The Front Lines

Fernando Flores Says Entrepreneurs Are New World Leaders.  By Thomas Petzinger Jr.
05/23/97
The Wall Street Journal

(Copyright (c) 1997, Dow Jones & Company, Inc.)


SANTIAGO, CHILE
-- I FIRST HEARD the name Fernando Flores when I was writing six months ago about the dramatic operating turnaround at Cementos Mexicanos, the biggest cement company in Mexico. Although I didn’t say so in print, the Cemex people spoke reverentially of the Chilean consultant. Before I had the chance to check out the guy, I received an e-mail from a former top Air Force general. He mentioned he had been deeply influenced by a philosopher, business consultant and onetime political prisoner named Fernando Flores. How often do you see those descriptions on the same resume?
About that time -- don't ask why -- I was searching the Web for information about human cognition; "Fernando Flores" popped up everywhere. The punch line hit me when I came across something on the Internet in which he declared, "Cyberspace will become the principal medium for inventing our public identities."
You don't say. Precisely who is Fernando Flores? He is an imposing man – picture
Sidney Green Street
-- with some fascinating ideas about computing and capitalism. "I have the best theory of business process in the world," he told me. And whether the claim is true or not, few business consultants can match the intellectual journey behind it.
Trained as an engineer, at age 28 he became finance minister in the Marxist regime of Salvador Allende in 1970. At a time when computers were mostly stand-alone number-crunchers, he helped develop a radical plan to link far-flung factories into a single data network -- a project called Cybersyn (back when the prefix "cyber" meant "control").

THEN, IN 1973, the military seized the presidential palace. President Allende lost his life. Mr. Flores was jailed. Cybersyn went nowhere, and Mr. Flores spent three years in prison brooding over the notion of computers for communication rather than computation. "I wanted to be a force in that," he says today.
When Amnesty International and others won his release in 1976, he exiled himself (with five kids in tow) to Stanford University. His wife, Gloria, wrapped airline sandwiches for Marriott. His teenage children pitched in their Burger King wages. And Mr. Flores threw himself into doctoral studies intent on investigating communication at the most fundamental level: by asking what it means to be human.
From the German philosopher Martin Heidegger he learned that existence arises from interaction. Studying the theory of "speech acts," he realized that language always conveys not merely information but commitment. And soon a light bulb went off: "A human society," as he puts it, "operates through the expression of requests and promises."
A business, likewise, is a collection of simultaneous conversations,  and every conversation involves an act of commitment. ("Can you do this?" "I will pay that amount.") In this "network of commitments," everyone is a customer, a provider, or both at once. Thus, where computers are concerned, "You should not track information, you should track commitments."
Working with the computer scientist Terry Winograd, he created a product to transform computer workstations from solitary appliances into devices for tracking commitments between workers. The system, called the Coordinator, ushered in a generation of collaboration programs known as work-flow tools, or "groupware." Some users found the system dogmatic, but its success left Dr. Flores fixed for life.

To further commercialize his theory of business process, he launched a consulting practice called Business Design Associates, based in Alameda, Calif. Although it conducts no marketing, BDA in seven years has reached nearly $30 million in annual billings. (You'll read about BDA's methods in next Friday's column.) IF DR. FLORES becomes famous for anything; it may be for a concept of entrepreneurialism he has described in a forthcoming book from MIT Press called "Disclosing New Worlds," co-authored with the philosophers Charles Spinosa and Hubert Dreyfus. In a time of vapid values and insipid politics, they say entrepreneurs are becoming the leaders of the world. While the typical capitalist merely forecasts human needs, they argue, "The entrepreneur is the person who determines which needs will seem important."
Dr. Flores says he hopes for nothing less than entrepreneurs one day "overcoming the classical distinction between left and right that has dominated the world since the French Revolution."
True entrepreneurs, he says, aren't motivated solely or even principally by money. Profit is essential, of course -- even a onetime Marxist can see that -- but generating a return on capital is no more the objective of business than having competent employees or loyal customers. "We compete to make things, and ourselves, more worthy," the book says. Profit is but a step in a process by which entrepreneurs attain identities.

Dr. Flores is convinced those identities, corporate or personal, will increasingly take shape in the on-line world (which, after all, is where I encountered him). But identities, he says, must be grounded – in history, in personal style and, of course, in commitments. "You need to be settled in something," he says. "You are not infinite."
Next week: inside a consulting gig with a
Flores associate.
THE FRONT LINES
For This Chilean Firm,
Commitment Is What
Creates Real Change