It has been a while since I last posted a blog. Thinking about why, I guess it has to do with the load of unimaginable things that came over us during the last few months. One wonders what use it is to comment, when clearly the speed of misconduct is increasing, and becomes increasingly unimaginable. Anyway, here we are again. I would like to start, as a general introduction, with the very first paragraph of our new book: “Values Based Leadership in Business Model Innovation”, Baets and Oldenboom, Bookboon, 2013, (which is a free downloadable internet book).
“Increasingly managers, politicians and the wider public start agreeing that the never-ending story of misbehaviour, unethical behaviour, fraud, poor service delivery, etc, mainly in business, is unworthy of the 21st century. For years the corporation was kind of the cornerstone of our economic system, stable, trustworthy, taking care of growth, creating employment. All this, of course, for the benefit of society. And arguably, corporate development, business development has contributed to the increase of wealth, at least in parts of the society, and parts of the world. At the same time this often had negative effects for others parts of society, and in other parts of the world. Overall, however, until roughly a decade ago, we did not know the scandals and brutalities that we have known over the last decade, probably starting with the Enron case. Books have been written about these scandals, analyses have been made, correcting measures have been taken, but not a lot has changed. The Libor manipulation, which for the time being is the latest one in a long series, goes beyond imagination. Why is it so difficult to change? But, maybe in the first place, do we have an interest in change, and who are ‘we’?”
That some users were monitored, and mostly not the terrorists amongst us, is not news. It is as old as myself, and it happened in all countries in the world; in Russia, of course, the former Eastern Germany, China, who in a way were more public about it than countries like, say Belgium (just to talk about those I know). It happened, it had political and economic reasons, but it happened on “reasonable” scales. That did not make it more ethical, it did not make it more acceptable. But, the taxpayer did not pay an awful lot for getting nothing. Say it was the hobby horse of a few. One could call it folklore, part of “democracy”, or any other word you would like to give it. My surprise was great, however, when suddenly it appears that the NSA is following tens of millions of phone calls and internet messages of innocent people all over the world. One cannot even imagine the size of this scandal. Worse, they are allies and we suddenly learn that the British spy on the Belgians (no, this is not a James Bond movie, and no, we are not in the cold war era. Or are we?). And how involved are our telecom providers, the Google’s, Facebook’s, Apple’s, etc?
This raises more than a few issues. Who controls the controllers? Who decides who to spy on, and what happens with the outcomes? Of course, politicians all say they are not aware and so say the CEOs of companies and services that HAVE to be (for technical reasons) involved. A service (what’s in a word) like the NSA is able to beef up a programme into the billions no doubt, with no apparent purpose, no apparent approval, and apparently without any “elected” responsible person being aware. Taxpayers, be aware of what your money is serving. Oh yes, by the way, I also learned that some of South Africa’s wealthy are very proud that they do not pay taxes, in a country where there are “some” issues that need redress. No comment, it speaks for itself, but do not be surprised that it is difficult to attract foreign direct investment into a country where the “better” part of that economy is pulling itself out. Simple, no? Back to the spies.
The scandal, that is what I would like to call it, has many dimensions. Who controls who, what is the purpose of spying (terrorism seems a bit too easy), who pays for this, and how is it possible that a service can decide all by itself to do “whatever”, which goes even against the Constitution? But more surprising is that the few people that seem to have a kind of a consciousness, and feel that this should be known, suddenly become the victims. Snowden, who brought all this out into the public, is the criminal, the enemy number one, instead of the real criminals. Snowden has to be punished, but what for? For serving his constitution, for protecting his allies (yes, the Europeans at the least)? Then we get the British Prime Minister Cameron threatening the press for publishing any further information. Isn’t it the role of the press to inform the public, particularly when the parliament fails. Instead of apologies, instead of actions to protect the citizens, we only get a clear-cut threat for publishing information. If we thought that the South African Information Bill was an issue, in the UK they don’t even need such a bill obviously.
I would be interested to learn more about it, but I am sure that we will not be able to do so. We will not know who or what is behind all this, but the size is just scandalous. All this while in the banking business the same story continues over the past five years. Good old stories just continue. We move from scandal to scandal. My retirement fund (in the Netherlands) informs me that my retirement will go down, due to bad management of the investment fund. One would expect that some of the fund managers would be replaced, at least, but no, the poor buggers can’t help it. It is the market. And we continue paying bonuses for performance that according to any standards, in any industry, would be “under-performing”. Still too much of the banking industry is bailed out by governments, and the only thing banks can do (the new chairman of the ING) is complain about this. If government would not have done that a few years ago, they might not have existed anymore today. Bankers, please become realistic, and stick to your profession. We need well-operating banks. However, some professionalism in that sector would do some good.
But possibly most shocking (for me) was the announcement that now, also, the Rabobank is guilty of manipulation of the Libor. I thought (see intro to our book) that it could not become much worse after that announcement a few years ago, but no, the Rabobank is also part of it. Until recently I always used them as an example of a “good” bank, a co-operative, of not having been taken hostage by its shareholders, of having a clear focus on adding valued, etc, etc. And now this: it cannot become much worse. And they don’t have the excuse that it was the shareholders; they don’t have any. Of course, the management was not aware. But people are not born bad, or born unethical. Society has made them like that. We business schools play a role in that, and I am again surprised that the new dean of HEC in France thinks we are in the crisis for nothing. We teach the right things (with which I disagree profoundly), it is just some people who are unethical and “tempted” by greed (any pastor in a Sunday church service could learn something from his argument). The society, our paradigm, the values we teach (or we don’t teach maybe), the reward systems of banks, all contribute to turning responsible people into hugely unethical people. If it goes unseen, they cash huge bonuses. Sometimes it goes wrong, but management is never aware. No problem, clients, the bank is doing well.
As a thought, allow me to quote Chief John Fire Lame Deer:
“Before our white brothers arrived to make us civilised men, we didn’t have any kind of prison. Because of this, we had no delinquents. Without a prison, there can be no delinquents. We had no locks nor keys and therefore among us there were no thieves. When someone was so poor that he couldn’t afford a horse, a tent or a blanket, he would, in that case, receive it all as a gift. We were too uncivilised to give great importance to private property. We didn’t know any kind of money and consequently, the value of a human being was not determined by his wealth. We had no written laws laid down, no lawyers, no politicians, therefore we were not able to cheat and swindle one another. We were really in bad shape before the white men arrived and I don’t know how to explain how we were able to manage without these fundamental things that (so they tell us) are so necessary for a civilised society”.
More recently written in 1964, Herbert Marcuse’s book “The one-dimensional man”, may be a must-read today. It is a criticism on both capitalism and communism (yes that was in those days the big enemy, and the world would be so much better if that would not exist anymore??). It announced a logical progression towards a world of consumerism, without any value proposition, in order to serve a limited number of people (those in power). He also expected a world in which there is no sense of the important and the non-important anymore. And indeed, do watch CNN, or any news chain, for that matter, where minor issues are blown up out of proportion, and real major disasters get just as much attention as any “fait divers”. We cannot make the distinction anymore between real issues, and minor issues. We concentrate on our duty of consumerism and wealth gathering.
Two other books, old indeed, that might be interesting to re-read, or for the younger people to read, are: George Orwell, 1945, “Animal Farm”, an allegory on the Soviet Union, but in the absence of the Soviet Union, perfectly applicable to almost any country today. “All animals are equal, but some are more equal than others”, writes Orwell. And “1984”, again from Orwell, published in 1949, anticipating that in 1984 “Big brother” would be watching us everywhere, and take over society from a democratically elected body. How far are we away from this situation, which for many in those days seemed impossible.
More than ever, we have to make sure that each of us, in any circumstance, lives up to the categorical imperative of Kant: “Act so that the basis of your action, could serve as a general rule”. More applied to business and society, you might want to have a look at the book we published recently and mentioned earlier: “Values Based Leadership in Business Model Innovation”. It is possible, we are very glad to help you with it, but it is you who has to get up in the morning and decide you want to be of value to society. And if all this is too much, use my wife’s rule: If you take a decision that you happily and proudly would share with your children and grandchildren, you are probably doing good. If you cannot share it, think twice.