Sustainability

The obliquity concept

January 20, 2012

Global

January 20, 2012

Global
Iain Scott

Senior Strategic Analyst, Global Life Sciences Centre

Iain Scott is a lead analyst at Ernst & Young's Global Life Sciences Center, where he manages thought leadership programmes and conducts research across the sector.

Exploring the question of purpose

One way to explore the question of purpose, according to Julian Birkinshaw, Professor of Strategy and Entrepreneurship at London Business School, is through the idea of "obliquity," as discussed by the economist Dr John Kay in his 2010 book of the same name. The basic concept is simply that if you want to get to point A, you should aim at point B. As paradoxical as this sounds, it basically suggests that more goals are likely to be achieved if they are pursued indirectly. As a concept, obliquity has enormous power, Professor Birkinshaw says, quoting the pioneering Austrian psychiatrist Victor Frankl: "Success, like happiness, cannot be pursued; it must ensue, and it only does so as the unintended side-effect of one's personal dedication to a cause greater than oneself."

But for many companies, pursuing an oblique course suggests high exposure to risk, which may outweigh the opportunity for big rewards. Obliquity is not easy to set in motion. In his book, Dr Kay cites the example of ICI, Britain's leading industrial company for most of the
20th century, driven by its purpose, "the responsible application of chemistry." Through this period, not only was ICI Britain's largest and most successful manufacturing company, it also made significant contributions to the evolution of the modern corporation in the United Kingdom, to the foundations of Britain's modern pharmaceuticals industry, to the capabilities of scientists and managers, and to innovation.

However, over a 20-year period, before it failed, a succession of senior executives pursued shareholder value through short-term decisions – each of which was good for shareholders at the time, but which cumulatively dismembered the company and contributed to its slow death. This shift from a societal purpose to the profit motive was ultimately a destructive one for ICI.

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