Morals have failed to curb business malfeasance. Maybe it’s time to try real ethics.
 

Moses with the Ten Commandments
Painting by Rembrandt

There have been many—probably far too many—articles in the media complaining about the corruption, greed and dishonesty apparent at every level of business in recent years. Solutions abound, usually linked to the idea of better moral and ethical teaching. The trouble is, morality has been around since the earliest periods of recorded history, and it has yet to prevent people from behaving in ways that break just about every moral rule.

If something doesn’t work, the only sensible course of action is to try another approach. It is also sensible, before doing that, to wonder why people go on behaving badly and defying society’s norms. Answers based on the supposedly debased nature of mankind, like the claim of original sin, don’t do it for me. They avoid the question by claiming mankind is inherently immoral. Even if that were true, it would explain nothing.

What I want instead is a way of understanding why conventional approaches to moral rules—based, as they all are, on a combination of stick-and-carrot and pleasing the powerful—are never make mankind any less inconsiderate and selfish than we are today.

I think I may have found one, based on understanding the fundamental difference between morals and ethics: morals are external, imposed rules; ethics are principles derived from individual thinking.

Thought is the basis of ethics

What started me on this track was an article on the HBR Editor’s Blog and the link there to a book by a fifth-grade teacher called Rafe Esquith, who for decades has been teaching groups of the children of Latin American and Korean immigrants at Los Angeles’ Hobart Boulevard Elementary School. Esquith has written a book about what he has learned from this, called “Teach Like Your Hair’s on Fire: The Methods and Madness Inside Room 56.Æ

What Esquith uses to teach his students ethical behavior is a structure for thinking; a ‘template’ to help them grasp the basis of ethical behavior and why it depends on them, based on psychologist Lawrence Kohlberg’s Six Levels of Moral Development.

I have adapted my own version, which helps me understand why people approve of ethical behavior when asked, yet consistently fail to put it into practice in their lives. I call it ‘The Six Stages of Ethical Understanding’.

Many people, even highly educated ones, are stuck in Stages One and Two. Many more never go beyond Stages Three and Four. None of these stages require ethical thought, since they consist in doing what others want to gain reward or approval and avoid punishment. Only in Stages Five and Six, the least common, do you encounter a need for thought, reflection and personal choice.

Forget the stick and the carrot; ignore pleasing others

No stick-and-carrot, reward-based system of ethics ever works for long, since rewards lose their value and people find ways to avoid the punishments, either by concealing what they are doing or weaseling out of the consequences. One of the reasons why greed and dishonesty have been so rampant in business in recent years—and probably always were—is that the basic business attitude encourages nothing more that this ‘don’t be found out’ approach.

Being ethical only to please those in authority, like the boss, has similar drawbacks. Rules, it’s said, are made to be broken—or, at least, evaded with the help of cunning lawyers. Information rarely makes it to the boss if a subordinate is sufficiently determined that it shall not. It also encourages others to inform on wrong-doers as a way of advancing themselves.

True ethics arises when people take the time to think and question what values count for most, what standards are needed for a civilized society and why ethics are needed in the first place. By discovering their own needs and standards, they establish principles they are far less likely to break or evade than those imposed on them by others.

It’s easy to confuse ethics and morals, but they are quite different. Morals are sets of rules, imposed from outside, like the Ten Commandments. Ethics is a process of personal exploration and thought, with the aim of discovering what ways of behaving are necessary to have the type of life you want in the the kind of society you are happy to live within. Morals are authoritarian, derived from society at large and usually restrictive (“Thou shalt not . . . ”); ethics are democratic, individual and derived from living freely (“This is what I understand to be right for me . . .”). Morals come from control by someone of greater power than you; ethics come from within.

Give me ethics every time.

Technorati Tags: corporate ethics, business ethics, morality, honesty, integrity

“There art two cardinal sins from which all others spring: impatience and laziness.” ~ Franz Kafka
 

The other day I was speaking with a neighbor—a single, 50-something woman who’s a high-level executive for a Fortune 50 company. She was coming home from work, carrying some packages. At the end of our conversation I said, “Enjoy your evening.” She replied, “Oh, I will. I have some delicious take-out.” Perhaps feeling this remark needed some context, she added, “I have some good stuff in the fridge, but these days the microwave just takes too long.”
 
Impatience is a familiar topic. At work, it causes people to be abrupt with colleagues and customers—cutting them off, interrupting them, and pushing them away if they don’t get to the point quickly enough. It makes us more prone to giving up too quickly on tasks that require focus and concentration; more likely to try to save time by cutting corners, being unethical, or not acting with integrity. It leads to increased stress, burn-out and anxiety. It even contributes to today’s obsession with being in control. If you have to rely on others, they may take too long.

We’re all in a hurry. Why?

There’s plenty of evidence that impatience causes us to spend inordinate amounts of time and energy repairing, re-working and re-doing what we did when we were impatient. Sadly, we live in a culture of ‘hurry up’—of fast-food, immediate gratification and impulse purchases. We act as if delay spells d-e-a-t-h. We’re like sharks who have to keep moving to get oxygen into our lungs.

But why are we in such a hurry to get to the next thing? What’s the rush? What happened to taking time to enjoy things fully? What happened to patience?
 

No time to breathe

This obsessive need to be somewhere else has created a joy-less life for many people. They can no longer find any meaning or interest in where they are right now. Happiness is always somewhere else; somewhere away ‘over there’ they must rush to get to. In their obsession with dropping this to get to that, they create a life filled with haste and empty of pleasure, joy and happiness. They’ve become so conditioned to being impatient they cannot settle, breathe or be at peace. They must always hurry on their way to the Nirvana they seek. Sadly, of course, they never get there. 
 
Instead, they race through life, giving up the capacity to experience happiness in the moment. They live in a constant state of frenzy and frustration. What they seek is always ahead of them—always just out of reach, however fast they run to catch it—like the cartoon donkey chasing a carrot being dangled in front of its nose by the rider on its back.
 

How to improve your patience

• Be aware of your feelings of impatience. Sense where and how they show up. Then allow your impatience. Don’t fight it. Don’t judge it. Don’t tell yourself a story about it. Just allow it to be.
• Breathe deeply into your belly. Feel your feet on the floor and, if sitting, feel your butt in your chair. Allow the floor to support you; allow your chair to support you. Breathe deeply.
• Send your breath to any areas of discomfort in your body. Don’t try to make anything happen. Just send the breath to the areas of discomfort.
• Notice your experience and as you do, time will begin to expand a little, then a little more, and a little more. As you watch yourself in this experience, the discomfort, the agitation and the impatience itself will begin to dissipate.
• See what replaces the impatience. As your feeling of impatience subsides, you’ll fine an opportunity to experience an inner OK-ness, right here and right now, in this moment. There’s no need to be somewhere else.  Patience has arisen in this moment.

Impatience is an ego-mind quality. The mind always needs to be “somewhere else.” Patience is a heart quality. The heart is just fine, right here, right now. This capacity to be in the moment brings focus, clarity and discernment. It is a state of responsiveness, not reactivity.
 
What does patience mean to you? Has it taken on a negative connotation? When you hear the phrase, “Be patient,” how do you feel? Do you dislike waiting? If so, why?

“Learn the art of patience. Apply discipline to your thoughts when they become anxious over the outcome of a goal. Impatience breeds anxiety, fear, discouragement and failure.” ~ Brian Adams

Technorati Tags: patience, being in the moment, enjoying life, relaxing

From business hero to criminal swindler. It has all happened before—if you take the trouble to look.
 

George Hudson ‘The Railway King’ (1800–1871)

Sometimes writers really do seem to foresee the future—though I suspect it’s more a case of stating what is clearly true, but people have temporarily forgotten. One of the attributes of chance events is that what goes around, comes around. Only recently, I was reading about an entrepreneur in Britain who got in on the huge boom in building railways in the 1840s. His name was George Hudson and people at the time called him ‘The Railway King’—until his ‘empire’ collapsed into bankruptcy, taking their savings along with it.

What was especially striking was the way in which his actions, nearly 170 years ago, mirrored everything from Enron to Bernard Madoff. Hudson bought up existing railways, promoted more and shamelessly used his position as a Member of Parliament to push his own interests and thwart those of his rivals. He published vaguely worded and heavily doctored accounts (sometimes no accounts at all). Like Madoff (and long before Ponzi), he paid huge ‘dividends’ to shareholders using the money paid in by new investors to buy more shares. He also creamed off vast sums into his own pockets to fund a lavish lifestyle and pay out ‘sweeteners’ on all sides.

When the bubble burst, he was charged with bribery, corruption and stealing the enormous amount of 600,000 pounds (probably close to Madoff’s billions of dollars in today’s money), fled to France and died in poverty. He wasn’t the first and he won’t be the last to act like this. It’s all there in the history books. I guess no one ever reads them or thinks about what they might teach us.

What happens when trust collapses?

Coming much closer to our present times, Charles Handy wrote this in a December 2002 article for Harvard Business Review (“What’s a Business For?” ):

“The markets will empty and share prices will collapse, as ordinary people find other places to put their money—into their houses, maybe, or under their beds. The great virtue of capitalism, that it provides a way for the savings of society to be used for the creation of wealth—will have been eroded. So we will be left to rely increasingly on governments for the creation of our wealth, something that they have always been conspicuously bad at doing . . . Trust is fragile. Like a piece of china, once cracked it is never quite the same. And people’s trust in business, and those who lead it, is today cracking.”

Macho management places suspicion and lack of trust at its center. Company executives not only distrust their own employees, suppliers, customers and society as a whole, they don’t even trust each other. Once their selfish actions come to light, of course, they also forfeit everyone else’s trust in them. Witness the way people all around the world have heaped abuse and derision, not just on those directly involved in the risks that broke the banks, but just about everyone else employed in financial companies.

Can we ignore the social impact of commercial actions? I think not. Business and trade used to be seen as the preeminent force for peace and civilization, replacing feudal bickering over land and titles with the solid co-operation essential to successful trading. Promoting wealth through trade, rather than stealing it by war and conquest, requires people to be honest, to respect contracts and collaborate readily with strangers. Over time, warlike kings became poorer and merchants richer, proving the point that the pen (and the ledger) is mightier than the sword.

Somehow we seem to have lost that. The cult of macho management denies any links between business practice and morality, citing pure self-interest as not just acceptable, but required for markets to operate properly.

But thinking this way inevitably leads to a loss of trust and legitimacy. History proves that again and again. Business today has become more merciless and warlike, even as warfare has become ever more dependent on society’s skills in technology and manufacturing, rather than the individual prowess of warriors on the battlefield.

Do you get it yet?

Even today, there are some who still encourage the kind of macho management that’s based on maximizing short-term profits and executive pay, while ignoring the wider public good. In a forthcoming book, “Think Like a Champion: An Informal Education In Business and Life” Donald Trump (hardly an exemplar either for trust in commerce or successful enterprise) says:

“Business is about making money. It’s about the bottom line. The sooner you realize that, the sooner you’ll get a grasp about what business is. I’m very often surprised by people who think business is something else. They come in with lofty ideas and philanthropic purposes that have absolutely no place in a business meeting. It’s a waste of everyone’s time.”

With an attitude like this, it’s hardly surprising that many organizations still see themselves as somehow outside society—neither bound by its rules and norms, nor concerned with its stability or prosperity. How they expect that same society to have the money to buy their goods and services is beyond me.

Trust is crucial to a civilized way of life, but it is also very easy to abuse. As the present crisis graphically shows, too much is as bad as too little—though the laissez-faire approach of the past decade or so could better be described as apathy than trust. Badly burned by all that has happened, banks and businesses went overnight from trusting almost anybody to trusting virtually nobody.

How can we get back our trust in business? I would be very interested in your thoughts and ideas.

Technorati Tags: business ethics, honesty, trust, the purpose of business, business and society, corporate culture

Another case of look before you leap?
 

Downsizing—laying people off—is the immediate response of macho managers to corporate profitability problems. It’s conventional wisdom that cutting costs—especially labor costs—is the best way for a company to get back on its feet.

But does it work?

An interesting article by Professor Freek Vermeulen on the Harvard Business Publishing blog reviews the evidence and suggests an answer (“The Tricky Truth About Downsizing”).

The answer? Not very often. On average, they simply don’t work. For example, professors James Guthrie, from the University of Kansas, and Deepak Datta, from the University of Texas at Arlington, examined data on 122 firms that had engaged in downsizing and statistically analyzed whether the program had improved their profitability. And the answer was a plain and simple “no.” The average company did not benefit from a downsizing effort, no matter what situation and industry they were in.

It looks as if this is yet another management myth. Organizations are much more than financial entities. Over the last few decades, our obsession with accounting practices, financial trickery and the primacy of ‘shareholder value’ (another myth), has blinded us to the basic fact that organizations are as much human systems as financial ones.

Only organizations that treat their ‘human resources’ with the least as much care as their finances stand any chance of coming out of this recession in reasonable shape.

Technorati Tags: downsizing, lay-offs, cutting costs, evidence-based management

The curious world of the ‘morally disengaged’
 

People routinely behave in unethical, immoral and untrustworthy behaviors, yet a good many hardly ever experience one scintilla of guilt. They behave dishonestly, then somehow rationalize their behavior to let themselves off the hook. Why do they do this? How do they live with themselves?

Psychologists tell us that ‘moral self-regulation’ and ‘moral disengagement’ can both lead to dishonesty. These two modes of reacting to a dishonest act allow the perpetrator off the hook. They either interpret what they do in a way that lets them link their act to moral goals or values (moral self-regulation); or they uncouple their dishonest behavior from their personal conception of moral values altogether (moral disengagement). What we seem to be experiencing now is more and more of the latter.

“The ideals which have always been before me and filled me with the joy of living are goodness, beauty and truth. To make a goal of comfort or happiness had never appealed to me; a system of ethics built on this basis would be sufficient only for a herd of cattle.”—Albert Einstein

Dealing with ‘cognitive dissonance’

A person who behaves dishonestly and unethically usually experiences both a mental and physical reaction. Mentally, knowing that there is a disconnect between their action and their value system, they experience what psychologists term ‘cognitive dissonance’. Physically, there is a ‘felt-somatic’ sense in the body that is experienced as discomfort.

How do they come to grips with these sources of distress? To either see what they do as somehow morally permissible, or remove any moral aspect altogether, they resort to ‘moral disengagement’. They disengage their actions from their sense of right and wrong; for example, to benefit from other people’s dishonest or unethical behavior while buying cheap clothes from a company that ignores human rights and uses child labor.

Guilt, shame and self-regulation

The ego-need underlying moral disengagement is to absolve one’s self of guilt, blame or shame for dishonest actions. By deciding to act dishonestly, then morally disengage, people set themselves different standards to those they impose on others. Simply put, given the same dishonest behavior, they accept themselves as ethical and judge that you’re not.

The large number of hypocrites who have surfaced or been ‘outed’ recently—corrupt politicians, cheating sports stars, crooked financiers and immoral religious leaders—provide a prime example of the duplicity that moral disengagement perpetuates.

What do these people tell themselves? Perhaps things like these:
“I may have slipped this time, but overall I engage in more ethical behavior than others.”
“I am less unfair than many others. You’re simply picking on me.”
“Everyone does it. I’m just surviving like they are. It’s unfair to single me out.”
“I have a right to be more suspicious of others’ actions than they do of mine. I’ve been hurt too, you know.”
“Sure, I like money, but there are many others far more greedy and driven by money than I am.”

The truth is that everyone has the ability to view their actions and either act morally or not; we all face the choice to behave well or badly; and we all need to accept that others will—rightly—judge us by our actions. We choose to disengage morally or stick with our values and sense of ethical standards.

Workplace ethics

The ethical and moral bottom line is whether to consider ethical standards, a moral code, or inner values in deciding your conduct. Yet the degree to which any individual will do this often depends as much on the environment and culture in which they find themselves as the strength of their own ethical convictions.

As you reflect on your workplace environment, ask yourself what is the culture around notions like dishonesty, cheating, lying, or behaving unethically. What are the tacit, subtle or unwritten rules that are applied to dishonest or unethical behavior? Is moral disengagement a business-as-usual strategy? Is there a sense of pervasive dishonesty?

In the final analysis, you are responsible for your own actions. Excuses like “The devil made me do it” or “Everybody does it” do not apply—ever. You and you alone are responsible for moral engagement or moral disengagement. Whether you ‘go along to get along’ or choose to adhere to your internal values and sense of ethics and honesty is always your choice.

Given the strong force of peer pressure and the almost obsessive need to ‘fit in’ or be accepted as ‘one of us’, even those with a strong internal core-value system can still succumb to an unethical environment. Where opportunities, pressure or ‘silent consent’ drive people to lie, cheat and steal, even many of the strong-willed will do so.

Moral disengagement has become the ‘behavior-du-jour’. When we uncouple our behavior from our internal moral code, and detour from our moral compass with an ends-justify-the-means or everybody-does-it mindset, we are running the risk of accepting—even encouraging—a culture that may later turn around and bite us.

Here are some questions it may be worth asking yourself:

• Do you go along with a culture that invites dishonesty? In your workplace culture, is unethical behavior OK because others are doing it?
• Do the ends justify the means? Do you use euphemistic language to sanitize or condone moral disengagement?
• Is it usual to assume getting ahead is more important than how you get there? Is cheating OK “if no one gets hurt?”
• In your organization or department, are there open discussions about ethics and standards? If not, why not?
• Do you ever use moral disengagement to justify your own unethical or dishonest behavior? If so, why?

Technorati Tags: business ethics, workplace standards, corporate culture, why peole cheat, moral disengagement

Maybe it’s time to ask some fundamental questions about the purpose of business.
 

Reading Simon Caulkin’s column last week brought me up against a fundamental question: as the recession tightens its grip, more and more people lose their jobs and we discover ever more dubious actions taken by large (and formerly respected) organizations, should we be reformulating our views about the purpose of work?

Caulkin reported on a seminar entitled ‘Recession: health and happiness’, organized a week or so ago by Britain’s Economic and Social Research Council. One of the topics raised at that meeting was the direction of public policy in supporting business and trying to help us out of the recession. During the debate, Richard Layard of the London School of Economics and Warwick University’s Professor Andrew Oswald argued that the aim of public policy should switch from boosting GDP growth to measures that more directly relate to human happiness.

That’s a revolutionary concept. Should the value of a business be measured, not by how much wealth it produces (the conventional view), but by how much happiness it generates and for how many people?

Some of what lies behind this thinking is the so-called Easterlin Paradox—a key concept in ‘happiness economics’. In the 1970s, American economist Richard Easterlin sought evidence for what made for happiness. As most of us would expect, he found that people in a given country who earn more are more likely to report being happy. However, if you look at international comparisons, he said, the average reported level of happiness does not vary much with income per person—at least for countries with incomes generally sufficient to meet basic needs. And although income per person rose steadily in the United States between 1946 and 1970, average reported happiness showed no long-term upward trend—and actually declined between 1960 and 1970.

Unemployment harms people more than we think

While trying to cope with recession and cut-backs makes everyone less happy, we should not underestimate the truly devastating effect of unemployment. Yet, so long as the opinion remains dominant that the main (even sole) purpose of a corporation is to create wealth for its shareholders, those effects—as bad for individuals’ well-being and happiness in many cases as divorce or the death of someone close to them—have been widely ignored in public policy and corporate deliberations. As Caulkin writes:

“Over the past 30 years of shareholder dominance, however, redundancies have become the measure of first resort rather than last. However, while shareholders may be temporarily mollified, sackings frequently cast a pall over the survivors, with dire effects on engagement. Lower costs but higher disengagement is not likely to be a winning trade-off in an environment where attracting customers may be key to survival.”

If, as conventional management theory claims, the duty of management is to maximize shareholder (or stakeholder) value, a cursory glance at people’s 401(k) retirement funds, or just about any mutual funds, will be enough to show how dismally they have failed. Rather than increasing value, several decades of unbridled take-over activity, macho management and obsession with numerical measures have destroyed that value on a gargantuan scale.

Nor have other ‘stakeholders’ fared better: employees are being laid off in unprecedented numbers, suppliers are facing ruin and even customers are faced with cutbacks in service and limited options. It’s a wonder that there aren’t many more unemployed executives out there, given their appalling levels of performance against the standards they claimed to espouse.

Is shareholder value the wrong metric?

The view of the economy as nothing but a financial operation for shareholders and highly-paid executives is now being challenged. ‘Happiness economists’ focus on the notion that purely financial measures of a country’s success—such as GDP or average income per capita—are inadequate. The real indicators of national ‘wealth’, and the true purpose of government, is more closely linked to the oft-quoted words in the U.S. Declaration of Independence—that people have a self-evident right to: “. . . Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, [and] That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it . . .”

Looked at this way, the age of unrestricted economic self-interest has turned out to be as destructive of human happiness as it has of the economy. As I pointed out last week, even Jack Welch now admits that chasing ‘shareholder value’ as the prime purpose of business was a dumb idea. Maybe a more civilized and human-centered approach could benefit us all. Surely it’s worth trying, given the way the current orthodoxy has ended in disaster?

Many Japanese companies go to extraordinary lengths to avoid lay-offs of permanent staff and commit themselves publicly to maintaining lifetime employment. In contrast, the Anglo-American view stresses work as a purely personal matter; whether you have a job is pretty much up to you. In lands dominated by conventional free-market, capitalist economics, jobs simply form another market—sometimes vibrant, sometimes not—as subject to the ‘laws’ of supply and demand as any other. You sell your labor to an employer, seeking the highest price you can get. The employer buys it, seeking to pay as little as possible.

On that basis, it is quite logical for employers to take on the minimum number of people they can get away with; and to fire them as soon as their cost becomes difficult to meet. It is also logical for employees to look only at the wages paid and leave immediately they can get more money elsewhere. There’s no call for loyalty on either side.

Of course, in reality, we know business cannot behave that way. The only result would be ever-increasing salaries as people kept swapping jobs for more money, until the employers were priced out of the market. Loyalty is essential to keep a trained and experienced workforce. What we have seen, however, is an attempt by corporations to make that loyalty work only one way.

Is there a more civilized approach?

In contrast, try to keep people in work is an obvious expression of confidence in the long-term future, both by corporations and governments. After all, firing employees sends a simple message that your business is going to be too weak, too small or too close to bankruptcy to need them. If actions speak louder than words, all the words about “employees are our greatest asset” are plainly nonsense, if the first action on encountering tough times is to lay off those ‘assets’ in droves. All that demonstrates is that protecting the wealth of the shareholders and executives is the first—sometimes the only—area of interest.

Maybe today’s business leaders should reflect on this simple question: if you let your skilled and experienced employees go to achieve lower costs and higher profits, how will you defend those profits against the competition?

Wrecking morale, encouraging those with the best chance of getting other employment to leave, and overworking those who remain—all common effects of widespread lay-offs—is hardly likely to be a winning strategy in an environment where attracting and retaining customers may be main key to survival. If all those macho bosses aren’t swayed by humanitarian arguments, or simple human feelings, maybe looking at the economic effect of lay-offs will attract their attention?

A narrow-minded, selfish emphasis on personal wealth is perhaps not surprising amongst the rich. But if government is truly instituted to “ . . . secure these rights [life, liberty and the pursuit of happiness] . . .” as the U. S. Declaration of Independence states, and “. . . whenever any form of government becomes destructive of these ends, it is the right of the people to alter or to abolish it . . .”, today’s politicians should probably be worried about their security of employment.

Technorati Tags: leadership, shareholder value, purpose of business free-market capitalism, future of capitalism, unemployment

Can we make competition more of a positive force?
 

I’ve written several articles in the past few weeks that have been rather critical of workplace competition—or, at least, how competition is being used in many organizations. Perhaps it isn’t surprising that some readers have taken me to task for painting a gloomy picture of what they experience as a good way to motivate themselves and others. That started me wondering. Competition clearly can be both a positive and a negative force. What makes the difference? Are there ways to recognize what produces the positive kind of competition (and could be encouraged) and what gives the negative type that I wrote about.

These are my initial thoughts on the subject. If you would like to add your experience and views, please leave a comment that we can all share.

What makes competition positive?

Sport is often used as an analogy for business, especially by those who advocate the motivating powers of competition. Most sports match all these requirements. To be motivating, I think competition needs to match the following requirements.

• It must be entered into willingly (or be self-imposed). It must be your free choice to compete, both in what that competition is and how far you want to take it.
• Standards for winning need to be objective and fully understood in advance. There must be clear ‘rules’ that aren’t changed during the ‘game’ or subject to the whims of a few people.
• There must be a variety of levels of ‘play’. The level of ‘play’ needs to be adjusted to allow for ability, experience or keenness. In golf, for example, the level of play expected of the Sunday golfer isn’t the same as that expected of Tiger Woods. Everyone must have some reasonable expectation of being able to ‘win’ at his or her appropriate level. Moving to the next level must be voluntary and the step up not too great.
• Rules and standards must be applied evenly to all competitors. No ‘favored few’ who get a free pass due to personal influence.
• Cheating must be rigorously discouraged and, where necessary, punished. All wins must be fairly due to skill and dedication. Losers will always be demotivated unless they can easily accept that those who won ‘played’ better than they did.
• Umpires must be scrupulously fair and objective; as must all decisions about winning, losing or the margin of defeat.
• You must always be free to refuse or step away from a challenge you aren’t ready or willing to take on.
• There must be no punishment for losing.

What makes competition destructive?

Many workplace situations are characterized by a very different list of attitudes and behaviors.

• Both the fact and the extent of competition is imposed. You have no choice about taking part or at what level.
• There are no clear rules and the standards for success can be changed arbitrarily, even while the ‘game’ is in progress.
• The expectations that have to be met to win are likely to be very high, even impossible for nearly everyone to meet, but they are still imposed regardless.
• Such ‘rules’ as there are tend to be applied unevenly and in discriminatory ways. Certain groups (women and minorities, for example) are expected to reach higher standards than the rest for the same reward.
• Cheating is often tacitly rewarded or deliberately overlooked. Those in charge of rewards act on the basis that winning is all that counts, however it was achieved.
• The decisions of the ‘umpires’ (bosses making performance ratings, for example) are arbitrary, subjective and capricious. Who you can get on your side often matters more than your ability or standard of ‘play’.
• No one is allowed to step away from challenges they don’t want to take on—or can do so only great personal or career cost.
• Losing is punished more often—and more severely—that winning is rewarded. The competition is for survival, not displaying skill or improving knowledge.

Liars, damned liars and macho managers

If all competition was truly based on the ‘motivating’ characteristics, I don’t think anyone would have an issue with it. What I see today are organizations claiming benefits from competition based the kind represented by the first list, while using competition that works according to the second list of characteristics. It’s another case of, “don’t look at what we do, look at what we say we do.”

That’s why I go on warning that macho managers routinely tell lies about their actions and cannot be trusted to behave fairly or honestly—especially where they can gain personally by hiding behind a false analogy like sport. If any sport was played according to the methods on the second list, I cannot imagine it would be fun to play or tolerable to watch—unless you count cock fighting, bear baiting and gladiatorial duels as sport.

If managers are going to use competition to motivate, they have to follow the ‘rules’ as well. If not, let them be honest about what they are doing: not setting up fair competition but running a casino with loaded dice.

Technorati Tags: competition, motivation, workplace standards, how to motivate, fairness, corporate culture, ethics

Why you need convictions even more in turbulent times
 

I don’t mean the kind that come as a result of appearing in a court of law; I mean the type that the Merriam-Webster dictionary defines as “. . . a strong persuasion or belief; the state of being convinced.” ‘Conviction’ and ‘convinced’ come from the same basic word and idea: that you hold to a position because you have examined the evidence and reached a firm conclusion. Anyone can hold some belief or an opinion on any basis whatever—with or without actual evidence—but, for me, a conviction can only come about as a direct result of discovering, weighing and sifting evidence, for and against, and using your mind to come to a reasoned position.

I think this is important. The workplace, and management teaching and practice in general, are full of unexamined beliefs and opinions: notions that exist on the basis of hearsay, anecdotes, insufficient evidence, disproved evidence or no evidence at all. Where are the skeptics ready to point out how many organizational emperors have no clothes?

I recently came across this quotation from Josef Stalin, the former Soviet dictator, which seems to me to sum up perfectly the attitude of all too many of today’s macho managers: “I prefer my people to be loyal out of fear rather than conviction. Convictions can change but fear remains.”

Convictions can indeed change. That is their strength. Since real convictions depend on rational agreement to a body of evidence, if new evidence comes along (or old evidence is disproved) a conviction can, and should, be changed or dropped altogether. Dictators, whether they are found in presidential palaces or corporate boardrooms, dislike the whole idea of ‘ordinary’ people questioning what they have been told. It makes them too hard to control and threatens the dictator’s security and position. That’s why they prefer to rule by fear and impose obedience to their views.

“But I have a right to my beliefs, don’t I?”

One of the attitudes that I often observe—and dislike greatly—is summed up in that trite phrase: “I have a right to my beliefs.” Like all truly pernicious ideas, it is both true in one sense and dangerously false in another. In a free country, no one should be forced into accepting anything that they don’t truly believe, whether by social pressure, political pressure or any other kind of coercion. In that sense, you do indeed have a right to your beliefs, provided that you don’t act them out if that will produce behavior that is contrary to the law.

However, this isn’t how the phrase is generally used. Instead it’s used to prevent challenges to irrational and evidence-free beliefs. It’s used to claim that you should not be asked to explain why you believe whatever you say you do; that for anyone else to challenge your beliefs is somehow unacceptable. A manager can believe, for example, that people will only work if they are bribed or forced to do so, and—despite all the evidence proving that this is not so—he or she can create a corporate system built on that myth, and inflict it on others, because that is what they believe. . . and (chorus) they have a right to their beliefs and opinions.

Let’s be plain. No right of free speech can make what you say correct. You may be allowed by the law to say it, but that doesn’t stop it lying anywhere along the spectrum from sublime truth to total rubbish. Besides, I cannot see that anyone has a ‘right’ to push their opinions onto others—especially if those views ignore plain, basic facts—just because it suits them.

“But it’s what I feel!”
Another pernicious idea going the rounds equates emotion—passion—with some species of correctness. If you believe whatever you believe with real emotion—if you’re passionate in your belief—that somehow makes it better or more ‘authentic’. That’s an abuse of the concept of authenticity. Why should it matter if your passion is authentic, if what it’s directed towards is wrong?

If you are truly passionate about something, the passion itself may be authentic, in the sense that it is real to you. But, if you use ‘authentic’ in the sense of “based on fact; not fake or imitation,” a good deal of the passion being spread around in the world is definitely not based on fact—it’s based only on myths and common falsehoods. Quite a lot is fake too, acted out by people who have found it a useful way to sell anything from dubious ideas to cheap make-up.

The poet W. B. Yeats expressed this clearly in his poem ‘The Second Coming’ where he wrote:

“Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.”

Today too, the ‘best’—in the sense of those who would try to base the way we live on civilized and rational principles—seem dangerously short on real conviction, while there is no shortage of passionately intense proponents of panaceas, quick fixes and hokey ‘cures’ for all our ills.

Since when has emotion been proof of anything save itself?

Where next?
What are you truly convinced about? How rigorously do you check out whatever you put your trust in, whether fact or system or teaching? How openly do you base your actions on your convictions? How ready are you to change them if the evidence moves against you?

I ask because, if thinking people fail to stand up for rationality and evidence, we will get the alternative: a world of work dominated by passionate advocates for untested and irrational notions, often backed up by force.

The more confused and afraid people become—and there’s a good deal of both around right now—the more they long for some certainty in the world. The proponents of blind belief are right there, handing out fake versions of certainty. It’s tough to be the person who points out the plain truth that there is no certainty in the world (and never has been), but vitally necessary if we’re not to be swept along by plausible, power-mad rogues.

The only bastion that’s proof against the most passionately held belief in nonsense is to demand the evidence. Skeptics often have a bad name (usually given them by people who fear that the skeptic will uncover their particular fraud), but they don’t reject all beliefs. They just want proof before believing.

Is that so wrong?

Technorati Tags: security, beliefs, opinions, evidence, evidence-based management, proof, skepticism, faith

Bastardized ideas of ‘the survival of the fittest’ still plague the workplace
 

2009 sees the bicentenary of Charles Darwin’s birth and the 150th anniversary of the publication of his seminal work, ‘On the Origin of Species’. It’s sad, therefore, to note that the principal form in which many people encounter his world-changing idea is a bastardized, superficial set of notions greedily seized on by self-serving bosses: I mean the notion that cut-throat economic competition is normal and that the strongest—in a basic, brutal sense—will always rise to the top; that macho management and exploitation of anyone weaker than you is part of the ‘natural law’ and the inevitable course of history.

Simon Caulkin wrote a powerful article attacking this debased from of corporate Darwinism recently. In it, he wrote: “Bastardized and coarsened, the concept of “the survival of the fittest” (a phrase only later adopted by Darwin from Herbert Spencer) has powerfully shaped modern business. The robber barons of the early 20th century quickly latched on to the self-serving idea that “might is right”—cut-throat economic competition was the normal state of affairs and the rise to the top of the strongest was part of natural law and the inevitable outcome of history.”

How did this silliness arise? What possessed us to imagine that Darwin’s theory of gentle, gradual and typically minor changes over untold eons of time, all based on producing a better fit between a creature and its environment, could be used to justify dramatic, all-or-nothing, violent and impulsive actions by testosterone-fueled corporate martinets intent on self-aggrandizement?

Out-of-date, out-of-touch and out of ideas

As Caulkin says, John Maynard Keynes wrote:

“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist.”

I would add that the vast majority of managers and leaders, practical people all, are nowadays the unwitting slaves of long-defunct management theorists and writers.

It saddens me that, even in the face of global economic meltdown, people are still trotting out the same tedious Anglo-American ideas on management that got us into this mess in the first place.

Let’s be plain. The conventional economic and business approaches of the past hundred years or so have failed. Not failed a little. Not shown themselves to be in need of minor modernizing. They have failed. They don’t work in today’s climate. I don’t know what will—I wish I did—but I sure know what won’t and that’s ‘more of the same’.

The natural law of extinction of the most rigid

When creatures or species become hopelessly out of sync with a changed environment, what follows is extinction. The dinosaurs were massive, powerful, superbly developed creatures who ruled the Earth for millions of years. Something happened that changed their environment, most of them failed to adapt, and they were gone. Only the species that could cope with the changed situation are still around today. If you want a ‘natural law’, that’s one you can be sure of.

When you consider the leaders of all too many organizations, you find people who don’t even recognize that the environment has changed, let alone have any ideas about how to cope with it. Nor do most management theorists help, let alone the business schools. They’re just as stuck in the past, still teaching ideas that were new seventy or more years ago and haven’t seriously been reconsidered since.

Today’s business isn’t like the business of the nineteenth century—nor that of the early twentieth, which was when nearly all today’s management theories were derived. The world is a different place. Henry Ford did not have to cope with global competition and outsourcing to low-wage economies. He sold cars to the masses who had none. His successors have to try to sell cars to people who see a car, not just as a basic necessity of life, but as a fashion and lifestyle statement too; people who can buy a car from manufacturers based almost anywhere in the world. Try telling them they can have any color so long as it’s black.

Dangerous toys

The basic problem behind our financial crisis was not excess credit or poor risk management (though both played a major part in the outcome). It was financiers and bankers playing with new kinds of securities invented on virtually a weekly basis: securities that almost no one understood and whose value depended on arcane calculations so novel that even their inventors got them wrong.

We took basically nineteenth-century banks and bankers and gave them powerful and dangerous toys to play with that were still being designed, and whose side-effects were totally unknown. It was like giving a doctor used to leeches access to a slew of unproven products of genetic engineering. Is it any wonder it all went wrong?

What does this mean for you?

In case all this seems like so much irrelevance to individuals in the workplace, let’s bring it down to earth. Most of what you think you know about management is wrong. Much of it is a mixture of folk wisdom, mythology and rules-of-thumb. When you are asked to lead a team, unless you start thinking for yourself, you’ll simply repeat the failed nostrums of yesteryear. How much will that help you or your career?

When people claim to be able to prove their ideas with statistics, how able are you to consider their claims for yourself? How easily could some self-proclaimed ‘expert’ fool you with glib words and fancy PowerPoint slides? How much time do you allocate to thinking through the implications of what you see around you, or questioning the assumptions you’ve been taught to make by others?

If ‘survival of the fittest’ means anything in today’s workplace, it surely means that people who can think and question and test out their environments for themselves will have the edge over those who are forced simply to accept what others tell them. Remember Bernie Madoff. Smart people gave him their money willingly, seemingly totally relaxed with the notion that no one had the slightest idea how he produced the investment returns he claimed. Now it seems he never invested it at all.

If voodoo like that is what you trust, you’ll find plenty of people—and leaders—happy to oblige you. What will happen to you? I don’t know, but I’d be pretty worried if I were you.

I’ll leave the last word to Charles Darwin:

“It is not the strongest of the species that survive, nor the most intelligent, but the ones most responsive to change.”

Technorati Tags: change, management, leadership, survival of the fittest, business ideas, management myths

I found Peter Vajda’s article on envy today quite fascinating, so I spent a little while exploring the topic of workplace jealousy a little further. It’s not something that’s discussed very often, but I suspect feelings of jealousy—and associated attempts to put the favored person in their place—have a much greater impact on many decisions that we would like to admit.

Envy is based mostly on the fear of losing something, like social standing or hierarchical position relative to others or a sense of personal worth. What’s odd about it is that is nearly always a fear of losing something you don’t actually have. When you think about it, like all such fears, envy is typically based on concern about what will happen, or may happen, sometime in the future. If someone gets a promotion you wanted, you may be jealous, but nothing has actually been taken from you. You didn’t have the promotion before and you don’t have it now. All that has changed is that someone else does. The same is true of the big bonus or the favor of the boss. Though we treat envy as theft of what we believe we ought to have, that’s only rarely the case. What we have lost is the expectation of something, not the thing itself.

In an article by Bruna Martinuzzi, I found this statement:

“There are many reasons for envy to manifest itself in the daily theatre of the workplace: Competing for scarce resources or limited budgets, and vying for important assignments, are commonplace situations that can trigger predictable envy; Coveting attributes and qualities a colleague has that another might lack is another understandable possibility in the frailty of human nature; Losing a promotion to someone better qualified can also be a trigger for envy. Many of these situations are normal occurrences and cannot be avoided.”

I’m sure you can think of even more envy-laden situations, especially today, when a favored few seem to be insulated from the problems of the recession by fat bonuses and the rest fear even for the salary they have. Dr Robert P Vecchio, Professor of Management in the University of Notre Dame’s Mendoza College of Business, who died this month at a tragically early age thought envy is “commonplace in work settings in part because of the inherent competitiveness of organizational life”.

So what happens if our management theories serve only to increase the amount of open competitiveness around us? Is competition such a healthy and desirable way to motive people, if it also going to lead to a sharp increase in the incidence of envy and jealousy? Leon Gettler, writing for the Australian newspaper The Age, said:

“Workplace envy does not just happen by itself. And it’s wrong to put all the blame on the person consumed by envy. Workplace envy is what you get when you combine emotionally stupid bosses with extremely competitive environments with favouritism, the extreme level of achievement that delivers the promotion and that gets everyone pissed off.”

The English is a little contorted but what I think he is pointing to is that envy can easily by institutionalized by “emotionally stupid bosses” (and equally insensitive management theorists) who see competition and envy only as spurs to action and ignore the corrosive effects they have on many other aspects of the workplace. Given the actual, proven impact of winding up competition in spurring short-termism and excessive risk taking, it may well be worth asking ourselves whether competition is indeed a healthy way to interact with our fellows in the corporate world.

Technorati Tags: envy, jealousy, workplace emotions, competition