Ethics

Flattery Will Get You Nowhere

August 11, 2020 By Nagesh Belludi Leave a Comment

Flattery has had a bad name since the Greeks. Over 2,000 years ago, Publilius Syrus, the Latin writer of mimes and dramatic sketches, warned, “Flattery was formerly a vice; it has now become the fashion.”

Flattery continues to be an obligatory weapon in all manner of political and personal influence. Richard Stengel’s A Brief History of Flattery (2000) lists over 200 synonyms for “to flatter” and “flattery.”

A trio of marketing professors conducted a set of experiments using a sunglasses kiosk. The sales clerks flattered customers either during the sale, after the sale, or not at all. Then, researchers asked the shoppers to evaluate the trustworthiness of the clerks.

Turns out that the customers could see through it. Flattery, whether it comes during or after the sale, reduced the customer’s perception of the clerk’s trustworthiness. Without conscious reflection, flattery made the customers distrust the salesclerks:

Our findings show that even when it was obvious the compliment didn’t serve any underlying sales motive, the participants didn’t trust what the sales agent had to say.

In a way, it’s sad that the marketplace has become so suspicious, but it seems that when someone flatters us, we get our back up even if it’s not called for. It’s the consumers’ default position to react negatively to what is perceived as an attempt to manipulate them.

Idea for Impact: Don’t try to sway anybody by unsavory flattery and ingratiation.

Flattery is an inducement that seems great initially but leaves a horrid aftertaste. People will eat up your flattery if they’re starving for affection, but undue adulation isn’t as appealing as honest, sincere appreciation.

Food Delivery Apps are Eating Up Your Money

August 3, 2020 By Nagesh Belludi Leave a Comment

Food delivery apps have been the salvation for restaurants—and laid-off workers—during the COVID-19 pandemic. However, the promotions and fees charged by the likes of Uber Eats and GrubHub are bleeding restaurants dry. According to the Washington Post, one restaurant with $1,043 in food sales was left with just $377 after GrubHub’s charges for delivery, commission, processing, and promotions.

The food delivery startups’ #eatlocal and #keeprestaurantsopen promotions are exploiting customers’ generosity. Customers aren’t really helping out local restaurants as much as they may think. WIRED notes,

Uber Eats has waived delivery fees to consumers on most phone orders but still charges a 25% commission on orders from restaurants it partners with.

On a normal Wednesday night, [one Miami restaurateur] would expect roughly $5,000 in revenue. This Wednesday, the total was $665. Of that, $523 came through delivery apps, primarily Uber Eats. Those commissions totaled $131, leaving him just $534 to cover rent, plus the cost of food and staff. His typical daily overhead is about $3,000. With reduced staff, it’s now $1,200—more than twice as much as his revenue Wednesday. “It’s not sustainable,” he says.

Uber Eats isn’t the only company accused of trying to capitalize on the crisis. GrubHub’s “Supper for Support” initiative, meant to encourage buying from local restaurants, drew widespread criticism. The deal offers a $10 discount on certain orders between 5 pm and 9 pm, but restaurants that opt in cover the discount, and GrubHub still charges its commission on the full price.

Customers ought to know about these apps’ deceptive business practices and be able to make meaningful choices about patronizing local businesses.

In 2018, food delivery raked an estimated $161BB in sales worldwide, and the potential market size has attracted a great deal of startup funding. En bloc, the food delivery business has struggled to sustain itself profitably. The restaurants are particularly agitated, not least because food is a low-margin business, and the fiercely competitive meal-delivery firms just can’t recompense restaurants and riders as much as needed.

Idea for Impact: If you want to support your local businesses, patronize them directly. Call your order in. Pick up the order yourself or get your food delivered by the restaurant itself. Cut out the intermediary.

Power Inspires Hypocrisy

July 27, 2020 By Nagesh Belludi Leave a Comment

Mark Hurd, whom I featured in Friday’s article, was one of the most respected and eminent leaders in Silicon Valley until his mighty fall following his dalliance with a contractor during his time as CEO of Hewlett Packard (HP.)

Hurd had hired this contractor, a glamour model, as a “hostess” for “executive summit events,” even at out-of-town places where there is no HP event, but Hurd happened to be.

Power Corrupts and Inspires Hypocrisy Hurd was ultimately exonerated of violating HP’s sexual-harassment policy (nothing was consummated with the contractor, and Hurd settled with the accuser for undisclosed terms) but he was officially charged with drumming up expense reports.

Hurd walked away from HP with a $34 million severance package. Almost immediately, he became co-president of Oracle, earning $11 million a year and options.

Much has been speculated about the real reasons HP’s board gave Hurd the boot, especially considering that he probably falsified his just an expense report just the once. Even then, said expenses were petty compared to the massive turnaround he had engineered at HP after walking into a very troubling situation. Hurd was famed for his no-nonsense management style and for finagling a culture of operational excellence at HP.

When the Hurd controversy broke out, Wall Street Journal’s Jonah Lehrer argued that when nice people rise to positions of power, “authority atrophies the very talents that got them there.”

The very traits that helped leaders accumulate control in the first place all but disappear once they rise to power. Instead of being polite, honest and outgoing, they become impulsive, reckless and rude.

Contrary to the notion that nice guys finish last, research shows that the surest way to accumulate power is to do unto others as you would have them do unto you.

But once nice guys reach the top, the headiness of wielding power causes them to morph into a very different kind of beast. They lose their ability to empathize with others, especially lesser mortals, and ignore information that doesn’t confirm what they already believe. Most tellingly, perhaps, they learn to excuse faults in themselves that they are quick to condemn in others. That’s not to say that every CEO is a secret villain. But even the most virtuous people can be undone by the corner office.

Idea for Impact: Power can become an enabler of corruption, deceit, and hypocrisy. People in positions of power have incentives to hold others to strict account for their behaviors even as they themselves act up, especially when the odds of being caught and punished are slim.

The Poolguard Phenomenon

February 24, 2020 By Nagesh Belludi Leave a Comment

Even Petty Power Corrupts

Ever wondered why some people in a position of power, but without the concomitant rank or status, tend to exert their power unreasonably?

People in menial jobs can have, within their petty fiefdoms, the ability to inconvenience people. Rub a TSA agent the wrong way, for example, and you could be signaled for expanded screening. Summer-time poolguards can be seen checking excessively over kids and parents who show no deference to the poolguards’ authority. At bureaucratic offices, clerks and stern supervisors sometimes impose petty rules that must be followed for the sake of the rules—and nobody likes dealing with them!

The power tripper’s fragile ego hinges on exerting his/her power.

Power Increases People’s Sense of Entitlement

The Poolguard Phenomenon: Even Petty Power Corrupts This anecdotal fact seems to be substantiated by this study, titled “The Destructive Nature of Power Without Status.” The researchers make a case that neither power nor low status independently provokes people to mistreat others. Rather, the combination of these two facets of social interaction makes abuse that much more likely.

We predicted that when people have a role that gives them power but lacks status—and the respect that comes with that status—then it can lead to demeaning behaviors. Put simply, it feels bad to be in a low-status position and the power that goes with that role gives them a way to take action on those negative feelings.

One way to prevent such power dynamics is to find ways to make all individuals feel respected and valued irrespective of the status of their roles. “Respect assuages negative feelings about their low-status roles and leads them to treat others positively.” Courtesy pays!

Notes

Some people will despise anyone they suspect is exerting power over them.
Compare to the 1971 Stanford Prison Experiment, in which a group of students was appointed either prisoners or guards in a mocked-up prison. Although all the participants understood they were part of a simulation, the “guards” treated the “prisoners” in extremely humiliating ways because, per the researchers, the guards recognized that they lacked respect and admiration in the eyes of others. (This controversial experiment was the subject of a 2015 docudrama.)
Compare to the concept of the Napoleon Complex, through which, shorter men could overcompensate for their height by means of social aggressiveness. (Napoleon wasn’t short.)
Cf. The “Waiter Rule” states that how you treat seemingly insignificant people says a lot about your personality and priorities.

Why People under Pressure Choose Self-Interested Behaviors

January 17, 2020 By Nagesh Belludi

Why People under Pressure Choose Self-Interested Behaviors Pressure can put people in a state of threat. As I’ve examined previously here, here, and here, pressure can undermine people’s ability to make sound decisions.

Under pressure, people can abandon their inhibitions, cut corners, and loosen up their moral standards. In other words, they are more likely to engage in self-centered behaviors as opposed to pursuing the common good.

People adopt moral standards that dissuade them from unacceptable behaviors. Under normal circumstances, they think sensibly about the costs and benefits when making decisions. However, under pressure, people can be depleted of the cognitive resources they need to act ethically and resist temptations. See my article on the much-debated “muscle metaphor” of willpower.

When people are in that state of emotional and psychological anxiety, the brain goes into a defensive mode. With that, they are more likely to engage in self-interested behaviors that they would otherwise avoid, especially if the payoff for such behavior is high, and the odds of getting caught and punished are low.

Two Leadership Lessons from Oscar Munoz, United Airlines CEO

December 12, 2019 By Nagesh Belludi 1 Comment

United Airlines announced last week that CEO Oscar Munoz and President Scott Kirby would transition to new roles as executive chairman and CEO respectively in May 2020.

Two Leadership Lessons from United Airlines' CEO, Oscar Munoz Munoz was very good for the airline. He deserves kudos for getting United back on track, for improving the company’s culture, employee morale, brand image, and customer experience, and for hiring Kirby.

Munoz, who came to United from the railroad company CSX, had hitherto gained considerable experience while serving for 15 years on United’s (via its predecessor Continental Airlines’s) board. But, when he became CEO in 2015, he stated that he hadn’t realized how bad things had got at United. That admission reflects poorly on his board tenure—board members are expected to be clued up about the day-to-day specifics of the company and have more visibility into the pulse of the company’s culture beyond its senior management. Alas, board members not only owe their cushy jobs to the CEOs and the top leadership but also build long, cozy relationships with them.
Munoz will be remembered chiefly for the David Dao incident and the ensuing customer service debacle. The video of Dao being dragged out of his seat screaming was seen around the world. While the dragging was not Munoz’s fault (the underlying problem wasn’t unique to United,) the company’s horrendous response to the incident was. However, Munoz is worthy of praise for using the event as a learning exercise and an impetus for wholesale change in United’s operations and employee culture. In the aftermath of the incident, many customers vowed to boycott United flights, but that sentiment passed as the backlash over the incident waned. Even so, the David Dao incident need not have happened for United’s operational and cultural changes to materialize.

Now then, Scott Kirby is a hardnosed, “Wall Street-first, customer loyalty-last” kinda leader. Even though Kirby has made United an operationally reliable airline, his manic focus on cost-cutting has made him less popular with United’s staff and its frequent fliers. Let’s hope he’ll keep the momentum and preserve the good that Munoz has wrought.

Leadership Lessons from Lee Kuan Yew, Singapore’s Founding Father

June 24, 2019 By Nagesh Belludi 1 Comment

Almost all leaders take office with an ambitious vision for their country or their organization, but only a few ever succeed in transforming that vision into reality. Lee Kuan Yew (1923–2015,) the architect of modern Singapore, was one of them.

Leadership Lessons from Lee Kuan Yew, Singapore's Founding Father

Lee was one of the most competent leaders the world has ever seen. An incorruptible Cambridge-educated lawyer, he was an autocratic pragmatist—a strong-willed, visionary leader who “got it done.” Under his leadership, Singapore metamorphosed itself from a tropical backwater with few natural resources to a first-world metropolis in just one generation. Today, Singapore’s per-capita GDP in terms of Purchasing Power Parity is the third highest in the world.

There is also a darker side to the Singapore story, however. The island-nation’s prosperity came at the cost of a rather authoritarian style of government that sometimes infringed on civil liberties. In a 1986 National Day Rally, Lee defended,

I am often accused of interfering in the private lives of citizens. Yes, if I did not, had I not done that, we wouldn’t be here today. And I say without the slightest remorse, that we wouldn’t be here, we would not have made economic progress, if we had not intervened on very personal matters—who your neighbour is, how you live, the noise you make, how you spit, or what language you use. We decide what is right. Never mind what the people think.

Singapore is not quite a dictatorship, but neither is it a full democracy. Its political system is skewed to let Lee’s party dominate the country’s polity. In an interview with CNN’s Fareed Zakaria, Lee asserted, “It is not the business of the government to enable the opposition party to overturn us.”

A vast majority of Singaporeans today will overlook these civil-liberty concerns in the context of the country’s socio-political stability, public security, world-leading and affordable healthcare, free education, good housing for all, and high employment.

Singapore’s spectacular success is accepted as evidence, sometimes lamentably as justification, as with Rwanda’s Paul Kagame, that a vibrant economy and sustained prosperity could blossom only under a totalitarian government. Singapore’s achievement is not likely replicable in its entirety elsewhere.

Over the last several months, I’ve read a few biographies and evaluations of Lee and his political leadership, including the memoirs The Singapore Story: From Third World to First (1998) and One Man’s View of the World (2013.) Here are a few key leadership lessons that Lee had to teach.

Vision, structure, and determination are paramount to efficacious leadership. Lee was a brilliant, clear-eyed, far-sighted statesman. Singapore’s political stability, rapid economic growth, and its raising affluence between 1959 and 1990 were not accidental, but the result of his dynamic leadership and disciplined social engineering. In The Singapore Story (1998,) he writes, “The task of the leaders must be to provide or create for them a strong framework within which they can learn, work hard, be productive and be rewarded accordingly. And this is not easy to achieve.”

Leadership entails tough, unpopular decisions. Lee was not afraid of being out of favor. “I have never been overconcerned or obsessed with opinion polls or popularity polls. I think a leader who is, is a weak leader. If you are concerned with whether your rating will go up or down, then you are not a leader. You are just catching the wind … you will go where the wind is blowing. And that’s not what I am in this for.” He famously forbade the sale of chewing gum to keep Singapore’s streets clean. He maintained capital punishment and caning. Singapore’s vandalism rules drew worldwide attention in 1994 when American teenager Michael Fay was caned for damaging cars and public property, in spite of appeals for clemency from the US media and government, including then-President Bill Clinton.

The litmus test of great leadership is results that matter. Many take issue with Lee’s methods, but few dispute the results he achieved. He was a pragmatist with devotion to no particular ideology. He once contemplated, “I was never a prisoner of any [socio-political] theory. What guided me were reason and reality. The acid test I applied to every theory or scheme was: Would it work?” and “The acid test is in performance, not promises.”

Nurture a meritocracy. Lee’s commitment to meritocracy is a hallmark of Singapore’s national identity—social mobility is rooted in hard work and contribution regardless of ethnic differences. He devoted resources to cultivate an excellent education and health system, and developed a high-quality teacher workforce—all to maximize people’s potential. According to Lee Kuan Yew: The Man and His Ideas (1998,) he wrote, “It is possible to create a society in which everybody is given not equal rewards, but equal opportunities, and where rewards vary not in accordance with the ownership of property, but with the worth of a person’s contribution to that society. In other words, society should make it worth people’s while to give their best to the country. This is the way to progress.” In recent years, though, the debate over rising social inequality has led to some reproach of Singapore’s meritocracy.

Attract and retain superior talent; pay them well. A key contributor to the wealth, stability, efficiency, and cleanliness of Singapore is its civil service—it’s one of the most proficient and least corrupt bureaucracies in the world. The government’s transparent policies have been a powerful enticement for people, businesses, and investments. Singapore has some of the highest paid civil servants in the world. The country is not content to let its top graduates all go straight to the private sector, so it pays what it takes to get them. Prime Minister Goh Chok Tong, Lee’s immediate successor, told Singapore’s parliament on 3-Dec-1993, “If we do not pay ministers adequately, we will get inadequate ministers. If you pay peanuts, you will get monkeys for your ministers. The people will suffer, not the monkeys.”

One’s accomplishments become one’s legacy. Having a broad picture of the effect you want to have on the world will help you pinpoint the actions necessary to achieve it. Explaining his legacy, Lee wrote in Hard Truths to Keep Singapore Going (2011,) “I have spent my life, so much of it, building up this country. There’s nothing more that I need to do. At the end of the day, what have I got? A successful Singapore. What have I given up? My life.”

To judge leaders by their methods alone is to underrate their successes. While considering Lee’s legacy, one needs to acknowledge his achievements while refusing to close one’s eyes to certain lapses. Lee’s many critics considered him authoritarian—he imposed media restrictions and used detention without trial and defamation suits to quash critics of his government. Discussing a political opponent in Lee Kuan Yew: The Man and His Ideas (1998,) Lee justified, “If you are a troublemaker, it’s our job to politically destroy you. … Everybody knows that in my bag I have a hatchet, and a very sharp one. You take me on, I take my hatchet, we meet in the cul-de-sac. That’s the way I had to survive in the past.” Lee was unapologetic about his heavy-handed style of governing, seeing it as necessitous to get Singapore to where it got.

How to Make Others Feel They Owe You One: Reciprocity and Social Influence

September 18, 2018 By Nagesh Belludi Leave a Comment

Reciprocity, as described below, is a manipulative technique. My aim for this article is twofold: firstly, it sensitizes you to one of the many things people can do to get you to do their bidding. Secondly, reciprocity is a handy technique for those circumstances where certain ends can justify certain means.

Reciprocity is treating other people as they treat you, or for the purpose of this article, as you wish to be treated—specifically with the expectation that they will reciprocate your favor in the future.

In other words, reciprocity is a sneaky trick that permits deliberate interpersonal influence. Do something for other people and they will be willing to do something for you, partly because they’ll be uncomfortable feeling indebted to you.

The concept of reciprocity is ingrained in human nature. As part of our upbringing, we are taught to give something back to people who give us something. Reciprocity and cooperation are the underpinnings of a civilized society—they allow us to help people who need it and to hope that they will help us when we need it. Research suggests that the desire to repay goodwill is hard-wired in the human brain.

Jack Schafer’s The Like Switch: An Ex-FBI Agent’s Guide to Influencing, Attracting, and Winning People Over (2015) offers a clever technique to put reciprocity into action:

The next time someone thanks you for something, don’t say, “You’re welcome.” Instead, say, “I know you’d do the same thing for me.” This response invokes reciprocity. The other person is now predisposed to help you when you ask them for a favor.

The effects of goodwill are short-lived. A long-forgotten reputation for helpfulness gets you nothing. You have to renew your reputation by helping others regularly.

To learn more about reciprocity, read social psychologist Robert Cialdini’s Influence: The Psychology of Persuasion (1984.) He identified reciprocity as one of six principles that can help get others’ compliance to your requests.

The Dramatic Fall of Theranos & Elizabeth Holmes // Book Summary of John Carreyrou’s ‘Bad Blood’

September 10, 2018 By Nagesh Belludi Leave a Comment

The Fall of Theranos and Elizabeth Holmes

Bad Blood: Secrets and Lies in a Silicon Valley Startup (2018) is Wall Street Journal investigative reporter John Carreyrou’s remarkable exposé on Theranos, the former high-flying Silicon Valley tech startup founded by Elizabeth Holmes.

Theranos formally dissolved last week after a high-profile scandal revealed that the company not only deceived investors, but also risked the health of thousands of patients.

A Gripping Narrative, A Charismatic CEO, and A Big Fraud

In 2015, Theranos was one of Silicon Valley’s superstars. Valued at some $9 billion, Theranos claimed an out-and-out disruption of the $73-billion-a-year blood testing industry. Elizabeth Holmes pitched a revolutionary technology that could perform multiple tests on a few drops of capillary blood drawn by a minimally invasive finger prick, instead of the conventional—and much dreaded—venipuncture needle method.

The Story of Theranos and Elizabeth Holmes received much adulation by the media Theranos has its origins in 2004, when the brilliant Holmes, then a 19-year old Stanford sophomore, dropped out of college to start the company. Her missionary narrative swayed just about everyone to believe in the potential she touted.

Over the years, Theranos attracted a $1 billion investment, an illustrious board of directors, influential business partners (Walgreens, Safeway, Cleveland Clinic,) and significant amounts of adulation by the media—all of this lent credence to Holmes’s undertaking. She was celebrated as the youngest, self-made female billionaire in the world.

Nobody Asked the Hard Questions

Theranos’s castle in the air started to crumble in October 2015, when Carreyrou’s first Wall Street Journal article reported that the company was embellishing the potential of Theranos’s technology. Based on past employees’ disclosures, the article also cast serious doubts on the reliability of Theranos’s science. Behind the scenes, Theranos performed a majority of its blood tests with commercial analyzers purchased from other companies.

The persistent question in Carreyrou’s Bad Blood is how the many smart people who funded, endorsed, defended, and wrote about this company never set aside their confidence in Holmes’s persuasions and looked beyond her claim of “30 tests from one drop of blood.”

Without much independent due diligence, Theranos’s supporters possibly assumed that everyone else had checked out the company, its founders, and its science. Theranos got away with its actions for as long as it did because no one could conceive of the idea that the business would simply lie as much as it did.

The Story of Theranos and Elizabeth Holmes Appeared so Promising That Everybody Wanted it to Be True

Bad Blood also draws attention to Silicon Valley’s many failings, including the cult of the celebrity founder. Holmes’s smoke and mirrors was enabled by the notion of a “stealth mode” in which many Silicon Valley startups operate to protect their intellectual property. Theranos never proved that its testing technology really worked. It was performing tests on patients without having published peer-reviewed studies, getting FDA certification, or carrying out external evaluation by medical experts.

Carreyrou acknowledges that Holmes’s initial intentions were honorable, even if naïve. What triggered Holmes’s downfall was the characteristic entrepreneurial “fake it till you make it” ethos—it inhibited her from conceding early on that her ambitions were simply not viable.

When things didn’t go as intended, Holmes exploited the power of storytelling to get everyone to buy into her tales. She continued to believe that the reality of the technology would catch up with her vision in the future. Trapped in a web of hyperbole and overpromises, Holmes and her associate (as well as then-lover) Sunny Balwani operated a culture of fear and intimidation at Theranos. They went as far as hiring superstar lawyers to threaten and silence employees and anyone else who dared to challenge the company or expose its deficiencies.

Book Recommendation: Bad Blood is a Must-Read

Every inventor, entrepreneur, investor, and businessperson should read Bad Blood. It’s a fascinating and meticulously researched report of personal and corporate ambition unraveled by dishonesty. This page-turner is a New York Times bestseller and is expected to be made into a movie.

Shrewd Leaders Sometimes Take Liberties with the Truth to Reach Righteous Goals

April 12, 2018 By Nagesh Belludi 1 Comment

Shrewd Leaders Must Sometimes Take Liberties with the Truth to Reach Righteous Goals Duplicity must be decried when used to justify the attainment and exercise of power. However, sometimes, even principled leaders must put on an act to realize noble ends—infuse optimism to surmount hopelessness, win followers’ devotion to audacious new ideas, for example.

In the Zen parable that follows, a warrior motivates his followers in the face of desperate odds. He persuades his outnumbered army by flipping an unfair coin and proclaiming that they are fated to win the battle.

A great Japanese warrior named Nobunaga decided to attack the enemy although he had only one-tenth the number of men the opposition commanded. He knew that he would win, but his soldiers were in doubt.

On the way he stopped at a Shinto shrine and told his men: “After I visit the shrine I will toss a coin. If heads comes, we will win; if tails, we will lose. Destiny holds us in her hand.”

Nobunaga entered the shrine and offered a silent prayer. He came forth and tossed a coin. Heads appeared. His soldiers were so eager to fight that they won their battle easily.

“No one can change the hand of destiny,” his attendant told him after the battle.

“Indeed not,” said Nobunaga, showing a coin which had been doubled, with heads facing either way.

Idea for Impact: Moral Leadership Relates to the Integrity of Leaders and Their Intentions

A wise leader must be open to bringing deception into play to smooth the way to sound decisions and noble results.

As long as leaders use these methods to respectable purposes, and until people wise up to their methods, certain ends can justify certain means.

Postscript: The quoted Zen parable is sourced from the celebrated compilation Zen Flesh, Zen Bones: A Collection of Zen and Pre-Zen Writings, Shambhala Edition (1961) by Paul Reps. This book traces its roots to the thirteenth-century Japanese anthology of Buddhist parables Shasekishū (Sand and Pebbles) compiled by the Kamakura-era monk Mujū.

Ethics

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Even Petty Power Corrupts

Power Increases People’s Sense of Entitlement

Notes

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A Gripping Narrative, A Charismatic CEO, and A Big Fraud

Nobody Asked the Hard Questions

The Story of Theranos and Elizabeth Holmes Appeared so Promising That Everybody Wanted it to Be True

Book Recommendation: Bad Blood is a Must-Read

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Idea for Impact: Moral Leadership Relates to the Integrity of Leaders and Their Intentions

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