Published in the San Diego Union-Tribune, August 12, 2019
What does it mean to do “the right thing”?
That’s a no-brainer you say, but the devil is not just in the details, it is staring you in the face larger than Godzilla. What is obviously the right thing to do for you, not just from a values perspective, but also from a solid business decision — well, to me your idea of the right thing is absolutely ridiculous. When this happens in a partnership, a company or a marriage, there is a momentary disconnect. You ask yourself who is this person, I thought I knew him, and then he comes up with a decision that is clearly incorrect on multiple fronts.
Doing the right thing is a central tenet of being human. It is the core of the Judeo-Christian heritage. Parents teach this concept to their children. How can we not agree on something that is so basic and obvious?
Well, Stanford Professors Ken Shotts and Neil Malhotra have researched human psychology and ethical philosophy to explore how a leader’s individual values inform business decision making. Often, the leader doubles down on that decision without fully understanding how he got there. This can be seen across multiple themes — environmental, religious, political, financial, health care, etc. If doing the right thing were easy to see and agree on, then what would we argue about at the dinner table?
Malhotra explains that companies create vision statements and mission statements that the whole company buys into, and then the leader often ignores them and uses his own personal value system as the model. As examples, he cites Uber and Theranos, which are only the tips of a very long sword. Did the leaders do “the right thing” from an ethical, core belief system, or did they choose the business decision because it was a profitable one, irrespective of their own value system?
Shotts argues for leaders to embrace accurate data analysis, and then to create a marriage of the gut with the spreadsheet — and not the one you prepare for the board that always shows revenue increasing dramatically in the next quarter. Malhotra focuses on “high-functioning people” who use their intellect to rationalize their gut. He looks at the Supreme Court as nine members who use their brilliant intellectual skills to support their gut decisions as to what is right and wrong. Welcome to the tasty rationalization pretzel. It is baked first and then twisted to fit.
Malhotra makes the point that “powerful people typically don’t perceive that other people are agreeing with them because of their role (CEO).” You run the risk of the blind leading the merely myopic, and no one puts on glasses because they don’t like the way they look. Malhotra suggests that leaders ask for input “in order of reverse seniority” as a way to counteract the bias of “boss, your idea was brilliant.”
To some extent, business decisions are like supply chain management. Buying material from companies that do not abuse their workers or energy from environmentally sustainable sources, for example, are the easy ones. The ones that are more challenging often arise from human interactions. There are the black-and-white, obvious frauds like Bernie Madoff or the abusers like Jeffrey Epstein. But when the canvas is gray, it is more difficult, and that is the exact time when your ethical roots need to be planted deepest. Consider the issue of big pharma and drug pricing (Purdue and opioids), and if you need more, maybe cast a quick peek at Facebook.
There are some lines that I will not cross (at least I tell myself that), but I have seen leaders who proudly don that mantle, and then in crunch time, they claim they have not changed, they are the same as they always were, rather it was the line that moved. (Gimme a break.)
Without going too deep into politics, a local congressman, who is under indictment, has tried one of the most famous defenses of bad behavior (those with children, stand up), by saying “Well, everyone does it.” Shotts says that you need to plan ahead for ethical challenges, because in the actual moment, without previous consideration, there is a good chance of making a misstep.
Rule No. 622
Right makes might.