Running anything – whether it is a national government, vast state industry, world-circling multi-national, small family business, or private club – involves making choices. Indeed, the definition of an executive is one whose job it is to make choices, and the best executives are, of course, those who day in day out make the most sensible choices – choices between different courses of action, between men and women available for the job, between planning alternatives, between the multitude of opposing expressions of advice volunteered from all and sundry.
What happens is that the nearer the top of any organisation a man or woman gets the more difficult the choices become. Near or at the top, in fact, it often becomes an exercise in choosing which is the lesser of two evils. The top management of anything is a continuous business of deciding between the devil and the deep blue sea. The most heartfelt question which any Prime Minister or Chairman asks colleagues is surely the one which, I think, originated in Trinidad – and which Godfrey Chin, of Nostalgias fame, has made his own – “Ya think it easy?”
No, it isn’t easy. In fact, in poor countries nowadays it is impossible. Who, for instance, would wish to have to choose again between going under the whip of the IMF in order to suffer the 6 pains of death, and refusing that whip only to feel the half-dozen pangs of mortal illness? And who with $100 million in foreign exchange available, would want the job of deciding between $100 million of essential life-saving drugs or $100 million of essential life-giving fertilizers or $100 million of essential life-maintaining spares? Really important decision-taking involves choosing between the bad and the worse much more often than it involves choosing between the good and the better. Ask the hard-pressed executives of embattled GuySuCo – they know this very well.
But a more fundamental choice, underlying all such decision-taking, faces the top echelon of people in charge of running any enterprise, from largest to littlest. Put crudely, it is the choice between profits and people. Debate about how to rule a country, how to run a business, even how to run one’s own life, more often than not comes down to considering to what extent people or profits should have priority.
To any person of goodwill, the choice may seem straightforward and simple – people must always, surely, take precedence over profits. But consider the matter a little and the question becomes much more complex than it seems at first sight. To give one instance: if, through an understandable concern for people’s welfare, surplus funds which should be devoted to renovation and expansion are devoted either to employing more people than are needed or to paying greatly increased wages or to dispensing improved social benefits, this may seem wholly admirable in the short term but may actually be disastrous in the longer term as productive capacity collapses and marketing opportunities are lost. In such a case the end result is extremely detrimental for people as well as profits, and in the end there is absolutely no benefit to anyone. The decision that temporarily goes easy on people often brings them misery later; the decision that seems immediately tough on people may well yield the best results for them in the long run.
It is also too simplistic to associate compassion with state intervention and profit with private enterprise. In the case of both state-controlled and private enterprises equally, it is a most important and delicate question as to what extent commercial considerations can, or should, make allowance for compassion and vice versa. The type of organization makes no difference – the competing pressures cannot be avoided. The distinction, rather, should be made between concerns which are either well run or badly run. The fact is that all enterprises, state-owned or private, have one objective and that is to increase efficiency and productivity, since out of such increases will arise the capacity to be both more compassionate as well as more profitable. Certainly, inefficiency can and will produce neither compassion nor profit.
Jock Campbell, Chairman of Bookers in the 1950s and early 1960s, was that seeming anomaly – a socialist who ran a large private multinational company. In Guyana he once used in a speech a phrase which became famous: “People are more important that ships, shops, and sugar estates.” In the deepest sense that is true, since if there is no regard for people then ships, shops, sugar estates and everything else all become inert and useless. However, Jock Campbell had another phrase which he also used frequently. He used to say: “An unprofitable enterprise is a fraud on its own people and on the whole community.” That also is true.
The simple fact is that in order to achieve progress through the sensible development of resources, a concern for people and a due regard for profit are both essential. To find the right balance between the two is the art of good management – and the best artists of management, whether state employed or private entrepreneur, are not at all easy to find in this hard and puzzling world. And if you do find them, how long will you keep them in a poor country where managerial artistry cannot hope to attract the sort of premium it attracts in richer countries?
