The Tragedy of the Commons happens when individuals make decisions that are right for themselves but wrong for the common good. Arguably this is what led to over-fishing Cod in the North Atlantic or over-grazing common lands.

Yet again, world leaders are gathered (in Glasgow this time) to try to stave off the ultimate tragedy of the commons – making the planet uninhabitable by humans. Those leaders will succeed only if they find ways to help each other make better complex decisions cooperatively. That’s going to require:

 

  1. A shared understanding of and belief in the current reality, the barriers they have to overcome, and the impact of the various levers at their disposal to change the current course of events.
  2. Embracing Einstein’s realization that “We can’t solve problems by using the same kind of thinking we used when we created them.”
  3. The ability to move beyond simple, tactical, choices with more narrow impact to more complex, strategic choices impacting all.

 

Let’s unpack that.

It all starts with believing that each of us will be better off if we work together than if we look out for our own self-interest. This gets at the core nature of human beings. Must we be regulated or can we cooperate?

While Garrett Hardin, who wrote the seminal essay on The Tragedy of the Commons, argued that disaster can be avoided only through total privatization or total government control, Nobel Prize winner Elinor Ostrom argued that a cooperative system can work if it includes:

 

  • Clear boundaries (the ‘community’ doing the managing must be well-defined);
  • Reliable monitoring of the shared resource;
  • A reasonable balance of costs and benefits for participants;
  • A predictable process for the fast and fair resolution of conflicts;
  • An escalating series of punishments for cheaters; and
  • Good relationships between the community and other layers of authority, from household heads to international institutions.

We’ve seen this work in cooperatives in which various individual farmers get together to pool resources and have a bigger collective market impact. We’ve seen this work in buying cooperatives. We’ve seen this work in retail cooperatives. Cooperatives of all types, particularly those in agriculture, are consolidating in order to continue gaining economics of scale to serve diverse members.

If we stick with this cooperative business model that is usually governed by cooperative members who are elected to a Board of Directors, we begin to gain clarity on the distinct needs of the organization and the responsibility placed on their elected Boards.

If the organization is to successfully fend off the Tragedy of the Commons and actively participate in the growth and consolidation of an industry through a process of mergers for the greater good of the cooperative members, the following must occur among Boards, where the big and complex transformational decisions are made:

1) The individual board members must have a robust understanding of the forces at work and how their collective influence could only be maintained by increasing the numbers, size and scale, of their cooperative.

2) The individual board members, who tend to be successful businessmen with a lot of confidence in their own thinking and decision making, must realize that protecting the status quo will inhibit growth for the greater good. They must embrace that the future should look different, and if it doesn’t, there may not be a future for the cooperative in the long term.

3) The individual board members, who are often are the head of their own family businesses, are used to making decisions on their own with an eye to doing what is best for their own families. For the most part those decisions are relatively tactical and straightforward. These same people must, in their cooperative Board leadership role, embrace the needs of the organization over their own individual needs in order to create the long term future. They must successfully place the greater good of the cooperative ahead of any self motivation.

Boards must build strengths and skills around decision making in complex situations. The easy work will always be easy, and the difficult work will paralyze unless these decision making skills are honed by Boards before the battle begins.

 

Implications for world leaders

Job #1 is getting all to believe the platform for change – that we really are facing the ultimate Tragedy of the Commons.

Job #2 is getting all to share a common vision of working together cooperatively for the collective good.

Job #3 is getting all to commit to being part of the solution. This may need to happen in steps:

1.    Increasing everyone’s knowledge of the macro trends and drivers.

2.    Helping people understand the value of new ways of thinking.

3.    Changing the players at the table to include more capable of complex decision making and training all to get even better at that.

Click here for a list of my Forbes articles (of which this is #734) and a summary of my book on executive onboarding: The New Leader’s 100-Day Action Plan.

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