The other day, I sat in on yet another stimulating teleconference hosted by the Plexus Institute.  Today's call featured Bill Frederick, Tom Petzinger, and Dick Knowles.  The three represent deep knowledge about the concepts of complexity science as well as the real-world application of those concepts to business.

Frederick is professor emeritus of management at the University of Pittsburgh and is a leader in the study of business ethics.  Frederick was trained in economics and cultural anthropology, a rare but powerful combination.  In 1995, Frederick wrote a book titled Values, Nature, and Culture in the American Corporation, which presented the corporation as a dynamic system that reflects the tension that exists between three competing sets of values: economizing (the fundamental need to be productive and profitable), power aggrandizement (the accumulation of coercive power), and ecologizing (trashing community and the environment is bad for business in the long run).

Back in 1998, I learned of Frederick's book from Petzinger, who was a fixture on the complexity conference calendar.  At the time, Petzinger was a columnist for The Wall Street Journal who later wrote a highly regarded book of his own, The New Pioneers.  Subsequently, Tom left the world of of business observation to become a business practitioner as the founding CEO of LaunchCyte, a Pittsburgh-based biotechnology business incubator.

Knowles was featured in a section of Petzinger's book.  Petzinger told the story of how Knowles lead the turnaround of a down-in-the-dumps chemical plant in West Virginia while working for Dupont.  Knowles discovered during his practice of maintaining a "walking dialogue" with people on the factory floor that business values and culture served as an "attractor" for evaluating business decisions.  A scientist by training, Knowles may have an unusual affinity for theory.  Nevertheless, no one can accuse him of being an ivory tower dreamer.  In West Virginia, Knowles was faced with some harsh "economizing" reality.  Either he and his colleagues turn the plant around, or 1,400 people were going to lose their jobs.  The plant's ultimate success helped launch Knowles' new career as a leadership consultant.

During the teleconference, I had the opportunity to re-submit to Frederick a quote from an email he had sent me five years ago:

If today's humongous Corporate Dinosaurs are stomping around the world shaking the ground with every (merger) step, what chance is there that the small Complexity Mammals can survive and begin to take over the landscape? Remember, it was only that errant asteroid which destroyed the dinosaurs that allowed mammals and eventually hominoids to emerge. Do you suppose there is an equivalent asteroid that might take out the Corporate Dinosaurs, clearing the way for us complexifiers?

I asked Frederick what he thought about the prospects for complexifiers in the post-Enron world.

He isn't optimistic.

Frederick's most recent work builds upon (rather controversial) thinking from the field of evolutionary psychology.  As I understand it, evolutionary psychologists claim that the human brain contains lots of genetically specified "modules" that are evolutionary adaptations.  These modules act as cognitive rules-of-thumb that predispose us to think and act in certain ways.  Frederick suspects that adaptations that reflect the hunter-gatherer reality of most of human history can explain how power aggrandizement values might have a built-in edge over ecologizing values or even economizing values.  In other words, Andrew Fastow, the disgraced (but currently still wealthy) former CFO of Enron, was following the inner voice of his hunter-gatherer ancestry when he apparently plundered corporate assets.

I believe there is something to the theory.  I don't doubt, for instance, that the slow pace of change experienced by humans during most of their existence may well underlie a persistent belief in linearity, even when it comes to economics.  Even so, I'm more optimistic than Frederick.  The hard-nosed practitioner, Knowles, is, too.  While acknowledging that aggrandizing behavior exists, and can thrive in a culture of secrecy, Knowles believes that open, honest, ethical organizations are more flexible and adaptive.  In the long run, therefore, open organizations will be more successful.

So human biology probably helps to shape the culture of business organizations.  On the other hand, institutional context influences our individual behaviors, notwithstanding the existence of genetically wired pre-dispositions.  So will aggrandizement win out over ecologizing?  It depends upon the institutions we emphasize and the individual choices we make.

I went to the same business school as Fastow.  We also went through the same bank training program in the mid-1980's in Chicago.  The last time I saw Andy was in Houston, just after he'd accepted a job in the energy trading group at Enron.  I was an aspiring late-stage venture capitalist in Dallas.  That is when our paths diverged.  I turned away from the world of large corporations toward start-ups and other entrepreneurial ventures.  Fastow wanted to walk with the terrible lizards; I chose to scramble with the mammals.  I'd like to think that I'm less susceptible to aggrandizing behavior than Fastow.  The truth is, getting an MBA at a brand name school is, to some degree, an act of aggrandizement.  The big difference between us lies in our choices and in the stages on which we chose to perform.  The people involved in entrepreneurial growth companies are not morally superior to their counterparts in large corporations.  However, the former have little opportunity to accumulate coercive power.  So, in addition to their superior ability to generate economic wealth, entrepreneurial business, as a class of institution, may be fraught with less ethical peril.