The Upward Spiral

Guest Post by Elizabeth Doty – Author of the book “The Compromise Trap – How to Thrive at Work Without Selling Your Soul”

In November last year, I got the chance to speak on campus at Harvard Business School and returned to the classroom there for the first time in twenty years.

Being in the amphitheater-style room again brought back many memories and some new perspective. My cohort, the class of 1991, was the first to take a required ethics module when we started in 1989 – a response to the unethical behavior of the junk bond era. During those first few months, Mike Milken’s trial was in full swing, Ivan Boesky and Ira Sokolow were in prison for insider-trading, and Michael Lewis’ Liar’s Poker (an expose on Salomon Brothers) had just been published.

 ‘How Quaint’

Looking back, the cases we studied are disorienting in scale. Whereas Ira Sokolow received a whopping $120,000 for insider information on the RJR takeover, the mortgage-backed securities debacle has implicated thousands of professionals in multiple industries and cost at least $500 billion. As Michael Lewis said in an article revisiting Liar’s Poker in 2008, “What I didn’t expect was that any future reader would look on my experience and say, ‘How quaint.’”

Now, to help explain how such critical failures of responsibility could happen on a mass scale, I was there to talk with the Harvard Business School Association about my book, The Compromise Trap.

I was both overjoyed and saddened by the passion in the room. Every professional there had some experience with pressure to compromise, several with severe consequences.  There was a shared and genuine concern that a “downward spiral” was eroding something supremely valuable in our society – not just at work but in every sphere of life. Clearly, in a knowledge-economy more of us face conflicts of interest as we try to live up to our fiduciary duties and professional responsibilities. For example, in 2006, 90% of real estate appraisers reported feeling pressured to distort property valuations.

Unfortunately, such pressures create cynicism and compromise. According to the Josephson Institute “regardless of age, people who believe lying and cheating are a necessary part of success are more likely to lie and cheat. In fact, this belief is one of the most significant and reliable predictors of dishonest behavior in the adult world.” Perhaps this explains why Dan Ariely and his colleagues found that a majority of MBA students cheated on a self-scored math test with financial incentives.

Yet there is a paradox here: Professionals are now pursuing higher aspirations on a greater scale than ever. Social entrepreneurship is exploding. Business for Social Responsibility has more than 250 members whose combined revenues make up 42% of the U.S. economy. And over 5,000 MBA’s worldwide have signed the MBA Oath.

How do we amplify these efforts? “Is it possible,” said one businesswoman during our conversation in November, “to counter the downward spiral with an upward one?”

Shifting the Dynamics that Drive the Downward Spiral

Amplifying an upward spiral would require shifting three critical dynamics:

  1. Situational Influences: Despite our confidence in our moral compasses, we are all remarkably susceptible to situational influences. For example, when the MBA students in Dan Ariely’s studies were given poker chips instead of cash the level of cheating doubled – even though participants exchanged the chips for cash just 60 seconds later. And when they were asked to write down as many of the Ten Commandments as they could remember just before they took the self-scored test, cheating dropped to zero. Similarly, Stanley Milgram ran 19 variations on his famous experiments in order to isolate exactly which conditions increased or decreased unethical compliance. Typically, 63% of subjects were willing to administer electric shocks all the way to the level of death when an authority figure told them to do so to help another person “learn”.  (The shocks were fake and the learner was a confederate.) When the subjects did not have to touch the knob to administer the shocks themselves, compliance skyrocketed to over 90%… but when they witnessed two others refusing to administer electric shocks, compliance dropped from 63% to 10%.
  2. Self-justification: Once we have taken an action, even if it contradicts our values, we have a strong psychological need to justify it. According to the authors of Mistakes Were Made (but not by me) this drive is so strong that we will alter our beliefs, confabulate our memories, tune out disconfirming data, and filter our perceptions in a reinforcing cycle of self-justification. Conversely, having the humility and self-awareness to question ourselves and admit when we are wrong enables us to learn and reinforces our values.
  3. Influencing Others: Finally, our actions become the situational influences that push others into conformity and compromise or prime them for courageous action. One businessman at my talk had left his home country due to rampant corruption. On the other hand, Jon Haidt’s studies of “elevation” show there is a measurable physiological change when we witness another person’s good deed, leaving us inspired to take altruistic actions ourselves.

As you can see in the simple diagrams below, these three forces can add up to negative or positive trends

How do we shift toward the positive?

Downward and Upward Spirals


A Model for the Upward Spiral

The best example I know of an upward spiral that shifts these dynamics comes from a piece by Vaclav Havel, the Czech dissident who helped mobilize democratic action across the former Eastern bloc and became the first president of the Czech Republic.

Havel’s once-outlawed essay, The Power of the Powerless, describes how the automatism of life under Soviet rule was the result of being unable to own one’s personal responsibility. Describing a downward spiral, he showed how the lowest shopkeeper and the highest ranking elite both helped keep the rituals of conformity in place. “In everyone there is some willingness to merge with the anonymous crowd and to flow comfortably along with it down the river of pseudolife,” he wrote.

According to Havel, we reclaim control of our sense of responsibility when we decide to live in the truth, to face the larger realities that are often eclipsed by pressure or temptation. Bringing in these bigger truths enables us to have a positive influence on others, as long as they feel some connection with us. This happens all the time, though it’s not something we normally notice or talk about. For example, a plant manager who was tempted to manipulate some safety testing procedures stopped because he knew his staff would not go along with a lie. In essence, his staff’s presence reminded him of the larger stakes involved. In another instance, a top executive of a Fortune 50 company resists pressure to make a loan to a croney because a front-line loan officer five levels below him says, “I won’t make a bad loan.” A customer service executive convinces her CEO to change unsafe production processes by bringing the corporate attorney into his office to lay out the risks. A stock trader invites his boss to reconsider whether working all weekend is good for either of their families. A civil rights activist asks the mayor of Nashville if he doesn’t actually believe in desegregation… and he says yes, and so the lunch-counters are desegregated. And so on, and so on.

Strangely enough, positive influence can work even when we have little power. As Havel puts it, “This power does not rely on soldiers of its own, but on the soldiers of the enemy as it were-that is to say, on everyone who is living within the lie and who may be struck at any moment (in theory, at least) by the force of truth.” For example, Reverend Timothy Ngoya of Kenya was attacked one night by seven armed assailants for preaching pro-democracy messages under a dictatorship. At one point, lying on the floor believing he was dying, he began giving away his treasures to his attackers – his Bible, his library, etc.   His assailants were so overcome by his generosity that they rushed him to the hospital, where doctors saved his life.

Wherever we are situated, all of us face daily choices about whether to add to the upward spiral or the downward one, contributing to the myriad feedback loops that together determine the trends in society. To quote two experts in the science of complexity,

Our attitude and being forms the climate others live in, the atmosphere they breathe. When we’re negative or dishonest, this exerts a subtle influence on others, quite aside from any direct impact our behavior might have. Subtle influence in its negative sense — collusion– holds restrictive limit cycles together, but in its positive sense is vital for keeping open systems renewed and vibrant. In this way, each of us is a hidden degree of freedom, an angle of a system’s unexpressed creativity.

From 1978 to 1989, Havel’s essay was part of this subtle influence, passed illegally throughout the Eastern bloc, helping groups such as Solidariti sustain their resolve and tipping the scales toward democracy.

Now, twenty years after the fall of the Berlin Wall, is it time to apply these methods more globally to renew the values and integrity that enable democracy?

Your reactions, thoughts, and stories are most welcome. Who knows, they could exert a positive influence on someone!

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