Even at places like McKinsey, KMPG, and Deloitte, which genuinely endeavor to promote a set of principled norms, some senior leaders have engaged in practices that are in direct opposition to their firms’ values. Such deviations underscore the fact that newly created norms are neither natural nor permanent. Practicing and even “living” these values for decades within one of these firm cultures is insufficient to avoid the corrupting influence of encountering new and different norms. Maintaining new intuitions requires continual renewal and reinforcement. For these moral intuitions, there is no such thing as permanence.
There’s a fine distinction between being confident and displaying hubris. The successful financiers Lloyd Blankfein of Goldman Sachs and Bill Ackman of Pershing Square Capital have both expressed how they believe their firms are doing “God’s work.” Even if stated in jest, this belief in the righteousness of their ambitions and the lack of any sense of fallibility is precisely the sentiment formerly held by many executives prior to faltering.
Nitin Nohria, dean of Harvard Business School, described an assignment he gives to new CEOs to complete during a training program for senior leaders. The CEOs are asked to rank a list of ten responsibilities—setting their firm’s strategy, getting a new management team, and working with the board of directors, among others—from the item they feel most to least prepared to take on as they begin leading a multibillion-dollar organization.
Invariably, new CEOs rank “setting the right moral tone” as one of the easiest aspects of management. “They all feel deeply secure in their own moral compass,” Nohria explained. “They have a sense that they are a people of extraordinary moral character and that it is very unlikely that they are going to do anything in their organization to lead either the organization astray or do something that will get them in the front pages of the newspapers.” Yet, as Nohria pointed out, it is exactly many of these same leaders who later appear on the front pages of newspapers for engaging in precisely the egregious conduct that they once insisted they would never do.
The simple fact is, most of us think that we are better and more moral than we actually are. No one, especially those who have achieved success, believes that they are likely to stumble and err. It is this sense of invincibility that has felled leaders across a range of fields—including the cyclist Lance Armstrong, the writer Jonah Lehrer, and the NBC news anchor Brian Williams. It’s only after faltering that people humbly ask, as observed by the psychologist Max Bazerman, “How could that have happened? And why didn’t I see that coming?”
One of the things that I’ve found especially fascinating during my conversations with the former executives discussed in this book is how strongly people hold on to the notion that it wasn’t really their actions that were all that deceitful or destructive. Their actions are not that bad, they argue, when compared with what others have done. According to the executives who committed insider trading, it’s the ones who committed financial fraud who really damaged the integrity of financial markets. According to those who engaged in financial fraud, it’s the executives who built Ponzi schemes that lacked an underlying business who are the real culprits. And for those who created pyramid schemes, it’s the investment bankers who went unpunished during the financial crises who are the real villains. Virtually every one of the former executives I spoke with pointed out, even complained, that it was not he who was the true villain—it was always someone else.
Beneath the irony of this defense, there is an interesting truth. We all confidently believe that we would have behaved differently if placed in the shoes of an executive engaging in malfeasance. However, this confidence is artificial.
We don’t get to reevaluate executives’ decisions using our current beliefs, the norms we’re instilled with now, or our current perspectives on what matters most. Likewise, we don’t get to bring along any finely tuned intuitions that we’ve acquired in our own lives to avoid this kind of be-havior when we place ourselves in these executives’ shoes. Instead, we have to imagine ourselves surrounded by their norms and immersed in their culture—not just in the present but in the past as well. We have to see ourselves as being shaped by the experiences they faced throughout their careers, not by those we face in our own.
If we see ourselves as experiencing the world as many of these former executives did, I don’t believe we can actually know how we would act if placed in their shoes. If anything, maybe we ought to humbly recognize that we might have behaved as they did. Yet, we can still hope, wish, and believe that we would act differently. Frankly, however, we just can’t know.
Perhaps Marc Dreier, the former graduate of Harvard and Yale who engineered a Ponzi scheme, actually had it right when he reflected on this conundrum. “It is easy to say you would never cross the line, but the line is presented to very, very few people,” Dreier explained. “How many could say for sure that they would never do what I did if they had the opportunity and thought they wouldn’t get caught?"
Appreciating our lack of invincibility—our inherent weakness and frailty—offers us the best chance of designing the appropriate mechanisms to help manage these limitations. If we learn to be more suspicious of our gut feelings when placed in new or difficult situations, we can acknowledge the need to create more opportunities for reflection and to bring in the viewpoints of others to question us. If we humbly recognize that we might not always even notice the choices that will lead us astray, we are more likely to develop ways to identify and control those decisions. But it’s only when we realize that our ability to err is much greater than we often think it is that we’ll begin to take the necessary steps to change and improve.
Excerpted from Why They Do It: Inside the Mind of the White-Collar Criminal by Eugene Soltes. Copyright © 2016. Available from PublicAffairs, an imprint of Perseus Books, LLC, a subsidiary of Hachette Book Group, Inc.