What good is having a belly if there’s no fire in it? Wake up, drink your passion, light a match and get to work…Simon Sinek
I’ve worked in business since I left school. Although my career started by training as a mechanical engineer, I was always more passionate about organisational leadership and management than I ever was about engineering.
In the course of my career I’ve had some great sponsors/mentors. I worked hard and enjoyed some success, if you measure it in terms of progressive learning, career advancement, job promotions, increasing influence, pay rises and bonuses. I’ve also had my share of mistakes and failure; most of them a result of the relentless struggle to find the right balance of behaviours as my career progressed and I faced novel and challenging situations – which we all do every time we change jobs or get promoted. For example, I’m naturally competitive. It served me well when I used to race in multi-sport endurance events, like the Ironman Triathlon World and European Championships, where the single-minded drive of an individual-contributor was directly related to performance. It also translates in a competitive business world, but there is a paradox. On one hand, personal success is generally rewarded on an individual basis whereas performance tends to rely on collective effort and team activity, which is not the natural domain of individual contributors. This creates a natural tension, knowing when being competitive is a help or a hindrance. How achievement/goal driven should we be before it becomes counter-productive? How do we gauge between being too ambitious and not ambitious enough? How do team players stand out in a competitive world?
How authentic should we be?
Most of us face these dilemmas during our careers, dilemmas exacerbated by a ‘system’ that typically rewards MORE rather than LESS. That was certainly the case for me as I searched for an appropriate balance between behaving in ways that brought personal success and advancement, while finding a happy and satisfying pro-social medium while team working. I certainly found that making the compromises and adjustments needed for an optimal position isn’t easy. It’s often fraught with personal risk, and has positive and negativeconsequences for us individually, and for the companies we work for. For example, these themes have spurred a great deal of organisational research…
Do ‘nice’ people get ahead?[1-6]
Do ‘bad’ people get ahead?[7-14]
It’s not a huge leap to realise that rewarding counter-productive/anti-social behaviours results in increasingly counter-productive/anti-social behaviours. This is a learned response that has a biological, neurological and psychological basis in increased dopamine activation – dopamine is a hormone commonly associated with reward, which is why we feel great when we achieve an important goal. It encourages striving, but dopamine can be addictive, and it can have undesirable behavioural outcomes – like increased risk taking, gambling and self-serving behaviour. The challenge of filtering out unhelpful learning experiences is exacerbated by inappropriate role models, mentors, sponsors, misguided experiences and policies that promote poorly adjusted behaviour.
Nature Vs. Nurture
Of course, all behaviours are a function of our conditioning and personality. The NATURE Vs. NURTURE debate lies at the heart of this idea. Personality Psychology helps inform us that it is not a case of one versus the other. A large element of our personality is genetically inherited; and our personality traits are derived from the conditioning that takes place throughout our lives, but especially in our early years (2 to 7) and into our late teens. As we experience life and mature, we learn new behaviours, (hopefully) curb self-sabotaging excesses that result in personal failure, and adjust/adapt – for better or worse. But, we can’t rely on life-experience and conditioning alone, otherwise people would never get fired, relationships would never fail, there would never be any corporate scandals, and jails would be empty.
An often overlooked or poorly understood factor is that personality traits only express as behaviours when they are activated by an interaction between personality traits and important and relevant Situational Cues. As an overly-simplistic example, an Agreeable individual can’t express agreeable behaviour in an empty room, or in a room full of disagreeable people. It needs an appropriate ‘Situational cue’ (opportunity) to activate the trait and trigger Agreeable behaviour, otherwise agreeable behaviour remains a latent predisposition of the agreeableness trait. Similarly, a person that is disagreeable (agreeableness is low) will not behave agreeably unless the situational cue is strong enough to overcome the inherent lack of agreeableness. That’s why some people can be nice to their boss, and those with whom they have important relationships, while being unpleasant with everybody else. In this case, the importance of the relationship either creates a strong enough situational cue to overcome a lack of agreeableness, or it doesn’t, and the person behaves disagreeably in line with the strength of that trait. The key point is that personality traits interact with a mind boggling array of situational factors that either strongly or weakly influence behaviour. This is why behaviour is much more unpredictable than those that promote personality assessments would like to admit – though this doesn’t make personality assessment any less important. The issue isn’t with the data, it’s with the way in which the data is used.
Understanding the interaction between important situational factors and personality traits is crucial to understanding the dynamics of organisational behaviour and ensuring appropriate Organisation Design and HR strategy.
It’s also critical to predicting how individuals might behave based on a personality assessment, because strong situational cues result in behaviours that personality assessments can not predict. Personality assessments only help to predict behaviours when situational cues are either well understood, or when they are very weak, or non-existent – which is impossible in real life when we constantly interact with people, processes, systems and other environmental conditions.
People are Inherently Good
So…on the basis that most people are inherently good and nobody goes to work to do a bad job, why are there so many examples of undesirable behaviour and negative organisational outcomes?
The following is just a very small selection of prominent recent examples of successful people and great companies behaving questionably – with all of the associated consequences and reputational damage to their brand.
To be clear, there’s no intention to judge, criticise, embarrass or impune those included below. These are not bad companies. Without exception they are some of the leading, best known corporate brands on the planet. Neither are the individuals involved bad people. They can’t be, or they would never be hired by such companies in the first place. Accepting that qualification leads to the most important of questions.
Why Do These Things Happen?
- Auditors broke rules on hospitality
- UK accountancy giants ‘should be broken up’
- Bean Counters: The Triumph of the Accountants and How They Broke Capitalism
- Auditor Ernst & Young apparently missed ‘highly suspicious’ trades at collapsed investment firm London Capital & Finance before it went bust
- Patisserie Valerie auditor faces probe over alleged fraud
- KPMG Ex-Partner Convicted In ‘Steal the Exam’ Scandal
- KPMG, EY Reported to Police Amid Danish Laundering Probes
- UK Partners of KPMG see bumper payouts despite scandal-stricken year
- Carillion fiasco shows why auditors must be accountable to parliament
- FCA fines Goldman Sachs International £34.3 million for transaction reporting failures
- Standard Chartered Bank’s Long History Of Financial Crime
- Federal Reserve Board fines Standard Chartered $164 million for firm’s unsafe and unsound practices
- Lloyds ‘tried to silence’ whistleblower over HBOS fraud
- MPs threaten to publish internal Lloyds report into HBOS Reading fraud
- Libor scandal: the bankers who fixed the world’s most important number
- These Are the Banks Caught Up in the Russia Money-Laundering Scandal
- Big Banks Money Laundering: UBS Fined $4.2 Billion, Danske Shuts Down in 4 Countries
- Netflix documentary re-examines HSBC’s $881 million money-laundering scandal
- Santander and Barclays face legal action over alleged multibillion pound tax dodge
- GE Fined $58 Million as EU Cracks Down on Bad Merger Info
- Holland & Barrett accused of treating suppliers ‘shabbily’
- ELIZABETH HOLMES’ DOWNFALL HAS BEEN EXPLAINED DEEPLY
- BMW, Daimler and VW charged with collusion over emissions
- Former VW boss charged over diesel emissions scandal
- Bookmakers accused of bypassing FOBT rules with roulette-style games
- Ladbrokes staff told to sign gamblers to online accounts to avoid redundancy
- Corruption scandals show why leaders should highlight ethics
- Johnson & Johnson Admits Baby Products Contain Cancer-Causing Formaldehyde
- As Baby Powder concerns mounted, J&J focused marketing on minority, overweight women
- Facebook’s Scandals Are Finally Starting to Hurt Its Business
- Boss of British Gas owner gets 44% pay rise to £2.42m
- Highest-paid male NHS doctor earns £591,000 a year — four times as much as Theresa May (and 20 times more that trained nurses)
- Persimmon launches review in drive to rebuild its image
- Tesla’s CEO Pay Ratio Hits Stratosphere With $2.28 Billion Grant
- Bet365: UK’s best-paid boss sees pay rise to £265m
- Gender pay: Fewer than half of UK firms narrow gap
- Payroll ‘upgrade’ means thousands of workers face week without pay
- Man Who Bribed Son Into Penn Found Guilty in $1.3 Billion Health Fraud
- Florida man accused of shoplifting light bulbs days after buying $8m private island
- Lori Loughlin and 15 Others Face New Charges in College Admissions Scandal
- Felicity Huffman Will Plead Guilty in Operation Varsity Blues Case
- US college admissions scandal: how did the scheme work and who was charged?
- Google AI Ethics Council Is Falling Apart After a Week
- Universities urged to stop using ‘unethical’ tactics to pressure students
- Gender pay: Fewer than half of UK firms narrow gap
- The secret lives of Facebook moderators
- Oil And Gas Giants Spend Millions Lobbying To Block Climate Change Policies
- It Only Took Elon Musk 10 Words to Reveal Why You Should Never Want to Work for Tesla
- DR. ELON & MR. MUSK: LIFE INSIDE TESLA’S PRODUCTION HELL
- Tesla employees were reportedly told not to walk past Elon Musk’s desk because of his wild firing rampage
- Badly-behaved surgeons are putting patients’ lives in danger due to ‘culture of bullying’, report finds
- Rogue breast cancer surgeon sentenced to 15 years’ prison for ‘butchering’ patients
- Liver surgeon Simon Bramhall marked initials on patients
- What Went Wrong?
- Hospitals Crack Down On Tirades By Angry Doctors
- PLAYING FAIR? Watchdog probes XBOX
- Nintendo Switch and PlayStation amid fears their fees are ripping off gamers
- Tesco knowingly delayed payments to suppliers, Tesco, Aldi and Asda accused of paying poverty wages to Bangladeshi workers
…. As you can see, the list spans industry sectors and is endless.
[I got into the habit of saving these news stories to my reading list over the last 12 months and only realised how many there were when I came to Spring clean it. This list is about 1/4 of the number I had saved!]
Warren Buffet summed this behaviour up in his annual letter to shareholders…
“…have seen all sorts of bad corporate behavior, both accounting and operational, induced by the desire of management to meet Wall Street expectations. What starts as an ‘innocent’ fudge in order to not disappoint ‘the Street’ — say, trade-loading at quarter-end, turning a blind eye to rising insurance losses, or drawing down a ‘cookie-jar’ reserve — can become the first step toward full-fledged fraud.”
What’s Going On?
What’s going on? These companies spend many millions promoting their brands, training staff, developing robust ethics and CSR policies; and the people involved are all likely to justify their actions as being in the interests of their organisation? They believed they were doing the right thing, i.e. the thing that would result in their success being rewarded.
- How is it possible that Auditors, who are required to comply with stringent codes of professional ethics, can be persuaded to behave in ways that invite the type of publicity and criticism displayed in these media reports?
- How is it possible that banks, the pillar of a system that relies on trust, can be repeatedly sanctioned for knowingly committing serious illegal activities, such as money laundering for drug cartels?
- How can medical professionals that swear to uphold the Hypocratic Oath act in ways that cause harm to their patients?
- How can World Class corporations market unsafe products, fight against disclosure in subsequent litigation, or lobby against regulation that seeks to protect the planet?
Taking an uninformed view that these are bad people, or bad organisations, means we miss the opportunity to make a positive difference by recognising the dynamics of these behaviours – which are not unpredictable. We simply need to understand the factors that create an environment that encourages the right behaviours, while discouraging those that don’t. We need different practices based on well-established scientific evidence; and we need to stop rewarding the wrong types of behaviour, even if it result in short- term gain.
This is all about understanding the Human Condition and designing and developing organisations in ways that are complimentary with productive pro-social behaviour.
Better Organisational Behaviour
This is a systemic problem that includes poor Organisation Design (OD) and Human Resource Management (HRM). Interventions to encourage ethical behavior are often based on misperceptions of how transgressions occur, and thus are not as effective as they could be. Compliance programs increasingly take a legalistic approach to ethics that focuses on individual accountability. They’re designed to educate employees and then punish wrongdoing among the “bad apples” who misbehave. Yet a large body of behavioral science research suggests that even well-meaning and well-informed people are more ethically malleable than one might guess.
It’s time to recognise that the situational cues within organisations trigger behaviours that are both desirable, in terms of performance outcomes, and/or undesirable, in terms of destructive self-sabotaging behaviour, non-compliance and rule breaking. If we want to make a positive change, we can start by improving understanding about the behavioural dynamics in our organisations, thereafter incorporating that thinking, intelligently, into actionable policies and procedures and in the core design of organisations. This is what evidence based management is all about.
No company will ever be perfect, because no human being is perfect. Indeed, some companies we’ve used as examples have had serious ethical lapses. Real people are not purely good or purely evil but are capable of doing both good and evil. Organisations should aim to design a system that makes being good as easy as possible. That means attending carefully to the contexts people are actually in, making ethical principles foundational in strategies and policies, keeping ethics top of mind, rewarding ethical behavior through a variety of incentives, and encouraging ethical norms in day-to-day practices. Doing so will never turn an organisation full of humans into a host of angels, but it can help them be as ethical as they are capable of being.
Of course, we can do nothing. Some organisations have deep pockets and punitive damages are a trivial cost of doing business to them. But times are changing. Failing to move with the times makes organisation leaders complicit in the wholesale rule breaking these reports seem to suggest.
When trust is in global decline, this can’t possibly be in the interests of shareholders, other important corporate stakeholders, and the public’s perception of the brand – because the public is ultimately the consumer.
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