We Shape The Leaders We Get

Ever wonder why so many of the top executives of corporations are similar in character? Why is it that many accept a huge compensation package while at the same time communicate that it is necessary to cast off many people for the sake of competitiveness? Why is it that many CEO’s seem disconnected from the very people who are living a work-a-day life in their organization exchanging their labor for a weekly paycheck? Why is it that the CEO seems to always satisfy his/her material self-interest irrespective of the performance of the corporation?

 

Clive Boddy (Nottingham Business School, Nottingham Trent University) in an article in the Journal of Business Ethics defines the corporate psychopath as executives/business leaders “who have no conscience or empathy and who do not care for anyone other than themselves.”  As Boddy explains these type of people can be callous in their disregard for the needs of others in pursuit of their interests and their “own self-enrichment and self-aggrandizement.”

 

A Good Fit

How is it that such people can realize positions in the upper echelon of corporations? To answer this all we need to do is understand what the economic system and business culture find most important. In an economic system that advances the primacy of material self-interest and a results oriented culture, getting results irrespective of means is what counts!

 

Clearly the corporate world would be quite enticing to the socially friendly psychopath.  After all, it can be just as lucrative as the world of crime without offering a high probability of prosecution for crimes committed against humanity.  But not only is a world of self-interest with short-term thinking desirable to the psychopath, many of the traits of these people—calculating, charismatic, manipulative, materially driven, ruthless, unemotional—are embraced by a material self-interest oriented corporate world.

 

Thus charismatic people who unabashedly focus on driving for results will do very well in such a world—a world where nice guys finish last.  Accordingly, with the maximization of short-term profit being most important people who can drive and deliver results will be deemed ‘leader material’ and accordingly developed by their organization for positions of increasing responsibility.

 

A Matter of Degree

Seemingly what the above is describing are quite self-interested people and possibly greedy characters.  But is greed different than self-interest?  Well of course they are different, but they are also foundationally related.

 

Greed is essentially unfettered self-interested behavior; it is self-interest on steroids. With self-interested behavior you could have people seeking advantage over others for self-benefit and with greed you could have people causing harm to others for self-benefit.  That is to say, people acting out of self-interest can lead to unfairness and people acting out of greed will often lead to fraud.

 

Greed as a behavioral trait is sought and developed.  It is because of greed that the drive for getting and having goes forever unsatisfied ensuring a consuming and acquisitive society.  Adam Smith argued the importance of the pursuit of material self-interest to the industriousness of the labor class and in turn to the wealth of a nation.  As he assumed (in The Wealth of Nations) “every man…is much more deeply interested in whatever immediately concerns himself than in what concerns any other” thus implying that the propensity for satisfying one’s self-interest is most significant in influencing profit maximizing behavior.  In a recent paper appearing in The Academy of Management Annals, titled On Greed, authors Long Wang and J. Keith Murnighan claim “the basic logic of capitalism…suggests that organizations and their members should do what they can to maximize their economic interest.”

 

People have taken for granted, without questioning, the notion that we are at base selfish beings.  Accordingly our societal culture embraces the notion that people are at base driven to maximize their material self-interest—what’s in it for me is not just cliché it reflects a general attitude, the American zeitgeist.  This unquestioned belief has been forged by the widespread application of the self-interest precept of our economic system, infiltrating life in society in so many aspects—business, government and education.

 

Accordingly rigging the system in service to one’s self-interest is just the way we’ve designed things to work—special interest rules the day.   Why else are there so many elected officials who become millionaires during their term in office in what should be service to society?  Why else are there lobbyists (many of whom served on Capital Hill prior to becoming a lobbyist) working to establish quid pro quo relationships with government officials? Why is it that those who are able to offer sizable amounts of money to elected officials (our public servants) given far greater access, credibility and opportunity?  Seemingly every thing is an economic exchange through which each is seeking to better his/her position materially.

 

According to Smith “it is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from the regard to their own interest.”  Substitute senator, congressmen and president and it no doubt applies. It is therefore no surprise that special interests dictate the discourse and much of public policy.

 

Insatiability of Material Gain

Moreover according to Wang and Murnighan “neoclassical economics’ focus on self-interest almost seems to glorify greed” (p 287).  British philosopher David Hume, a close friend of Adam Smith, believed greed to be both vice and virtue.  In regard to the latter Hume claimed it motives people and thus can be a positive force in commerce.  Smith clearly agreed since his theory of economics (of societal wealth creation) rested upon each individual striving to maximize his/her material self-interest.

 

As Wang and Murnighan noted “the negative social consequences of greed focus primarily on its uneven distribution of resources” and the growing gap in income inequality in the U.S. is a case in point.  In the period between the 1950’s and 1960’s CEO compensation was about 25 times that of the average worker.  Today it is 340 times that of the average worker!  As a result of the income trend lines going in quite different directions, some argue that we have two economies.

 

It would appear that the seed of material self-interest has grown into sequoia-sized greed.  It seems clear that everything for me and nothing for others—though a popular path for those seeking greater personal wealth—is a recipe for destruction and the eventual depletion of societal wealth.  It surely is not the way to progress, if by progress we mean the likelihood is good that our future will be better than the present.

 

As Lester Thurow noted in his 1996 book The Future of Capitalism, in capitalism “there is simply no social must.”  Moreover, capitalism honors competition, and winning in a limited resource competitive environment is auto-correlated.  In other words the probability of winning is greater for those who have previously won—winning begets winning—and the probability of non-winners winning increasingly diminishes.   As the gap between winners and losers increases moving from losing to winning gets more and more difficult.  Correspondingly, since a self-interest seeking materialist can never have enough, trickle-down doesn’t happen—the evidence of this is quite strong.

 

How does material self-interest become greed?  The pursuit of material gain has no natural satiation point, thus unless the individual is morally awake the desire for having more is unfettered and thus escalates without bound.  Moreover with egoic self-interest bounded by one’s own skin, in pursuing more and more a concern for one’s impact on others is essentially nonexistent. The concern for ‘me’ and ‘mine’ is all consuming.  The 2008 financial crisis is a case in point of the consequences of greed. In fact, Clive Boddy claims corporate psychopaths theory as an explanation of the cause of the global financial crisis.

 

Smith believed that human beings weren’t capable of self-control and thus people require external forces to keep them within the boundaries of fair play in their economic endeavors.  Smith wasn’t advocating regulation but enforceable laws.

 

Unfortunately human behavior can’t be legislated, especially greedy behavior.  Unregulated material self-interested behavior transitions readily into fraudulent behavior.  What’s better for society, to reign in such behavior before the fact or to seek retribution for the behavior after the fact?  Is it better to prevent theft or to enforce the law (i.e. prosecute) against theft?  [It seems, at least thus far, we’ve done neither in regards to the actions of Wall Street.]

 

The issue is not whether greed is part of human nature, but whether greed is an unavoidable part.  We could say the same for morality.  Both are in our potential.  However we are not destined to be moral actors any more than we are destined to be greedy.  Just as a sense of morality must be developed, so too must greediness.   In regards to the latter, our current system of economics is doing this quite well.

 

As with most dimensions of human development, we are guided and facilitated in our development by the societal context—the zeitgeist—within which we are raised.  In the U.S. the societal context facilitates the belief that we each are self-interest maximizing beings—self-interested behavior is expected, it is our ethos.  It is no wonder that many of our corporate executives are far more calculating, far less empathetic and ruthlessly political/manipulative; there appears to be no concern or regard for the impact of their self-serving actions on others.  [We are even seeing this in our elected officials.]

 

Just because the Citizens United decision by the Supreme Court concluded that corporations are people and thus it is legal for corporations to have an opaque and dominant voice in the election of our representatives doesn’t mean that corporate executives should act on this.  Those who are morally developed—whose sense of self doesn’t stop at their own skin—and who are not solely guided by the legality of an action understand that can doesn’t imply should.

 

What if we believed we are not just self-interest maximizing beings? What if we weren’t so consumed by (i.e. addicted to) having more and more as a way of being and establishing our personal identity? What if having a concern for ‘We’ is just as important as a concern for ‘me’? What if we are deeply connected?  [As noted by Amitai Etzioni “the I’s need We to be” (The Moral Dimension)]. What if our sense of self didn’t stop at our skin, but included all of humankind?

 

Acknowledging our ‘I-We’ nature puts us in touch with the individual and collective aspects of being human and in turn to the simultaneous responsibility we have to each other.  Accordingly life in society is not simply a collection of independent individuals seeking advantage over others as each strives to have it all for ‘Me’. We are not simply instrumental to each other’s wants.

If we wish those who lead—corporations and government—not to be so self-serving then we must change how we as a society not only choose but also shape them.  This requires us to change what we believe about ourselves, and in turn to change the system of economics, and correspondingly the conduct of business, that has infiltrated so much of life in society.  After all we do shape the reality we experience.

 

3 thoughts on “We Shape The Leaders We Get

  1. Pingback: A Real Crisis « For Progress, Not Growth

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