Wednesday, June 17, 2009

Organizational Development through Islamic Management Frameworks

American Muslim landscape has changed dramatically since 9/11. America’s political culture, legal environment and public discourse have become structurally Islamophobic.1 On one hand Muslim organizations have made significant strives in opening up their doors and engaging in civic and interfaith dialogue. On the other hand the perpetuation of fear of prosecution and lack of due process in implicating Islam and Muslims in terrorism has left its psychological impact on the American Muslim populace dampening our ability to integrate Islam in the fabric of North America.

In the post 9/11 era reacting to redress government scrutiny, improve public image and educate the general public about fundamental Islamic values, is only half of the American Muslim struggle. While progress has been made in creating Muslim advocacy groups, educational centers, public policy institutes, political action committees, and interfaith outreach programs, not much effort has been spent in harmonizing and codifying institutional and organizational governance models. As a result the long term sustainability of our institutes and organizations, vis-à-vis their ability to share best practices, their ability to communicate effectively internally and externally, their ability to instill organizational efficiencies and their ability to be at par with the western organizational management paradigm, is at risk. While Islam offers the best approach to eradicating the ills of society, western organizational management frameworks offer a process oriented approach to managing organizations for achieving effectiveness and inducing efficiencies.

Why not an Islamic Management Framework?
Verily never will God change the condition of a people until they change it themselves...--The Quran, Chapter ArRaad Verse 11.

The time has come to initiate change and merge the two ideologies together; Islamic spirituality with western process oriented management frameworks. This merger will be the birth of an Islamic management framework called “Management by Islam (MBI)”. Such an Islamic management framework would then offer Muslim organizations and institutes a unique solution for the other half of the American Muslim struggle:

1) Adopting, implementing and maintaining best practices.
2) Streamlining organizations with process oriented efficient governance models.
3) Training leaders, managers and workers in state-of-the-art management practices with a God-centric frame of reference for creating transparency and accountability.

In a time when corporate ethical standards are being myopically driven by material gains, a balanced approach like MBI will provide an alternative to existing management frameworks eliminating their eschewed focus on year end profit and loss (P&L) statements as key performance indicators (KPI) for business health and performance measures. A balanced management approach will offer a positive spiritual dimension to governance enabling American Muslims to reach higher grounds and set examples for others to follow.

What is a God-centric Frame of Reference?
When our leaders, managers and workers all recognize the importance of abiding by a set of divine guidelines prescribed by God and the example set forth by Prophet Muhammad (May Peace and Blessing of God be with Him), then transparency and accountability becomes the focal points of governance of all our affairs; private or public.

To God is your return...He knows what they conceal and what they reveal...He knows well the (inmost secrets) of the hearts...All is in a clear Record... The Quran, Chapter Hood Verses 4-6.

A God-centric frame of reference is one where we are cognizant of the transparency of our intensions and mindful of the accountability of our actions. A model like MBI will offer our organizations and institutes a shift from the short term focus on capital return on investment (ROI), to the long term focus on spiritual ROI. Instilling this type of a God-centric frame of reference in our day-to-day operational and governance activities will rejuvenate our lost sense of humanitarian and environmental activism brining social justice, public service, civic outreach and environmental safeguard back on our priority lists.

Leading by Example
When it comes to corporate governance and organizational management, how can Muslims play the role of good counselors? The answer lies in comprehensively adhering to God’s divine framework, not just in our private affairs but also in our public affairs. A holistic public/private God-centric frame of reference is therefore paramount in exhibiting exemplary moral values and public trust stewardship responsibilities.

For Muslim organizations, who aspire to be exemplary Islamic institutions in North America contributing positively to the betterment of the Muslim community and the society at large, what greater ROI can there be then governing their affairs utilizing such an Islamic management framework? As evident by a saying of the Prophet of God, that the essence of the religion of Islam is giving good counsel2. Counseling in this context relates to our organizations and institutes being models not just in principle but also in governance as well. Exemplary are those entities where transparency and accountability to God is the hallmark for success. This type of organizational behavior is not mere lip service to the intent to govern with Islamic principles; it is the synchronization of good intensions with the ability to continuously set higher standards of performance.

Facilitating a Balanced Approach
And the heaven He raised and imposed the balance. That you not transgress within the balance. And establish weight in justice and do not make deficient the balance... The Quran, Chapter Al Rahmaan, Verses 7-9

The MBI framework thus has to be a concept that is a balance enabler facilitating the process of learning professional and organizational wisdom behind implementing globally harmonized God-conscious policies and ethical standards for establishing effective and sustainable personal and organizational environments.

Maintaining balance is not a mere recommendation but a divine order. Although Islam may play a balancing role when it comes to our personal lives, seldom do we inject and harmonize our organizations and institutions with that balanced approach. It is this balance that helps us in mitigating risk and achieving success. The MBI methodology is therefore, a means to achieve a balance scorecard.

And let every soul look to what it has put forth for tomorrow and fear God... The Quran, Chapter Al Hashr Verse 18

Risk Management
If the purpose of this life is to attain the love of God, then by default our long term strategy should be to focus on activities that bring us His favors. The strategy, for attaining God’s favors, can not be fulfilled without our commitment to short term roles and responsibilities here on earth. Western management frameworks are excellent tools for achieving such short term objectives. However such frameworks can negatively affect our performance, if servitude to God is not an integral component of the broader framework. When liabilities of this magnitude are ignored and we get too focused on everyday living, an element of risk enters the equation. The risk we so inherently face as human beings of meeting our Lord, on the Day of Judgment, in a state of bankruptcy. The degree of confidence in minimizing liability is a key performance indicator (KPI) for predicting desired end result. An MBI risk management approach, one embodying Quran and Sunnah as the underlying core decision support system, facilitates a balanced approach in controlling risk. Thus the MBI approach promises a greater potential in producing ethical corporate citizenry; one that is synchronized and mindful of the responsibilities entrusted on us as representatives of God on this earth.

Where Do We Go From Here?
Are we as Muslims ready to implement such a God-centric framework so that we can comprehensively begin to take on the challenges of our times; eradicating Islamophobia, and leading by example?

Most of our organizations already have the wisdom and the expertise needed to succeed. The challenge is to efficiently manage the ability to draw on people’s competence, expanding the flow of information and opening up channels to understand and act on that information, enabling organizational growth. Too many organizations spend energy and time organizing and planning, reacting to the circumstances. Not many organizations take the necessary steps to proactively improve processes, implementing measurable objectives with associated accountabilities.

Verily never will God change the condition of a people until they change it themselves… The Quran, Chapter Ar Raad Verse 11.

We as American Muslims need to start building teams that understand the efficiencies associated with bilateral collaboration, recognize the dynamics of empowerment, and realize the importance of adapting to change. The desire to change however needs to come from within our organizational leadership. For a change without the internal desire to change, is only a cursory change on an emotional level. Emotions might help us acknowledge the enormity of our challenges but mere rhetoric cannot improve our existing condition. We need to meet the challenges we face today head on for us to pave the way for future American Muslims to succeed. Combining western process oriented management frameworks with Islamic spirituality is not just another good thing to have, but it is a necessity for sustainable governance.

MBI offers a new perspective!

Where Accountabilities Start Transparencies Begin

Debt leveraging is a detrimental financial concepts; a concept fueled by the desire to capitalize an asset beyond its leveraged value - securities of packaged subprime loans and credit default swaps. This desire to keep on leveraging with perpetuity has led to the collapse of large US financial institutes. 15 or so banks have failed to date while several others have been rescued through government intervention or acquisitions by other banks. Because we live in a global economy, the affects of this financial disaster is not just confined to the United States, it has rapidly evolved into a global crisis. Resulting in a number of bank failures in Europe and triggering a sharp decline in the value of equities and commodities worldwide. Iceland was immediately threatened by bankruptcy. The International Monetary Fund (IMF) dubbed this financial downturn as a complete meltdown of the world financial system.

In today’s business world financial profitability plays a central role in strategic organizational decision-making. With increasing emphasis towards return on capital, we frequently put aside social justice, public trust and civic responsibilities. Corporate scorecards are myopically evaluated by stakeholders, only to focus in on year end profits. Performance, quality and customer satisfaction are viewed only in terms of their impact to financial bottom lines. Year end profit and loss statements have become the only guiding tool for economic health and performance measures. Transparency although is offered by myriad governance philosophies and management frameworks, yet the focus tends to always be the promise of a greater return on investment.

Free enterprise benefactors have long argued that corporate governance layers stifle a market’s creative abilities and create roadblocks to financial prosperity. The notion that free enterprise system inequities adjust automatically to induce innovation and growth is a very narrow perspective. The analysis is limited when it is based solely on market financial performance. It ignores other equally important market growth parameters such as education, social services, environmental sustainability etc. When other elements of growth are removed from the equation, we end up with a meltdown of the very markets, we strive to sustain. As a result, socio-economic interdependencies breakdown inflicting enormous strains on our economies and our way of living.

Unfortunately in the free market system corporate governance is generally a lagging influencer, meaning that we introduce rules and regulations after a negative event has already occurred. Our knee jerk reactions to unforeseen performance results almost always give rise to efforts for greater transparencies. Although greater transparencies may create short term performance correction, they seldom create accountabilities to the right entities. The concept of a balanced governance model is one which is built on the foundation of accountability. Because where accountabilities start transparencies begin.

A balanced corporate governance model is one where accountability, commitment and transparency are the foundation for organizational management responsibilities. Responsibilities only to stakeholders in terms of financial performance leave other governance components either under utilized or over leveraged. If financial performance is then put ahead of all other performance parameters, imbalance is created. In such one-dimensionally run organizations when the financial element weakens or buckles, the entire organization collapses instantly. Wonderment and unbelief follows as leaders and analysts are left dazed and confused only to blame their failure on external market economic forces. Financial uncertainly and risk are always part of the equation and can not be totally isolated or controlled.

When asked to define the significance of his students’ existence in this vast universe, a teacher replied that it was the recognition of the interdependencies of the smaller elements in life that give meaning to the bigger universe around us. And true interdependence can only be realized by looking at the universe from the outside in, not the inside out. Organizations have long looked at corporate governance from the inside out perspective. However, an outside in approach to evaluate governance in terms of balanced and broader economic growth perspective is an exercise worth conducting.

Intrinsic to long term economic sustenance of any organization is the adherence to a balanced governance framework; a framework that is built on the pillars of accountability, commitment and transparency. Balance is core to universal governance laws. It is this balance that in turn induces sustained prosperity.

A balanced corporate governance approach is one where accountability, commitment and transparency are the fluids that run deep into the veins of organizational management practices nourishing all aspects of governance equally.

Dysfunctional Dichotomies of Greed

It is simply the lack of transparency and accountability that allows people to manipulate stuff any which way they want without the fear of repercussions. We as individuals have forgotten how to live within our means. We have become a mind-numb generation void of any intellectual discourse.

Our lazy minds acquire knowledge without ascertaining where it comes from. Knowledge that we intake affects our emotional state of mind. It is our emotional state of mind that dictates our actions. Flawed knowledge creates flawed emotions and flawed emotions create flawed actions. Our knowledge, our emotions and our actions all form our belief system. Our belief system when implemented outwardly becomes our reality.

In order to live we have to borrow. I do not deny that fact! But some where along the lines we have been made to believe that living beyond our means is the way to live; for one can not simply enjoy life until it is living beyond means.

Borrowing only works when there is something tangible that can be leveraged.

So what happens when tangibles get scarce?

Intangible assets leveraging is a fascinating concepts; a concept fueled by the desire to fully capitalize an entity beyond its sustainability. This desire to infringe with perpetuity is what has led us to create complicated financial economic models; models where intangible leveraging is justified by manipulating conjured financial economic data. The result is financial derivatives based on speculative variables artificially inflating our leveraged assets. In our global economies these capitalistic complexities have gotten exponentially interdependent and our desire to live beyond our means that much more inflated. When something outgrows its initial containment it expands; rapid expansion almost always results in an explosion. When something explodes, the restrains cease to function. Explosions wreak havoc in their path often wiping out the very societies that contain them.

This notion that only capitalistic underpinnings lay the right foundation for economic vitality is a fundamentally flawed notion. Unfortunately our numb minds have accepted this reality; a reality that we have become so accustomed to…

Dysfunctional dichotomies of greed
Bleeding what’s left of our creed
With numb minds we desecrate
We accept, we believe and we perpetuate
Hollow rituals of civilized societies
Norms binding us to distorted realities

What’s On Your Conscience?

Without the internal desire for change, people cannot be changed by external stimulus. A change independent of our internal desire is only a cursory change on an emotional level. Hollow emotions might help us push a ship onto the water but mere “feelings” cannot chart a course to a specific destination. What good is a ship that just sits on water at the mercy of the waves that might take it wherever they want to? As Muslim professionals we ride on the waves of corporate culture like empty vessels; vessels in an ocean subjugated to philosophies of profitability, ambition and growth. Knowing very well that as Muslims we do not bow down to anyone or anything else but our Creator, yet incapable of infusing that mindset in our professional decision making processes. In the absence of a way of implementing God-centric management frameworks, we drift like fallen leaves from one professional setting to the other. Corporate winds blow us around, our careers disperse us like bits and pieces, a supervisor here, a manager there, if lucky a VP, a SVP or maybe even a CEO. But yet at the end of the day, it is the same corporate philosophies we accept and perpetuate. When a business’s hallmark is the mere size of its market share and stock value, and virtues like civic and environmental responsibilities are side lined or marginalized, do we really expect equity and justice? Our inability to create balance makes us an endangered species that is rapidly racing towards extinction in the corporate world; a world where organizations solely cater to shareholder value and profit and loss (P&L) statements.

I believe it is time for evolved and balanced business leaders to emerge and take charge. Interns and seasoned Muslim professional around the globe can take on this responsibility better than anyone else. I believe we have the acumen and capability to rise to the occasion.

This is a call for all Muslim professionals who are in the position to influence change; a positive change that is balanced in all aspects; for profit, but also for restrain on wasteful use of our resources; for ambition, but also for introspect and inner reflection; for growth, but also for respect of laws of nature.

I believe together we can all make a difference. If not in the lives of others, then in our own lives and our future generations, by dedicating our selves to the “Cause”!

What’s on your conscience?

Join the MBI movement! Make a difference! Learn to implement the ultimate operational framework of all; the framework of Islam!