> To front-line employees, the line between right and wrong is very bright. Something happens to people as they climb up through management, she said. The bright line seems to fade.
This doesn't seem like a mystery to me. In my experience the more you climb up through management the more you leave the realm of clear-cut choices and enter a world of nasty trade-offs. Do that enough times, and get your head spun around enough by trade-offs you don't know how to navigate but have to deal with immediately, and you'll get a kind of "trade off numbness".
> and get your head spun around enough by trade-offs you don't know how to navigate but have to deal with immediately, and you'll get a kind of "trade off numbness"
I wonder if this could explain why corporations grow into slow behemoths, as a kind of subconscious moral cover. Most people think the causal arrow happens one way, ie. corporations grow due to efficiencies or other factors and moral rot is a side-effect, but maybe it's actually the other way around in some cases. Since everyone tries to see themselves as basically good, but they still want to make money and be profitable, they migrate towards structures with extra layers that provide extra plausible deniability and obfuscation of questionable moral decisions.
I do not think it is just that. In organizations where low level employees are rewarded for breaking the law or doing unethical acts, front-line employees have as muddled line between right and wrong as managers.
In corporations, as you climb up, you get rewarded for unethical more and more. Ethical people get kicked out of the ladder.
Do you have an example of nasty trade offs? I am not familiar with managing so I am interested what those could be. I assume taking care of the worker vs taking care for the company (growth) is one of them, but again not sure.
I immediately sanity checked this with three examples.
SBF fit amusingly well. His fraud had all of these, with Effective Altruism providing an extreme example of how goodness in some areas atones for evil in others.
Stanford's president Marc Tessier-Lavigne resigned after his reputation was found to be based on fraudulent research. Descriptions that I've read from those in his lab showed most of these.
Enron is too canonical an example to ignore. Yes, it had all of these.
I think the sanity checking works better the other way round: how much of this is just corporate norms that apply to most companies above a certain size, including ones with no particularly significant ethical challenges? One of the bullet points starts off by pointing out that 47% of companies have one type of conflict of interest!
CEO being higher profile and a generation older than [some of] the people sounds like a pretty normal company tbh, and probably only a major issue if the ethical issues are caused by the CEO
(it technically doesn't apply to SBF, although his reports were even less experienced and in awe of him)
CSR and diversity initiatives and other corporate do-good messaging? Most companies do that to some extent, and it's not like the ones who don't even attempt to launder their reputations tend to be squeaky clean rather than too cynical to even try to look like they care.
And sure, KPIs and stretchy sales targets can definitely cause bad behaviour and lying, but they're also extremely common, and can be beneficial when companies actually get them right.
It's easy to find these things in retrospect. It could be that ethical breaches are common and it's easy to ascribe lapses and wrongdoing to someone after a scandal.
For the model to be useful we have to show it can be used to consistently predict scandals and wrongdoing before they happen and before others notice
Eg. Can we confidently use this model to short corporate stock
On the one hand, the article and the talk it is about stresses the severity of the moral transgression: "moral meltdowns", "really crossed very bright lines", "ethical collapse".
But on the other hand, the implications of the moral failure for the moral status of the company and its employees is pushed far away into the corner:
- "These are great companies, great organizations, good people"
- "misguided companies"
- "good people at great companies"
The list that follows is something you can retroactively apply to numerous instances of corporate wrongdoing, but also provides an enormous amount of false positives and a false negatives.
Thousands of businesses don't meet these criteria and yet are morally compromised (e.g. Cargill). Thousands of businesses do meet these criteria and yet aren't going to be called out as "ethically collapsed" by the author before they've been outed and widely accepted as failed.
1. Pressure to maintain numbers
2. Fear and silence
3. Young ‘uns and a bigger-than-life CEO
4. Weak board of directors
5. Conflicts of interest overlooked or unaddressed
6. Innovation like no other company
7. Goodness in some areas atones for evil in others
Umberto Eco's 14 signs of fascism:
1. The cult of tradition.
2. The rejection of modernism.
3. The cult of action for action's sake.
4. Disagreement is treason.
5. Fear of difference.
6. Appeal to social frustration.
7. The obsession with a plot.
8. The humiliation by the wealth and force of their enemies.
9. Pacifism is trafficking with the enemy.
10. Contempt for the weak.
11. Everybody is educated to become a hero.
12. Machismo and weaponry.
13. Selective populism.
14. Ur-Fascism speaks Newspeak.
Each list contains symptoms of some degenerating organisation. However, I can easily find counterexamples of successful organisations which demonstrate one or more of these qualities. In fact, these organisations may be successful because they exhibit one or more of these qualities. This way of understanding the world is entirely juvenile and unfit as an evaluative framework.
I cannot agree. It is not a juvenile way of understanding, it is the only sensible way of understanding. Or rather it is not a way of understanding, it is one of the tools that can speed up understanding.
Social systems are very complex, you cannot write an algorithm of evaluation in terms of "measure this and that, then use this formula". It never works. You need to understand how the system works and it takes some research.
To do the research these 7 signs can be very helpful at first. They allow you to form you hypotheses fast on a data that not completely irrelevant. Just one more thing: these 7 signs are not just a measure procedure giving you one number, each one is a facet of an organisation that should be studied.
To be sure you'd better find some another evaluation framework, and study facets of an organization that it deems to be the most important.
It is like psychological tests: they do not diagnose the problems, but they allow to see a client from different perspectives. Tests are relatively cheap and they give you some threads to unravel.
> I can easily find counterexamples of successful organisations which demonstrate one or more of these qualities
1. No one said that these signs are signs of an unsuccessful organisations. You can be completely unethical and pretty successful at the same time. To my mind, the question does ethics correlate with a success or not is an ideological one. Theoretically speaking you can study it in a relatively objective way, but ideologies will win at the end. Either your indoctrination will take the upper hand, or indoctrination of others will force you to argue in a favor of "our sin will be punished inevitable" or something like. It is hard to find thinkers who are immune to that, there is a lot of wishful thinking goes on.
2. 1-2 signs is not a verdict, but an invitation to look deeper at the matters. Likewise 0 signs is not a verdict but very suspicious situation: how so? I will be very surprised if I find no these signs in any mildly successful organisation.
Part of the problem with this sort of analysis is that hindsight is always 20/20.
You may think your company has is transparent and has a wonderful process for handling conflicts of interest. Then only when things collapse do people come out of the woodwork and start dishing drama.
If they have a fear and suppression program that works, you would never hear about it!
Yes, it's often hard to identify this as an outsider. But people inside the company know, and if you've worked in places that handle conflict in healthy ways and in some that handle it not-so-well, you'll know quite clearly within a few days where your workplace stands.
This article, and especially point 2 (Fear and silence) is a great rebuttal against the flaw of the Radical Candor/Manipulative Insincerity framework; which considers apathy towards issues in the workplace as tantamount to being manipulative without considering why people resort to this behavior in the first place.
It is not easy for an single employee to change deeply embedded negative organizational behaviors, and therefore it is better for the employee to work with the goal of reward maximization (through a focus on total compensation and hitting numbers) and feigning ignorance or not bothering to report issues that cross ethical lines, which may backfire and cause trouble for the employee (constructive dismissal, smear campaigns, lawsuits etc.)
My last job was at a company where the CEO had the vision and the personality to lead the company through a necessary transformation (it was in a long-tail business).
The individual contributors were smart, experienced, and good people.
But between the top and the bottom there was a complete disconnect, as people were driven by incentives that rewarded individuals and teams for things that did not serve the company as a whole.
Not an unusual scenario in any large organization, but it was beyond frustrating.
A more-prosaic example: I worked at a company where their internal enterprise software was sometimes the battleground between different groups, in particular Operations kept trying to put in guardrails to prevent commission-driven Sales from closing unprofitable deals.
How do you get a CEO with vision to structure the incentives towards achieving the vision (presumably starting with the incentives for his direct reports and maybe coaching them to do the same for their reports, and on down the chain)?
Not exactly clear-cut to identify... 7 different subjective signals?
Sounds too much like astrology where 10/12 different horoscopes would apply to most people anyways.
Before subscribing to something like this, I'd want to see hard data around how common each of these signals is in a random sample of companies(possibly even with a breakdown by industry)
> Weak boards tend to have inexperienced members, often ones who are too young to have experienced a complete business cycle, which was often the case with companies in the dot-com boom.
> Often they have ethical conflicts of interest as well, in terms of consulting arrangements, related party transactions, …
Feels like half of this advice is directed at people that wouldn‘t profit from it. The reason people higher up are/become less ethical is because that usually is a quality needed to rise.
The direction of progress is the direction of increasing accountability
good book about that - https://www.amazon.com/Reckoning-Financial-Accountability-Ri... tldr thesis is that the invention of double entry bookkeeping is the thing that has caused modern prosperity, not capitalism. we can only cooperate to the extent that we can detect cheating. Consider a 1600s merchant – without the ability to detect fraud, how can you give your goods to a shipping company? Capitalism is only possible if you can count your capital! a memorable example was a French king (Louis XV?) who bankrupted the realm because he didn’t know how much money he had.
It makes for an kind of inherent contradiction--or at least tension--inside certain types of laissez faire capitalist thought, between perfect-information versus the autonomy of secrecy.
On Monday, capital-C-Capitalism is celebrated as being the most efficient and economist-approved system (i.e. the bestest) when--if--there is somehow perfect price/deal information available to all actors.
On Tuesday, no-True-Capitalism is lauded as immune to cartels and collusion, because any actor will quickly undercut the others with secret prices and deals and hidden identities and wash-trading.
On Wednesday, Virtuous Capitalism needs no oversight because nasty behavior will be seen and detected by consumers who will vote with their wallets.
On Thursday, Property-Respecting Capitalism refuses to infringe on the owners' essential freedom... to construct impenetrable webs of shifting corporate ownership to obfuscate all controlling relationships.
Pressure to maintain numbers
Fear and silence
Young ‘uns and a bigger-than-life CEO
Weak board of directors
Conflicts of interest overlooked or unaddressed
Innovation like no other company
Goodness in some areas atones for evil in others
I was hoping for something, but sadly feel these all apply to our majority government in many world countries today, don't they?
That's 2012.
Now we have a TikTok generation. After seeing interviews with Free Palestine protesters and general TikTok crowd, I fear US has no future and it will be an easy pick for China.
These people are from prestigious universities but they are so dumb. Very, very dumb. In 20 years they will be working for US government ( because Yale, Harvard).
TikTok is a weapon of mass destruction.
So economy in the aggregate is in the midst of ethical collapse?
You can find numerous examples across institutions and industry that meet all these criteria.
1. Pressure to maintain numbers… line must go up economy.
2. Fear and silence… quiet quitting, workers keep going in while expressing fear in private
3. Young uns and bigger than life CEO… see tech, finance, academia, politics exploitation of naive grads
4. Weak board of directors… voters and workers are subservient to 1%
5. Conflicts of interest overlooked… why do so few have so much reach into all our lives?
6. Innovation like no other… US capitalism is unsurpassed! World cannot do without it!! Resell yesterday with faster chips and flatter design!! … metrics hacks line up!!
7. Goodness in some areas atones for evil in others… we are burning up the planet for the next generation but how about that iPhone 15, dick rockets into space, and those massive F350s!
> 7. Goodness in some areas atones for evil in others… we are burning up the planet for the next generation but how about that iPhone 15, dick rockets into space, and those massive F350s!
This is not what that point means. “Goodness” isn’t referring to cool shit. It’s referring to doing good things.
Someone buys an F350 but then “offsets it” by donating money to a climate activist charity.
[+] [-] overvale|2 years ago|reply
This doesn't seem like a mystery to me. In my experience the more you climb up through management the more you leave the realm of clear-cut choices and enter a world of nasty trade-offs. Do that enough times, and get your head spun around enough by trade-offs you don't know how to navigate but have to deal with immediately, and you'll get a kind of "trade off numbness".
[+] [-] naasking|2 years ago|reply
I wonder if this could explain why corporations grow into slow behemoths, as a kind of subconscious moral cover. Most people think the causal arrow happens one way, ie. corporations grow due to efficiencies or other factors and moral rot is a side-effect, but maybe it's actually the other way around in some cases. Since everyone tries to see themselves as basically good, but they still want to make money and be profitable, they migrate towards structures with extra layers that provide extra plausible deniability and obfuscation of questionable moral decisions.
[+] [-] watwut|2 years ago|reply
In corporations, as you climb up, you get rewarded for unethical more and more. Ethical people get kicked out of the ladder.
[+] [-] prox|2 years ago|reply
[+] [-] joelthelion|2 years ago|reply
[+] [-] btilly|2 years ago|reply
SBF fit amusingly well. His fraud had all of these, with Effective Altruism providing an extreme example of how goodness in some areas atones for evil in others.
Stanford's president Marc Tessier-Lavigne resigned after his reputation was found to be based on fraudulent research. Descriptions that I've read from those in his lab showed most of these.
Enron is too canonical an example to ignore. Yes, it had all of these.
[+] [-] notahacker|2 years ago|reply
CEO being higher profile and a generation older than [some of] the people sounds like a pretty normal company tbh, and probably only a major issue if the ethical issues are caused by the CEO (it technically doesn't apply to SBF, although his reports were even less experienced and in awe of him)
CSR and diversity initiatives and other corporate do-good messaging? Most companies do that to some extent, and it's not like the ones who don't even attempt to launder their reputations tend to be squeaky clean rather than too cynical to even try to look like they care.
And sure, KPIs and stretchy sales targets can definitely cause bad behaviour and lying, but they're also extremely common, and can be beneficial when companies actually get them right.
[+] [-] geepytee|2 years ago|reply
[+] [-] lordnacho|2 years ago|reply
[+] [-] imhoguy|2 years ago|reply
[+] [-] legitster|2 years ago|reply
[+] [-] vivekd|2 years ago|reply
For the model to be useful we have to show it can be used to consistently predict scandals and wrongdoing before they happen and before others notice
Eg. Can we confidently use this model to short corporate stock
[+] [-] hackernewds|2 years ago|reply
[+] [-] thundergolfer|2 years ago|reply
But on the other hand, the implications of the moral failure for the moral status of the company and its employees is pushed far away into the corner:
- "These are great companies, great organizations, good people"
- "misguided companies"
- "good people at great companies"
The list that follows is something you can retroactively apply to numerous instances of corporate wrongdoing, but also provides an enormous amount of false positives and a false negatives.
Thousands of businesses don't meet these criteria and yet are morally compromised (e.g. Cargill). Thousands of businesses do meet these criteria and yet aren't going to be called out as "ethically collapsed" by the author before they've been outed and widely accepted as failed.
[+] [-] drones|2 years ago|reply
1. Pressure to maintain numbers 2. Fear and silence 3. Young ‘uns and a bigger-than-life CEO 4. Weak board of directors 5. Conflicts of interest overlooked or unaddressed 6. Innovation like no other company 7. Goodness in some areas atones for evil in others
Umberto Eco's 14 signs of fascism:
1. The cult of tradition. 2. The rejection of modernism. 3. The cult of action for action's sake. 4. Disagreement is treason. 5. Fear of difference. 6. Appeal to social frustration. 7. The obsession with a plot. 8. The humiliation by the wealth and force of their enemies. 9. Pacifism is trafficking with the enemy. 10. Contempt for the weak. 11. Everybody is educated to become a hero. 12. Machismo and weaponry. 13. Selective populism. 14. Ur-Fascism speaks Newspeak.
Each list contains symptoms of some degenerating organisation. However, I can easily find counterexamples of successful organisations which demonstrate one or more of these qualities. In fact, these organisations may be successful because they exhibit one or more of these qualities. This way of understanding the world is entirely juvenile and unfit as an evaluative framework.
[+] [-] ordu|2 years ago|reply
Social systems are very complex, you cannot write an algorithm of evaluation in terms of "measure this and that, then use this formula". It never works. You need to understand how the system works and it takes some research.
To do the research these 7 signs can be very helpful at first. They allow you to form you hypotheses fast on a data that not completely irrelevant. Just one more thing: these 7 signs are not just a measure procedure giving you one number, each one is a facet of an organisation that should be studied.
To be sure you'd better find some another evaluation framework, and study facets of an organization that it deems to be the most important.
It is like psychological tests: they do not diagnose the problems, but they allow to see a client from different perspectives. Tests are relatively cheap and they give you some threads to unravel.
> I can easily find counterexamples of successful organisations which demonstrate one or more of these qualities
1. No one said that these signs are signs of an unsuccessful organisations. You can be completely unethical and pretty successful at the same time. To my mind, the question does ethics correlate with a success or not is an ideological one. Theoretically speaking you can study it in a relatively objective way, but ideologies will win at the end. Either your indoctrination will take the upper hand, or indoctrination of others will force you to argue in a favor of "our sin will be punished inevitable" or something like. It is hard to find thinkers who are immune to that, there is a lot of wishful thinking goes on.
2. 1-2 signs is not a verdict, but an invitation to look deeper at the matters. Likewise 0 signs is not a verdict but very suspicious situation: how so? I will be very surprised if I find no these signs in any mildly successful organisation.
[+] [-] malfist|2 years ago|reply
[+] [-] legitster|2 years ago|reply
You may think your company has is transparent and has a wonderful process for handling conflicts of interest. Then only when things collapse do people come out of the woodwork and start dishing drama.
If they have a fear and suppression program that works, you would never hear about it!
[+] [-] unknown|2 years ago|reply
[deleted]
[+] [-] shimon|2 years ago|reply
[+] [-] supriyo-biswas|2 years ago|reply
It is not easy for an single employee to change deeply embedded negative organizational behaviors, and therefore it is better for the employee to work with the goal of reward maximization (through a focus on total compensation and hitting numbers) and feigning ignorance or not bothering to report issues that cross ethical lines, which may backfire and cause trouble for the employee (constructive dismissal, smear campaigns, lawsuits etc.)
[+] [-] pstuart|2 years ago|reply
My last job was at a company where the CEO had the vision and the personality to lead the company through a necessary transformation (it was in a long-tail business).
The individual contributors were smart, experienced, and good people.
But between the top and the bottom there was a complete disconnect, as people were driven by incentives that rewarded individuals and teams for things that did not serve the company as a whole.
Not an unusual scenario in any large organization, but it was beyond frustrating.
[+] [-] Terr_|2 years ago|reply
A more-prosaic example: I worked at a company where their internal enterprise software was sometimes the battleground between different groups, in particular Operations kept trying to put in guardrails to prevent commission-driven Sales from closing unprofitable deals.
[+] [-] indigochill|2 years ago|reply
[+] [-] stcredzero|2 years ago|reply
This is the Homo sapiens version of the Alignment Problem.
[+] [-] darkerside|2 years ago|reply
How did you know? I ask because most people in a position to know would also be part of the middle that you are blaming for the company's dysfunction.
[+] [-] Thoreandan|2 years ago|reply
[+] [-] adverbly|2 years ago|reply
Sounds too much like astrology where 10/12 different horoscopes would apply to most people anyways.
Before subscribing to something like this, I'd want to see hard data around how common each of these signals is in a random sample of companies(possibly even with a breakdown by industry)
[+] [-] jahewson|2 years ago|reply
> Weak boards tend to have inexperienced members, often ones who are too young to have experienced a complete business cycle, which was often the case with companies in the dot-com boom.
> Often they have ethical conflicts of interest as well, in terms of consulting arrangements, related party transactions, …
Sound familiar?
[+] [-] Vegenoid|2 years ago|reply
3. Young ‘uns and a bigger-than-life CEO
6. Innovation like no other company
7. Goodness in some areas atones for evil in others
[+] [-] Traubenfuchs|2 years ago|reply
[+] [-] nothrowaways|2 years ago|reply
2. Fear and silence
3. Young ‘uns and a bigger-than-life CEO
4. Weak board of directors
5. Conflicts of interest overlooked or unaddressed
6. Innovation like no other company
7. Goodness in some areas atones for evil in others
[+] [-] dustingetz|2 years ago|reply
good book about that - https://www.amazon.com/Reckoning-Financial-Accountability-Ri... tldr thesis is that the invention of double entry bookkeeping is the thing that has caused modern prosperity, not capitalism. we can only cooperate to the extent that we can detect cheating. Consider a 1600s merchant – without the ability to detect fraud, how can you give your goods to a shipping company? Capitalism is only possible if you can count your capital! a memorable example was a French king (Louis XV?) who bankrupted the realm because he didn’t know how much money he had.
[+] [-] Terr_|2 years ago|reply
On Monday, capital-C-Capitalism is celebrated as being the most efficient and economist-approved system (i.e. the bestest) when--if--there is somehow perfect price/deal information available to all actors.
On Tuesday, no-True-Capitalism is lauded as immune to cartels and collusion, because any actor will quickly undercut the others with secret prices and deals and hidden identities and wash-trading.
On Wednesday, Virtuous Capitalism needs no oversight because nasty behavior will be seen and detected by consumers who will vote with their wallets.
On Thursday, Property-Respecting Capitalism refuses to infringe on the owners' essential freedom... to construct impenetrable webs of shifting corporate ownership to obfuscate all controlling relationships.
[+] [-] mannanj|2 years ago|reply
I was hoping for something, but sadly feel these all apply to our majority government in many world countries today, don't they?
[+] [-] cbsmith|2 years ago|reply
[+] [-] unknown|2 years ago|reply
[deleted]
[+] [-] myth_drannon|2 years ago|reply
[+] [-] neon_me|2 years ago|reply
[+] [-] stillwithit|2 years ago|reply
You can find numerous examples across institutions and industry that meet all these criteria.
1. Pressure to maintain numbers… line must go up economy.
2. Fear and silence… quiet quitting, workers keep going in while expressing fear in private
3. Young uns and bigger than life CEO… see tech, finance, academia, politics exploitation of naive grads
4. Weak board of directors… voters and workers are subservient to 1%
5. Conflicts of interest overlooked… why do so few have so much reach into all our lives?
6. Innovation like no other… US capitalism is unsurpassed! World cannot do without it!! Resell yesterday with faster chips and flatter design!! … metrics hacks line up!!
7. Goodness in some areas atones for evil in others… we are burning up the planet for the next generation but how about that iPhone 15, dick rockets into space, and those massive F350s!
[+] [-] kortilla|2 years ago|reply
This is not what that point means. “Goodness” isn’t referring to cool shit. It’s referring to doing good things.
Someone buys an F350 but then “offsets it” by donating money to a climate activist charity.
[+] [-] csours|2 years ago|reply