Socratic Business Methods

Socrates the ancient Greek philosopher is well known for coining the phrase – "I only know that I know nothing". This phrase is now over 2400 years old and its accuracy is still under contention. Perhaps from a philosophical view point, there is the possibility that it will be debated for all time. However, as most of my posts have something to do with today's business environment, I want to apply it to that field.

The first and most important message that can be learned from this simple statement is that the assumption of knowledge can be detrimentally misleading. If business leaders think they know all there is to know about their business, they are more often than not, incorrect. If they think that they know all there is to know about business, again, probably incorrect.

That being said, another popular subject of Socrates was his inference that all knowledge is innate and all it takes is the correct line of questioning to bring it out.

If Socrates ran a business today, would it be successful? I would argue that while he may not be able to effectively lead a business to success as an owner or manager; he could provide an extreme benefit as a consultant.

Philosophy, like so many of the arts is subjective. To paraphrase one of Socrates most well known pupils, Plato, "Beauty is in the eye of the beholder." To me, the beauty of philosophy is in its simplicity. Utilizing the Socratic method in business can bring a wealth of information that will be beneficial to the growth and effectiveness of any business model.

Every person in a business is ultimately responsible for asking themselves two questions every time they make a decision: Why? and Why Not?

The farther up the corporate ladder you go, the more important these questions become. An executive, called upon to make a strategic decision must ask themselves at each point in the decision making process both of these questions. The answers will then shape the decision.

Too often, the wrong question is asked and answered. Too often, we ask our managers "How?" instead of "Why". "How do we make more money? Instead of "Why do we need more money?" While to some it may seem an issue of semantics, I would argue that it is much more of a philosophical difference. Asking the "how" question is only important once the "why" and "why not" have been answered. How something is accomplished doesn't mean anything if it's accomplishment serves limited purpose.

There is a major difference between questions and answers. It is often much easier to answer questions than it is to come up with them. The problem with answers is that they are limited to the questions being asked. The great thing about questions is that they are limitless in their availability and boundless in their scope.

A boardroom is not the place to figure out how do to something, but a place where the philosophical dialectic needs to take place. Every CEO and VP needs to be able to harness their inner Socrates and dig into the correct issue. More than likely, there is enough intelligence and experience to provide the basis to bring about this type of necessary conversation. There will be an answer to any question or problem. The key to finding it is as basic as asking the correct questions in the correct order.

Birth of the five minute thinker

Short term thinking in a long term world is killing many businesses. In a hierarchal sense, most business are structured to have their strategists at the top of the pyramid and those managing the path of the decisions following below. Many smaller companies today are utilizing their managers as strategists. While on a personal level, there may be many managers capable of developing strategic plans, the companies are many times either not set up, or are wary of providing the essential information needed to make an effective strategic decision. The result of this is the Five Minute Thinker.

The Five Minute Thinker has only either enough time or information (and many times less of both) to take a snapshot of the recent past and an estimate of the company's future. This type of thinking has the unfortunate consequence of relying on those decisions to mold the future and pad the balance sheet. A business cannot survive long term when the decisions that shape its future are being made by Five Minute Thinkers.

Strategy has to come from someone who has three equally important powers:

The power of accountability – They are being held accountable for the decisions they are making. Someone, or a group of people, is taking the time and energy to review the decisions and the effect they will have on the business. This is the check and balance necessary to ensure long term survivability.

The power of authority – They have the authority to enact any changes or actions that a process will bring with them. They can institute and hold others accountable for ensuring that their decisions are being followed through and any issues that arise are being dealt with accordingly.

The power of information – They have access and to a certain extent, control, of any information necessary to make both short and long term decisions.

If these powers are intact, only then can a realistic and intelligent strategy be presented. Excluding or limiting one of these mutually exclusive powers will only serve to the detriment of the company. A true leader can persevere having any one of these powers be limited, but trying to grow and deepen a company's talent pool in a similar scenario will lead to frustration and degradation of the company's infrastructure and effectiveness.

Five minute thinking needs to be pushed out of today's business environment. Strong businesses, especially those with plans to remain in business for the long term, need to either give the power of strategy to a designated strategist, or need to give their current strategy oriented employees the three powers listed above.

Long term commitments are something businesses make on a daily basis to their customers, landlords, lending institutions, etc. As easy as a long term commitment seems to be with those outside of the company, more of them need to be made within the company. If a company really wants to stick around, they need to commit to it, starting from the top. Companies need to commit to their own future by taking the ability and necessity of making strategic, long term decisions serious enough to provide those with the function of making them enough accountability, authority and information to get it done.