Ends and Means

Last week, I noticed a newspaper report about a CEO who netted a considerable amount of cash for himself and a favored cadre by changing issue dates on stock options and awarding some to nonexistent employees, so he could later transfer them to himself and his friends. In the same paper, there was an article pointing out that a number of the executives involved in recent corporate scandals, including Enron, were graduates of some of the nation’s most prestigious MBA programs. It seems that these programs are now falling over themselves to introduce compulsory courses on business ethics as a result. Then, a few days later, a comment on a post to this site directed me to this great article that uses the analogy of scar tissue to account for how organizations become rigid and weighed down by bureaucracy, simply by responding to corporate mistakes the way those MBA programs are dealing with alumni with felony convictions: by setting up a mechanistic, compliance-based response.

I love it when disparate ideas come together for me with a very loud clang! Linking these notions led me to write this article. Here is the sequence of thoughts I followed.

If this is so, and it is at least an interesting line of thought to follow, we need to deal with the possibility that most of the people now vilified as corporate criminals did not think what they were doing was wrong.

I’m quite ready to concede that some criminal types manage to achieve executive positions in major corporations, but I cannot believe that it is at all common. I’m sure there must be far quicker and easier ways for smart, ambitious criminals to make money. Nor do I find it any easier to follow the saying that all power corrupts to the conclusion that even honest people who get to the top are automatically corrupted in the process. Again, there are probably instances where that is true, but my own experience has been that most top executives I’ve dealt with are no less (but no more) honest than the average person. Certainly they see themselves as basically moral people. I cannot be sure about those who are now behind prison bars, but I suspect they were no different. If this is so, and it is at least an interesting line of thought to follow, we need to deal with the possibility that most of the people now vilified as corporate criminals did not think what they were doing was wrong.

Let’s assume they thought it was—what? Clever? Really neat business thinking? Perhaps they saw their actions as sharp, the way that negotiating a deal that nets your organization megabucks while screwing the other guy is sharp: not exactly behavior you would want to talk about too openly, but certainly something you would happily acknowledge among your own coterie of equally “sharp” colleagues. Not perhaps as ethical as some would want, but not really dishonest . . . not criminal.

If we follow this line of thought a little further, and bring in the fact that most of them were highly educated alumni from some of the best business schools around (plus they typically had outsized egos), here’s what results.

Let the other dummies play by the old rules and see where that gets them. We are the smart guys, so we find new ways to play this game of business.

You have a number of corporations run by clever, ambitious, arrogant people. Part of their arrogance is the view that they’re way smarter than your average Joe, even the average Joe in the boardroom. Someone among them comes us with an unusual way to make gazillions of dollars. It’s really, really neat. Yes, it is just a bit beyond what those dull folk who cling to old-fashioned notions of business practice might see as ethical, but that gives it some added spice. After all, who takes any notice of them? In the circle of those in the know, the ones with modern ideas, business practices like these are applauded. Let the other dummies play by the old rules and see where that gets them. We are the smart guys, so we find new ways to play this game of business.

Based on widespread reports, and the fact that several settled with the government by paying large fines, even major financial institutions went along with these “new and unusual” approaches to business thinking, to the extent of funding them with huge amounts of cash and sharing in the profit bonanza that followed. So, the thinking maybe went, if the serious money men are on board, it must be alright. We’re not dishonest. We’re simply ahead of the rest of the business world in our ideas and methods.

You can see where this line of thinking takes you: to that well-known position that the ends justify the means. I suspect that the prospect of massive rewards, personally and organizationally, coupled with the idea that there was no actual rule that said it was all wrong, went a long way to help such people justify what they were doing as clever and even innovative.

The ends justify the means. That’s the thinking behind most of today’s conventional, macho, grab-and-go management styles. We need profit, because that is what business is for. More profit is bound to be better than less. So whatever leads to more profit—unless it is specifically forbidden—is surely good business practice. Never mind if:

• People must be coerced into working ever longer hours.


• More people suffer work-related stress and burnout.


• It becomes necessary to lay-off large numbers of loyal people, or outsource their jobs to somewhere we can get the work done for far less money.


• We have to sacrifice quality and cut corners everywhere.


• Work becomes a miserable place for most people except us.

The ends justify the means . . . don’t they?

That article I mentioned earlier adds the final point to this train of thinking. In the wake of all the scandals and losses, people rushed to institute policies to make sure, as the saying goes, “this kind of thing can never happen again.” Maybe that isn’t the best answer. If my suppositions about how these scandals arose are anywhere near correct, policies won’t stop the process. After all, if the major driving force is the belief that ends justify means, the secondary motivation is a belief that you, and those like you, are plenty smart enough to find ways around such old-fashioned restraints as policies and rules. Isn’t that what lawyers are for? To find ways of re-interpreting the rules to your advantage?

. . . a good story sticks in the mind, where rules are forgotten faster than they can be written down. And, for the record, the ends have never, and will never, justify the means in a civilized society. . .

As I wrote at the start, I don’t believe most executives are any less, or more, honest than anyone else. But they do have highly developed instincts for self-preservation. Perhaps the best way to prevent—or, at least, severely limit—corporate wrongdoing in the future is to spend enough time telling the stories and reflecting on the flawed thinking that brought smart people down tot he level of common criminals. After all, a good story sticks in the mind, where rules are forgotten faster than they can be written down. And, for the record, the ends have never, and will never, justify the means in a civilized society, whatever smart ideas are produced to weasel a way around that fact.

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