We live in a time when many people have little faith in large institutions. Congress’s approval ratings hover in the low teens. Wall Street seems plagued by corruption and a lack of remorse for their wrongdoings. The recent Penn State scandal showed yet another example of trusted leaders failing to act to protect the vulnerable. This list goes on. Trust in institutions seems at an all time low. Politically we’ve seen leaderless, self-organized movements such as the Tea Party and Occupy Wall Street that are distrustful of institutions rise to vent frustration. It all seems a little dark and angry.
It got me thinking that at the heart of this problem is a culture obsessed with success and in particular monetary success to the exclusion of all other achievements and values. You don’t report child molestation because the football program pulls in all the big alumni money. Wall Street’s only real metric is quarterly profit. The professions are also subject to this trend. Law firms and lawyers themselves have become focused increasingly on profits per partner rather than taking into account a broader group of factors. Most public corporations emphasize short-term shareholder value and quarterly profits over long-term investment or non-monetary goals. In reducing every aspect of our professional lives to one number, we’ve reduced our own humanity and damaged our culture.
My message isn’t an anti-capitalist one. I’m an MBA after all and, as a business owner, I know how important profits and growth are. They are signs that you’re doing the right things - that the company is healthy. Profits get reinvested and help make progress and change possible; making money isn’t an evil thing. However, profits aren’t sufficient goals in and of themselves. For example, I recently finished reading Steve Jobs’ biography. Here is the most successful CEO in modern and in some people’s minds all of U.S. corporate history. One of the most striking things I took from his book was how little importance he placed on making money. In fact, one of the first principals that Jobs and Mike Markkula, Apple’s key early stage investor and President of the company, set out was that Apple wasn’t just about making money. Sure it was necessary to build the company but it was not a sufficient reason to be in business. The larger purpose was changing computing, putting tools in the hands of people that unleashed their personal creativity, and marrying the humanities with computing.
Bettering society, allowing consumers to do new things, reducing the cost of products or making them more widely available are all worthwhile goals. Each involves working on behalf of something larger than oneself and one’s own short-term monetary interest. This connection to a larger purpose is an essential part of being human and it is one of the key factors in inspiring creativity and achieving happiness.
Dan Pink makes this point in Drive: The Surprising Truth About What Motivates Us. He highlights a body of scientific research done over the last several decades that shows that purely monetary incentives reduce the effectiveness of employees involved in creative, non-repetitive tasks. That describes just about every well-paying job in our modern economy. This research shows that providing people the opportunity for autonomy in the way they work, helping them master increasingly complex skills, and creating an organization dedicated to a larger meaning or purpose is what people most want. It’s also what produces the best outcomes and the most profits. However, contrary to the subtitle of the book I don’t think it’s all that surprising. We know this instinctively.
The solution for leaders and employees is to hold explicit values that go beyond profit and loss. They can’t just write them in a strategic plan and then leave them on the shelf to gather dust. Leaders need to hold those values front and center and use those values as a roadmap to run their organizations. They need to make decisions informed by those values and reward those who successfully put the values into daily practice.
That’s how people will regain faith in institutions and let’s hope we do. Institutions are a fundamental way in which we collaborate to build things larger than ourselves and leave legacies to new generations. I can think of no nobler goal than bringing integrity to that effort.