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Yes, The Inmates Really Do Run The Asylum

2017 November 12
by Greg Satell

At a recent NFL meeting about the anthem protests, Houston Texans owner Robert McNair warned his fellow owners that the league should avoid having “inmates running the prison.” Besides mangling the common phrase about “inmates running the asylum,” the racial undertones of the comment caused an uproar.

McNair quickly apologized and explained that he wasn’t referring to players, but league staff who he felt were making decisions without adequately consulting owners. Still, leaving political and moral issues aside, McNair’s comment raises important issues about governance in an increasingly complex world.

As Moisés Naím pointed out in The End of Power, today “power is easier to get but harder to use or keep.” So leaders are faced with a significant challenge. How to guide and shape an organization in an age of diminished power? The answer, unfortunately for McNair, is to acknowledge that the inmates really do run the asylum and leverage new sources of power.

The Roots Of Power

Imagine a dictator in a totalitarian state with absolute power over his country. He controls the police, the media and economic institutions. He projects influence through a patronage system. To achieve any prominence in society, supplicants must display absolute loyalty. Falling into disfavor leads to ruin — or worse.

Now imagine that all the janitors in the country refuse to work. They don’t throw rocks or stage protests in the street, they just call in sick and stay home. All of a sudden, even the absolute power of a dictator proves insufficient to keep refuse from piling up. Power is not always what it seems.

Every regime needs supporting institutions and activist groups have long recognized that these pillars of support are every regime’s achilles heel. For example, in 1984 supporters of the anti-Apartheid movement spray painted “Whites Only” and “Blacks Only” over Barclays’ ATMs in British college towns. The damage to its business was so great that bank pulled its investments out of South Africa, greatly damaging the ruling government.

Yet smart leaders understand that these pillars of support can be leveraged to their advantage. When Paul O’Neil took over as CEO of Alcoa, he made it clear that he would make the dignity and safety of its workers his first priority. Investors balked at first, but his actions won him strong union support, which helped him achieve a historic turnaround at the struggling company.

The Illusion Of Control

Once you understand the dynamics of power, you can begin to understand McNair’s frustration. Ownership of an NFL franchise represents an enormous investment and it is not unreasonable for leaders to expect their organizations to reflect their values. The anthem protests and, so it would seem, the league executives’ handling of them, obviously fail to reflect his.

However, any organization needs to answer to a wide variety of stakeholders. Traditional firms have shareholders, customers, employees and the communities in which they operate. In the case of the NFL, there are owners, league executives, players, coaches, fans, TV networks, sponsors and the specific communities that host franchises to take into account.

Much like the janitors in the hypothetical authoritarian state, every single one of these stakeholder groups can wield significant power. Players can strike, fans can refuse to watch, sponsors can back out and communities can hold protests outside games. For the NFL to prosper, it cannot simply do as it pleases.

So clearly, the inmates really do run the asylum. There is very little that NFL owners — not to mention a single owner among 32 — can dictate. They could, of course, demand that league executives enforce their will, but doing so would risk retribution from other stakeholders. Control is an illusion.

Operating In A Complex World

Clearly, the world today is far too complex to be dictated to. Besides the challenge of managing multiple stakeholders, there is the fact that all of them interact and influence each other in real time. So no situation remains static, but will evolve and change — for better or worse — in ways that we cannot control or even predict.

General Stanley McChrystal experienced an extreme version of this in Iraq. As he would later write in Team of Teams, “the world had outpaced us. In the time it took us to move a plan from creation to approval, the battlefield for which the plan had been devised would have changed. By the time it had been implemented, the plan — however ingenious in its initial design — was often irrelevant.”

Over time, McChrystal began to understand that any attempt to control all of the variables that the success of a plan depends on is futile. So he did the opposite. Realizing that “it takes a network to defeat a network,” he worked to empower his people to make decisions that reflected an evolving battlefield.

However, he also warns that this kind of distributed authority can only be effective if there is a common sense of purpose.  “An organization should empower its people, but only after it has done the heavy lifting of creating shared consciousness,” the General would later write.

Building A Vision For Tomorrow

Every successful organization has a stake in the status quo. That is, after all what made them successful in the first place. Yet clearly, any enterprise that wants to remain successful, must build a vision for tomorrow. That involves change, which is often painful.

In the case of the NFL, that means it must play the part of a national icon in a deeply divided country. Constituencies in places like Houston or Dallas are likely to have vastly different perspectives than those situated on the coasts. Football games, which have long been a source of shared experience, have become a platform for diverse beliefs.

In more conventional organizations, the change is often technological or with consumer preferences. Aligning an entire enterprise, with all of its diverse sources of power around a new vision always requires forging of a common purpose. Paul O’Neil’s turnaround at Alcoa, for example, was based on the realization that better safety and operational excellence go hand-in-hand.

And that’s the dilemma that the NFL — and many other organizations — face today. Complex problems require networked solutions and the forging of a common purpose. That can’t be dictated. The inmates really do run the asylum. It’s leadership’s job to help them run it effectively.

– Greg

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