Brexit, Drucker, & Systems Thinking

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Brexit, Drucker, & Systems Thinking

“There is one fundamental insight underlying all management science. It is that the business enterprise is a system of the highest order: a system whose parts are human beings contributing voluntarily of their knowledge, skill and dedication to a joint venture. And one thing characterizes all genuine systems, whether they be mechanical like the control of a missile, biological like a tree or social like the business enterprise: it is interdependence.”

Drucker was writing about businesses when he wrote that, but the same principles apply to any purposeful system. Given the obvious interdependence of the UK with the EU, what light can systems thinking shed on the reasons behind Brexit – this dramatic breaking of a socio-economic system?

One of the most basic systems concepts is that of emergence or in business speak – synergy, the added value generated by the system as a whole that isn’t generated by the parts alone. Surely that interdependence in the EU and the synergies that come from it – like the single market should have won the day?

Well, against that there was another systemic factor in play, the tension between autonomy and cohesion that is fundamental in any organisational or social system. The trade-off from membership of any system is that we sacrifice some autonomy in return for being able to accomplish more than we could alone. As Stafford Beer wrote, from a systemic viewpoint, the “argument for autonomy is distinct from ethical, political, or psychological arguments. It is mathematical” and systems approaches provide heuristics and structures for setting out where different levels of governance should operate. Unfortunately, the EU didn’t understand the structure and maths of autonomy. As a result, instead of dealing with issues that were pan-national and therefore appropriate to the level of a body like the EU, too much effort went into regulating things that were relevant to individual services at a local authority level. Inevitably, this was seen as bureaucratic meddling in local issues and micro management. To some extent, this wasn’t the EU’s fault, truly pan-national issues would include European level foreign policy and defence – issues that national governments refused to relinquish control of. The one truly pan-national issue the EU did manage to grasp was the common market, but the one that it could have addressed and crucially failed to was border control – dealing with the refugee crisis. The failure to address this was a failure of the EU to be effective at its natural level, the potential for synergy was largely lost and with it the return that should have balanced a loss of autonomy.

Jan Smuts, the originator of the idea of holism, described it as ‘the tendency in nature to form wholes, that are greater than the sum of its parts, through creative evolution’ and you can easily see the drift of European history as a series of moves to integrate diffuse dukedoms into countries, countries into larger blocs whether by conquest or alliance. From this perspective then the formation of the EU with its motto of “ever closer union” and its geographic expansion into territory formerly dominated by Moscow is just the latest move in this holistic trend – and certainly the most benign. Instead of the border spreading by conquest, countries have queued up to join. In the face of this strong and historic drive towards integration, why then Brexit?

Balanced against that holistic drive to unity is the issue of identity. From a systems thinking point of view, we see that patterns of behaviour create and maintain a system’s identity. Britain has run the same repeating pattern for the last 600 years in relationships with Europe – whenever there was a prospect of a European superpower emerging that could dominate the continent, the Brits went to war to prevent hegemony. In the C14 that meant fighting France, in the C16 Spain, C18 France again and C20 Germany. What’s different with the EU project is that the consolidation has been voluntary rather than by coercion, but British identity was forged by its adopted role of standing apart and maintaining a balance of powers in Europe and the identity and the behaviour pattern that goes with it has played out yet again in the Brexit vote. To paraphrase Drucker: “Identity eats strategy for breakfast”.