Roger Martin, most notably associated with the concept of Integrative Thinking, was the Dean of the Rotman School of Management in Toronto and is a renowned management thinker.
Martin's focus in this book is founded on the dislocation that has occurred in the industrialised world between the rewards people receive and the output they generate. Recently it has been evident that the elite have been doing better than the rest, exemplified by the growing disparity between top executive pay in comparison to that of everyone else.
Economic growth in the last two centuries has been based upon the concept that business and the economy are a 'perfectible machine', which with ever-more finely calibrated tweaks will increase prosperity for the majority as well as the poor and the rich. In the four decades since the US bicentennial in 1976 (his selected pivot year) this growth has ceased to provide the prosperity increase it is supposed to, and a consequential disillusionment has started to set in, rotting the foundations of democratic capitalism.
The core problem, Martin asserts, is the relentless pursuit of efficiency, ignoring the natural balancing all systems require. The most notable missing element is that of 'resilience', which requires the system to be more 'adaptive' than the efficiency focus allows for.
The solution lies with an acknowledgement that we cannot reach 'perfection' by just striving for continual efficiency improvement; we need to adjust to new contexts and circumstances as they arise with alternative solutions which are not purely based on the maximisation of efficiency. As Martin says, "businesses are part of a natural and highly complex system, characterised by a large number of interdependencies and contingencies."
These interdependencies make trying to accurately forecast the future "a fool’s errand". He highlights the failure of Toys'r'Us and iHeartMedia in 2017, not through poor operational management, but because they were owned by Leveraged Buy-Out firms focused on future cash flows and critically "maximising the benefit of the LBO-investors, with no regard whatsoever for the employees." That single-minded focus debilitated the companies' resilience.
The pursuit of perfection can be 'delusional and dangerous' in a complex system, as it reduces the space for error to occur. Systems need to be designed with 'firebreaks' in them, to prevent systemic collapse occurring.
Martin sees the issue that too much specialist focus on the economy as ‘a machine of many parts’ occurs, and too few seeing the whole, integrated eco-system, and the impact that one element can have on another. To rebuild resilience requires a reconstruction around the three core features of natural systems: complexity, adaptability and systemic structure.
Martin does not just offer solutions for business folk, but also politicians, educators and citizens. He concludes with a plea for a multiple, diverse, non-ideological approach to resolving the Democratic Capitalist decline. It is through experimentation, many small projects and open-mindedness that resolution lies. Diversity in approach, will, as in nature, lead to survival. So, abandonment of the pursuit of hyper-efficiency (especially through the capital markets) as the primary goal cannot happen soon enough.
‘When More Is Not Better: Overcoming America’s Obsession with Economic Efficiency’, Roger Martin. Published by Harvard Business Review Press, September 2020, ISBN 978-1-647-820-06-0