As published on SMH on 25 August 2015
It has long been an axiom of government that the key to success is trust.
As long ago as Confucius it was held that three things were needed for government – weapons, food and trust – but that if a ruler could not hang on to all three, they must guard trust to the end.
Yet, no institution is immune to what has been described as the “institutional imperative”. This debilitating force is at work everywhere in politics, business and life, and dictates that the principal characteristic or symptom of an institution is that it will resist any change from its current direction.
In 1992, my own direct experience in business bore this out.
When we launched a new division within Transfield, an operations and maintenance unit, management of our construction arm strenuously opposed the establishment of a new stand-alone entity which we, the owners, the Belgiorno-Nettis and Salteri families, argued for. Our view was that the nature of the two businesses – construction and maintenance – were quite different, and needed differing management cultures.
Then, several years later, when the maintenance arm, Transfield Services, listed its shares on the stock exchange, directors and management became hypnotised by its success, believing it could keep growing quickly. Overheads built up to the point that the business became uncompetitive.
As renowned investor Warren Buffet put it: “I thought that decent, intelligent, and experienced managers would automatically make rational business decisions. But I learnt over time that isn’t so. Instead, rationality frequently wilts when the institutional imperative comes into play.”
This imperative prompts organisations to resist changes to their structure and procedures. In physics it is defined as inertia.
Any organisation can be affected by the inertial resistance to change.
Turning to the political arena, we can find similar examples of inertia.
In particular, there is failure in our parliaments, in the way they are constituted.
For centuries, we’ve grown up thinking that the election contest is the best way to effect political representation. The contest conflates issues with candidates/parties, and as we have become so mesmerised by the theatre – and its actors – we’ve lost sight of the real issues and a better way.
Concurrently, the traditional constituencies of the left and right are evaporating. New parties are taking their place and many people are disaffected.
As an example, the real winner in the recent British general election was not the Conservative Party, but rather the non-voter (more than a third of the electorate).
When one considers options for reform, it is helpful to reflect on that original democracy: Athens had neither candidates nor parties: representatives were selected by lot, for a limited term.
The Polish sociologist Sztompka argues there is a reciprocal relationship between trust and democracy, that trust collapses in institutions when they fail to adapt to changing circumstances, when the institutions fail to fulfil their professed function and stagnate in outmoded behaviour.
For our democracy today, perhaps the institutional imperative is the electioneering imperative, whereby the party political institutions seek to win and retain office at all costs – even at the cost of sensible public policy development.