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The Covenantal Structure of Service

Written by Gary North on February 13, 2016

Because the foolishness of God is wiser than men; and the weakness of God is stronger than men. For ye see your calling, brethren, how that not many wise men after the flesh, not many mighty, not many noble, are called. But God hath chosen the foolish things of the world to confound the wise: and God hath chosen the weak things of the world to confound the things which are mighty; And base things of the world, and things which are despised, hath God chosen, yea, and things which are not, to bring to nought things that are: That no flesh should glory in his presence (l Cor. 1:25-29).

It is said that the British Navy is an organization that was designed by geniuses to be run by morons. The genius of the founders is testified to by the survival of this organization in both peacetime and war.

Similarly, every organization needs to be designed to be run by people of less-than-mediocre abilities. Why? Because there is such a thing in life as the bell-shaped curve. There are very few geniuses and very few morons. If the population sample is large enough, a pattern of individual performance emerges in every field of lite: Some win, some fail. Some do, some don’t. And most people are in between. If, therefore; the founder can design his organization so that it can be run by morons, he is truly a genius. He will be able to hire the services of morons–for whom there is comparatively little market demand — at low wages. He will make winners out of losers, competent performers out of recognized failures.

Surely, if an organization can be run profitably by morons, it can be run spectacularly by mediocrities. It is not that the British Navy is filled with morons; it is that it is filled, inevitably, with mediocrities who have been enabled by the “moron-effective” structure to perform at above-average levels. Large organizations must content themselves with mediocrities as on-line staff; there are not enough senior managers to go around.

No organization that expects to grow should be designed from the beginning on the basis of the rule, “No Mediocrities Need Apply.” Most people are mediocre. Most students receive C’s, not A’s or F’s, assuming, that the grading system is a real-world system that is intended to identify individuals in terms of their competitive performance. To hire the best, you must pay top wages. There just isn’t sufficient talent to go around. To hire the worst, however, is also not possible for a growing organization; there just aren’t enough incompetents to go around. A successful organization must employ ordinary people.

Michael Gerber’s brilliant book, The E-Myth (“E” being “entrepreneurship”), has stated the reality well:

It is literally impossible to produce a consistent result in a business that is created around the need for extraordinary people. On the other hand, if you intentionally build your business on the skills of ordinary people, you will be forced to ask the difficult questions about how to produce a result without extraordinary ones. You will be forced to find a system that leverages your ordinary people to the point where they can produce extraordinary results.

Built-In Failure

Each year throughout the world, people start businesses and non-profit ministries or charities. Both types of organizations are necessarily service organizations. This is not generally understood with respect to profit-seeking businesses, but it is nonetheless the case. The business that does not serve consumers by offering to them goods and service at a price they are willing and able to pay will not survive in a competitive market. Also, if the business serves the consumer inefficiently — if it costs the business more to serve the consumer than the consumer voluntarily pays in return — then it will not survive.

Few new businesses survive. The general estimate, in the United States, is that 80% of all new businesses fail within the first five years, and 80% of those that survive succumb in the following five years. This means that 96% of all businesses fail within the first decade. Nevertheless, overconfident people keep starting new businesses.

(For the rest of my article, click the link.)

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