Management Lessons from the Commons: How to Make the Boss Shape Up



August 28, 2007

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One of the many tragedies of the conventional economic mind is the grip that the “tragedy of the commons” has upon it.   Among other things, the “tragedy thesis,” as it is called, feeds the economist’s arrogance about modernity itself.  Traditional societies all were stupid and programmed for destruction, it says implicitly.  Only we moderns, with our market mechanisms and technological wonders, can save the world.

This is, of course, total bunk.  Most traditional societies did far better jobs of managing their resources than we moderns, or post moderns, have been able to do.  An example is the remarkable water sharing organizations in the Northern Philippines called zangera. These embody a native genius in husbanding the water commons in such a way that everyone gets a just share.  They also show how to arrange a system – “incentivize” it in the econ parlance – so that leaders work to that end rather than to their own aggrandizement and gain.

Zangera typically begin when a group of tenant farmers approach the owner of  unirrigated land and offer to build an irrigation system, in exchange for the right to farm the land.  They then create the organization to build and manage the system.  It is no picnic for the farmers involved.  The dams are homemade out of bamboo, banana leaves, rocks and earth.  They break routinely during monsoon season, sometimes three or four times.  The systems require constant maintenance.   One study found that, on average, zangeramembers contribute some 40 days of work a year – grueling work in tropical heat – and sometimes much more.

Yet there were well over 600 of these organizations as of the late 1970s,  and they have worked out some ingenious ways to allocate the common resource – water – in a just manner  For example, they divide the land into three or more sections and give each member a plot in each, in differing sequences along the irrigation ditches.  That way, in dry seasons, each member gets at least some land near the front of the line.  Nobody has to go totally without.

It is interesting to consider how that principle of burden sharing might play out in an economy at large.  In tough times we all would get a share of the diminished resources, instead of the system we have today, in which some get axed while others speed merrily along.

But the part I like best, from a management standpoint,  concerns the role of the chief excecutive, or maestro.  The maestro doesn’t have an easy job.  He must organize the construction work, muster the materials, and keep members motivated for what amounts to more than a month of hard work a year.  As a reward, he gets an extra allotment of land, as do the secretary, treasurer, and cook.

But this extra land comes at the very end of the irrigation line.  The boss gets no water unless everyone else gets it first.  The “incentive,” in the economic parlance, is to run the system for the maximum benefit of all the members, rather than for their own gain.

What would happen if we ran our corporate system at least partly on that basis?  What if the top people got nothing beyond an ordinary salary unless and until their employees, shareholders and the communities in which they operate all were taken care of first?   Commons-based management — Harvard Business School could use a course like that.

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