The Tide Turns on Woke

Cancel culture, ESG, and CRT cannot succeed because they are divisive, racist, and deny the pursuit of excellence and promotion of meritocracy. No society that turns its back on excellence and meritocracy has ever succeeded. Just ask the Soviet Union. This whole crazy experiment is doomed to failure. Shareholders are already balking at ESG investment strategies. It is only woke, super-large investment houses that are keeping this afloat. They are the oligarchs of today. At the end of the 19^th century, it was railroad and transportation trusts that dominated the economy. Teddy Roosevelt broke them up with new antitrust laws. These same laws are still on the books and should be used again. It is time for a reckoning.

Companies that drifted into the woke agenda are waking up to the damage caused by an ideology rooted in grievance and division

Companies that drifted into the woke agenda are waking up to the cultural and institutional damage caused by an ideology rooted in grievance and division. Organizations are becoming slower, more brittle, more risk averse, and sluggish in responding to both danger and opportunity. And no wonder, given the corrosive nature of these ideas. No one with a lick of common sense believes this nonsense, yet we remain muted. The time to push back and speak up has come.

As the woke agenda fails and the world enters a period of slower growth, or perhaps worse, a new crisis will emerge. The burning question for leaders will be “How do you restore the soundness of your company, your institution, and your economy? How do you cleanse yourself of these self-destructive values and practices?” It will amount to a massive detox exercise.

This new agenda is not about abandoning progressive ideas but about challenging them. Do they make sense? Do they make organizations stronger and more cohesive, or do they have the opposite effect? The key to digging ourselves out of this mess is to reorient ourselves around the customer and the shareholder, but especially the customer.

Quality Improvement revolution. Focus on the customer and deliver value, and you will prosper

Leaders must stop allowing one narrow constituency after another to capture precious corporate resources when, in the end, it is only the customer that matters. When the customer's needs are met, shareholder needs will be met, employee needs are best met, and so will the needs of society.

This brings us back to antecedents of the Quality Improvement revolution. Focus on the customer and deliver value, and you will prosper. It is not all that complicated. But if the focus instead is on racism or reverse racism, grievance, division, pronouns, and micro-aggressions, it must and will corrode your institution. This ideology infects whatever it touches and too many CEOs have been content to go along to get along. But the tide is turning, albeit slowly, but inevitably. Public institutions, lacking the discipline of a bottom line, are particularly vulnerable to this infection. Many of our universities may already be beyond redemption. They have become intellectual wastelands where healthy debate and skepticism have been crushed. Private companies with shareholders and a bottom line will adapt first…or die. And make no mistake, some will choose to perish rather than admit to an error this gross. This explains why so few Fortune 500 companies last more than one or two generations.

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Getting into the Mess

Hubris born of post-war economic dominance allowed America to take its eye off the customer by the 1970s in favor of planned obsolesce, profits over investment, and the indulgence of powerful unions. This brought on the “quality crisis” of the 1980s where customers avoided cars built on a Monday or Friday. Do remember the bumper sticker “Another Rusty Ford.” It appeared for a time that Japan would eat America’s lunch. But it did not happen. Why? Because America returned its attention to the customer and clawed its way back into a number one position in global competitiveness. It was a stunning comeback. There is a famous Time Magazine cover from the early 1990s which featured a sharpened pencil against the backdrop of the US flag with the header “Who’s sharper now?” The headline says it all. America can indeed dig itself into holes but is damn good at reversing course and digging its way out when new thinking is required. The flexibility, creativity and resilience of the US economy remains astounding.

But history does have a way of repeating itself. Today, corporate America is once again taking its eye off the customer in pursuit of divisive notions of equity, inclusion, and reverse racism. Perhaps a decade of free money based on near-zero interest rates enabled companies to become unhinged from reality. The same can happen to people. In a world of near-free money, a lot of loony ideas can be floated, at least for a time. 

Who will lead this counter revolution? Who will be ahead of the learning curve? Who will push the envelope of change?

In a world of free money and unlimited federal deficits, a lot of silly, non-productive, downright crazy things can be funded. Ask yourself how many DEI managers or vice presidents does a university need? Too many apparently, as they are starting to outnumber faculty. Rich endowments may allow this nonsense to carry on for a time, but the handwriting is on the wall. Universities exist to serve the needs of customers (students and parents) and the community, and they are built around the scholarship of the faculty—that is the product. This legacy can be traced back to the Sorbonne, Bologna, and Oxford. If a university fails at this mission, it has no God-given right to perpetual existence. If the Roman Empire can go out of business, so can Rutgers University.

As interest rates rise and the economy slows, the folly of all this will become clearer and clearer. Companies with sound, prescient leadership will want to move away from destructive policies and strategies and return their focus to the customer. This is the fulcrum point for leveraging change. As Archimedes proclaimed, “give me a lever long enough and a fulcrum strong enough, and I can move the world.”

This is the next big thing. Who will lead this counter revolution? Who will be ahead of the learning curve? Who will push the envelope of change…a change America desperately needs right now?

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