The Social Gadfly: Management Lessons from Socrates

The social gadflyWhen studying business, there is little time for critical reflection on what has been learnt. Newly minted MBAs are armed with Maslow’s Hierarchy of Needs, the BGC Matrix, Porter’s Generic Strategies and other tools to solve business problems. Their acceptance as valid tools is, however, often not based on critical reflection or solid empirical research but on mythical stories of how they were used successfully in the past.1 The study of business and most of writing about business is based on the case method. In this system, students are presented with a business problem and placed in the shoes of the decision maker charged with solving the problem.

In the Critical Perspectives on Management course, Rolf Strom-Olsen advocates an approach that deviates from the standard case methods and draws from the more critical humanities. He sees the life of ancient Greek philosopher Socrates as a signpost for a different way to think about business.

Socrates: “I know nothing except the fact of my ignorance”

We know about Socrates from the vivid writings of Plato who was one of his followers. His writings form the foundation of European philosophy and in fact profoundly influenced Western civilisation as we know it. Socrates spent his time meeting people in the market place in Athens and questioned their opinions and cherished beliefs. Socrates was like an annoying toddler that keeps asking “Why?” to find the foundations of what we hold to be true. The Athenians themselves compared him with a gadfly, a fly that annoys horses and other livestock. A lifetime annoying people by questioning everything they know is, in the words of Rolf, not a way to Win Friends and Influence People. Socrates thus paid the highest price for his life as a social gadfly—he was convicted of drinking a cup of poisonousness hemlock and died.

The Socratic path: philosophical deviance

From my experience, it is clear that being the social gadfly in business can be a dangerous activity which could lead to career suicide. For me, following the Socratic path has helped me to be very successful in solving business problems. Only by daring to ask the hard questions and draw from disciplines outside business we can see perspectives on issues that a case method cannot provide. The traditional case method of solving business problems looks backwards at past experiences. Using the analytical method from the humanities allows us to draw from entirely different perspectives and analyse problems in creative ways. Business is an applied social science, and it seems only reasonable that the methods of social science should be used to understand the problems of humans.

The Lucid Manager is courageous and not afraid to be a social gadfly. The Lucid Manager stops asking “Why?” (go beyond The Five Whys if needed) and try to view your problem from all angles—including disciplines that are not traditionally used in business. Reading about the life of Socrates teaches the way of philosophical deviance as a path to business success. Following the path of Socrates will help you to develop those cherished innovative solutions.

  1. See my earlier blog post on the classification of business theories

Organisations do not exist—a Buddhist perspective

One of Cyndi's slides

One of Cyndi’s slides.

Yesterday Cyndi Laurin presented at the World Business Capability Conference about The Four Pillars of Organizational Greatness. One analogy presented by Cyndi used stuck in my mind as it took me back to my days as a philosophy student.

Cyndi asked which part of a car is the most essential. The audience mentioned several options, and then it dawned on me that this analogy is much like a famous line of reasoning in Buddhist philosophy about the self, which I will use to show that there is no such thing as an organisation.

the idea of the firm

The Buddhist view of the firm would be that there is no such entity, illustrated by a debate between King Milinda and the Buddhist monk Nagasena.1 Following the analogy used by the monk, we can compare a firm with a chariot, or in more modern terms a car. None of the individual parts of the car (the wheels, the engine, the radio and so on), are the car. Nor can you say that the combination of the parts is the car. We can not discover a firm at all, only the word that denotes the idea of the business. A business consists of its parts, just like a car does. None of the parts of the firm, however, are the firm. No part is less important than the other—although followers of the Lean philosophy will disagree on this one.

The Buddhist argument extends to management in that a firm is not about its constitute parts, but a firm is a cycle of cause and effect, or in Buddhist terms, Karma. A firm is not about its CEO, the share price, employees, customers or fancy headquarters. A company, just like a person, is defined by the actions it takes and their results.

Following the Buddhist view to its conclusion, there is only one pillar of organisational greatness: the actions taken by the organisation.

  1. Edward Conze, Buddhist Scriptures (London: Penguin Books, 1959), pp. 147–149. 

The Marketing Mix as a Metaphor

The Marketing Mix as a MetaphorManagement is a complex activity. To be able to deal with the inherent complexity of business most management advice is littered with simplifications—formulas, diagrams, matrices and other mnemonics help managers to create order in the chaos of everyday business life.

Marketing students at all levels of academia are indoctrinated with the concept of the marketing mix as the 4P-mnemonic: product, price, place and promotion, initially proposed by Jerome McCarthy.1 Other scholars have built on McCarthy’s insanely popular scheme, most famously Bernard Booms and Mary Jo Bitner proposed three additional concepts to account for the precise nature of services, i.e. people, process and physical evidence.2

The simplicity of this approach fuelled its popularity, and the 4Ps have become synonymous with the Marketing Mix. Most practitioners and scholars do, however, seem to forget that this system is merely a metaphor, a simplified checklist to aid marketers.3

There are serious issues with this simplified approach. Most importantly this seven pronged attack of the market seems to ignore the relationship between the organisation and the consumer, and that marketing is based on an exchange of value. The 7P system defines business from the organisation’s perspective and is as such severely limited in informing an enlightened marketing approach. More interesting ways to look at marketing focus on value and relationships and view the world from the customer’s perspective and are based on understanding the customer.

  1. Jerome McCarthy (1960) Basic Marketing: a Managerial Approach. Homewood: Richard D. Irwin. 

  2. Booms, B.H., Bitner, M.J. (1981 ) Marketing strategies and organization structures for service firms, in Donnelly, J.H., George, W.R. (Eds), Marketing of Services, Conference Proceedings: American Marketing Association, Chicago, IL, pp.47-51 . 

  3. Philip J. Kitchen ed. (2008) Marketing Metaphors and Metamorphosis. Palgrave MacMillan. 

“Waiter, there is a fly in my soup”—When Customer Service Goes Wrong

dreamstime_xs_5655515Customers are always right is one of the adages often proclaimed in marketing.1 Lucid managers object against this presumed absolute truth because bowing to every whim of customers would make it very hard to achieve organisational goals, i.e. to provide a return to shareholders or help as many people as possible in the case of social marketing.

Customers are always right

Some might hold that the customer is always right about their perception, but that is a far too simple view of this problem. To find out what this statement means, it needs to be unpacked and analysed. There are three aspects to this: customers, the qualifier always and the idea of being right.

For this statement to make sense, the term “customers” should be demarcated, or in marketing jargon, segmented. Market segmentation is, however, an artificial construct used to simplify soup.” groups of people. Understanding customers does, however, go beyond quantified constructs and focuses on customers as individuals. Furthermore, demographic variables are poor predictors of behaviour as they rely on descriptive, rather than causal factors.2 Customers are individuals that can only be understood within a specific context. This implies that the statement should be “the customer is always right”, narrowing it down to individuals, rather than all or some customers.

Second part of the statement, “always right”, infers a universality. Whatever the customer says, truth is on their side. However, truth is a tricky concept, specially when combined with a universal statement. Absolute universal truth is mostly proclaimed by religions and not in marketing. The “always right” component should be understood as an ethical marker. The term always implies that an organisation should do whatever a customer wants because they are presumed to be always right. However, an organisation serves customers, but can never become the slave of customers as it will undermine economic sustainability. This can be corrected by narrowing the statement down to: “The customer is sometimes right”. But this is not enlightening and practically tautological.

The way out of this conundrum is to find out what a customer can be right or wrong about. The easy way out is to say that the customer is always right about their perception, but that is too much of a simplification as two planes of reality are at work in customer service:

  • Fact: “Waiter, there is a fly in my soup.”
  • Feeling: “I am angry because there is a fly in my soup”

Customers can certainly be wrong about facts because they are by their very nature verifiable. A waiter can confirm whether there is a fly in the soup or whether it is an oddly shaped croûton. Perception is not reality, and where possible, every claim customers should be verified.

The customer is always right about their own state of mind

The second type of statement is much harder to verify because it is, in the words of Bernard Williams, incorrigible.3 A proposition p is incorrigible when it satisfies this description: “if I believe that p, then p“. These statements can neither be verified nor denied, and they assume that the customer is sincere, and they thus have to be true. Customers are logically always right about when it comes to incorrigible propositions about how they feel about the level of service. The incorrigibility is problematic because of the implied sincerity. Some customers might exaggerate their feelings to obtain preferential treatment. Some psychologists would argue, however, that nobody can truly be sincere about their internal state of mind because of subconscious drives.4 Although customers might not always know or able to express their state of mind, incorrigible statements are absolute truths to those who utter them.

The original statement can be corrected by saying that “the customer is always right about their state of mind”. The customer is always right about how they feel about the level of service and the marketer has to accept these statements as absolute truths.

  1. Coined by Harry Gordon Selfridge, Sr. (1864–1947), retail magnate and founder of the British department store Selfridges. 

  2. Russell J. Haley (1968) Benefit segmentation: a decision-oriented research tool. Journal of Marketing, pp. 30–35. 

  3. Bernard Williams, Descartes: The project of pure enquiry, (London: Penguin Books, 1978). 

  4. See also our work on personality tests

Management Science: Nothing more practical than a good theory

On the train from Hanoi to Sapa, I shared a cabin with two English women. One was completing her PhD studies in corporate social responsibility and lamented the amount of work it takes to promote.

One professor of the Graduate School of Management of La Trobe University once tried to convince some students to continue with a PhD after completing the MBA. Most of us just laughed and shook our heads in disbelieve as every student will be happy to finish studying, at least for a while.

Later I had a discussion with him, and I put the point to him that a PhD does not create better opportunities on the job market and does not make you a better manager. There is a vast chasm between managerial reality and academic discourse. This chasm is not a bad thing because academic research is essential in advancing the knowledge and practice of management.

There are, however, great differences. For example, in scientific management, every fact that has been sourced from somewhere has to be referenced. Failure to do so is considered plagiarism, the worst sin that an academic can commit. This requirement leads to footnote fetishism, and even worse, it induces a fallacy in argumentation called the fallacy of notoriety. Just because something has been published in a reputable magazine, does not mean that it should be considered correct. The Fleischman-Pons announcement and the Sokal Affair are poignant illustrations of why this is so.

In managerial practice, nobody ever references anything—taking somebody else’s idea is called ‘best practice’. In my experience, adding references to business reports is looked upon strangely.

Another difference is that correct argumentation, essential for academic papers, is almost never practised in business reports. Business reports are usually dot-pointed and quite often lack precise argumentation and rely on rhetoric. I am not claiming that rhetoric is always dangerous, it is an essential part of life.

The third difference I’d like to point out is that academic management is about creating knowledge, while management practice is about achieving goals and those goals are most often not about gaining knowledge but relate to selling goods or providing services.

There are thus enormous differences between management as a science and management practice. It is important that for an MBA a balance is achieved between the two modi operandi.

Will I ever attempt a PhD in management? I love a healthy academic debate, and I love to research, but as a manager, I have found that it is important to leave the scholarly method behind and translate scientific knowledge so that everybody can understand how goals can be achieved, which is what business is all about.