Following up yesterday’s post on Nobel Prize winner Joseph Stiglitz’s talk and my Q&A with him…
He spoke on leadership and ethics. I felt honored and flattered for him to describe my question as “A great question, really the core question.”
He spoke mainly about the many corporate decisions business and political leaders made that hurt many people and the systems that enabled them, as well as the beliefs and assumptions that also enabled them. For the decisions, think of the predatory lending leading to the recent great recession, schemes pharmaceutical companies made to make creating generic drugs impossible, BP in the gulf, or any number of other corporate or government acts that resulted in people dying, losing their homes, or further inequality. For the assumptions, think of blindly believing in Adam Smith partial belief in the invisible hand, neglecting to account for Smith’s own admonitions in applying it thoughtlessly.
I haven’t found that people decide to hurt people. They may decide things that result in others ending up hurt, but a result doesn’t mean people intended it. On the contrary, I find people intend to help people, or at most affect them neutrally. Whatever decision led to BP’s actions that led to people dying and the poisoning of the gulf, the people who did it, when they decided, probably didn’t think they were doing something to create that result. You, I, and the legal system my find their behavior inarguably negligent and guilty, but that doesn’t mean they meant it when they decided.
Why this matters to you and me and the question I asked
After his talk, I pointed out how he started his talk, on the common misunderstanding of Adam Smith that many people don’t realize they have. They believe his invisible hand idea means that their acting in their interest will best help everyone else, which Joseph describes as a misreading of Smith and history.
I’m most interested in the leadership perspective, not just the ethics perspective. After all I teach, coach, and train people to lead. My question to him:
If, as you suggest, they acted under a misinterpretation that led them to believe they were helping others or at least not hurting them, how do we as future leaders avoid acting and deciding based on flawed assumptions that lead to hurting others?
If they didn’t know their assumptions were flawed, how should we?
Besides pointing out the importance of this perspective, he mainly said
- Question your assumptions: he described many of the assumptions that led to these decisions as patently bogus on a moment’s reflection.
- Avoid groupthink: he pointed out most decision-makers lived in bubbles made of people thinking just like them with incentives just like theirs.
He spoke in more detail, but these lessons seemed relevant and important enough to focus just on them.