I’ve been thinking a lot about revolutions lately, and what they were really all about.
On the face of it, they had many and various goals and effects. For example:
- Establishing the first democracy (Athenian Revolution of 508BC);
- The abolition of the unfree labor system in England known as serfdom (The Peasants’ Revolt, 1381);
- The global decline of absolute monarchies and their replacement with democracies (French Revolution, 1789); and of course
- The transition to new manufacturing processes and power sources, and the technological and economic progress that kick-started the growth of the middle class (the Industrial Revolution).
But it struck me that what all of the revolutions throughout history really add up to is that people need autonomy, and they’re willing to fight for it. Freedom, yes; but at the true core – social, political, and economic autonomy.
The Oxford English Dictionary defines autonomy as: “Freedom from external control or influence; independence”. What does this mean to us? It means the ability to pursue your own life goals, take charge of your education and career, to take things and improve them – the freedom to make choices, make mistakes, dream big, and decide on your own path. Revolutions show that people yearn so strongly for autonomy that they are willing to die for it.
So it should be a concern to us that autonomy is being quietly strangled in the world of big business, and with barely a hint of protest. Have we moved into a long-term autonomy recession? Might it become a full-blown crisis?
Let me explain:
Corporations are pursuing a culture of compliance as never before. There are many good and not-so-good reasons for this, but the biggest reason is the introduction of new legislation that polices corporate behavior.
The very public accounting failures of companies such as Enron, Tyco International, Adelphia, Peregrine Systems, and WorldCom resulted in a series of new laws being written in a bid to improve corporate transparency, and protect investors from the possibility of fraudulent corporate accounting activities.
By far the most famous of these is the Public Accounting Reform and Investor Protection Act, better known as the Sarbanes-Oxley Act (2002), or SOX. Its eleven sections range from additional corporate board responsibilities to criminal penalties. It requires the Securities and Exchange Commission (SEC) to implement rulings on requirements to comply with the law.
Barely had business recovered from reacting to SOX when it was hit by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, written in response to the financial meltdown of 2008. Dodd-Frank runs thousands of pages long, and has an implementation schedule of several years. Along with both Acts came a number of new government agencies tasked with overseeing various components of each.
That’s governance with a capital-G.
Whilst it is arguable whether these laws have improved corporate transparency, they have certainly made the many companies they affect dramatically more risk averse. The increase in IT monitoring and process control systems, and more frequent and invasive audits, has tied these organizations into bureaucratic knots.
And what does more monitoring, more controls, and more bureaucratic knots add up to? Less willingness to take risks on people, less room for creativity, less freedom to try things differently and less freedom to fail. Less autonomy.
Corporate fraud should absolutely never be tolerated. But big business should fight to bring back the autonomy that allowed it to thrive and innovate in the first place. It should be rattling the bars of the Bastille and demanding the time and freedom to grow more and better leaders, and nurture committed and thinking employees; not waste talent and resources in struggling with over-regulation and bureaucracy. Autonomy is the key to moving towards better-led and better-run companies. Those countless uprisings throughout history can’t all be wrong.
Come the revolution.