Life in the corporate world is rough. Despite its unpleasantries though it hasn’t destroyed my belief that free enterprise in a lawful environment is still better at creating sustainable wealth than any grand central government engineered projects or thinking. If anything my belief’s been oddly reinforced, both because I’ve grown older and wiser and, more importantly, due to one of the limitations of people and human behaviour I’ve noticed.

Yes, structure and organisation of large groups of people is necessary in order to achieve tasks and goals, hence why enterprises and nation states exist, and a level of governance from a central government is vital for the greater health of a society. However one of the things I’ve noticed is just how limited senior management understanding of the mechanics in a business can really be and how their success in confronting this critical fact can be contrasted against politicians’ misconceptions and repeated failure for not doing so.

Senior management’s limitation in itself is not because of foolishness, arrogance or corruption on their part. It’s rather because it’s impossible for all information both to reach such individuals and for them to receive, read and understand it all within limited time, being the same limited human beings we all are. The division of labour in the modern world has also fueled specialisation to such a degree across skill sets that senior management within corporates is rather now about setting the tone and culture, people skills and about guiding the overall direction of a business within a team of similar skilled leaders. That’s rather than directly tinkering or properly understanding on a technical level how the mechanics of, for example, business processes work. As a result most decisions are done on the basis of limited information with inherent subjectivity partnered by reliance on personal experience, intuition and assumption while all the time facing the possibility of being wrong and placing quiet reliance on others. That means also importantly being able to admit mistakes, change direction and make unpleasant decisions quickly.

Contrast this against the behaviour and belief of the local central government, politicians and, unfortunately, electorates. The notion still holds dear amongst so many that only some fine-tuning of some grand socio-political formula that must be enforced rigidly denies our path to some false utopia. That same formula is set by individuals who are essentially chosen on their ability to play political and popularity games rather than ability, and who often bring their own biases while shrugging responsibility for difficult choices they may not even understand in the first place. That behaviour is often also accompanied by the notion that it’s possible to micro-govern whole economies and even 21st century industries with 19th century thinking when experienced and revered business leaders with numerous desired qualifications several lines long behind their names long often call a single market wrong and can’t personally understand why a particular department within their enterprise is performing so badly. Further, ask yourself just how a politician reacts when their grand socio-economic idea is failing and compare that against what free enterprise or a proper leader does in a similar dilemma.

The parallels extend further, but it’s disappointing ultimately that so many politicians and government officials who behave in such a limited fashion don’t appreciate the irony of how they fail to acknowledge and harness those same limitations.