As the third and final in a series, this post explores how institutions might understand and manage the forces which can lead to behaviour that undermines their legitimacy in the eyes of stakeholders and the broader public (I am grateful to my readers for some very helpful comments on the earlier posts).
I have so far argued that many organisations – like most people – have a deep attachment to a discourse of self-pity which, combined with the will to survive, provides the enabling context for unethical decision-making (or decision avoidance). Ultimately, organisations need to behave as if they were operating in a glass box: if they are making decisions which most people outside the organisational would find unjustifiable they are storing up problems and risking further reputational damage.
This might sound like a pious injunction. Organisations might set such a goal but how do they live up to it? Here are three methods which, pursued in concert by organisational leaders, might help:
Name and tame the hurt: The group therapy process I described in the first post enabled participants to name the scars left earlier in their life which they had subsequently used to excuse bad choices. This is only step one but it is difficult and its power shouldn’t be underestimated.
Leaders need to find the pain at the heart of their organisation (why we feel under siege/hard done by/doomed) and name it. Only then can those leaders work with their organisation to transcend those feelings, showing that whether or not they were ever justified, they should not be a constraint on the organisation trying to do the right thing now and into the future. It will often be that part of the pain concerns feelings towards management so this too has to be identified and discussed.
Change the choice architecture: The phrase ‘choice architecture’ was coined by the same people who developed the idea of ‘nudge’, itself derived from insights provided by behavioural economics and social psychology. The point is to make ‘good’ choices easier and ‘bad’ choices harder, for example, putting healthier food closer to the counter in self-service canteens or opting people in to pension schemes.
The discourse of organisational self-pity generally refers to a set of adverse contexts which make it hard for the organisation to succeed while behaving ethically. Rather than simply exhorting leaders to be braver and more ethical we should encourage them to realign the forces around them so that doing the right thing is easier, and the bad thing harder.
Honest, open and independently verified social and environmental auditing might be examples of the latter. The decision of Unilever CEO, Paul Polman to stop quarterly reporting and to refuse short term investing is an inspirational example of the former.
Very often organisational or professional self-pity is of the ‘no one understands us’ variety. This is a corrosive form of self-pity to which the answers are ‘maybe they do and that’s the problem’ of ‘if they don’t you have to get out and find a way of engaging people rather than using their alleged ignorance an excuse for self-indulgence’.
A recurrent example of this problem in charities is that the activities the organisation could undertake that would have the most impact are not the things their funders or stakeholders most value. A failure to address this conundrum is the single biggest explanation of the profound level of underperformance that plagues our third sector
Accept the possibility of an honourable death: My interest in institutions stems from an analysis based on a set of ideas (unhelpfully) named cultural theory. This theory suggest there are three active ways of thinking about and pursuing change; individualism, hierarchy and solidarity. The analysis of my 2012 annual lecture was that these forces have become disastrously unbalanced in modern society. In particular, hierarchies have become frail and ineffective.
But cultural theorists also say there is a fourth, equally ubiquitous but generally passive way of thinking about change – fatalism. I have always found it hard fully to accommodate the fatalist dimension of the theory but perhaps I am beginning to.
Good organisations and their leaders know, accept and admit that they are involved in the messy business of juggling ethical goals with organisational self interest in changing and challenging contexts. This is not a problem that can be solved forever but must be continuously and reflexively managed. This is the stuff of leadership but it is also ultimately exhausting.
Freud talked about exchanging hysterical neurosis for everyday melancholy. Leaders need to recognise that sooner or later they will run out of runway. The dilemmas I am describing can only ever be successfully managed for now. Directly contrasting a plethora of theories which promise the possibility of transcendent, post conventional, leadership, sane leaders with integrity know that sooner or later they and or their organisation will lose the capacity to juggle successfully and then the right thing to do is to move on.
Going back to the charity sector, another problem is the difficulty organisations have with admitting that their best is behind them, their organisational form is no longer fit for purpose and that it is time to have big party, celebrate and pull down the shutters.
‘Fine words from the CEO of a 260 year old organisation’ you may well say. True dat. Across its distinguished history the RSA has suffered very long periods of ineffectiveness and has in the last few years substantially re-invented itself. But I am under no illusions that two weeks after I accept the inevitable mortality of leadership (or it is pointed out to me by the Board) the new CEO will – quite rightly – be telling the staff and Fellows it is time for a radically different approach!
That is my hurt, but now I have named it, you know it really isn’t that bad.