The Ethics Scandals of Our Day

Tom Morris

Author Interview Andrews McMeel Universal

Tom Morris is author of the new book on ethical success, "The Art of Achievement" (Andrews and McMeel, 2002). In it, he lays out wisdom from all the great philosophers of the centuries on how to succeed properly in any endeavor, practical and penetrating advice that our business leaders need now more than ever. Fortunately, he's just been traveling the country, bringing his insights on the power of ethical success to leaders in nearly every industry. We caught him at home between trips and asked him a few questions about the recent scandals we've all be watching unfold nearly every week.

Question: Tom, ordinary people are wondering whether big business has suddenly become corrupt all over America. There is a new scandal every week, and sometimes every couple of days. Enron, Tyco, Global Crossing, Wordcom, Adelphia, ImClone, Xerox, Arthur Andersen, Merrill Lynch -- the list keeps growing. What's going on?

Morris: Well, unethical behavior in the world of business is of course nothing new. In the sixth century, B.C., the philosopher Anacharsis once defined commerce in a distinctively pessimistic way. He said, "The market is a place set apart where men may deceive one another." Two centuries later, his spiritual descendent Diogenes was spotted carrying around a lighted lamp, up and down the city streets, in the middle of the day. Asked what he was doing, he replied, "Looking for an honest man." In corporate America these days, he'd be burning the midnight oil as well, stalking the corridors of some of our biggest companies. At the root of all our current business scandals are simply classic human scandals of greed, overweening ambition, pride, and massive self-deception. People have been vulnerable to these things since there was human life on earth. It's not that people have suddenly become worse in American business, but that conditions have become ripe for the worst to come out and have major repercussions.

Question: Why then are all these scandals erupting now? And on such a scale?

Morris: Human nature hasn't changed at all over the centuries, but the world of business has. There have always been corrupt business people and there always will be. But there have always been noble business people, as well, and this continues to be true at every level. The current scandals don't prove that rogues and rascals have secretly taken over modern American business in the last few years. There are still plenty of good and honest people running companies of every size in America. I meet them all the time. The difference now is that many businesses have grown in size and complexity to the extent that their structures and processes can leverage good actions into great results and bad actions into truly terrible consequences. It's a matter of scale and power. Globalization, technology, and the complexities of our markets have created new ways for people to exploit the system and cover their tracks, while doing incredible harm. It isn't that our leaders are worse than ever, just that the bad ones can do more damage than ever before, and on a spectacular scale.

In addition, I believe that the dotcom bubble economy of the past decade, that "irrational exuberance" leading to, and in turn generated by, all the skyrocketing tech stock prices also created a lotto land mentality roughly equivalent to a new gold rush. Senior executives in large corporations could easily be tempted to resent deeply all those twenty-somethings who were starting up dotcoms and overnight getting rich. I believe this whole bubble economy created tremendous new pressures to move and shake outside the ordinary boundaries, to try new and dangerous things beyond the normal accounting and growth practices that were a tried and tested path in those larger companies. But creativity easily slid into impropriety as people rushed to get their piece of the pie just as quickly as the dotcomers.

Question: You say the world of business has changed in such a way as to allow bad actions to have tremendously bad consequences. And you point to the tech bubble as perhaps responsible for distinctive pressures on executive behavior. Are there any other changes that have created our current climate, changes other than those in size and power and pressure that you've mentioned?

Morris: I think we've forgotten what ethics is really all about. Too many business people these days seem to think that ethics is really just about staying out of trouble. You create lots of rules, and then follow them to the letter, and you encourage others to do so as well, in booklets and memos, all for the sake of staying out of trouble. But ethics has never been mainly about staying out of trouble. The ancients saw into it all much more deeply. They believed that ethics is all about creating strength -- strong companies, strong relationships, strong people. Ethical behavior creates the foundation for trust, and without trust there can never be effective, efficient partnerships and collaborations of any kind. When people come to think that ethics is just about staying out of trouble, they can easily be tempted to accept any other way of staying out of trouble as a functional equivalent -- covering their tracks well, maintaining deniability, manipulating accounting rules in complex ways -- and that leads to disaster.

As we're seeing, ethical companies are stronger companies, all other things considered. Unethical success is always self-destructive over the long run. How many companies have to implode before we'll get the message that philosophers have always been delivering? Unethical behavior may hurt lots of people, but it always hurts the doer of the deed. Plato loved to say that other people can harm you only on the outside, but that only you are capable of harming yourself on the inside. And that's what we're seeing in all this unethical conduct on the part of corporate leaders. Too many otherwise smart and technically well trained people are completely self-destructing.

And, by the way, it's not just in the corporate world. In the past few months, we've seen prominent football coaches caught lying on their resumes, well known historians found plagiarizing others' work, priests and leaders in the Catholic Church doing things and allowing things completely at odds with all the values and beliefs they espouse. Why? Because of greed, improper ambition, desire out of control, pridefulness, self-deception, and other universally operative forces in human life. But these forces have been allowed to prevail in a number of prominent people's lives for a diversity of reasons, and none of them have distinctively to do with business, or corporate commerce, or capitalism as an economic structure.

Question: What are these reasons?

Morris: Well, I've mentioned self-deception. People sometimes do things they know to be wrong because they convince themselves both that there is great benefit to be derived from whatever it is, and that they really won't get caught. We've seen the power of self-deception operative in the life of a president even in the White House. The most visible man in the world in the most visible and scrutinized place in the world gets himself to believe he won't get caught. As many great thinkers have pointed out, we're all masters at self-deception. We fool ourselves more easily than we fool others. And if we hadn't already fooled ourselves, we wouldn't even try to fool the others.

In big organizations, people often are tempted to think they can cover their tracks and maintain deniability, regardless of what they do. They sometimes think they can get their pile of gold and be gone before anyone notices anything wrong, and leave the problems to their successors.

Even in small companies, there are people who just can't resist the temptation to cash out big and get out quick, not thinking for a second how their actions may affect and terribly harm other people. It's a fundamental misunderstanding of business to see it mostly as a matter of getting rather than giving. I know it sounds na?ve to say that, but it's still true. There is a universal, cosmic law in life -- we get in proportion to what we give. It's only those who have a mentality of giving, who are seeking to create and contribute, who benefit long term is deeply satisfying and sustainable ways. Anything else is just a bad mistake.

There is also a misconception abroad in the land that, in some relevant sense, business is war, or else is at least a highly competitive mental contact sport, and that anything permissible in war or football is perfectly ok in corporate life as well, aside from, obviously, shooting or physically tackling people. Deception in war, for example, reduces casualties, and in a football game can make all the difference for a first down, or a touchdown. Craftiness has always been seen as a warrior virtue, like courage, persistence, and focus. The quarterback who fakes out the defense can be a hero. But deception in business, rather than reducing harm, can have the absolutely opposite effect, as we've just been seeing. Surprising the competition can be completely acceptable, and even advisable in business, but there are certain sorts of surprises that neither Wall Street nor Main Street likes to see. Many of the warrior virtues, such as courage and persistence, do indeed apply in important ways to business. But others don't. And it's a failure to see the difference that has brought individuals and companies down. Business is a creative, humane endeavor that, for all its competitiveness, requires a level of honesty, public openness, and accountability that should never be compromised for the sake of the game or the win.

Question: What makes for ethical success?

Morris: I've discovered, in the works of all the great thinkers across cultures and through the centuries, seven universal conditions for success in anything we do. In any endeavor we need:

(1) A clear CONCEPTION of what we want to attain, a vivid vision, a goal clearly imagined. This mental conception should be rooted in proper self-knowledge and should be directed by what we know is right.

(2) A strong CONFIDENCE that we can attain our goal. We can't be confident concerning what we know is wrong, or wrong for us. Proper goals allow for great confidence, and confidence facilitates success.

(3) A focused CONCENTRATION on what it takes to reach that goal. The most successful people learn how to divide and conquer, setting intermediate and more immediate goals in support of their vision. Again, this process should be guided by a concern for what is right and proper.

(4) A stubborn CONSISTENCY in pursuing our vision, a determined persistence. Little things add up, day after day. The number one cause of failure in our time is self-imposed, self-sabotage -- people acting inconsistently with their own goals and values.

(5) An emotional COMMITMENT to the importance of what we're doing. We need to be motivated by the noblest possible sense of what we're doing. You can't get the deepest commitment to goals that aren't right.

(6) A good CHARACTER to guide us and keep us on proper course. Integrity and conscience - that inner guidance system reported since the time of Socrates - should direct our paths. Bad characters can have success for a while, in a limited domain, and at the expense of what really matters, but over the long run, unethical success is always self-destructive. That's just how life works.

(7) A CAPACITY TO ENJOY the process along the way. The best people in any field are people who love what they are doing. If we don't enjoy the process, we're unlikely to get the results we want to see.

These are The 7 Cs of Success that should guide all our enterprises. When we leave one or more out, we always suffer the consequences. Too many businesses have been hiring for intellect and skill without considering deeply enough the issue of character, our sixth condition of success. And we're now witnessing the consequences.

Question: What's your long term prognosis for the ethical shape of American business?

Morris: I've long said that the worse things get, the more of an optimist I become. But I'd better explain that. People can tolerate incredibly bad situations -- the human spirit is so resilient, and so capable of putting up with stuff, and the power of inertia is so strong -- yet when things get bad enough, literally intolerable, it's a wake up call to everyone, and we start making changes that, typically, are long overdue. I believe the avalanche of ethical scandals we're witnessing now will serve as a vital wake up call to a lot of people. We need new rules. We need new ways of monitoring corporate conduct. We need new procedures for corporate boards and new compensation schemes for top executives. But more deeply, we need a new understanding of ethics -- one that happens, ironically, to be an ancient understanding -- along with a new conception of what business is all about. We've had warm and fuzzy positive feelings toward the topic of business ethics for quite some time, but we haven't been clear enough on what exactly ethics is and what exactly we need. The crisis we're going through now will serve to help us clarify many things we've been far too vague about. If I can help, as a philosopher, I'll be very glad. The wisest people in history had perspectives we can use now, and that we obviously need. I hope my new book will serve to bring people some of the most important of these perspectives. I also invite people to visit our website, www.MorrisInstitute.com, on a regular basis, to read more on these ancient perspectives and the practical wisdom they generate.

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