Platt Perspective on Business and Technology

Some thoughts concerning a general theory of business 25: considering first steps toward developing a general theory of business 17

This is my 25th installment to a series on general theories of business, and on what general theory means as a matter of underlying principle and in this specific context (see Reexamining the Fundamentals directory, Section VI for Parts 1-24.)

I have been discussing a series of hiring process exceptions in this series since Part 20: personnel policy and process exceptions of types that can and do arise in businesses, and for reasons that I have at least been briefly noting as I have successively explored those exception case possibilities. And one key detail that they have had in common with each other, and with the more normative processes that they serve as exceptions to, is that they each present themselves as special case exceptions, and in ways that hold up a business’ more normative, official and expected hiring, onboarding and employee retention processes as the appropriate basic standard in place.

I turn here to consider one final hiring exception scenario, or rather category of them, that at the very least holds potential for challenging that last point of assumption: nepotism. And I include that possibility here, for how explicit rule breaking, and rule breaking that can challenge the basic legitimacy of a business’ basic processes and systems in place, can shed light on how a business is more normatively run, and on why it is run that way too.

I begin with what might be considered two of the more acceptable and business systems accommodating scenarios of this set of exceptions possibilities:

• The owners of a family run business that make no claims that they in any way seek to shift this enterprise from being family owned and run, bring in a son or daughter with a goal of training them and grooming them for eventual leadership there. But at the same time, they seek to maintain their business as a viable and even a competitively strong enterprise. So their next generation potential leader of this business is going to have to learn and grow into that position of responsibility. And I assume for purposes of this case in point example, that it is not a foregone conclusion that this heir to be will end up as CEO and Board Chair there and even if they stay with the company and long-term. That, at least in principle will depend on how their training and advancement through the ranks at this business works out. So yes, if they do succeed there, they will end up inheriting a leadership role there. But at the same time the current generation family-sourced leadership of this business is not willing to allow or support that move if it would put their family business that they have worked so hard to build, in jeopardy.
• And alternatively, the son or daughter of a long-term and valued employee or manager at a business, is offered a foot in the door as a new hire and at least to a significant degree because of their family connection to that business. But for purposes of this scenario, I only assume that meaning their being given an opportunity to prove themselves there. They still have to go through the same new hire orientation and new hire probationary period that anyone else entering that business as an employee would face. And their staying on and advancing there would depend on their performance there, exactly as it would for any other new hire or employee.

Think of these scenarios as rule bending, without necessarily being system breaking. For more extreme system challenging examples, consider the implications and the complications of breaking any of the basic constraints that I built into those two scenarios, that if adhered to would led this business back to normal, official and long-term effective, as its basic functioning norm.

I freely admit that I once took a consulting assignment as an interim C level officer, with a business that I came to learn was owned and run by a mob family. This was in fact one of their legitimate business endeavors and a key part of an effort on their part to break away from their past and entirely into legitimate business ventures. But this business was still plagued by nepotism, and by a form of it that held family, and mob family connections as being much more important than anything else going on there. As a result, it was impossible to even acknowledge that at least one such individual in a key position, was both incompetent and venal about it from how they sought out personal advantage and prerogatives at the expense of that business and its suppliers and customers. This business was in fact riven with nepotism sourced incompetence, even if most of the people so involved there were not in a position to create the levels of challenge that that one family favored individual did.

I did not stay there very long, but I did learn a great deal about nepotism and its more toxic forms from observing that approach to hiring and retention in action there. And I include this life experience story here for the lessons that I learned from it regarding business resiliency and flexibility, and how ongoing knowing violation of both normal business practice, and trust can create challenges throughout an organization.

I have been writing in the progression of series installments that lead up to here, of business as a system of interpersonal relationships and interactions. And I in effect conclude this phase of this series as I have been developing it up to here, by stressing a key word and a key issue that underlies whether and how that business might work: trust. Nepotism always at least raises low level questions as to trust and even when it fits a less damaging pattern of the type offered in my two above-offered bullet pointed examples. Where does the first of those scenarios leave lifelong employees who have moved up through the ranks of that business, but who can never hope for advancement to a next higher position there because a family member is being groomed for that next job up – and ultimately just because they have the right family connections? That type of complication can play out through the entire multi-year process that an inheriting son or daughter goes through, as they rise through the ranks in a business, and with the possibility of their pushing others aside as they are advanced to higher positions: as their family guided advancement stymies the professional futures of others there who are at least as fully invested in that business and its success and who are worthy of advancement if considered on a merit-alone basis. I specifically note here, that the non-family employees and managers so affected in this, are essentially always going to be among the very best people there that that business should most want to retain. They are usually among the highest performing, valuable people there who this business would, at least absent nepotism, be the most eager to retain and advance though their system.

I add that I have posited this scenario strictly in terms of some single heir to this business receiving special preferential attention. But it is not all that uncommon for this type of preferential treatment, and its appearance to be offered towards more than just some single next generation family member. The first nepotism scenario that I offered above can be applied to several or even many family members and certainly for a larger business, who would with time come to assume a wide range of positions there, and as much because of blood and family connections as for any other reasons.

And where does the second of the above two basic scenarios leave current employees who see someone who otherwise might not be hired at all, taking a job opening that others who might be more qualified have applied for too? For that, consider current employee stakeholders who meet with job hire candidates, including ones who they see as having tremendous value and potential. And then the person who is hired for that job, comes in as a “legacy” hire to use the family connections term used when a college or university accepts an incoming student candidate at least in part because their father or mother is a well heeled alumnus or alumna there. People talk. What impact will that have on employee morale, and certainly if this type of non-merit based hiring becomes something of a practice there? And add to that the opinions arrived at and shared in office cafeteria and break room conversations, if such a new hire finds themselves going through a more stressful and steeper learning curve than another less-connected new hire would be expected to have to deal with. And consider that in light of the ongoing impact that this family connection new hire has on everyone they now find themselves working with, who have to find ways to accommodate the consequences of those extra learning curve hurdles in their own work.

But as my above-noted more toxic nepotism example illustrates, the types of problems that can arise from its scenario, can and do get a lot worse than anything found in the first two as just discussed here.

• Ultimately, businesses, and organizations in general have to be built on a foundation of trust and of trustworthiness. And any real challenge to that can quickly become a challenge to the business as a whole and a challenge to all that that enterprise stands for and seeks to accomplish.

I am going to return to this narrative and to a discussion of business processes and business theory, in subsequent installments to this series. But as already promised, I am going to step back to reconsider and build upon the more general principles of general theories that I started this series with. And I will do that beginning in my next series installment. Then, when I have concluded that digression, I will turn back to explicitly considering theories of business per se, in light of the conceptual structures and approaches that I will develop and offer starting in the next installment. And I will begin to formally discuss emergent properties when I do that, and where and how they arise in a business as it develops in scale and complexity.

In anticipation of that, I note here that I have been discussing business theory as such in this series, since Part 9, in terms of individual to individual, interpersonal interactions and relationships. And I have cited higher organizational levels in this, primarily as context for clarifying points made there. I have noted and on a number of occasions that I have been planning on discussing emerging properties in this series too, as they arise in larger and more organizationally complex business systems and contexts. But I have not addressed that up to here.

I will offer more general theory of general theories context, at least beginning in the next installment to this series, building onto the organizing framework that I began laying out in Parts 1-8 of this series. Then I will turn to consider the lowest level of organization and structure in a business where overtly emergent behavior and its consequences begins to emerge, and essentially of necessity: at the organizational level of the intra-communicating tile, to cite the term that I have been offering and developing theory around in Building a Business for Resilience, Part 28 and following. As noted there, what I refer to as “tiles” in that discussion, holds a number of key points of similarity with “cliques” as that term is used in social networking theory, though tile has additional defining properties that hold particular importance there in that series and here too.

I will discuss feedback and peer pressure as shaping factors in within-tile dynamics, and in the interactions between separate tiles in an organization, as representing the lowest level of organization there where true emergent properties first begin to arise in overall business systems. And then going beyond that, I will discuss how headcount expansion in an organization, approaching and then surpassing Dunbar’s number in scale, leads to further next step up emergent properties too, with among other things the emergence of an absolute need for formalized business processes that would shape and determine allowed interpersonal interactions, and through them essentially all business activity.

That outlines some of what is to come in this series, moving forward from here and through the next two major transitions that this overall narrative with go through. Meanwhile, you can find this and related material about what I am attempting to do here at About this Blog and at Blogs and Marketing. And I include this series in my Reexamining the Fundamentals directory, as topics section VI there, where I offer related material regarding theory-based systems. And I also include this individual participant oriented subseries of this overall theory of business series in Page 3 of my Guide to Effective Job Search and Career Development, as a sequence of supplemental postings there.

My primary listing for this series is in the Reexamining the Fundamentals directory as listed above, and I offer the first 25 installments to it as what amounts to a first volume of a longer work. I will begin Volume 2 of that with Part 26, and will organize the series continuation that begins with it as a progression of postings that focus on general theories per se, followed by one on theories of business – exactly as offered in Volume 1.

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