Dear Bob ...
In your recent column "Cwazy wabbits," you said:
Our biggest challenge is that economists don't understand macroeconomics the way Alcoa understands aluminum manufacturing. Worse, too many influential economists benefit personally from the approval of those who profit when a particular theory sets public policy rather than some other theory.
Which means economics isn't regulated by a culture of honest inquiry.
The real root cause is, of course, greed. The love of money is the root of all evil. There is zero chance of fixing that. Nothing has been accomplished in 6,000 years to stop evil.
So do we give every crook, bully, murderer, et al, a free pass? Or do we hold them responsible for their misdeeds and punish them? Even keep them confined in prison so that they cannot inflict further harm on society?
You might be amazed to learn that there are large numbers of bullies, sadists, and other types of psychopaths among managers, as well as those who are immoral, unethical, and pure evil, including greedy ones.
Just cause you have not run into them does not mean they are not there. I have suffered under way too many. My sample of management says about 5 percent are competent, 10 percent are benign, and the rest are scumbags or worse.
Since we can't touch, let alone fix, their root causes, we must hold them responsible for their own actions.
This is not a blame game. This is common sense. Stamp out evil to the extent we can, including among management. Not to do that is to encourage bad management.
Yes, it would be nice to eliminate the opportunities and incentives for them to do bad things. But they are still responsible for what they do.
Unfortunately the gold sacks bunch runs the government and has removed all constraints on their treachery.
And they design their own compensation systems, not us.
Dear Disgusted ...
The root cause isn't greed. Greed can't be a root cause because it, like gravity, is a fact of life as opposed to a solveable problem. When, for example, the 35W bridge fell into the Mississippi River here in Minnesota, gravity wasn't the root cause of the problem in any useful sense of the phrase. A failure to properly plan for and deal with the effects of gravity (which is to say a design that couldn't handle the load, failing materials that no longer could, or what have you)? That's a more useful path of inquiry.
Greed is a motivational tool, not a problem. The challenge is using the tool to achieve the leader's organizational goals instead of ignoring its effects and allowing it to stymie them.
I'll also tell you that not everyone is motivated by greed. Some are motivated by the desire for power, some by the need for approval (including celebrity), another bunch by their need for friends and sociability, and a few by scoring some important achievements with their names attached.
Know what motivates each individual and, as a leader, you have the ability to steer them in the desired direction.
We've created a system in which corporate leaders are rewarded for their career success with ludicrous levels of wealth and power. That will attract those who value wealth and power -- no surprise. Sadly, we've also allowed a governance model to dominate in which boards of directors happily select such individuals, figuring they're the ones most likely to "maximize shareholder value," the supposed sole "good" of the publicly held corporation. And we've created a system in which corporations are considered to be persons who, like real persons, should be allowed to influence the conduct of government.
Since it's the nature of things that people act in their own self-interest (which doesn't make them evil; it makes them human), the results are predictable: CEOs will influence government to maximize their wealth and power. Our experience with drug dealers is instructive here. The risk of incarceration has no impact on their behavior because the rewards are so great as to overwhelm the fear of consequences.
Want to change corporate behavior? Change the structure of the rewards. Everything we know about economics and psychology tells us this.
As for your management pie chart, all I can say is, phew! I'm aware of the study that suggested many CEOs are pretty far up on the sociopath scale. That's the top level of the corporation, and their average score is halfway up the scale. Descend the hierarchy and the sociopathability diminishes for all the obvious reasons.
I've spent a lot of time with a lot of managers and I'll tell you that most are just like everyone else in the world. They're trying to cope with what the world throws at them. It's easy to call people "evil" and "scumbags." It's an intellectually lazy alternative to the inescapable conclusion that people do things for reasons. Those reasons frequently subject everyone in leadership positions to the need to choose the lesser of the available evils. Doing so requires courage because people who don't understand what leaders have to deal with pretend that this isn't the case -- that "good" solutions always exist.
They don't, and if every time a leader makes a hard choice among bad alternatives we conclude that leader is a bad person, all we're going to do is discourage good people from taking those roles.