Can organizations ever give up their attachment to money?
 

“Financier leaving your little room/where the money is made but not spent,” wrote the poet W.H. Auden, “the game is up for you and for the others.” Auden’s warning to a sick society, written just after the 1929 Wall St crash, was very nearly fulfilled. Only the massive rearmament and mobilization of the late 1930s and the Second World War saved the financial system of the day from destruction.

And now, here we are again. The western economy may have collapsed completely by the time you read this (in which case you may not be reading it all); but, even if things don’t get quite that bad, it’s obvious that the game is up, not just for much of the finance industry, but for an entire philosophy of management and leadership—borrowed ultimately from that industry—which tries to motivate people through greed.

Incentives to be stupid

I wrote in an earlier post about the dangers of “monetizing” organizations: trying to motivate people by giving them financial incentives to do things. There’s a lot of agreement now that this approach can hurt organizations. Until the last few weeks, though, I don’t think anyone had appreciated quite how quickly it could completely destroy them.

The disappearance of the largest banks in the United States turns out, on examination, to be related to quite small and technical changes in the rules governing how much money they were allowed to borrow. Give somebody an incentive to be stupid and they will be stupid. Give somebody a large incentive to be stupid—like allowing them to borrow thirty times the capital of their bank to gamble with—and they will be extra-stupid. What are we going to do about this?

Obviously, different types of organizations will always have different relationships with money: a merchant bank and a school will never look at financial incentives in quite the same way. But it’s clear that the time has come to think again about a basic question: what effect does offering financial incentives to the workforce have on how an organization works? It used to be argued that organizations would benefit because people were motivated by more money to work harder. In fact, it turns out that people simply do more of what brings them extra money, at the expense of what doesn’t, even if the latter is actually more important.

Why is money supposed to motivate people?

It can’t be because people value money as money—like a miser, dripping gold coins through his fingers in a darkened cellar. That would be pathological. Presumably it’s because of what money is supposed to bring: status, freedom, and, most of all possessions. These things are supposed to make us happy. And the purpose of earning money is ultimately to be happy . . . Isn’t it?

At this point, we should remember that Buddhists have always argued that it’s precisely this hunger for the things that money is able to buy—“attachment” as it’s called—which is at the root of unhappiness. [Navajo myth refers to evil and witchcraft as "the way to make money."—Editor] True happiness comes from letting these attachments go. Some people interpret this as giving up all your possessions and going to live in a wooden hut in the forest. That can work in certain cases, but it’s not money or what money can buy which is the problem, but rather our relationship with these things. Too often, we don’t own these possessions: they own us.

Rethinking our relationship with money

The cure for this problem is to rethink our relationship with money—not just as individuals, but as leaders and members of organizations. For some years now, organizations have tried to motivate people by extrinsic rewards—money, status and so forth—rather than the intrinsic rewards of the job itself. As a result, people have come to measure their worth by their salary, the size of their office or the type of car they have been given. Yet, as Buddhists have long pointed out, unlike job satisfaction, extrinsic rewards can never be big enough to make us satisfied forever. There’s always more money, a bigger office, a better car. No wonder so many people in organizations today are rich and still unhappy.

Workers in organizations take their cues from the top. A good start would be a rigorous programme to ban every single financial incentive. Then, when the attachment to money and status has been flushed out of the system, you can start building a new system in which money is just a way of translating work into the means of living; and status comes not from the size of your salary, you office or your car, but the respect of your peers.

Organisations which hope to survive will have to move in this direction anyway. The sooner they start doing it the better. As Auden wrote in the same poem: “it is later than you think”.

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