In this, my first blog post for Guy Wallace’s HPT Treasures, I thought I should start small, really small, atomic-level small. So how about this? Let me conjecture that L&D (Learning and Development, including Performance Improvement) has been engaged for decades in following a radical right-wing ideology put forth most notably in Milton Friedman’s terribly influential free-market manifesto—published this week 50 years ago.
As the New York Time’s wrote this week:
“It was the essay heard round the world. Milton Friedman’s “The Social Responsibility of Business Is to Increase Its Profits” laid out arguably the most consequential economic idea of the latter half of the 20th century. The essay, published in The New York Times Magazine on Sept. 13, 1970, was a call to arms for free market capitalism that influenced a generation of executives and political leaders, most notably Ronald Reagan and Margaret Thatcher.”
The idea at the core of this atomic bombshell is that everything we do as members of organizations should be devoted to maximizing profits—specifically maximizing shareholder value! Our number one goal is specifically NOT:
- Providing value to customers.
- Providing value to suppliers.
- Providing jobs and careers to employees.
- Enabling self-respect among our employees.
- Enabling employees to support their families.
- Contributing to the wider economic good.
- Contributing to the wider societal good beyond economics.
- Being good stewards of the natural world.
- Providing stability so that democracy can flourish.
What Milton Friedman wrote was that businesses should stick to business and any focus on social responsibility was, in his words, “preaching pure and unadulterated socialism.”
In Friedman’s words again:
“IN a free‐enterprise, private‐property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.”
This should sound very familiar to you if you’ve been in L&D for the past few years or few decades. We as learning-and-performance professionals have been targeted with this type of message for years, coming from the highest-reputation citizens in our field. I know I preached a similar message when I was a leadership trainer—that our goal as managers was to increase shareholder value. Haven’t you heard messages like these below? Haven’t you said these things yourself?
- “The ultimate goal of training is business results.”
- “The ultimate goal of learning is ROI.”
- “The ultimate evaluation goal, Level 4, is business results.”
- “As instructional designers we are entrusted with shareholder equity.”
- “The goal is not learning, it’s business impact.”
- “It’s all about increasing shareholder value.”
- “Training is not an end in itself. Training is a means to an end.”
- “It’s about aligning learning to impact.”
- “We should work backward from the ultimate goal, business results.”
- “Too many learning interventions are created without any consideration of the impact on the organization.”
- “In designing learning, we should start with a targeted business impact.”
- “We work for the C-Suite.”
Essentially, what we’ve been doing in L&D over the past three or four decades is advocating for the raving machinations of a right-wing nut job! Friedman’s arguments are now largely taboo, discredited as being too narrow, too unfair, too unbalanced—and wrong! Even the Business Roundtable, a group of American CEOs focused on business interests, have admitted that the shareholder-only-focus of previous years was inappropriate, that the purpose of corporations should NOT just be profits. In their 2019 statement they affirmed “the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders.”
As Nobel Prize winner Joseph Stiglitz has written:
“By the time he wrote this essay, Friedman, who had done distinguished analytic and empirical work in economics, had become largely a conservative ideologue. I gave a talk at the University of Chicago around [the time of Friedman’s essay], presenting an early version of my research establishing that in the presence of imperfect risk markets and incomplete information — that is, always — firms pursuing profit maximization did not lead to the maximization of societal welfare. I explained what was wrong with Adam Smith’s invisible-hand conjecture, which said that the pursuit of self-interest would lead, as if by an invisible hand, to the well-being of society. During the seminar, and in extensive conversations afterward, Friedman simply couldn’t or wouldn’t accept the result; but neither, of course, could he refute the analysis — it has been a half-century, and my analysis has stood the test of time. His conclusion, as influential as it was, has not.”
You can read commentary about Friedman’s essay, including Stiglitz’s reflections at https://www.nytimes.com/2020/09/13/business/dealbook/milton-friedman-essay-anniversary.html.
Downfall of Our Professionalism
We have made ourselves subservient to our business masters! Yes, read that sentence again!
More importantly, think of the implications. When we are just cogs in the larger machine, we don’t exert our own direction; we circle round and round and round based on the whims and self-serving interests of our overlords. We are not professionals then, are we? We are robots, following the forces of algorithms, business incantations, managerial incentives.
Professionals have principles, validated practices, unshakable values. As cogs, we hope only for a thin veil of lubrication to ease the grinding servility of our work.
Think about it. Do we stand up for principles or kowtow to our business stakeholders? How many times have you been asked to build learning with no needs assessments or inadequate evaluations? How many times have you used learning designs that you knew were ineffective? How many times have you fallen to your knees as an order taker, when you knew that training wasn’t the real issue? Yes! We know we have a professional responsibility to do what’s right, but we stand down. Almost always! We comfort ourselves in fighting the good fight. We rationalize our place in the machine, thinking that we are lucky to have jobs, thinking that in the rightful order of things our job is to do what we can to increase profits. We are beholden to our bosses, who are beholden to their bosses; all of us are beholden to the business, which is beholden to shareholder value.
We build union-busting training without even thinking that we are hurting our fellow workers. We create onboarding programs that unrealistically show the organization at its best, failing to prepare new hires for the obstacles they will face. We create compliance training we know won’t help our fellow employees stay safe—except for the lawyers whose jobs will endure.
Who are we?
Certainly, there are acts of bravery and professionalism in the field. One of my heroes is Roger Kaufman, who has preached the importance of looking beyond the organization to other goals of learning and performance improvement. His work on MEGA is exemplary (https://megaplanning.com/).
In my LTEM Framework (https://www.worklearning.com/ltem/), I specifically point out that organizational outcomes are only one outcome to be measured. We ought to also look at our learning interventions’ impact on other stakeholders—including the learners themselves; their coworkers, family, and friends; the community; society; and the environs.
But to date, these efforts are too small and insignificant. We need more structures and practices and values focused beyond business results and shareholder value. We also need to empower ourselves to be professionalized, so we can stand up and do what is right.
Did You Know You Were Spouting Right-Wing Ideology?
You and I should worry. It’s easy to see things as they are as immutable and righteous. I bought into the dogma of shareholder value. I have focused too stridently on business results. I have been a helpful servant. I am not proud of this.
I write this post because I see a connection between politics-and-power and the work that we do—and the justice and fairness and empowerment that may or may not arise from our work. We may want our work to be siloed away from concerns about power and politics, but just because we haven’t noticed a connection, doesn’t mean there isn’t one.
It sure looks to me that the messaging we’ve heard and repeated to ourselves over the years is a message that pushes us away from thinking about our fellow employees, that focuses us on financial outcomes for a narrow few, that binds us to a state of servility, that makes us less than the professionals we yearn to be.
This is Will Thalheimer, President of Work-Learning Research, Inc.
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