Mind Over Matter Towards a New Paradigm for Leadership in Business and Economics by Sander G. Tideman, Global Leaders Academy

Wednesday, 20 January 2010 | Leadership Observatory

The Wall Street Journal Europe Future Leadership Institute invites thought leaders and decission makers to portray their work in the field of management and leadership research. The below essay is focused on creating solutions, showing promising new approaches and offering thoughts on how we could help in the creation of the next generation of economic systems.

Introduction

Humankind is continuously striving for well-being. A series of recent developments, from growing social inequality, continued destruction of eco-systems, demonstrations against globalization, massive corporate financial scandals such as Enron, WorldCom and Parmalat, and the collapse of some national economies, have led to a global search for alternative approaches to economics and business. Clearly traditional economics and business as usual do no longer work for everyone. The challenges range from the macro to the micro level. Economic pundits no longer provide coherent advice on the behavior of evidently irrational markets. In fact, a growing number of mainstream economists are now criticizing their own orthodoxies, such as Joseph Stiglitz, Jeffrey Sachs, Amartya Sen, George Soros, Paul Volcker and Paul Krugman. There is a groundswell in business, too, as consumers, governments, staff and shareholders increasingly expect corporations to take full responsibility for the welfare of all corporate stakeholders, including society at large and the environment. With continued globalization, increasing complexity, accelerating speed in information exchange and market volatility, we are now faced with a reality almost unrecognizable from the view of what traditional business education has taught us. It is increasingly evident that these challenges can no longer be readily solved within the conventional economic paradigm. One can say that the entire fundamentals of the mainstream western development model, based in capitalism, free-market enterprise and infinite material growth, are called into question. The industrial paradigm with its emphasis on production, specialization, its command/control type leadership and deterministic thinking is becoming obsolete. We have to revisit the assumptions that underlie our economic management models. For better or for worse, economies and business don’t function separately from our decisions, so if we want a better economy we have to look deeply at who we are and how we live. Conventional economics has left human psychology outside its spectrum, tacitly assuming that material development, as measured by gdp growth and financial profits, is positively correlated to human well-being. Further analysis of the relationship between material development and the human experience has been outside the scope of economic and social theory. Yet this is changing: breakthrough research – in quantum physics, medicine, biology, behavioral science, psychology and cognitive science – is now making the science of the mind relevant to economics.

Conversely, from within the profession of economics, attempts are being made to broaden the scope of economics into the domain of psychology. This paper argues that principles of the new scientific paradigm, particularly fundamental interconnectedness and the role of consciousness could provide potential answers to today’s complex problems. While conventional science has focused on the material, tangible world, the new sciences indicate that we need to understand the tangible and intangible dimensions of life, and their mutual dependency. Matter and mind – and therefore economics and consciousness – are ultimately inseparable, as two sides of the same coin. A growing body of research in economics, business and leadership practice – seemingly unconnected – points into a similar direction. While we come to understand the subtler yet more essential conditions for economic performance and value creation, a new vision for a healthier and sustainable way of organizing human activity is gradually emerging. We are moving towards a new economic paradigm, one that is not based on maximizing profits or boosting abstract statistics such as gdp, but concerned with our whole being and the quality of our lives. This inspires real hope for our future. But the new paradigm economic model is far from clear. How to quantify and measure non-material values such as well being, the environment and the future? How to design an economic model that brings benefit and well-being for everyone? Economic systems are ‘living’ systems, that is, they are both determined by and determining behavior of people, through multiple and interrelated feedback loops. Therefore, we have to look at these questions from multiple vantage points, not merely from the perspective of one discipline. First, in part one, we will go back to the origins of our dominant economic ideology, and unravel deeply held (yet not necessarily valid) beliefs about reality and human nature. We will look at how these views have become obsolete and no longer serve us. The second part of this essay is focused on creating solutions, showing promising new approaches and offering thoughts on how we could help in the creation of the next generation of economic systems.

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About the author

Sander G. Tideman (LL.M.) is a management consultant, holding degrees in international economic law from the University of Utrecht and University of London. After a career in law and banking, of which nine years based in Asia, he consult firms on leadership and strategy. He is an associate of the Teleos Leadership Institute in Philadelphia and Van Ede & Partners in Amsterdam. Sander co-founded Spirit in Business, a network organization promoting ethics and values in the business world. He also serves on the board of several institutions, including the Netherlands Commission on International Cooperation and Sustainable Development (ncdo) and the Bridge Fund. He is the editor of Compassion or Competition; A Discussion on Human Values in Business and Economics, by H.H. the Dalai Lama.

About the essay

This publication has become possible with assistance of the Van Ede Foundation. It emerged out of the Compassion or Competition Forum held in Amsterdam in 1999, with H.H. the Dalai Lama and the former Dutch prime minister Ruud Lubbers, and first appeared as a chapter in the book ‘Compassion or Competition’ containing the proceedings of the conference. It was adapted and expanded for presentation at the Spirit in Business Conferences in New York, San Francisco, Vienna and Zurich (2002-2004), the Indicators for Sustainable Development Conference in Curitiba, Brazil (2003) and the Gross National Happiness Conference in Bhutan (2004).