The effort to diagnose the epidemic of institutional failure sweeping the world and consider what might be done about it requires mastering four ways of looking at things;  as they were, as they are, as they might become, and as they ought to be.  To do so requires considerable thought about what an institution or organization really is.  

Imagine yourself a Homo sapiens in that shadowy world which preceded governments, corporations, institutions, tribes, perhaps even family.  A thinking animal in a world teeming with carnivores rich in tooth and claw, seeking to fill their bellies with your tender flesh.  Experience would soon teach you, if common sense did not, that failure to differentiate between the nature of a bear and a rabbit, a lion and a gazelle, or a cobra and a mouse would result in a short, nasty life.  If you did not understand the nature of the beasts, it would be of little use to know the mechanics of their anatomy.

Today, we are living in a world in which the filling of bellies by tooth and claw has been enormously diminished through the use of institutions – family, city, county, state, nation, church, corporation, school, association– millions of every size and description, accepted with as little thought as we accept the changing seasons.  Yet those institutions, which came into being to benefit us, can also demean, damage, impoverish, or destroy us as certainly and capriciously as any predatory animal.  And they can do so with technological, psychological, and economic instruments infinitely more destructive than tooth and claw.

Institutions are not a law of nature, nor did they spring full-blown from the head of Zeus.  In the great sweep of evolution they are, for all their size and complexity, newly born, primitive, aberrant, and often uncivilized.  People are not the creatures of institutions;  institutions are the creations of people, yet they increasingly seem as much beyond our control as the turning of the Earth and the burning of the sun.  We endlessly tinker with their anatomy and bear up under their abuse, but how well do we understand the intrinsic nature of the institutional beast?

Not well at all.  The problem arises from the pervasive habit of perceiving an institution as having tangible, physical reality, such as a building, a tree, or a machine.  It does not.  Fix the company you work for or any other organization of which you are part firmly in your mind.  Not its physical manifestations such as its name, logo, employees, buildings, products or services, but the entity itself.  Put all other thoughts aside and concentrate on the  organization you know so well.

Surely you have seen it.  What color is it?  No?  Well, then, you must have smelled it from time to time.  Describe its odor.  No?  Then surely you’ve tasted it.  Is it sweet or sour, tart or bland? You can’t taste it?  Well, you must have touched it often.  Is it hot or cold, hard or soft?  No?  Then, without doubt you have heard it.  Make its sound.  No?

Can you perceive the company you work for, or any other organization, whether political, social or commercial, with any of your senses?  Obviously you cannot.  If you can’t perceive an organization with any of your senses, does it have any reality at all?  Perhaps it simply does not exist.  But that explanation defies common sense.  

The truth is that a corporation, or any organization for that matter, has no reality save in the mind.  It is nothing but an idea; a mental construct to which people are drawn in pursuit of common purpose; a conceptual embodiment of a very old, very powerful idea called community.  

All organizations can be no more and no less than the moving force of the minds, hearts, and spirit of people, without which all assets are just so much inert mineral, chemical, or vegetable matter, by the law of entropy, steadily decaying to a stable state.  Constitutions, certificates of incorporation, by laws, regulations and all other organizing and institutional documents are nothing but a description of relationships which people are born into, forced to submit to, or are voluntarily drawn.   

Healthy organizations are a mental concept of relationship to which people are drawn by hope, vision, values, and meaning, along with the liberty to cooperatively pursue them.  Healthy organizations educe behavior.  Educed behavior is inherently constructive.  Unhealthy organizations are no less a mental concept of relationship, but one to which people are compelled by accident of birth, necessity, or force.  Unhealthy organizations compel behavior.  Compelled behavior is inherently destructive. 

Since the strength and reality of every organization lies in the sense of community of the people of which it is composed, its success for good or evil has enormously more to do with clarity of a shared purpose, common principles, and strength of belief in them, than to money, material assets, or management practices, important as they may be.

When an organization loses its shared vision and principles, its sense of community, its meaning and values, it is already in the process of decay and dissolution, even though it may linger with the outward appearance of success for some time.  Businesses, as well as nations, races, and tribes die out or become irrelevant not when defeated or suppressed, but rather when they lose shared vision, principles, meaning, and values.  

Without deeply held, commonly shared purpose that gives meaning to their lives; without deeply held, commonly shared, ethical values and beliefs about conduct in pursuit of a purpose that all may trust and rely upon, communities steadily disintegrate, and organizations progressively become instruments of tyranny.

To the direct degree that clarity of shared purpose and principles and strength of belief in them exist, constructive, harmonious behavior may be educed.  To the direct degree they do not exist, behavior is inevitably compelled.  It is not complicated.  The alternative to shared belief in beneficent purpose and principles is tyranny.  And tyranny, whether petty or grand, whether commercial, political, or social, is invariably destructive.  

People deprived of self-organization and self-governance are inherently ungovernable. And that is increasingly the situation in today’s societies, even in the most liberal of those we call democratic.