I have practiced my vocation (audit and risk advisory) now for just over 12 years. The early 4 years of my vocation I worked with an external audit enterprise. I was flustered (a simpler word failed to properly capture my mood at the time) by the fact that I was auditing the same clients and raising the same issues with them year after year in my reviews. My clients did not appear to be getting better for the time I spent with them. I decided to join their ranks so to say, and spent the next 8 years working within their systems just so that I could find out why my recommendations appeared hollow, maybe even superficial. After 8 years of observation I found nothing wrong with the recommendations (and I am not being a smug idiot as I say this either!). I discovered a number of human dynamics working in the spaces where I spent my time, usually originating from or reinforced by the top leadership: unwillingness to make hard decisions, little interest in engaging in the rigorous, time consuming but highly rewarding process of creative thinking and disruptive innovation, playing it safe; a psychological separation between ‘academic’ and ‘practical’ – this one usually applied as an excuse for why “that stuff learned in the Master’s program just cannot work in this environment”; a high appetite to avoid accountability or take responsibility; an affinity to always take the easy way out.

I have recently been reading Daron Acemoglu and James Robinson’s book “Why Nations Fail: The Origins of Power, Prosperity and Poverty”. The book studied the root origins of differences in incomes and standards of living separating rich countries from the rest of the world. Two interesting observations they put forward and supported with their research captured my attention. The first: wealth or poverty of nations has far less dependence on climate, geographical location, culture, religion/beliefs or even ignorance than has been put forward in much development publishing and economic theory we have consumed. They thoroughly ripped apart the cast of characters I was taught to hold accountable for my under-development. The second: The description of economic and political institutions as Inclusive or Extractive. Inclusive economic institutions were defined as being those that “…allow and encourage participation by the great mass of people in economic activities that make the best use of their talents and skills and enable individuals make the choices they wish”. Extractive institutions work in the opposite of this. Put simply, richer nations tended to be inclusive in character and poor nations were by pattern extractive. Through their research they also documented how certain regions came to be chained to extractive mindsets. In Africa’s case, it was interesting to observe that they documented the process as beginning before the slave trade and colonization, and our own leaders played a prominent role in the entrenchment of this character. Daron and James noted in their book how the politics of a region (politics being the process by which a society chooses the rulers that will govern it) tended to align with the character of the economic institution, with inclusive institutions adopting and reinforcing inclusive political institutions and extractive ones fostering extractive political institutions. They gave attributes of extractive institutions as lack of economic incentives e.g. guaranteed property rights, unbiased systems of law, provision of public services that provide a level playing field in which people can exchange and contract, freedom of entry to new businesses and individual choice of career; and the aversion of the ruling ‘elite’ to new ‘disruptive’ innovations. Throughout the book another pattern emerged that I found very important: even the rich nations of today that in character are inclusive did not being this way. They were originally extractive and faced a series of events that continually nudged them to transition from extractive to inclusive institutions.

So what does this have to do with organizations? I found that these national-level dynamics were applicable to explaining why some enterprises are energetic, full of verve, visionary, disciplined and consistently produce positive results; and why others stagnate and over time decline. Jim Collins in his book Good to Great outlines a series of factors he identified as characterizing companies that made the transition from good to great. I notice that the characteristics he identified are synonymous with an inclusive approach to organizational leadership. The “office politics” syndrome is typical of an extractive approach to leadership. And when the nature of the leadership is extractive, then EVERYONE behaves extractive: what’s in it for me, every man for himself, my advantage before the company’s. It creates an environment for corruption since what will be identified as the ‘ruling elite’ are preoccupied with protecting their privilege/advantage and everybody else is left to find their own means of survival. So asset misuse/misappropriation and overall inefficiency is rife and the customer is collateral damage. In such a space, vision, mission and values are marketing statements rather than the breath of the organization. Strategy is a public relations management process rather than a determined approach to winning; research and innovation are luxuries as opposed to a means to maintain capability to deliver the organization mission to its community. Long-term thinking…? Well, no one believes they are guaranteed the long-term so short-term focus is the default. As for those improvement audit recommendations? Who has the time to improve operations when there are political points that need scoring or when the recommendation is more disruptive than the leadership is willing to allow?

Reading Daron and James’ book I saw clearly that there is no rule of men or God that condemns us – Ugandans and Africans in general – to mediocrity and a perpetually undesirable standard of living or self-actualization. It is within our means to influence our institutions towards the character that best enables the realization of our full potential as individuals, entrepreneurs, and communities. We can begin in the spaces over which we have direct control and cultivate habits that encourage inclusive institutions to develop and mature. We need to do this too; the world needs us to rise and take our rightful place at the table of nations – not as a vote to be bought but as a voice to be heard, and possibly, even followed.

I highly recommend “Why Nations Fail” as a good read if you are exploring how to transform the organization culture of your family, enterprise, community or nation. I will be interested to hear your observations from reading the book too.