handed fiscal policy and the de-regulation of the Banking Sector resulted in the worst financial collapse in human history.
Although, one has to ask the question as to whether it was the free market system that failed, or the ethics of those taking the risks. Perhaps with a higher moral path, this free trade system would work and the markets would be able to balance and regulate themselves. However, for this new moral code to take effect the human species would have to undertake a huge social change immediately and perhaps have some form of ethical awakening. Realistically, this is not going to happen as this form of social change takes many years to implement and take root. What we require is leaders within the business and political realms to act with a higher level of ethics, and to take responsibility for their actions. I believe that theoretically the free market system might actually be the best and most efficient system for economic development and growth, but i feel that looking purely at a rising GDP should not be the only bench mark. We need to look for and strive to attain a lower level of inequality and higher standards of living. We live in a world that is not a perfect petri-dish to test economic policies and so some initial regulation is required of key sectors so that ‘Joe Blogs’ does not suffer in a quest for a rising bottom line in a resource restricted world.
As i begin to prepare myself for my Executive MBA at University West of England, i have started to research my course and the topics i might very well study and discuss. This blog is a place for me to begin to understand more of these topics and try to engage with others about such things and effectively increase my learning.
As i have been looking through organisational structure and management i have come across a tool that offers managers ‘apparently’ objective feedback on their ability to manage that can be used at all levels within a business. This is called a 360 Degree Assessment Survey, or the Full-Circle or Multisource Assessment.
This assessment tool, allows organisations to gather feedback and information on a specific employee from managers, co-workers and those that report to the individual. It is apparently objective, and gives great insight and data on a specific individual within a specific job role by asking a set of questions about this individual and allowing a space for comments and feedback under a range of headings such as leadership, vision, clarity, work ethics, performance management, communication and many others.
The organisation can utilise this data to look at how an individual is viewed by his/her self and of all their colleagues around them who have undertaken the survey. It is, effectively a managers reality check, and a method for increasing self-awareness of strengths and weaknesses as perceived by others.
At first glance, this might very well sound like an interesting and useful tool. I don’t doubt that perhaps, within the correct organisation this information can be used to shape an individual so they become more effective at their role so long as no one becomes defensive or concerned about giving frank and honest feedback. And a lot of statistical data does point to this being a great tool… but…
I have just read a blog post by Marcus Buckingham that talks of a fatal flaw within the very fabric of this assessment tool, and how they can do more good than bad (if the organisation is not careful).
‘And yet I still think all but a very few 360 degree surveys are, at best, a waste of everyone’s time, and at worst actively damaging to both the individual and the organization. We could stop using all of them, right now, and our organizations would be the stronger for it.’
Marcus has some good point in his article, regarding the questions asked. How can someone give feedback objectively… really? Because surely their response is in some way related to their position and opinion of the assessment’s subject? Marcus states pretty clearly that the data garnered from these are in general.. bad.
‘No, my beef with 360 surveys is more basic, more fundamental. It’s the data itself. The data generated from a 360 survey is bad. It’s always bad. And since the data is bad, no matter how well-intended your coaching, how insightful your feedback, how coherent your leadership model, you are likely leading your leaders astray.’
And the last things we need from these surveys, is the take the leader in the wrong direction. That is the ultimate ‘no no’ and a waste of valuable time and resources.
Typically the survey breaks down core competencies into questions about behaviour that apparently encompase these. If we take communication as a core competency, and the evaluators use the following question;
‘Is Logan a good communicator?’
Your answer to this, will actually tell us more about you than of Logan. If your answer is ‘yes, Logan is a good communicator’ this simply indicates that Logan is a better communicator than you. And if your answer is ‘No, Logan is a poor communicator’ it could simply mean that Logan is a worse communicator than you. This could be said for all answers to questions that are asked in this way. It is based on the relative skill set of the person answering the questions to the relative skill set of the person we are asking about. And Marcus argues that no matter how much bad data you get it will always remain bad data.
‘Again, this sounds right, but it still doesn’t hold up. Each individual rater is equally unreliable. This means that each rater yields bad data. And, unfortunately, when you add together many sources of bad data, you do not get good data. You get lots of bad data.’
So, is there a solution to this? Everyone can answer a question based on their own experince, emotions and feelings, and thus be subjective. So why not ask questions that allow people to answer subjectively. A better question to ask about communication might be;
‘Do you understand Logan’s verbal instructions?’
The answer to this can be yes, or no and will give more accurate feedback because it is based on the way you specifically feel about the question.
These tools can be very useful, and the best leaders will be able to use them correctly and take good information and feedback and use this to develop. However, it can obviously be very easy to structure these incorrectly and point the leader in the wrong direction.
Be careful, think hard before implementing these forms of feedback survey otherwise you may be doing more harm than good.
If you have any thoughts on this, just comment as i am keen to hear what people think.
If you wish to read the full article by Marcus Buckingham follow this link.
A friend of mine put me onto the RSA Organisation, and i have to say that they have some incredibly insightful talks/lectures/animations that really do make you think about some important social and work issues.
The RSA is a self proclaimed enlightenment organisation committed to researching and presenting practical solutions to some of today’s social challenges. Utilising its 27K strong following, it aims to understand and enhance human capability so that it can close the gap between the reality of today, and the hopes for tomorrow’s world.
This video below, is well put together, including some great animation which seems to make the content sink even deeper into your mind cogs. It talks about Motivation, and within a work environment this has to be one of the most important factors to gain the most out of your Human Capital. It actually highlights some surprising truths and ideas about the real reasons and motivations behind ‘Motivation’ (yes i did write that correctly).
Which company would want to recruit, train, and invest into its staff to then go and demotivate them, so that they begin to look elsewhere and leave, which will eventually reduce the bottom line? We have all worked in a an uninspiring workplace, for bad managers or bosses and we have all been as quick to leave. Surely offering autonomy, promoting innovation and instilling trust in your employees and work colleagues is imperative to a well functioning company? Perhaps this is not so obvious to all.
Watch this video, and for more great videos and information click on the link below.
I have just started reading this MBA In A Day by Steven Stralser. Within the first two chapters alone i have found some great advice on the importance of both a companies Human Capital (ie the soft squidgy Human bit) and the Motivational factors within the organisation.
I am reading this, so i have a little heads up before my MBA course in January, but i would recommend any business owner or aspirational manager read this.
Chapter 3 here we come….