From the dark side of business and the growing imbalance of power to making a difference with naming and words.
Lehman Brothers Inc. was an American global financial services firm and the fourth-largest investment bank in the United States. Its founding dates back to 1847. Before filing for bankruptcy in 2008, the firm employed 25,000 people.
A culture of fear permeated the company. Richard Fuld is the former CEO of the only bank that collapsed in the financial crisis. The bank collapsed because they were taking too high risks. Fuld was known for his super aggressive language: “we’re at war,” “we want to kill the enemy,” and when we was talking about ‘enemy’ he meant Goldman Sachs and other financial institutions.
Framing the world — the industry counted as these people’s entire world — in terms of war created an environment where people did “whatever it takes” to win. Leaders have tremendous power in organizations; their words become mantra for the rank and file. Context at work forms from the way we speak, which determines what we think, and what we ultimately do.
But instead of looking at their context, companies and institutions focus on finding and punishing one person: someone who has done something bad. We analyze the person, and overlook the context, the conditions present when decisions were made.
All the hate going out made Fuld “the most hated man in America,” in his own words. In our conversation of the value in ethical decision-making, Prof. Guido Palazzo talked about narrative and the power of words and language. For example, he’s found that changing the name of an activity to position it as a collaborative effort, rather than a competition, changes the results.
I found, however, that it’s not just the words. It’s the thinking as well. I recorded this episode of Conversation on Value the morning I learned of my sister’s death. I’m amazed I was able to function at all. So you’ll kindly forgive me for a slightly faulty microphone in my headset.
Our anger can literally consume us, to the point that it becomes impossible to reason together. Yes, anger can be a motivating force, but only when we get past it and focus on broadening our gaze to potential paths out of our predicament. It breaks my heart that we’re still subject to the illusion that fear and anger can solve anything.
Anger can take hold of us and do a fairly fast job of diminishing us in our beauty and potential. When people tell me about dysfunctional work environments, I often find that it’s the narrative that has gone wrong. From the words spoken, it’s gone to everyone’s heads, but also to their bodies and souls. And now it’s part of the very fabric of the organization.
Many companies hire people for their skills and experience. Yet it’s become harder and harder to provide “proof of life” that will satisfy a hiring committee. Take for example the recent discussion about hiring academics based on their publishing output, rather than their ability to teach. Could the lack of faith in a fair process be preventing companies from hiring the best people? Once inside a company, people are subjected to tight pressure that transforms their judgement. Could the business environment we’ve created be the problem to flourishing?
Prof. Palazzo talks about how speed (in decision making), space (of uncertainty), and social pressure collude. When you have these three, values or principles and outcomes collide, resulting into ethical dilemma. Context then can become stronger than reason.
Climate change is another example of where we go wrong. For years, we believed that if we could only bring facts to the conversation, we would act. But humans don’t act on facts, they act on stories. There’s always a certain component of belief. Our beliefs are embedded in the stories we tell ourselves and each other. And if we facts contradict the stories, we discard them.
Our stories and beliefs make up the larger narrative, which is the neoliberal narrative. Maybe not you and me, but in society — politics, education, decision-making in companies — the belief is that free market means freedom for individuals and consumption makes someone happy. We believe that individuals are altruistic and that the social default is fighting, social Darwinism, and not collaboration. We believe that infinite growth is possible and that if we just globalize “free markets,” democracy will follow.
After World War II these elements coalesced from new and old stories into the homus economicus story. But now, all these beliefs we embraced for so many years are starting to fray and crumble. The grand narrative that existed is now fragmented and is destabilizing individuals and society. There’s an emerging narrative, so far at the margins.*
Change always comes from the edge of the system.
It’s the outcasts, the disenchanted,
the people who cannot fit with the status quo
that build a new narrative.
When the number of people who don’t fit anymore swells, that’s the moment the new narrative starts taking form — with action. But it’s not always a nicer alternative. Fascism emerged from a mix of toxic beliefs, involving artists and futurists as well. History provides a rich repository of stories that can tell us how things went wrong.
Questions are worth exploring to imagine our way into a more desirable future. How can we build a vision for companies where growth is not the aim, but stability? How do you work in a world that is continuously disrupted? What kind of life do we want for our future? By imagining the outcomes we want, we can become better at telling different stories and building the new narrative.
At the heart of our current economic theory is this idea of monetizing the maximum output to measure the happiness of people. Which means we overlook value when it’s not easily (or not yet, or not recognized) attached to a mechanism to generate transformation into socially useful energy. We rarely think that it’s individuals that transform their human capital into intellectual capital that becomes the corporations’ energy in its social form.
Ethics are part of business, they are there. But the way we consider its value is in exchange — a utilitarian view. We have a set of beliefs that are not in touch with reality — trickle-down economics is not real, for example. Buying makes us immortal is another one. There’s a bit of magic in beliefs.
So the big question becomes:
what will be the magic of a new narrative?
You can test values in everyday life. We don’t go to the doctor because she’s trying to make a profit out of us. We go because we believe she knows something that can help us stay healthy. All our interactions are based on beliefs, and there needs to be enough overlap between our beliefs — and that something must be bigger than money.
That’s the art, as Aristotle said. When Prof. Palazzo talked about Patagonia, he focused on how the company’s success depends on the credibility of their promise. They may make a little less here and there, but the consistency in the behavior, even if it costs money, that makes you credible. Ethics most of the time operates in shades of gray: from something right to something more right.
A promise is a good test to tell the difference
between a real and a fake
ethical dilemma.
Say you make a promise to friend that you’re going to help them. Then the sun is shining and you want to go to the beach. And you decide to lie to your friend because you want to go to the beach. In this scenario you have a promise and an egotistical interest. There’s no value here. Ethics is always about social interaction.
Imagine you made that promise to help your friend. But then you remember it’s your grandmother’s birthday and she would suffer for not seeing you. The tradeoff is that you would have to sacrifice your value of duty toward your friend for the loyalty toward your grandmother. That’s the tradeoff: one value over another.
When you’re in a decision-making situation try to understand what are your options. Then see if you can universalize the decision in one direction or another. Ask which values from you are involved in one or the other option and who is affected. It remains a compromise.
How we frame questions and the words we use make a difference. But context still dictates whether they have an effect, especially in the short to mid-term. Values are interesting because you’re constantly trying to strike a balance — dismissing them on one hand of the spectrum, focusing too literally or to excess on the other. Compromise is how you maintain that balance in life, and not just on the balance sheet.
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* A reference to Elena Ferrante’s, In the Margins (Europa Editions, March 15, 2022) translated by Ann Goldstein.
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[Image by Gerd Altmann from Pixabay]