Its significance for corporate management
Viktor Frankl (1905–1997 Vienna): Neurologist, Psychiatrist and Philosopher
Founder of Logotherapy and Existential Analysis
"More and more people have the means to live, but no meaningful goals to live for."
Who was Viktor Frankl?
Throughout his life Frankl was a socially committed person. At the age of twenty-three he set up youth counseling centers; at twenty-eight he was head of a hospital ward treating suicidal female patients. Frankl came from a family of civil servants; he qualified as a doctor of medicine and specialized in depression and suicide. He was also a doctor of philosophy with a thesis entitled The Unconscious God. Due to his Jewish background Viktor Frankl, his wife and family were imprisoned in Nazi concentration camps – Theresienstadt, Auschwitz, Kaufering and Türkheim. He was the only family member to survive. Despite this horrific experience he retained a noble and generous spirit. Soon after the war he spoke up for reconciliation – rejecting the idea of collective guilt. Viktor Frankl was an enthusiastic teacher and Professor of Neurology and Psychiatry in Vienna (also several guest professorships in the USA) who wrote thirty books (translated into thirty-two languages), a popular and inspiring speaker at countless events worldwide, and was a passionate Alpine mountain climber. For his academic work he received twenty-nine honorary doctorates and numerous civic, state and scientific awards.
Viktor Frankl is the founder of Logotherapy, a meaning-focused psychotherapy (often referred to as The Third Viennese School of Psychology(1) based on a view of human nature that emanates from existential analysis. Frankl's work centered on mankind's search for meaning in life.(2)
The following essay relates his ideas and practise to the current business world – especially corporate and personnel management – and his teachings which can serve as lessons for life.
Widespread crisis of meaning
It may sound commonplace to mention the precarious state of society and economy, nevertheless the insecurity experienced by today's younger generation is an undeniable sign of a serious social and economic problem. The high-rates of youth unemployment across Europe, almost every second young person without work, is a reminder of an earlier "lost generation" — those born in the early twentieth century: what then was due to two catastrophic world wars is today due to a new form of political incompetence. For many school leavers, working life starts with the insecurity of repeated 'internships'. Further widespread hopelessness is caused by exaggerated hiring demands of employers, inadequate vocational training, and declining social mobility.
There is a further politico-economic aspect to contemporary society which affects the wealthy: the consumer society and pursuit of material happiness appear to have reached saturation point. According to US studies, the pinnacle of material happiness is reached at a net annual income of seventy-five thousand dollars. From then on, consumption for consumption's sake fails to deliver extra happiness. The never-ending pursuit of economic growth, seen from this perspective, makes little sense, especially when consumers are merely an end-product of seductive advertising. Even new social networks are rapidly mutating into dependency-creating instruments, equipped with means of distracting us from the sensible and worthwhile, while coincidentally extracting our money. Short-term distractions may be fine, but we should realize how long-term indifference to the real world is at odds with a highly developed culture. These are mutually exclusive – a practical lesson which we can learn from history.
Neither should we expect the welfare state to give us a meaning or purpose to life, not even in the form of practical solidarity. It can provide nothing more than adequate material compensation for economic disadvantages. These so-called 'social benefits' can also turn out to be a pressing financial burden on future generations – a worrying automated process.
Neither can capitalism give our lives purpose, because it is a competitive system that serves to increase the wealth of a minority. Classical capitalism is not connected to the common good. Consider the outlandish spending habits of new internet tycoons based in California; notwithstanding their charitable donations we hear about. Because capitalism has a tendency to commoditize everything, the capitalist method devalues innumerable aspects of life: the purpose of education, friendship, love, caring, it weakens the family as the essential foundation of socialization, and so on. Secularization, which often accompanies capitalism, also ignores or trivialises a search for a deeper meaning to life, which is a precondition for human development and advancement.
Socialism, on the other hand, was a utopian vision totally discredited by reality. Noble social ideals were sacrificed to functionary classes and an economic system (the communist centrally planned economy) that was a complete disaster, as was its inability to uphold moral values.
The balancing act attempted by the European social market economy – combined with democracy – has been successful so far, but will fail if it continues to become increasingly less inclusive, and gives way to special interest groups.
Our present age exhibits a clear deficit of role models and teachers. A growing share of political and business leaders and self-appointed intellectuals reject any obligation to act as examples for others to follow. It says a lot that while firefighters and nurses rank among the most highly respected, politicians, journalists and bankers rank among the lowest. Managers too, especially top managers, have lost the respect of others. The situation is better for "entrepreneurs", but here a key distinction between "manager" and "entrepreneur" is often not conveyed, or not understood, by the media.
The present situation has similarities with Frankl's analysis of American society performed thirty years ago, when he identified a widespread feeling of meaninglessness and mass neurosis in a satiated consumer society. People found life both boring and stressful, and suffered from purposelessness and disorientation. This combined with consumerism, which dulls and addicts, together with self-induced stress in "leisure time", is both cause and effect. Today's rapid increase in psychological illness, and the breakdown of communities, is further signs of a dysfunctional society.
Four answers given by Viktor Frankl
Meaning must lie at the heart of human activity. Meaning or purpose provides orientation, gives individuals and communities stability and invokes personal responsibility. This is a solid foundation for creating real economic value – fed by discipline, desire to improve, and people who strive for excellence and are creative.
These answers have implications for business and corporate management.
First: freedom without responsibility is destructive
"The Freedom Equation is incomplete with Liberty alone. Liberty must co-exist with Responsibility to maintain Freedom."(3)
In his most popular book Man's Search for Meaning (4), ranked by the US Congress Library among the ten most influential books – Viktor Frankl suggests the Statue of Liberty on the US east coast be supplemented by a "Statue of Responsibility"(5) on the west coast. This symbolizes his belief that freedom cannot exist outside a moral framework, due its inherent potential for self-destruction. We need think only of the economically powerful using their freedom to expel competitors and corner markets; as the history of monopolies clearly demonstrates (see also today's major internet providers) or the self-exploitation of some self-employed and certain employees. Another aspect is the financial crisis that exposed how legal loopholes are used for Leveraging & Packaging(6) and Confusing & Cheating(7). Personal responsibility for such behavior is still being denied.
One more contradiction is worth highlighting: despite all the talk of sustainability, value extraction of customers was never more widespread: for example, despite supposedly rigorous risk management and best ratings, many financial products are still "worthless wares". Without government intervention innumerable banks and financial institutions would have failed. The conclusion to be drawn is simple enough but hard to implement: there must be responsibility and accountability and it must be set in a solid social framework. Those responsible of wrongdoing must be made accountable at all times. Anonymous behavior, complex systems, opaque processes and multi-subsidiary corporate constructions all facilitate irresponsible behavior. This is especially true for the complex organizational structure of large companies – such as (too big) banks, insurance firms, and other major corporations (like fast-expanding internet players and global IT utilities). The atomistic ownership of major public corporations contributes to the depersonalization of responsibility and undermines accountability.
Freedom should not be granted but earned through responsible behavior. Awarding responsibility must not happen automatically or during a gradually ascending career path but must happen along a testing, stony and hilly road. This means in terms of leadership that evidence of suitability for assuming responsible tasks must precede each step on the career ladder. Careerism is detrimental to responsibility. This is also true of excessive supervision by formal compliance systems (also called "American bureaucracy") or elaborate micro-controlling, which also undermines responsibility and accountability.
The principle of freedom must be linked to responsibility. In the words of Viktor Frankl: "Freedom is but the negative aspect of the whole phenomenon whose positive aspect is responsibility. In fact, freedom is in danger of degenerating into arbitrariness unless it is combined with responsibility."(8)
Second: personal decisions are what count, not circumstances
Human beings make their own destiny by their decisions. Viktor Frankl was a declared opponent of deterministic views of human nature, which support many scientific ideologies.(9) Frankl's world view is grounded in his existential experiences of Nazi concentration camps. According to Frankl, even in the worst possible circumstances human beings have a choice of acting like a "swine" or a "saint". There are numerous reports that even in the death camps a small minority of "humane people" existed. Human beings are not predetermined and human behavior is not simply causal. Projected onto companies, this means companies may be led by people of integrity or by people who are the opposite, or by people who combine both attitudes. Despite prevailing business ideologies of advantage and profit, there remains the choice of behaving ethically or unethically. The ability to choose is easier for those at the top of a company; their choice will be crucial for the behavior of the rest. But even in companies with strategies based on corruption or cheating, individuals cannot be excused moral responsibility for the decisions they take; they can partake in corruption and cheating, or oppose it. The concept of the honorable merchant is a good reference point and foundation for a self-determined attitude that makes honesty the first principle of commercial behavior; this honorable attitude should be backed by social sanctions against those who act dishonestly.(10)
In fair circumstances it is easier to act decently. It is harder when, for example, a loyal employee or good acquaintance has to be dismissed. What is the right thing to do in such cases? Options include an open discussion together with a commitment to actively help them to find a new post or pay them compensation – and not, as some managers do, dismissing subordinates by e-mail.
At this point, another paradox may be pointed out: there has seldom been more talk about leadership (or less pretentiously management) than today and yet never has there been such a deficit of common decency. This divergence between word and deed is partly why managers (as a body) are held in such low regard, as are many financial companies and other firms. The way to counteract this trend is simple: we must restore decency and moral character as criteria for the selection and promotion of managers. The low value attached to morality compared to technical expertise, presentational and other skills is a serious mistake. Conscious individual decision-making requires a self-directed person with ethical values. A person guided by conformity – for example, by the latest management consulting trends, consumerism, group pressure, or pressure from superiors – is more likely to behave in a harmful and unethical way.
Third: choose between the pull of purposeful goals or the push of circumstances
People who feel pushed about by circumstances are a syndrome of our age. Globalization and the internet, over the past twenty to thirty years, have accelerated and shrunk the world to a surprising degree. Short-termism is everywhere, not just in the world of work; people feel driven and stressed in 'leisure time' too, which they fill with events, games and trips. This weakens the positive pull of whatever meaningful life goals they may have set themselves; for many these purposeful goals will soon become distant memories.
According to Viktor Frankl, the nature of humans is to focus on the future and live in hope. Due to this self-determining nature, human beings can adopt various goals and attitudes. These can be tasks and activities or objectives of an ontological and existential nature. However, these adopted attitudes can become pathological if they are self-centered because as we become increasingly self-fixated our lives will revolve around ourselves. The unavoidable consequence is a neurosis. Companies too can develop neuroses, if they are over-organized, over-controlled and self-fixated; if they pursue every new management trend, constantly restructure, and lose their sense of direction. Such companies will become manageristic(11). In this context, we must note two further paradoxes: the first is the contradiction between perpetual talk of long-term objectives: 'visions' like 'sustainability' or 'continuing personnel development', while at the same time managers are driven into short-term actionism, such as 'job-hopping' or hiring only people who are 'ready to develop'. The second paradox is the contradiction between proclamations on 'knowledge management' and, on the other hand, the inability of managers to reflect on their own behavior or learn from mistakes. Short-termism finds managers 'releasing' loyal and experienced employees who possess invaluable, irreplaceable expertise, while also praising themselves as great leaders who are building a 'learning company'.
Fourth: "Meaning must be found, it cannot not made"
The existential meaning or worth of human life is to be found in transcendence – which is outside and beyond us – this meaning can be found and experienced(12). It reveals itself if we serve a cause, strive for good performance, or devote ourselves to the service of others.(13) Self-determination, the opposite of being pushed around by circumstances, cannot be achieved as long as we are addicted to money-earning or slaves to consumption. Finding a meaning or purpose in life is essential for personal development, and the same applies for managers.
The search for meaning is specific to human beings. This meta-purpose, if you will, must also extend to businesses, as they exist for human beings, and neither they nor capital or profit-making have a purpose of their own. In fact, the purpose of a business enterprise must be to serve not just its owners and managers but also its customers and the wider community (making a profit is merely an ancillary condition and criterion for efficiency)(14). By providing meaningful work, business enterprises will offer purposeful activity, which is essential for a balanced life; that is why business enterprises must be geared to our lives and enable us to pursue career paths throughout – to do so will be of mutual advantage because owners can raise productivity by developing and using the capabilities of employees, while also promoting their personal skills and self-confidence. The latter will enable them as members of civic society to creatively participate and develop sustainable communities. However, business enterprises and managers can also be negative and do the exact opposite, put short-termism and selfishness above all else, and ignore the simple truth that business and work are about more than earning money.
The welfare state and also trade unions will perpetually underestimate, if they adopt an instrumental perspective and focus on remuneration, the real value of meaningful work. This will devalue work which will become frustrating and disappointing. This is still often the case. Nevertheless, the truth remains: the search for meaningful activity is integral to human dignity and consistent with mankind's inner desire to lead a purposeful and fulfilling life.
There are two further paradoxes: firstly, the short-term and exclusive focus on profit, as often required by capital markets will destroy the engagement and commitment of employees which is essential for long-term business success – as a consequence, short-term profit maximization will ultimately be self-defeating. Secondly, never before was so much instruction offered on how to succeed at business or work, or promises made and patchwork concepts marketed, and yet seldom has work offered so little real meaning. It should be a key insight for company leaders that striving for profit alone will not guarantee business success if you are unable to invoke the work performance needed to reach the goals set. A purely target-oriented approach (management by objectives) is a method which overlooks this fact, as do many other 'incentive' systems. Work performance can be recognized through remuneration but to seriously invoke commitment requires proper human leadership, not just bean-counting. For the personal development of managers too, it is crucial to distinguish between primary objectives – lifetime achievement – and secondary objectives – the next step up the career ladder. This simple distinction can make the difference between a passive existence and a creative approach to life. Purposeful activity, not just earning money, will turn human dignity from an abstract concept into a living reality.
Principles for corporate management
"Humans not only want to be happy – they need a reason to be happy."(15)
Happiness means living with inner self-approval. This requires self-acceptance, being in harmony with oneself, respecting others and being respected, offering to contribute and being accepted as a worthy contributor. The essence of happiness is connected to wisdom and maturity which also depend on an experience-based awareness of the limitations of life and an ability to reflect on suffering and compassion.
Companies as productive socially integrated entities must recognize the importance of developing and advancing employees – as Peter Drucker consistently emphasized.(16) Companies can provide a positive work atmosphere and enriching human environment; if they do so they will counteract inefficient individualism and help to secure business success.
Four lessons can be derived from the rich legacy of ideas and experience of Viktor Frankl; these facilitate the self-direction of individuals and corporate leadership.
First: Accept responsibility
Individuals must accept responsibility for their actions – also on behalf of others. This acceptance of responsibility is consistent with the concept of human nature described in existence analysis and with a Christian view of human nature.
Second: Face up to challenges
This means, react to situations by doing what is honorable and ethical. This is a universal principle for a moral life. Ethical behavior cannot be divided between working life and private life. The work/life dichotomy does not really exist. A 'pragmatic' case-by-case approach, inventing something like 'business ethics', is restrictive and misleading because it presumes different moral standards apply to commercial activity. Another important point: to devote oneself to an assignment means to do your best and not just deliver a result. To fulfil an assignment, actors must be granted a degree of freedom but always within moral boundaries. Entrepreneurial behavior must be responsible behavior – this means more than being 'sustainable'. Work should be value creating(17) and not just a job. Commitment to a work assignment (without going so far as to being "devoted" to it, or in managerist-speak, being 'passionate' about it) is easy if you and others are satisfied with and recognize the value of your performance. That is why criticism of useless work, of bureaucracy, or the proliferation of compliance systems, must always be permitted and taken seriously.
Explaining the meaning or sense of work is one of the tasks of corporate management. If successful, then industrial and commercial activity can be truly beneficial to society. Companies must adopt meaningful challenges and not restrict themselves to targets such as size or sales growth, profitability or return on capital.
Third: Aim for moderation
As Viktor Frankl put it: "The most rational thing to do is ... don't try to be too rational."(18) Absolutization, the maximization of power and profit, is a form of dehumanization that cannot last – because it will eventually be rejected. Especially for business companies the key is to apply the principle of moderation: to accept that business includes both chances and risks of all kinds and both must be accepted in the calculation. Yet many management concepts rest on unbalanced purely rational thought patterns that exclude the human aspect; that is why they must be dispensed with: we will be better and not worse off without them.
Fourth: Set meaningful and challenging goals
The expectations and demands on individuals should be of a high standard. Only then will creative energy be set free and extraordinary efforts made to improve and create value for others. Viktor Frankl quotes the timeless aphorism of Johann Wolfgang Goethe, "If we take people as they are, we will make them worse. If we take them as they should be, we will make them what they could be."(19)
The message of Viktor Frankl, a great man, philosopher of human nature and scientist, can be summed up as follows:
Human beings must strive for a meaningful life.
In this human venture, business management should not be an obstacle, it should be a facilitator.
LITERATURE
Viktor E. Frankl: Say Yes to Life, 1963-2007 (A psychiatrist's experiences in a concentration camp.), Beacon Press, Boston.
Viktor E. Frankl: Der Mensch vor der Frage nach dem Sinn. A selection from collected works (foreword by Konrad Lorenz), 9th edition, 2009, Series Piper, Munich.
Viktor E. Frankl: The Will to Meaning, 1969, The World Publishing Company, New York and Cleveland.
Viktor E. Frankl: Ärztliche Seelsorge: Grundlagen der Logotherapie und Existenzanalyse, 10th edition 1979,Verlag Franz Deuticke, Vienna.
Viktor E. Frankl: Man's Search for Meaning: An Introduction to Logotherapy. 2004, Beacon Press, Boston.
LINKS
Viktor Frankl Zentrum
Viktor Frankl Institut
Konrad Lorenz: The Eight Deadly Sins of Civilized Society
Peter F. Drucker: Management Needs Moral Values
Notes
(1) Following the Psychoanalysis of Sigmund Freud and Individual Psychology of Alfred Adler.
(2) Notable is the relationship of Frankl's thinking to that of Peter Drucker and Konrad Lorenz (who wrote a foreword to Man's Search for Meaning). In their understanding of human nature and society they all emphasise the individual, value tradition and community, the significance of transcendence and lifelong striving for personal improvement and working for a better world. Their thoughts and teaching were interdisciplinary, Socratic and catalytic. This intellectual attitude can be largely traced to their broadly-based education, cultural background and cosmopolitan socialization in early 20th century Vienna.
(3) Extract from Man's Search for Meaning.
(4) A book published in the USA in 1956 based on a biographical report written in 1945 "... und trotzdem Ja zum Leben sagen. Ein Psychologe erlebt das Konzentrationslager". Over 10 million copies (over 15 editions) sold. English edition, Man's Search for Meaning.
(5) The "Statue of Responsibility" project is supported by a foundation. In 2010 the state of Utah declared it was willing to erect such a statue.
(6) Using the leveraging effect of borrowed capital in relation to own capital and excluding personal liability.
(7) Think of the manipulation of markets such as LIBOR and gold. The prices of electricity and telecommunications are anything but transparent.
(8) Extract from Man's Search for Meaning.
(9) This includes biologism, physicism, psychologism, behaviorism, sociologism and certain directions of neuroscience.
(10) Today the term "integrity" is used: see The Honorable Merchant – A Role Model for Today (Managerism, Insights 5
(11) Key aspects are the explicit instrumentalization of people and a reductionist view of human nature.
(12) Extract from Man's Search for Meaning.
(13) Rabindranath Thakur (Tagore) 1861-1941, Poet, Philosopher, Nobel prize winner (1913): "I slept and dreamt that life was joy; I awoke and saw that life is duty; I acted and saw that duty was joy."
(14) According to Peter F. Drucker (1909-2005), the great management thinker with roots in Vienna, the legitimacy of management derives from enabling individuals to develop their creativity and strengths within businesses or other organizations. "Business enterprises ... are organs of society. They do not exist for their own sake, but to fulfil a specific social purpose and to satisfy a specific need of society, a community, or individuals." (Management: Tasks, Responsibilities, Practices, p. 39).
(15) Extract from Ärztliche Seelsorge, p. 182.
(16) "The large corporation must offer equal opportunities for advancement. This is simply the traditional demand for justice, a consequence of the Christian concept of dignity." Peter F. Drucker: Concept of the Corporation, 1946, p. 141.
(17) Revealing is Frankl's use of certain German synonyms for "work" which also mean "to create".
(18) Extract from Ärztliche Seelsorge, p. 182.
(19) Extract from Goethe's Wilhelm Meister's Journeyman Years, Book 8, Chap. 4.