business strategy

A “Leading From Behind” Approach To Business Strategy

There is a quote you may have heard which goes something like:

“I am a libertarian at the federal level, Republican at the state level, Democrat at the local level, a socialist with my friends and family, and a communist with my dog”.

The idea is designed to reveal the fatuousness of political labels, but when taken more broadly it beautifully illustrates the importance of an almost completely neglected concept in modern life:

Scale.

To think about things (ideas, systems, organisations, strategies) in terms of scale is to recognise that they behave differently when implemented at different “sizes”, and across different expanses of space.  In the case of the above quote, you can see that it suggests that various policies work when activated at the appropriate scale – and equally that they don’t work when activated at a different, inappropriate scale.

This way of thinking differs wildly from the more standard belief that certain ideas are simply “good” or “bad” in a general sense.  Scale matters hugely, and your behaviours and philosophies must vary a great deal when you are operating at different levels.

If I were to offer a very rough rule of thumb for this variation, it would be something like:

The bigger the scale the less you should seek to control things; the smaller the scale the more you may control things.

At the root of this idea is the unassailable (but routinely ignored) fact of human limitation.  We creatures, it goes without saying, are not omnipotent.  We are smart, but we are only so smart.  We can see, but we can only see so far.  We can run, but we can run only so fast.  We can remember, but we can only remember so much.

What this means is that we have a highly limited “sphere of competence”.  In other words, we have a scale at which we are highly competent (generally referred to as “human scale”), and then larger scales at which we are incompetent (what we might call “inhuman scale”).

When we seek to master conditions at a human scale we are highly effective.  But when we seek to control things at an inhuman scale we are less so – sometimes disastrously.

An example I’ve used before of this idea is the comparison between a car engine and the global economy.  The car engine is a human scaled machine which we can effectively manipulate and master – thus producing predictable results in line with our intentions.  The global economy on the other hand is an “inhuman scaled machine”, which we cannot reliably manipulate and master – thus producing unpredictable results not in line with our intentions.

Historically I believe this idea was well understood, but as technology has gradually increased our sphere of influence (but not, I stress, our sphere of competence) we have forgotten it.  It is now commonplace for us to talk the language of “global solutions”; to buy from global corporations; to consume global news media; to judge our own lives via global comparison.  All of these things represent action at an inhuman scale and thus provoke inhuman consequences – which are by definition unpredictable, because we do not have the processing power to understand the complexity of what we are doing at that level.

Recent conversations about how we might “rein in” the tech giants are a case in point.  They miss the fact that the dubious consequences of these companies aren’t peculiar them as organisations; they are embedded in the very concept of the internet itself.  Information completely unbounded by geography betrays all laws of scale, and therefore must produce outcomes completely beyond our control.

Inhuman system, inhuman outcome.

Not to get too philosophical here, but personally I find it interesting to consider that there is not only a competence question here, but also one of psychological health.  If you think about it, you will notice that nature never gives any creature knowledge that is beyond its physical capabilities.  An eagle can see for miles and has mastery over all it surveys, meanwhile a mole can barely see at all and yet also has mastery over all it surveys.  Their knowledge and capabilities “match”.  What is going on beyond their sphere of influence is of no concern to them, so their lives are inherently satisfying.  We of course have no such privilege; our vision and knowledge far surpass our abilities, and as such we are forever aware of that which lies out of reach.  We are not only acting at a scale that is beyond our competence; we are also thinking at such a scale too.

So what’s the upshot of all this?

In short, we must recognise that strategic behaviour should always be bound up intimately with consideration of scale.  We must always consider the scale we are acting at, and adjust our plans accordingly – even if that means contradicting our prior positions as scale changes.

This is why I always propose a “leading from behind” approach to business strategy.  All businesses, other than perhaps the most tiny, are beyond human scale.  The founder is not a puppet master; the business is out there doing things they cannot see and cannot control.  It is not bounded, it is free, and interwoven with the outside world; a living thing more like an organism than an object.

This means the founder cannot hope to bend it precisely to their will, because it is beyond their capacities to do so.  It is too complex.  Therefore they must adopt the leadership style which is necessary for all systems beyond human scale, and that is to facilitate it rather than control it.  You must allow it to be what it “wants” to be, rather than dictating what you think it “ought” to be.

If helpful, you can imagine your leadership as something similar to being a politician.

A sensible political leader, when elected to office in a particular country, will recognise that that country has an organically evolved personality and culture, which was “designed” by nobody.  Their job is to simply facilitatethis culture, by removing barriers to its flourishing and cohesiveness.  This submissive form of leadership is of course why we call such politicians “civil servants”.  If on the other hand they wished to transform the culture from above we would call that totalitarianism, and it would look something like the handiwork of Pol Pot.  Imperialism is another example of this, where X culture takes control of Y culture and seeks to remake it in its own image.

(As an interesting aside I have read that many ancient empires didn’t seek to do this, and were quite happy for the people they invaded to continue in their own traditions.  Whether this is because of wisdom or simply lacking the technological means I’m not sure!)

In any event, such humble facilitation is the best you can ever do when operating at an inhuman scale.  Seek first to understand what you are nurturing, and then help it flourish in its own image.

A beautiful word for this process, which you may find useful, is “husbandry”.  This is normally used to describe human care for natural resources, which makes it a perfect analogy since we cannot remake nature as we please; we can only support it on its own terms.  As a founder or chief exec you too should practice husbandry of your business, out of respect for its scale, and your own limitations.

The one other way to tackle leadership at scale is decentralisation.  When you decentralise something you break it down from a large unwieldy unit, into multiple human-scaled ones.  Each of these then becomes manageable, provided they remain oriented to the priorities of the larger “whole” of which they are a part.

In politics this is exemplified by local governance; and in business it is exemplified simply by the “department” – logistics, sales, marketing, etc. – all of which of course need to harmonise under the will of the overall business.

So there you have it – two scales, and two corresponding behaviours:

Human scale (within our competence) – you may control and guide it

Inhuman scale (beyond our competence) – you follow it and nurture it

Flow back and forth between these states, with constant sensitivity to which is right at any given moment, and whatever you lead will become beautiful, vibrant, and healthy.