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Philosophy and Economy

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The  Enterprises of the future are

looking for philosophers of action – visionary leaders.

Who is preparing them?

 

In the near future every organization, from the smallest enterprise to the largest multinational, will be an ideological company, and will have a philosophy. The destiny of a man, the success and longevity of a company, and the wealth of a nation depend on their values, and are the result of their philosophies. At the top of every organization there will be philosophers of action, poets and visionary individuals, and pragmatic utopians. Who is preparing them?

 

Economics is a way of thinking Suppose that you are visiting a long-established college, the Campus of a leading university – let us say that it is one of the Ivy League schools in the USA, or a school from the Russell Group in the UK. If you search for the faculty of philosophy, or the humanistic and classical studies department, you cannot be mistaken. You will find them in the furthest corners of the campus – the furthest away from the faculty of economics. This physical positioning is emblematic of the conceptual distance which still divides these two disciplines. They feel themselves to be strangers to each other, though in fact, philosophy and economics are two faces of the same reality. Actually, economics is not carried out by economists, and cannot be explained by them without philosophy being considered in the equation. The wealth of some nations as well as the underdevelopment of others cannot be explained by economics. There is something in the invisibility of a country, of an organization, or of a man, and in the very roots of the Being which accounts for what we can observe in the outcome. The visible is produced by the invisible, as the blueprint precedes the physical construction. The economy of a nation, the maturity of its institutions, or the harmony of the civil and political life cannot be explained by economics, but rather by the beliefs, the system of values, and the philosophy of that nation.

Modern Japan: A Text Book Case
Philosophy and economics, as vision and reality, are one and the same thing. This statement is true for corporations as for entire nations. A textbook case for this theory is modern Japan. Two wars were lost by Japan. The Second World War culminated with its defeat and the destruction of two cities by atomic bombs. Japan is extremely overpopulated, speaks an impossible language, and is in the middle of nowhere. They were just emerging from a medieval culture. To top it all off, Japan does not have any natural resources whatsoever. Economics by itself cannot offer a convincing explanation for its prodigious economic growth. We cannot understand how it became the second strongest economy on the planet if we do not know and understand its culture and traditions – from the culture of rice, to the tradition of the samurai. We cannot understand why Japan developed so quickly, or why its social cohesion is so strong, without knowing the strength and weight of its system of values, the quality and breath of its moral principles, and without considering the roots of its culture and the depth of Confucianism, which nourishes it.

Japan’s Ethical DNA
Confucianism is not a religion, it is a philosophy of life which works as a strong social glue. Imported from China, Confucianism gave Japan its ethical DNA. Approaching the modern age, the original patrimony made up of the six main virtues recommended by K’ung Fu Tzu (Confucius) were reduced to five virtues: Justice (i), Ceremony (li), Knowledge (chih), Faith (hsin) and Loyalty (chung). The sixth virtue, Compassion/Benevolence (Jen), was in time completely abandoned and Loyalty grew in importance until it assumed the position of being the central virtue in the modern Japanese system of ethical values. This mutation of modern Japan’s ethical DNA, occurring in the invisible roots of the country, has moved mountains in its economy – demonstrating that the wealth of a country, and the stability of its institutions, is a reflection of its way of feeling and thinking; it is a reflection, specifically, of its philosophy. The system of values, the quality of thinking, and the ideas of a country, in one word, its philosophy is the cause and its economy is the effect.

The Short Century
The transformation of the former Soviet Union and of its economic system is exemplary of an epoch-making political and economical transition as a result of a paramount shift of the vision, and of the abrupt change in the value- system of that country. When President Mihail Gorbaciov was a guest at the ESE in Rome, he recalled in the speech that he delivered to my students and to the academic authorities, the words – in fact, qualities, that had only a few years before disrupted the political equilibrium of the world, and a fifty-year old status quo: Nobility, Morality, Goodness and even Mercy. In his historical speech to the great nations of the western world, he spoke about the “Spiritualization of Life”. This U-turn in the vision of the Soviet Union determined the collapse of that continuing state of political conflict and military tension, called “the Cold War,” which was so emblematically represented by the fall of the Berlin Wall. This event marked the premature end of the XX century, henceforth named the “short century”.

Philosophy is Economics
The equation we have applied to the economies of nations also extends to individuals and to enterprises. The financial destiny of a man, like the success and longevity of a corporation, depend on his principles and moral values, on the quality of his ideas and beliefs, and on his philosophy. Any company, regardless of size, needs a philosophy. Any successful organization of the future must be ideologically based. We will see at the helm of enterprises and multinational corporations, pragmatic utopians, philosophers of action, and poets capable of seeing beyond the surface of their organization, and capable of penetrating and nourishing them at the root. The world needs these men and women – visionary leaders, and pragmatic dreamers capable of approaching politics and business as if they were serving a cause; they must serve with competence, efficiency, honesty, and in one word – integrity. Without them, no progress is possible. If universities do not prepare them and do not even think about the task, who is going to take on this responsibility?

Corporate Longevity
All over the world, companies die young. Their average span of life is no more than 12 to 14 years. The largest corporations very rarely pass beyond their 40th birthday. The philosophy of the founder – the luminous guidelines that he gave at its inception – decides the lifespan of the company. Whatever achieves long life must have atoms of eternity woven into the fabric of its existence. An immortal institution can only be created by an immortal founder. Rome, the eternal city, which has recently celebrated 2,800 years of uninterrupted life, is exemplary of a long-established enterprise that could not be explained without reference to its founder and his qualities as an immortal being (Romulus was deified and worshipped by the Romans as the god Quirino). Another such institution is the Catholic Church – the largest and most long-lived multinational in the world; it is not by chance that it is assumed to have had an immortal founder. Behind a successful and long-lasting company, there are always the principles and ideas of a philosopher of action – a pragmatic dreamer. Beyond the visible assets of a company: its buildings, vehicles and machinery, offices and warehouses, and behind the army of workers and employees, managers, suppliers and any sort of stock holders, there is invariably one man – an individual and his dream. There must exist in that institution a philosophy – the luminous idea that created that company, the stroke of a tuning fork that still resonates in all of its cells, making them vibrate in unison. When the founder is no longer there, when nobody takes on his legacy, his philosophy dries up and the company starts to die.

Forgetting One’s Roots
Organizations forget their origin and die, or hardly survive, having lost any recollection of the dream that brought them to existence. Last year, visiting one of the Brooklyn College campuses in downtown New York, I asked the Dean for the motto of his glorious college which had just turned 80 years old. It took all the time of our meeting, and some embarrassed calls to a number of staff, to find out the Latin aphorism encapsulating the beliefs and the ideals encoded in the roots of the College: ‘Nil sine magno labore’. No one knew its meaning any longer. I was once invited as a key speaker at the ‘Canon Concerto’ to be held in Budapest. It was an annual event, which moved from one European capital to another, gathering together managers, customers and suppliers for two days each year. Preparing my speech to over one thousand European Canon managers, I discovered to my surprise that they did not have any recollection of the founder – a doctor, humanitarian, and fervent Buddhist. The founder had created the company almost 80 years earlier, in 1933. His legacy was that the company use its technologies to benefit people, and never for the purpose of building weapons or components for the war industry. They did not even remember the origin of the name “Canon” – so named after the Buddhist Goddess of Mercy. By example, there is also the sensational case of the world’s oldest continuously operating family business – Japanese Kongo Gumi – which disappeared after 1,400 years for betraying its mission and going astray from the guidelines of the founding fathers and the corporate philosophy. The Japanese temple builder Kongo Gumi, operating through the founders’ descendants since 578, ended its impressive run in 2006, after the decision was made to construct apartments instead of temples. Through this example, I do not mean to say that there are things in the vision or in the roots of the company that cannot be modified. A corporation can be deeply changed and even be reinvented if there is a real leader doing it.

GE Business Philosophy
GE, one of the largest multinationals, with over 300.000 employees in 160 countries, invests one billion dollars a year on training to inculcate the employees with principles of integrity and a single-minded purpose – to integrate GE business into one culture. GE’s motto “Imagination at Work” is the essence of its business philosophy. “Imagine” is an invitation to anybody working in GE to dream and dare to do something greater. “At work” expresses an action-oriented nature of the company, and means that at GE, imagination is fused with empowerment, and with the confidence that whatever one can imagine, GE can make happen. GE states that it wants to renew American leadership. In the meantime, the ‘triple-A’ bond rating was cut to a ‘double-A’ rating, and in the last two years GE has faced losses, cut dividends and reduced employment by 10%. This was the effect of a U-turn in the philosophy and mission of the company, and the effect of transforming an industrial corporation with over 100 years industrial tradition into a financial company relying for almost 60% of its profits on banking and financial services. The solution for GE is to go back to its roots, and to stick with its philosophy based on four core values: Imagine, Solve, Lead and above all, the fundamental value: Build. Where we’re heading is in many ways a reflection of where we’ve already been. For 125 years GE has been a manufacturing company. And when we look to the future, we know that for us, there’s only one way to get there: Build.

Temenos: A success story
George Koukis, Founder and President of Temenos, is a self-made man. A Greek who immigrated first to the UK and then to Australia, George Koukis bought a small failing company and attracted some venture capital money to create Temenos. In less than 20 years under his guidance, Temenos went from no revenues, 2 offices and 34 people, to become the Premier Banking software company in the world, with 5.000 people and operations on 5 continents. Temenos is one of the top five listed companies in terms of the quality of corporate governance. Mr Koukis has his office in Geneva, on the third floor of the Temenos building, at the emblematic address of Place des Philosophes. If you have the chance to meet him, look at the collar of his jacket. There you will see a clue to his entrepreneurial philosophy and the secret of his success: a gold lapel badge in the shape of a key. “We developed what I believe is the core of our success – a culture that puts people at the top of the pyramid. Everybody in Temenos has this lapel badge, to never forget that PEOPLE ARE THE KEY. This principle, when truly practiced, is the most powerful concept. It is like a tidal wave. It cannot be stopped.” Temenos’ organisational pyramid is connected to its leader’s philosophy. As for all true corporate leaders, a golden thread binds George Koukis’ image and personal destiny to that of his organisation and men. One of his preferred statements is: “I never get sick, I do not have the time for it.” This brings up the issue of the entrepreneur’s physical health as coincident with the health of his economy. Health is wealth. The king is the Land and the Land is the King. When the King is ill the Land is ill.

A Planetary School for Visionary Leaders

I’ve dreamed of a revolution.

Of a new generation of visionary leaders.

I’ve dreamed of a School which ‘remembers’

that the ‘dream’ is the most real thing there is.

 

One man makes the difference. Always. For a corporation, as for a country, the dividing line between winning and losing, between progressing and decaying, between being free and being enslaved, between staying alive and disappearing, is always made by one man with a dream and a sense of greatness – a visionary Leader. The world needs these special individuals. They are the most strategic resource for the economic growth and human development of nations. Their preparation requires individual attention; they have to be forged one by one, and cell by cell. Traditional schools and mass universities cannot do it. We need to create special schools to forge them. If we were able to “produce” them we could solve all the problems of our planet – from endemic poverty to pollution, and from conflicts to crime. The capacity to intentionally create impeccable leaders, and pragmatic dreamers, would be the greatest scientific discovery of all time. With this in mind, at the Forum Istanbul 2009, I announced the FLW – Future Leaders for The World Programme – exclusively designed for preparing visionary leaders for Turkey. This program is not geared to transfer a ready-made set of convictions and beliefs, nor to give the students any bookish knowledge, imposed from the outside, and equal for all. It takes place in Florence – where genius and excellence inspired the Italian Renaissance – and today’s students learn how to foster higher ideas and develop a sixth and seventh sense: intuition, and dreaming. Last January 6th, at the Ritz Carlton, we held the awards ceremony for the first 40 students, future leaders of Turkey. There they have learned how to overcome inner limits, cultivate independent thinking and a true passion for freedom and greatness. Art, music, theatre, philosophy, the economics of ideas, the psychology of creativity, and the search for truth have been the tools to amplify their vision and bring to light their inner qualities, and to develop the ideas and values of a visionary Leader. The next step in the Project is to expand the FLW from a national scholarship program into an ambitious philanthropic project: the creation of a planetary school to face the real problem of our civilization: a shortage of committed men and women capable of conceiving brave ideas and committing themselves to their realization. These men and women are the real wealth of a nation. Without them no progress is possible. On the 6th of January, George Koukis and I congratulated the first leaders of the Future for Turkey. We are already preparing the next editions of FLW for the worldwide.