Ethics

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

April 12, 2018 By Nagesh Belludi 1 Comment

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.

Why a Friend Can’t Keep a Secret

April 2, 2018 By Nagesh Belludi Leave a Comment

A caring, faithful relationship with a family member or a friend is a sacrosanct space where you can shed your guard, reveal your secrets, and disclose your worries. Such relationships are life’s principal social support systems.

Your ability to form close relationships with others hinges on the trust you feel with your nearest and dearest.

Once You Share Something Confidential, You Lose Control of it

Sharing your secrets with others and keeping others’ secrets are essential to establishing and nurturing bonds between people.

Secrets are kept or revealed for a variety of complex reasons—utter carelessness, actual malice, self-serving manipulation, or altruistic protection of others.

Forgetfulness and negligence often initiate letting a secret slip; some people may not understand the potential consequences of not keeping somebody’s secret to themselves.
As the World War II idiom cautions, loose lips sink ships. Some blabbermouths just can’t be the soul of discretion—they have no filters and don’t concern themselves with betraying others’ trust.
Some folks justify spreading others’ secrets by convincing themselves that the secret is common knowledge—if a source shared a secret with them, the source may have shared it with others too.
Some nefarious people use secrets they’re supposed to keep as currency to curry favor with someone else. An egregious recent example is that of McKinsey’s Managing Director Rajat Gupta revealing confidential information about Goldman Sachs, on whose board of directors he sat, to hedge fund manager Raj Rajaratnam.
Some people may assume an altruistic—or self-righteous—mind-set and reveal a secret assuming that divulging the secret could be more beneficial to those concerned than keeping the secret.
Some people reveal secrets because they can’t bear the mental distress of keeping the secret. Often, the bigger the secret, the harder it is to keep it.

If you’ve been told a secret or have some information in hand that may put somebody in immediate emotional or physical risk, be careful in how you act. Telling secrets in the wrong way, to the wrong people, or at the wrong time can be surprisingly destructive. If required, seek help from a relationship counselor.

If a friend shared something about you that you told them in private, try to forgive his/her lack of discretion. Hold back your trust until you can feel comfortable trusting them again.

Admit When You Don’t Have All the Answers

March 27, 2018 By Nagesh Belludi Leave a Comment

As a leader or as a salesperson, your employees or customers expect you to have the answers. However, there’ll times when you may not know the answer to difficult questions right away. To avoid losing credibility and causing others to question your knowledge, it’s important to know how to handle the situation properly.

Folks Don’t Want to Confess to Not Knowing Enough

Having quick, confident answers is often seen as a mark of proficiency and leadership. For that reason, you may be conditioned to believe that “not knowing” makes you look exposed. You may assume that any gaps in knowledge should be veiled at all costs.

Rather than admitting that you don’t have an answer to a tough question, you may tend to make something up on the fly, fast-talk, or stumble your way with a dubious response. Rookie salespeople are particularly prone to this—they tend to give answers they believe their prospective customers want to hear.

Consequently, in trying to look strong, you’ll end up looking weak.

The Power of Saying “I Don’t Know”

The ability to recognize one’s limitations is an underappreciated intellectual skill. A humble individual is all too aware of the confines of his/her corpus of knowledge.

Intellectual growth can come about only when the humble person can admit to not knowing enough and opening up to the possibilities of learning.

In an interview at the Wharton school, Carol Bartz (the no-nonsense, swearword-spewing former executive at Yahoo, Autodesk, and Sun Microsystems) commented about this false bravado and misplaced poise:

The phrase, “I don’t know” is in fact a strength. I have a [nonsense] detector that is really good, really good. And I love playing with people who rubbish me. I would much prefer if someone told me, “Not only do I not know the answer, but I wouldn’t even know how to get it. Could we talk about how, and I can get back to you?” That is so, so powerful. I don’t care how old or seasoned or how high you are in an organization. Saying “I don’t know” can give you the vulnerability you need to lead better.

Idea for Impact: Don’t Be Afraid to Admit What You Don’t Know

Great leaders know when to admit “I don’t know” and how to follow up appropriately. When you’re tempted to misrepresent your understanding, try to declare,

“I don’t know the answer at this time, but I will get back to you.”
“Good point. I don’t know, but I’m interested in what you think.”
“I don’t know, but let’s consult someone who knows more about this.”
“I don’t know, but I can do more research and incorporate those risk factors in our contingency plans.”

To be appreciated as a reliable, confident, and ethical person, be willing to admit that you don’t have all the answers. This act of humility and the readiness to seek the help of others can inspire greater trust within your team and encourage others to follow suit.

Be honest and direct when dealing with people, and they’ll respect you even if you aren’t able to answer all their questions.

Power Corrupts, and Power Attracts the Corruptible

January 12, 2018 By Nagesh Belludi Leave a Comment

Picture of Statue of Demon Mahishasura atop Chamundi Hills in Mysore, India The recent sexual misconduct allegations of influential men abusing their towering positions for contemptuous behaviors provide yet another reminder that power corrupts. As the British politician and historian Lord John Dalberg-Acton famously wrote in an 1887 letter to the Anglican Bishop Mandell Creighton,

Power tends to corrupt and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority: still more when you superadd the tendency or the certainty of corruption by authority. There is no worse heresy than that the office sanctifies the holder of it. That is the point at which … the end learns to justify the means.

The recent scandals lay bare the three distinctive characteristics of the intoxication of power: the inflation of the self, the devaluation of the helpless, and a dreadful shortfall in self-awareness of actions and consequences.

In the case of studio executive Harvey Weinstein, the worse outrage is that, many prominent people, despite their awareness of Weinstein’s uninhibited abuse, stayed silent—and possibly benefited. Some Hollywood celebrities are said to have overlooked his transgressions. Meryl Streep, one of Hollywood’s most successful actors, who once referred to Weinstein as ‘God,’ had to contend the blame that everyone in Hollywood knew of Weinstein’s conduct. His staff sheltered him or paid off victims, many of whom chose to remain silent for fear of derailing their budding careers. Going public would have hurt them more than it would have damaged Weinstein, until those accusations reach a critical mass and suddenly everyone flipped against him.

The Intoxication of Power

The British philosopher Bertrand Russell first wrote about the “intoxication of power” in A History of Western Philosophy (1945,) and best described what develops in the minds of many people who, in all walks of life, exercise a measure of power and dominance.

The Greeks, with their dread of hubris and their belief in a Necessity or Fate superior even to Zeus, carefully avoided what would have seemed to them insolence towards the universe. The Middle Ages carried submission much further: humility towards God was a Christian’s first duty. Initiative was cramped by this attitude, and great originality was scarcely possible. The Renaissance restored human pride, but carried it to the point where it led to anarchy and disaster. … Man, formerly too humble, begins to think of himself as almost a God.

…

In all of this I feel a great danger, the danger of what might be called cosmic impiety. The concept of ‘truth’ as something dependent upon facts largely outside human control has been one of the ways in which philosophy hitherto has inculcated the necessary element of humility. When this check upon pride is removed, a further step is taken on the road towards a certain kind of madness—the intoxication of power which invaded philosophy with Fichte. I am persuaded that this intoxication is the greatest danger of our time, and that any philosophy which, however unintentionally, contributes to it is increasing the danger of vast social disaster.

Idea for Impact: People with even the smallest amount of authority can and will find ways to abuse it

People can become corrupt with power, fame, wealth, and influence, and, as I’ve written previously, they regularly get away with it. The solution, I believe, is to subject our elites (and the sycophantic supporters who are disposed to collude in self-interest) to as many restrictions, supervisions, and checks and balances as possible, and scrutinize them closely so as to spot hubristic traits and symptoms of the abuse of power.

Moral Disengagement Leads People to Act Immorally and Justify Their Unprincipled Behavior

November 20, 2017 By Nagesh Belludi Leave a Comment

Temptation of Christ on the First Day of Lent

Rationality Drives Human Behavior Only After Emotion and Impulse Lose Their Hegemony

People adapt moral standards that dissuade them from objectionable behavior. But these moral standards do not serve as a steadfast regulator of their moral actions. Occasionally, circumstances can make people to become selectively disengaged from those moral self-sanctions and end up pursuing unprincipled actions.

Particularly when people feel angry, pressured, or depressed, their mental footing tends to ebb away. Any state of emotional threat can let up their determination to act ethically and resist temptations. They lose discipline, get into a defensive mode, and become susceptible to thinking only about short-term benefits. They are more likely to engage in self-absorbed behaviors that they would otherwise spurn, especially if the payoff for such behavior is high and the odds of getting caught and punished are low.

Circumstances Sometimes Sway People to Engage in Behaviors That Conflict with Their Internalized Moral Standards

Moral disengagement is the psychological phenomenon that describes how people rationalize behavior that is at odds with their own moral principles. For example, suppose a teenager who has a principled framework that forbids theft. If he takes a newspaper without paying for it from a Starbucks store, he may rationalize his actions by telling himself that Starbucks warranted some harm because it overcharges its consumers and, until recently, purchased not all its coffee beans from certified fair trade sources.

People engaging in wrongdoing often see that the rules are uncalled-for and unjustifiable. In their judgment, even though they may be breaking the rules and flouting conventions, they’re persuaded that they’re really not doing anything wrong because the rules deserve to be violated.

Moral reasoning usually deprives people when they devalue their prey and malign their victims (“her tattletaling deserved it” or “he brandish a knife, hence I pulled out my gun.”)

Stanford Psychologist Albert Bandura, who introduced the concept of moral disengagement, identified eight cognitive mechanisms (book) that disengage a person’s internal moral standards from his/her actions, thereby causing unethical behavior without conspicuous remorse or self-censure.

Idea for Impact: Be Wary of Suspending Your Moral Standards to Reduce Self-Censure

When circumstances or people provoke you to potentially regretful behavior, realize that you are a self-determining agent, and that you have a moral and ethical responsibility to behave with integrity and pursue wholesome actions. Step back and ask yourself, “Normally, would I judge this contemplated action to be wrong? Are my ways of thinking flawed? Am I defending the harm I am causing by blaming others? Am I criticizing the victim to justify my destructive actions?”

When in doubt, use Warren Buffett’s rule of thumb for personal integrity: “I want [people] to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper—to be read by their spouses, children and friends—with the reporting done by an informed and critical reporter.”

Making Exceptions “Just Once” is a Slippery Slope

October 30, 2017 By Nagesh Belludi Leave a Comment

Keeping Our Commitments Unwaveringly is Tough

The Harvard business strategy professor Clayton Christensen (of The Innovator’s Dilemma (1997) fame) often tells a story from his college days when he played basketball for his university team. His team worked hard all season and made it to the finals of some big tournament. The championship game was scheduled on a Sunday.

Christensen is a pious Mormon. Playing on the Sabbath (the “seventh day” is holy occasion and has a particular purpose, i.e. rest and spiritual renewal) was against his religious beliefs. The basketball team’s coach asked Christensen to break the rule for that big game, “I don’t know what you believe, but I believe that God will understand.” His teammates prodded him, “You’ve got to play. Can’t you break the rule, just this one time?”

Christensen prayed to God for guidance. After some reflection, he concluded that he would not play in the finals because he did not want to violate the Mormon way of life and break his personal rules: “Because life is just one unending stream of extenuating circumstances. Had I crossed the line that one time, I would have done it over and over and over in the years that followed.”

Willpower is Character in Action

Christensen’s team, however, played without him and won the basketball championship.

Discussing this experience in writings such as How Will You Measure Your Life? (2012,) Christensen says,

Many of us have convinced ourselves that we are able to break our own personal rules “just this once.” In our minds, we can justify these small choices. None of those things, when they first happen, feels like a life-changing decision. The marginal costs are almost always low. But each of those decisions can roll up into a much bigger picture, turning you into the kind of person you never wanted to be.

…

If you give in to “just this once,” based on a marginal-cost analysis, you’ll regret where you end up. That’s the lesson I learned: it’s easier to hold to your principles 100 percent of the time than it is to hold to them 98 percent of the time. The boundary—your personal moral line—is powerful because you don’t cross it; if you have justified doing it once, there’s nothing to stop you doing it again.

For Christenson, the opportunity cost of missing the championship game was large. Therefore, the marginal cost of breaking his rules “just this once” was comparatively trivial. However, the bigger damage of yielding to demands of the circumstances was larger yet, given his religious devotion.

Idea for Impact: Life becomes so much simpler if you decide what you stand for, stick with your values 100% the time, and make no exceptions.

It’s easy to lose your emotional footing and resist temptations, especially when you feel pressured or depressed, or face some other persuasive incentive.

It’s easy to unearth some justification to infringe a little upon your principles or break commitments you’ve made to yourself.

However, conceding “just once” is a slippery slope—the proverbial thin end of a wedge. If you allow yourself to compromise just the once, you can wind up doing it frequently.

In contrast, if you make up your mind to follow 100% on some standard, all of your prospective decisions are made.

Life becomes so much easier when you no longer need to expend your willpower on internal moral deliberations or justify/ regret your poor choices.

Moral Self-Licensing: Do Good Deeds Make People Act Bad?

August 25, 2017 By Nagesh Belludi Leave a Comment

When People Do Something ‘Good’ They Feel Licensed to Do Something ‘Bad’ Later

Being—and being seen—as moral, ethical, and principled is an important part of people’s self-concept.

Social psychologists have studied the tendency of people using their prior moral actions to license future morally questionable actions. According to these studies, prior to making morally important decisions, people may survey their previous moral actions. If they recollect engaging in virtuous moral behavior in the past, they may subsequently become less bothered about engaging in morally questionable behavior.

Prior Actions Can Affect Individuals’ Future Behavior

Past good deeds can license people to engage in behaviors that are immoral, unethical, if not problematic—behaviors that they would otherwise avoid for fear of feeling or appearing immoral. The deep-seated human tendency that makes people feel entitled to do something less moral because they’ve done something moral previously is called “moral self-licensing.”

Psychologists reason that people’s previous actions may cause them to feel more self-possessed in their own moral self-worth. As a result, this claim licenses their choice of a more self-indulgent moral choice.

Conversely, when people appear immoral or devious to others, they subsequently take up positive actions to restore their moral image. Psychologists identify this as “compensation or cleansing.”

When ‘Good’ Behavior Supposedly Counteracts Doing Something ‘Bad’

Moral self-licensing has been demonstrated in several realms of human judgment. However, in my opinion, much of the cause-and-effect narratives seem ambiguous. For instance,

In a set of pioneering studies, participants who established their racial non-prejudiced attitudes by endorsing President Obama or through selecting a black person for a consulting firm job were subsequently more likely to make pro-white decisions.
In one test, after subjects were given a chance to condemn sexist statements, they were found to be subsequently more likely to support hiring a man in a male-dominated profession.
One study on consumer behavior suggested that shoppers who brought their own bags felt licensed to buy more junk food.

Contribution Ethic and “Prospective Moral Licensing”

A phenomenon related to moral self-licensing is “contribution ethic” or the “moral credential effect.” When people feel they’ve done their fair share for some noble cause, they decide they need do no more. In one study, after people participated in a pro-social deeds (e.g., doing something good for the cause of the environment,) they felt licensed to behave more selfishly later (e.g., donating less to an environmental program). Another study showed that people who drive hybrid cars tend to get more tickets and cause more accidents than do drivers of conventional cars.

Some studies have suggested that just thinking about past moral behavior or writing about oneself as a moral person can decrease the likelihood of subsequently performing altruistic acts—such as decreasing contributions to charitable causes or being less engaging in cooperative behavior towards friends and colleagues.

Finally, simply planning to do good later can allow people to be bad now. Some studies suggest that when people merely plan to engage in a moral behavior in the future, they feel licensed to respond in a morally questionable way in the present. Psychologists identify this as “prospective moral licensing.”

Idea for Impact: Past Moral Deeds Could Make People Do Morally Wrong Things

Part of becoming wise to the ways of the world and getting along with people is understanding the many peculiarities of human behavior. Learning why people feel licensed to engage in potentially immoral behavior given their demonstrated moral behavior allows for a better understanding of the world in which we live.

Job-Hunting While Still Employed

June 30, 2017 By Nagesh Belludi Leave a Comment

Searching for a new job without revealing that you aren’t very pleased at your current job or getting fired can be a challenge. Here are four ways to job-hunt with caution.

Examine your motivations before job-hunting. Many people who jump ship in frustration run into the same problems that were an obstacle with previous employers. Try to ask for honest feedback about how you’re perceived by your managers and what’s holding you back from a promotion. You’ll find it easier to tackle career progression frustrations in a familiar environment at your current employer rather than at a new company where you’ll be under pressure to learn the ropes and produce results quickly.
Respect your employer’s time and resources. Don’t job-search on company time—your current job responsibilities are your priority. Looking for another position typically involves having to be away from your office for interviews; use your vacation days—not sick days—for job-searching and interviewing. Be careful about using your work computer to look up jobs, contact recruiters, or update your social-media presence.
Be tactful about whom you tell that you’re looking for another job. Even if you trust your coworkers, you can’t limit what they may share with others. Some of your coworkers may be ethically obligated to keep your boss and your company informed about any prospective changes in staffing or anything that might affect the organization’s goals. Be cautious about how you promote yourself on LinkedIn and job-search websites.
If you are offered a new job, be straight with everyone. Inform your boss immediately. Give as much notice as required, plan to tie up loose ends, and offer to help transition your responsibilities to a successor. Don’t be unreasonable in leveraging your new job offer to negotiate a counteroffer from your employer. Do your best to leave on the right note. Be consistent in what you tell different people about why you’re leaving. Do not burn bridges in the job-transition process.

Why Others’ Pride Annoys You

April 11, 2017 By Nagesh Belludi Leave a Comment

The problem with pride is that it is tainted by a self-view of being better than others are.

Pride is an essential element of the human condition. Feeling good about yourself is indispensable for your emotional wellbeing.

However, pride can be the thin end of the wedge as regards your social behavior. A rigid self-affirmation can morph into an inflated opinion of the self and arrogance. This air of superiority causes a disrespectful attitude toward others. The British novelist, literary scholar, and poet C.S. Lewis (1898-1963) wrote, “Pride gets no pleasure out of having something, only out of having more of it than the next man.”

For this reason, philosophers throughout the ages have decried pride. Buddhism lists pride as one of the kleshas—detrimental mental states that can cloud the mind and result in “unwholesome” actions. Christianity considers pride as one of the seven deadly sins and declares that pride “doth go before the fall” (Proverbs 16:18.)

We’re easily annoyed by people who have an inflated view of their abilities and their wisdom.

Human tendency is such that, while you do not acknowledge pride in yourself, you are quick to recognize and condemn pride in others when they prickle you with their comments. In his famous work of Christian apologetics, Mere Christianity (1952,) C.S. Lewis attributes your annoyance towards others to your own pride:

There is one vice of which no man in the world is free; which everyone in the world loathes when he sees it in someone else’ and of which hardly any people … ever imagine that they are guilty themselves. I have heard people admit that they are bad tempered, or that they cannot keep their heads about girls or drink, or even that they are cowards. I do not think I have ever heard anyone who was not a Christian accuse himself of this vice. And at the same time I have very seldom met anyone, who was not a Christian, who showed the slightest mercy to it in others. There is no fault which makes a man more unpopular, and no fault which we are more unconscious of in ourselves. And the more we have it ourselves, the more we dislike it in others.

The vice I am talking of is Pride or Self-Conceit … the more pride one had, the more one disliked pride in others. … In fact, if you want to find out how proud you are the easiest way is to ask yourself, “How much do I dislike it when other people snub me, or refuse to take any notice of me, or shove their oar in, or patronise me, or show off?” The point is that each person’s pride is in competition with every one else’s pride. It is because I wanted to be the big noise at the party that I am so annoyed at someone else being the big noise.

Check the urge to pump up your superiority and develop the attitude of dignity through humility and gratitude.

The attitude that entails self-centeredness and superiority is called hubristic pride. It springs from fragile self-worth and manifests in less-desirable behaviors such as being disagreeable, pushy, vulnerable, and given to disgrace. You feel so badly about yourself that you compensate by feeling superior. You try to find others’ flaws as a way to obscure our own limitations.

Consequently, hubristic pride deprives you of humility. As an alternative to hubristic pride, philosophers advocate authentic pride. While hubristic pride depends on what happens outside yourself, authentic happiness is internal. Authentic pride causes you to feel good about yourself and become more confident and productive. It manifests in being agreeable, conscientious, and sociable towards others.

In effect, authentic pride comprises of dignity and modesty and gives you a sense of kinship—this mindfulness is the foundation of righteousness.

Idea for Impact: Discard hubristic pride and exercise authentic pride instead

Hubristic pride, it turns out, isn’t easy to recognize or restrain. Benjamin Franklin (1706—1790) who was renowned for his lifelong quest for self-improvement, wrote in his Autobiography (1791), “In reality there is perhaps not one of our natural passions so hard to subdue as pride. Disguise it, struggle with it, beat it down, stifle it, mortify it as much as one pleases, it is still alive, and will every now and then peep out and show itself…For even if I could conceive that I had completely overcome it, I should probably be proud of my humility.”

Further in Mere Christianity, C.S. Lewis suggests discarding hubristic pride:

Do not imagine that if you meet a really humble man he will be what most people call ‘humble’ nowadays: he will not be a sort of greasy, smarmy person, who is always telling you that, of course, he is nobody. Probably all you will think about him is that he seemed a cheerful, intelligent chap who took a real interest in what you said to him. If you do dislike him it will be because you feel a little envious of anyone who seems to enjoy life so easily. He will not be thinking about humility: he will not be thinking about himself at all.

If anyone would like to acquire humility, I can, I think, tell him the first step. The first step is to realise that one is proud. And a biggish step, too. At least, nothing whatever can be done before it. If you think you are not conceited, it means you are very conceited indeed.

One key to better people skills is to develop an humble, self-effacing, but assertive outlook towards others by way of authentic pride. Authentic pride is a detached and steady sense of self-worth that you can develop by validating, affirming, and valuing yourself as you are.

Authentic pride comes from recognizing that many of life’s achievements and possessions are ephemeral. As I’ve written previously, everything in life is pointless, irrelevant, and ultimately insignificant in the grand scheme of things. When you focus on feeling good through accumulation of achievements and possessions, you become hooked on external sources of gratification. In comparison, dignity and modesty can dwell inside you regardless of your successes and failures.

You don’t have to prove anything to anybody—not even to yourself. When you become conscious of this, you will keep your hubristic pride in check. Others will become less irritable.

Book Summary of Donald Keough’s ‘Ten Commandments for Business Failure’

March 10, 2017 By Nagesh Belludi Leave a Comment

During a remarkable business career of 60+ years, Coca-Cola executive Donald Keough (1926–2015) developed an inspiring lecture on leadership failures. At the prompting of Warren Buffett, a former neighbor and friend, Keough published his lecture as Ten Commandments for Business Failure.

Keough worked for the Coca-Cola Company for 43 years and rose through the ranks to become its President and COO. Following retirement in 1993, he served on the boards of Coca-Cola, Buffett’s Berkshire Hathaway, and many other organizations.

At Coca-Cola, Keough steered the company’s global product expansion and directed its iconic brand image and enviable distribution network. He became the business world’s most celebrated non-CEO leader.

Keough gained reputation as the public face of Coca-Cola’s 1985 New Coke misadventure—he delivered an on-TV mea culpa (see YouTube video) and announced the volte-face reinstatement of “Coca-Cola Classic.”

Donald Keough’s Straightforward Analysis and Leadership Lessons

Keough’s Ten Commandments for Business Failure is a predictable, yet insightful—even if circuitous—exploration of ten (and a bonus) leadership mistakes.

Quit Taking Risks: “Failures, for all the valuable lessons that they teach us in hindsight about management blunders, are simply risks that just didn’t work out. Such miscalculations, costly though they might be at the time, are part of the price of staying in business. As Peter Drucker pointed out nearly fifty years ago, it is management’s major task to prudently risk a company’s present assets in order to ensure its future existence.”
Be Inflexible: “Flexibility is a continual, deeply thoughtful process of examining situations and, when warranted, quickly adapting to changing circumstances. It is, in essence, the key to Darwin’s whole notion of the survival of the fittest. … Most recalcitrant business leaders would certainly never actually characterize themselves as inflexible. More than likely they would pay lip service to a philosophy of change, expressing the usual platitudes about how they embrace change and welcome it.”
Isolate Yourself (i.e., Be Out of Touch): “One of the traits of many of the legendary builders of business was that they had an uncanny ability to know and relate to their employees at every level … if you isolate yourself, you will not only not know what you don’t know about your business, but you will remain supremely and serenely confident that what you do know is right. Isolation, carried to its most extreme form, tends to breed a sense of almost divine right.”
Assume Infallibility: “The infallible we-know-best attitude of management has caused many companies to ignore reality and miss opportunities … If you want to increase your chances of failure, deny the possibility that you are not always 100 percent perfect in your judgment. Ignore the fact that sometimes others do know a thing or two. … So, if you want to fail, pose as an infallible leader.”
Play the Game Close to the Foul Line: “Business finally boils down to matters of trust consumers trust that the product will do what it promises it is supposed to-investors trust that management is competent-employees trust management to live up to its obligations. In recent years we seem to have quite a few smart, energetic people who have evidenced a rather fuzzy view of the right thing.”
Don’t Take Time to Think: “Time to think is not a luxury. It is a necessity. As Goethe noted: “Action is easy; thought is hard.” Yet action frequently-in fact, more often than not-takes on a life of its own. We pay homage to reason, but we are held hostage to emotion. We are, after all, feeling creatures, and in the excitement of a particular endeavor once the ball is rolling, it’s difficult to stop.”
Put All Your Faith in Experts and Outside Consultants: “The narrow perspective of what appears to be genius is often the inverse of wisdom.”
Love Your Bureaucracy: “As [Warren] Buffett said, “It’s unbelievable how much bureaucracy can build up in businesses, particularly those in which you can pass almost all of your costs to the consumer.” … On the hazards of bureaucracy: at their worst, they cannot only impede success, they can also precipitate disaster. … The more cooks there are in the kitchen, the greater the chance that bureaucratic decision making will either be deadlocked or the decision will become an exercise in group wishing. … Ultimately, a bureaucracy can become so dysfunctional that there is literally no one who can rain on the parade. The team can never make anything approaching an objective decision.”
Send Mixed Messages: “Sending mixed or confused messages to your employees or your customers will jeopardize your competitive position, and result in failure.”
Be Afraid of the Future: “The most serious problem with great pessimism is that it is absolutely paralyzing. People are so afraid of dire consequences that they throw their hands up in despair and do nothing. Fear of the future guarantees that the future will be a failure. … To aspire to any kind of leadership in business you simply have to be a rational optimist. One optimist in a sea of pessimists can make all the difference.”
Lose Your Passion for Work-for Life: “A major component of happiness in the business world is finding something you love doing, whatever it might be, and then finding a way to do it. To have success you have to have a high level of unadulterated desire to get up and go to work. … The easiest way to develop an inner passion in a business setting is to focus all your mind and heart on four aspects of your world: your customers, your brands, your people, and, finally, your dreams.”

Words of Wisdom from a Distinguished Corporate Executive

Among the myriad offerings of “rules for success” volumes, books such as The Ten Commandments are distinctive for their memorable business stories and examples. Keough’s candid analyses include narratives as captivating as the historical origin of Coke, the commercial history of the xerographic machine, the Coke-Pepsi rivalry, Coca-Cola Company’s ownership of Columbia Pictures, and the New Coke debacle. When asked in an interview if New Coke was worth the risk, Keough famously replied,

I wouldn’t want to do it again. But it was an enormous learning experience, and oddly enough, it turned out to be positive for the Coca-Cola Company. Our sales increased when we brought the original formula back. The reaction from our customers was overwhelming. Once we realized that we had made a mistake, I went on television and simply said that we don’t own this brand, you do. You’ve made it clear that you want the original formula back, and you’re getting it back.

In the chapter on flexible and adaptive leadership, Keough blames Henry Ford’s stubbornness for the flagging market share of the Model T vehicle. During the mid-1920s, the industrial triumph of his mass production system and the commercial success of the Model T blinded Henry Ford to a budding customer penchant for cosmetic customization and convenience features. Electric starters, for example, were starting to be perceived as essentials and not as luxuries. Keough argues,

Henry Ford reportedly said, regarding the Model T, “They can have it in any color they want, as long as it’s black.” For a long time that was just fine. But then people began to get tired of the black tin lizzies. Yet even as America was roaring into the 1920s with bigger, faster, fancier, brightly painted automobiles, Henry Ford kept insisting that the Model T, essentially unchanged since 1908, was still what America wanted and needed and he was not going to change his mind. Inevitably, upstarts like Chevrolet and Dodge began to erode Ford’s market and seriously challenge the company’s dominant leadership. At last, more rational minds prevailed and Ford admitted the need to produce a better vehicle. After shutting down his main plant for six months, he successfully launched the Model A in 1928. But Henry Ford’s inflexibility had brought the company to the brink of disaster and cost it a competitive edge that it has never regained.

Recommendation: As a fast read, Donald Keough’s The Ten Commandments for Business Failure is worthwhile for its many nuggets of business history. Even though many of his cautionary lessons are not entirely unexpected, some are insightful. The “play the game close to the foul line” warning about values and ethics is especially thought-provoking. Keough writes, “The fact is, if you play on the edge the organization will step over the line from time to time. It is inevitable. Warren Buffett says: ‘Play to the center of the court’.”

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Ethics

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

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Once You Share Something Confidential, You Lose Control of it

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Folks Don’t Want to Confess to Not Knowing Enough

The Power of Saying “I Don’t Know”

Idea for Impact: Don’t Be Afraid to Admit What You Don’t Know

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The Intoxication of Power

Idea for Impact: People with even the smallest amount of authority can and will find ways to abuse it

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Rationality Drives Human Behavior Only After Emotion and Impulse Lose Their Hegemony

Circumstances Sometimes Sway People to Engage in Behaviors That Conflict with Their Internalized Moral Standards

Idea for Impact: Be Wary of Suspending Your Moral Standards to Reduce Self-Censure

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Keeping Our Commitments Unwaveringly is Tough

Willpower is Character in Action

Idea for Impact: Life becomes so much simpler if you decide what you stand for, stick with your values 100% the time, and make no exceptions.

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When People Do Something ‘Good’ They Feel Licensed to Do Something ‘Bad’ Later

Prior Actions Can Affect Individuals’ Future Behavior

When ‘Good’ Behavior Supposedly Counteracts Doing Something ‘Bad’

Contribution Ethic and “Prospective Moral Licensing”

Idea for Impact: Past Moral Deeds Could Make People Do Morally Wrong Things

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The problem with pride is that it is tainted by a self-view of being better than others are.

We’re easily annoyed by people who have an inflated view of their abilities and their wisdom.

Check the urge to pump up your superiority and develop the attitude of dignity through humility and gratitude.

Idea for Impact: Discard hubristic pride and exercise authentic pride instead

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Donald Keough’s Straightforward Analysis and Leadership Lessons

Words of Wisdom from a Distinguished Corporate Executive

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