Bankers sincerely don’t understand

I must explain that title. I mean that bankers are not necessarily malevolent as they once more bring mathematically smart but risky financial products on the market or use perverse reward systems.

I say that because people (bankers, in this case) will not be willing to talk about their actions when they are accused of malice. But also because alarmingly often this is the case: bankers believe in what they do. They don’t necessarily have bad intentions.

Merel van Vroonhoven, head of the Dutch Regulator Financial Markets, expresses this as follows: “Bankers feel that they have done what has been agreed, so that’s it. They are, unlike the surrounding society in which they operate, insufficiently aware that there is really need for something else. Therefore, the surprise in the sector about the commotion from society is sincere.”

And Joris Luyendijk, in his book Swimming with Sharks, says: “Outsiders see that the amoral financial system leads to immoral outcome, but bankers have learned in their economic studies, especially if that was at an Anglo-Saxon top university, that the result of their work is morally right because it contributes to economic growth. That is their dogma.” That’s what they believe in and much more they sincerely do not see.
In addition, says Luyendijk, that universe is not so exceptional. Rather, the amoral mindset where everybody is so angry about now, has found broad access in society, even in sectors such as education and healthcare. So the problem is the system, in the broadest sense, and instead of furiously blaming individual bankers for succumbing to perverse incentives we should invest our energy into tackling and eliminating them.

The wide spread of Anglo-Saxon management values – such as rational cleverness, priority for thinking over doing and for policy over implementation – allows the comparison of bankers with other professions that sometimes operate in a similar dysfunctional way. Certainly for the illustration of the influence of good intentions such a comparison is instructive, because in those other professions money does not play as big a role. So the accusation of avarice and greed (often directed against bankers) is not needed for an understanding of the type of dysfunctional behavior we talk about. Good intentions and ambitious cunning explain enough.

You can see that for example in the US policy officials who had to carry Obamacare through parliament. Obama’s team consisted of super smart people. But they appeared to have little interest in the concrete implementation and elaboration of the plan. They had terminated the insurance of millions of Americans without telling them they quickly would get a new - and better - insurance.

Obama’s project then was in danger of running ashore. With understated anger the president subjected his team to a questionsession which the participants experienced as “an autopsy and as much worse than shouting”. By doing so, Obama as yet made his policymakers aware of the panic and commotion they had caused to people and which they, with all their cunning, had not seen coming. As bankers do not understand the turmoil that may cause their products in society.

The comparison shows that these policy-makers and bankers have the following in common: a great belief in complicated products, thought-out by high potentials and rolled out downward; a certain blindness to the effects of those products in the daily lives of people; the belief that their products serve a higher purpose.

Anyway, well intentioned or not, if the results of their actions are undesirable, then bankers must be addressed on the risks of their actions, as Obama did with his policy officials.

In order to protect society from this kind of smug smart guys. And also because maybe it is not so nice at all for bankers and policy officials themselves, having to live in the above described value system. Luyendijk: “That’s why I say we should hug them. Because they lead tragic lives.”

Also see Crisis of Ethics or of Thinking?

Corporate Ethical Officer

Following its blameworthy behaviour around a public tender, Dutch Railways has decided to appoint a Corporate Ethical Officer.

You would better not think of getting that job. The splitting off of ‘ethics’ may very well be designed to give the other managers a free hand again, because formally the ethical side will then be covered. Being manager of ethics you will be forced to slow down the other managers in their ambitions, while they, to their feeling, are engaged with the reál work. You will then be the, probably little respected, spoil-sport.

I conceive this measure as an illustration of our tendency in organized life to excessively divide what can actually not be divided. It is questionable whether ethics is separately available, because actually it must be present in everything. Ín the people, ín what you do with each other, and not as an isolated category.

Does this last conviction of mine mean that I end up with the so called ‘virtue ethics’? This is the ethics that incites people to anchor virtues – such as temperance, courage, justice – in their character. With them managers and other employees of the organization would no longer need an external monitoring body because they act virtuously from themselves.

Surely there is something to say for this virtue ethics, at least it is hard to be against it. But I’m not a big supporter, because there is a hint of arduousness around it. You need to constantly work on your character, train your whole life long. Again, one can hardly object to that, but as to me, I would like to have it a little more relaxed.

Besides, how do you measure virtues without immediately entering into the false categories of which the ‘manager ethics’ is also an exponent? If you want to call in virtues in an operational way, the risk is considerable that once again you reduce moral qualities to defined characteristics and places them outside yourself.

It is funnier, and more relaxed, to just stumble upon good relationships, to find them in reality. The problem is, if that good is not to be a pre-defined, fixed category, then it must continually emerge in the situations and configurations that happen, in the relationships that occur. So, less in people and things, but between what happens. There is something surprising and unplannable to that.

But it shoúld be that way, because sharp demarcation of categories often does not convince us any longer. Think only of the ‘manager ethics’.

Also see Defining the world

Begging for Feed-back

I recently read that in the short term we in the West must not expect revolutionary new technological inventions. Technological innovation will mainly need to build on existing technology and therefore productivity increase on this basis will be modest in size.

If that’s the case indeed, more profits and faster productivity growth are to be expected of social innovation. By which I mean the fixing of the energy leak which in many organizations exists because people do not or too little cooperate. And also I mean the stopping of the waste of money, time and talent which results from dysfunctional beliefs about management.

That energy leak and waste are usually not caused because employees or managers have bad intentions, but because the organization through budgets and powers is sometimes arranged in such way as to set people against each other instead of bringing them together. And that in its turn is caused because we are saddled with obsolete, dysfunctional beliefs about management and organization. These limit, consciously or unconsciously, our space for movement and improvement.

Take the views on management and leadership. In most organizations it are still mainly forms of hierarchical thinking and command structures that determine which concepts are associated with management. These include concepts such as power, competency, the ability to override others. And far fewer – apart from exceptions – a serving and facilitating attitude.

Then this is what you get: managers who get a kick out of their decision-making-power and who in intimate moments don’t keep secret that they are in that position because they cannot stand that others tell them what to do. But who at the same time do not but expect that others are able to do precisely that.

And you get relatively many frightened employees, who have effectively been silenced.

That pinches of course, and those managers may as well feel the pinching. They largely, despite their formal power, fail to achieve what they aim at. And they feel that more is needed, and – above all – something else: they should engage in genuine consultation with “their” people. But at this point also impotence enters the story: they have to listen but because of the way they have organized things and because of their character structure that does not work properly. They beg for feedback, but what follows is a deathly silence. Touching, almost.

This is not managable any longer by hurling in a top-down way some more behavioral science and communication tricks into the organization. Here another way of social interaction is required. Which justifiably may be called: social innovation.

Also see Trust

Unlearning

A human being can learn, but can she also unlearn? I don’t mean that she can forget, for example in the sense of a skill you get unused to and lose. No, I mean that one has gained insights and then returns them. And not so by progressive clarification, but because these insights have become socially less desirable. In that case the question is: did you really get rid of them? Is the situation as it was before you gained the insights?

If that would be the case, unlearning would indeed exist. But if you still carry the learned things with you and simply don’t talk about them, then there is no question of unlearning. Then anyway the situation is very different from what it was before you started to learn.

These thoughts come to me because the last two years at my work were geared to collective learning. By focusing, with the help of external consultants, on our customer (the Amsterdam citizen) and our primary staff the permanent question was: where do our management concepts and controldrive hamper us more than they help us. When the management factory becomes dysfunctional?

In the process, we learned that the reality of the customer and the workplace may sometimes be very different from the manager’s reality. And that, in order to bridge the gap, and especially in order to somehow “have a control dashboard” often too quickly ICT is embraced, forgetting that a subtle network of connections between people and between people and machines determines the quality of information. We learned that there is no quick route, and that only constant attention to these connections eventually guarantees quality.

Those are insights indeed. Can one just shake them off once they are there? It seems so. At my work I already heard the simplicities pass again: just name some goals and implement them, and then the desired information rolls with the push of a button from the machine. As if not information is the result of a multitude of dependencies and delicate interactions. But maybe that kind of talk comes from people to whom the insights of the past two years have gone by, that is: who didn’t learn anything anyway. Of course, in that case you also cannot dislearn.

With people who díd learn something the past few years I suspect that the situation is different. There, I think, things have definitely changed in a way that is not easily reversed. Once you have seen how dysfunctional an organization can operate, your alertness to sham management will be aroused for ever. Dislearning and return to a naive embrace of command-and-control management have become impossible then. A broken egg cannot be repaired.

Of course, a stiffer regime and tight economic conditions can curtail the space to give effect to these insights quite severely. But people do not just lose their insights like that, so something under the surface will be different from what was the case before the insights came. Completely back to before will therefore not really be an option.

Also see Blowing bubbles and AAA