From: jimruttshow8596
Organizations, societies, and institutions face significant challenges in ensuring their long-term viability, particularly concerning leadership succession and the transfer of power and knowledge. Functional institutions are often the exception rather than the rule, requiring constant adaptation and “reimagining” to persist through changing circumstances [01:04:28].
Functional Institutions and Adaptation
A key indicator of an institution’s functionality is its ability to adapt and reorient itself in response to radical changes, whether cultural, technological, or geopolitical [01:18:38]. An institution that has navigated several unpredictable events well demonstrates a “self-re-engineering ability” rather than being an inert machine [01:19:16].
Live Players vs. Dead Players
This distinction helps explain an organization’s adaptive capacity [01:21:14]:
- Live Players operate in a responsive, creative way, actively perceiving and reacting to their environment [01:20:21].
- Dead Players execute a pre-existing script or archetype, potentially doing well currently but lacking the capacity to adapt when circumstances change [01:20:31]. Their success might be due to past momentum or chance [01:21:05]. An organization like Apple, despite its high value and prestige, might be considered a dead player if it continuously asks “what would Steve Jobs do?” instead of radically changing its style [01:22:40].
The Succession Problem
The “succession problem” arises because institutions built by one generation must be successfully handed off to the next to remain functional [01:28:03]. Without effective succession, organizations can face sclerosis or constant internal conflict [01:28:20]. This problem has two main components:
- Skill Succession: The transfer of knowledge and expertise [01:28:43]. This requires close personal collaboration and mentorship [01:28:47].
- Power Succession: The transfer of authority and influence [01:28:31].
Modern political and economic thought often tries to solve power succession by dispersing power, aiming for merit-based replacement by disempowering current office holders from choosing their successors [01:30:27]. However, this approach frequently fails [01:30:40]. Power, whether liked or not, exists in organizations and attaches to institutional positions [01:41:16].
Historical and Modern Solutions to Succession
Societies throughout history have devised various “social technologies” to manage succession.
Roman Adoptive Monarchy
The Roman Empire experienced a period of stability under the “Five Good Emperors” (Nerva, Trajan, Hadrian, Antoninus Pius, and Marcus Aurelius) through a system of adoptive monarchy [01:31:52]. Each emperor adopted an adult man as their successor, transferring the imperial title and legacy, rather than relying on biological lineage [01:31:58]. This mechanism credibly promised political succession to rivals, aligning their interests with the existing emperor’s legacy [01:34:08]. This contrasts with the later endemic civil wars often triggered by blood succession [01:31:03].
Japanese Mukuyoshi (Son-in-Law Adoption)
In modern Japan, many industrial dynasties (like Suzuki, Kikkoman, Toyota) utilize mukuyoshi, the practice of son-in-law adoption [01:34:49]. A daughter of the industrialist marries a man selected for his business acumen, who then adopts the family name [01:35:15]. This allows for social succession and the transfer of intangible social capital—friendships, reputation, personal assets—without a direct familial tie, ensuring a stronger position for the new leader [01:35:38]. The West lacks such a straightforward adoption technology for adults [01:36:05].
Botswana’s Presidential Succession
Botswana, a resource-rich, landlocked African country, has defied the “resource curse” and maintained political stability and economic growth [01:49:53]. A significant factor is that every president in Botswana’s post-colonial history has been the vice president of their predecessor [01:51:14]. This system allows for learning on the job and smooth political transitions, ensuring long-term planning vital for a resource-based economy [01:52:23]. This contrasts with Saudi Arabia, which has done a worse job of planning for the future [01:52:42].
Business Examples of Succession Challenges
In the business world, succession planning often involves formal processes, such as reviewing leadership candidates three levels deep from the CEO [01:38:12]. However, even well-designed plans can fail due to exogenous events, like a personal crisis preventing the intended successor from taking the role [01:46:56]. This can lead to a company losing its unique culture and collapsing into conventionality [01:46:58].
The skills needed for leadership also change as an organization evolves through different phases (e.g., startup, growth, maturity) [01:40:00]. A CEO who is excellent at launching a startup may not be the right person to scale it to a large organization [01:40:03].
The rise of “startup culture” itself can be viewed as a sign of weakness in existing organizations’ inability to adapt or re-invent themselves [01:41:43]. Rather than talented engineers rising within old companies to redirect their resources, they find it more effective to create entirely new ventures [01:41:52]. This indicates that power succession has become “stuck” within traditional corporate America [01:42:34]. Large firms often struggle to innovate because vested interests in current products can “frustrate and trump” new business ideas that threaten the core [01:43:50].
Impact of Social Technologies and Incentives
Social technologies, defined as the functional aspects of everyday interactions and codified coordination mechanisms like bureaucracies or markets, profoundly shape how organizations operate [01:13:56]. They can be compared to “software we implement in our minds and in society” [01:38:36].
For instance, the rise of modern marketing and advertising in the 20th century, influenced by insights from psychology (e.g., Edward Bernays, John Watson), enabled the purposeful manipulation of human psychology to induce desires and introduce new social roles related to consumption [01:12:07]. While this historically facilitated mass education programs for new domestic or workplace economies [01:14:07], its long-term effects, especially when driven by purely addictive aims without pro-social intent, may erode deeper cultural reservoirs [01:14:32].
In contemporary modern capitalism, particularly in its “hyper-financialized” late stage, the prevailing moral framework in some corporations has shifted to prioritizing profit and legal exploitation above societal good [01:16:32]. If the costs of being caught violating norms are less than the benefits, the violation is undertaken [01:16:56]. This ethos undermines trust and makes true organizational functionality for the public good more challenging.
The Role of Complexity
In organizations, complexity science provides a useful lens. Bureaucracies, for example, tend to climb and entrench on a “hill” (a local optimum in a fitness landscape) without considering other potential hills [01:08:49]. Business exists in a co-evolutionary context where “hills are growing and shrinking all the time” [01:09:12]. Organizations might need to execute “death valley attacks” (crossing a low-value area to reach a higher peak) or “parachute attacks” (acquiring companies in new, distant domains) to adapt [01:09:39]. The inability of internal dynamics to overcome vested interests in existing products often makes external acquisition or startup formation the only viable path for innovation [01:43:50].
Ultimately, society itself is viewed as an unfinished building or a complex ecosystem of interdependent, mutually competing institutions, requiring continuous maintenance and re-imagining to avoid decay and ensure viability [01:04:54]. The impossibility of avoiding mortality means that all organizations must plan for succession or face crises [01:49:01].