BRAZIL-Lessons we learned...

...in the world behind the looking glass

We do not often enter into the world behind the looking glass. It’s not the world of the enterprise manager. However, what we eventually learn is that logic is necessary but not sufficient to guide our actions. It can also lead to absurd conclusions that frustrate our objectives (e.g. “to get somewhere you must run faster than you can!”) as a function of your initial premises.

In any debate, the best way to make your point and win the argument is to dismiss the premisesof your opponent.

In the context of the current morass in which Brazil is currently immersed, the central figure is President Dilma Rousseff, supported by (reportedly) José Dirceu and Lula whose policy recommendations have resulted in almost total paralysis of the political and economic sub-systems and the institutions that support them.

What has Dilma told us about her initial premises? (The reason I predicted the “Clash of the Models”). Everything Dilma has said and done in the present and in the past has been to indicate that she rejects the premises of the “liberal” economic model – i.e. the model based on(not determined by) the decentralized workings of the market, individual choices of entrepreneurs and consumers and checks and balances to “control” abuse and risk of system failure.

The application of impeccable logic to Dilma’s premises will always yield absurd results in the context of the premises of the “liberal model” – and vice versa; the premises of the “liberal” model will also yield absurd results to those who espouse Dilma’s model. (This is most assuredly why she persists in applying the same policy “remedies”.)

Dilma’s premises are not simply beliefs; they are deeply-held convictions. We can more readily question beliefs than convictions that are the building blocks of our behavior.

I remember arguing with a group of business leaders when Dilma was still a candidate for her first term. I presented what I just wrote above and my arguments were rejected with the (correct) statement that people can change. That’s a perfectly logical statement that is predicated on the assumption that the person has changed certain premises. I suggested then and suggest now that we have and had no evidence to indicate that Dilma has changed her premises so she cannot change her behavior. She does not, and apparently cannot accept the premises of the decentralized “liberal” model. Everything she and the PT have done is based on those starting premises.

Consequently, the “clash of the models” must eventually escape the boundaries of intellectual debate and degenerate into outright conflict. That is where we find ourselves now in Brazil.

Dealing with the conflict

I have long been a fan and practitioner of the oriental martial arts philosophy, most especially jiu-jitsu. 

Years ago, the Harvard Business Review published an article entitled “Jiu-Jitsu Management”. The martial art is based on using the strength of the “other” to generate leverage. Hand-to-hand military combat is based on the same set of principles – i.e. minimum force to achieve maximum results.

You will notice that jiu-jitsu does not have “attack strategies”. Every move or “attack” is in responseto something the adversary initiates. If the attacker “pushes”, you “pull”, using the attacker’s movement to get him off balance.

(While all of this is most probably obvious, in the heat of a conflict most of us will allow emotion to surface and we will respond accordingly)

In my regular risk management report I referred to a comment (threat) issued by a Soviet diplomat to a Western analyst close to the end of the Soviet Empire and the fall of the Berlin Wall: “We will deal a critical blow to your system – we will deny you an enemy!” It was the quintessential jiu-jitsu approach. What does the preacher do when the Devil is saved?

In the ensuing weeks and possibly months, the administration and the PT (under the direction of Lula) will seek to provoke conflict and confrontation, all the while claiming that theywere the ones provoked.

The PT already announced today that it does not intend to promote a protest on the 13^thto offset the one planned to demand Dilma’s impeachment. On the other hand, the PT has publicly declared that it subscribes to the “inevitable” class warfare of its “model”. Consequently, it might not be able to avoid the “spontaneous” organizing of counter-demonstrations by the “victims” of the “class warfare” to fight for their “place in the sun”! If confrontation and conflict result, it is because the PT has advocated “democracy” but the “elites” don’t want it. The logic is impeccable - the premise regarding class warfare is what is wrong!

Therefore, the first measure is to “deny the premise” of an “enemy”. It is incumbent on the organizers of the 13 March demonstration to avoid an immediate response to provocation and to not provoke. Of course, if provoked and attacked the demonstrators (or preferably the police) must, by definition, respond, and do so with overwhelming force.

(In this regard, I highly recommend you read the work of community organizer Saul Alinsky and the tactics of Lenin in the Bolshevik Revolution. It’s not the kind of stuff you find in your MBA courses. As  a former community organizer in the US, I can attest to the effectiveness of the tactics!)

If you have ever frequented some of the bars I frequented in my misspent youth, you know that the most “dangerous” guy in the bar is the one who is not looking for trouble and quietly sipping his beer. He seeks to avoid provoking others and to deflect provocation until the moment he is attacked. I’ve seen many a large “bar bully” hit the floor like a sack of flour from a sucker punch delivered by “quiet types”.

There are plenty of “hotheads” supporting Dilma’s impeachment. She and the PT have imposed pain on the system, its institutions, and its members. It is incumbent on those organizing social movements to undermine the premises of the system they are opposing. 

If “class warfare” is an underlying premise, it must be shown that the premise is incorrect so the responses based on the premise are, in fact, illogical. (As results have so far shown!)

That is not the same as “caving in” – it is providing the rope with which your antagonists will eventually hang themselves or alternatively, save the Devil and the preachers will have to find some other way to “convert” you.

Brazil is not alone in this world behind the looking glass. The US political system is now in the midst of a similar situation. The Republican Party, initially (perhaps) amused by the theatrical antics of Donald Trump are now concerned for their image among moderate voters. Their logic suggested that Trump would eventually prove “manageable” and that has proven to be an erroneous premise.

The EU has similar problems in other areas – most notably with regard to history and national identity.

My fundamental premise is that we now live in a verydifferent world in which communication is cheap and easy. If we accept the premises of the 18^th Century Enlightenment that the individual freedom to choose is the most effective way to achieve sustainable prosperity and material progress, we must then adapt our “model” to accommodate the changes in the “communications” environment that provides the information we use to determine our choices. (That’s Drucker’s fundamental argument regarding the “knowledge worker” and the need for new management approaches.)

Our political institutional responses to the current business environment are still based on 20^th century organizations and thinking. The private sector has advanced faster in this regard than the public sector. This has served to condemn efforts to expand and render freer international trade. It has served to create “systemic risk”, which has become the new “weapon of mass destruction” (or disruptionif you prefer). If our premises about the model are correct, the defect is in the logic we use to deal with the model’s feedback.

(I guess I have beaten this argument enough. As a friend and mentor would always say to me, “This too, will pass!” It’s the same argument provided by Economist Herb Stein: “Things that cannot go on forever, don’t!”

Carpe Diem! In every crisis there is opportunity! (I hate that particular cliché, but it happens to be true!!)