I am in Astana, the capital of Kazakhstan. At the Forum for a sovereign state fund, Samruk Kazyna, to discuss organizational transformation.

A distinguished British leader of a company with 350,000 employees speaks before me. He is focusing on what he believes is a major fault with the managerial practice in Kazakhstan.  It is, he says, the appointment of people to leadership positions in the company not by qualifications but by blood lines and friendship lines.

He claims that this is the main reason companies are not performing well.  His recommendation is to discontinue this practice. It is absolutely mandatory, he says.

The facts are that during the collectivization of Kazakhstan by the Soviet Union regime, where land and animal stock were nationalized, millions of people died from starvation and people learned to take care of each other. Furthermore, this is a society of tribal connections.

In the name of more profits, he was proposing to stop this mutual caring, this love for one another and holding tight to family connections. I felt that he was wrong.

It occurred to me that this is precisely what we have done in the West.  In the name of more profits, we have caused people to disregard blood lines and friendship along with relations based on trust; and we have exchanged these values for some “objective” measurements of competence like education and experience.

Wait a moment, I thought to myself. Is the exchange worth it? Should we actually “cool off” deep relations for more profits? Do we need to throw the baby out with the bath water?

The problem is not “blood lines.” The problem is non-performance.

There are people who do not perform well who are not connected by blood lines.  And there are people with blood ties whose performance is quite exemplary. So let us focus on how to increase and improve performance and not on how to forbid hiring because of relational ties.

As a matter of fact, discontinuing this nepotistic practice would be dangerous for developing countries.

In developing countries, they do not have the sophistication of management. No job descriptions, no 360 appraisals. No control systems. So, what keeps the organization working is trust. Trust based on family relations. Remove that and the system will collapse.

For those who know Adizes theory I am referring the (A) – (I) exchange.

In a developing country, they use (I) to make the company interdependencies work. Removing (I) without having (A) will make the system collapse.

Focus on improving performance; Build (A) without destroying (I).

Just thinking

Ichak Kalderon Adizes