“Do the right thing” used to be an accepted mantra, as well as a point of pride.

That’s changed; think Volkswagen’s “defeat device” to Nissam’s 20+ years of using untrained inspectors (due to a “shortage”) to Uber’s Greyball, and others too numerous to list.

The companies involved only fixed/changed/stopped because they were caught.

These days, the mantra is “do the right thing if

• caught doing the wrong thing;
• it doesn’t interfere with revenue;
• it removes the spotlight from a scandal;
• it generates good press; or
• it counteracts bad press,

In other words, do the right thing as a sop to the masses until they forget and then it’s business as usual.

And why not?

The same attitude has worked well for politicians, religious leaders, and business executives for decades, if not centuries, so why change a formula that works so well?

The same attitude is in play for individuals, especially these days when personal convenience and comfort are paramount and ethics, morals, integrity, decency and responsibility play second fiddle to expediency.

Like companies, people go their merry way lying, cheating, and stealing their way to the top.

And if they happen to walk into/over/stomp on someone they will look around and, if caught, do the right thing by helping them up and apologizing.

Maybe.

But whether enterprise or individual, permanent change is unlikely.

Image credit: Kurt Bauschardt

Note: It’s imperative to recognize that culture has nothing to do with perks, such as free food, fancy offices, free services, etc.

Culture is about values and how they play out in both the internal and external functioning of the company.

But company culture isn’t the end game — micro cultures are.

Micro cultures are based on individual bosses’ values.

Both cultures are fundamental to that perennially popular subject, employee engagement.

HBS’ Jim Heskett recently asked his audience what’s needed to engender employee engagement given that engaged employees are 2.7% more productive.

Most of the responses talked about the need for managers to respect their people, listen to ideas from everyone, have better people skills, etc., and several mentioned the skills acquired with an MBA.

But, as I pointed out, and Heskett cited in his summary, “Respect and valuing employee input have little to do with education and much to do with personal values.”

Unfortunately, education is no guarantee of values.

Colleges are no different, with MBA students leading the pack. “56 percent of MBA students admitted to cheating…  In 1997, McCabe did a survey in which 84 percent of undergraduate business students admitted cheating versus 72 percent of engineering students and 66 percent of all students. In a 1964 survey by Columbia University, 66 percent of business students surveyed at 99 campuses said they cheated at least once.”

If scholastic success was based on cheating it’s likely that that lack of respect/get-ahead-at-all-costs mentality would carry over to their management style.

Yesterday’s post ended with this comment,

That [provide an environment in which people can learn, grow and excel] is what a good boss is supposed to do.

But it’s the great ones who actually do it.

In fact, they go beyond that and shelter their people from any kind of toxic culture coming down from above.

Image credit: thinkpublic

A few days ago Miki sent me an article about Tanium giving prospective customers a look into their client hospital’s live network, but without permission or protecting the identity of the hospital completely.

I wrote her back today as follows.

I had not seen this on my own, but I have been reading about the company for a few days now.

Coming from the medtech industry and security specifically I will say this.

The fact that he and his company used live hospital data without their consent will be a deathblow to them.

Hospitals take this very seriously because they are the ones who are held responsible by the Office for Civil Rights under Health and Human Services.

The hospital will be shown to have a vulnerability and will be forced to pay fines, lose out on government funds and potentially face sanctions. 

As a result the rest of the healthcare industry will treat Tanium like a pariah because they will not want to face repercussions.

Regardless of the industry it’s shocking to see how folks think it’s ok to manipulate or abuse customer relationships for their own profit, it always ends badly.  

Miki responded.

Sadly, I think they will find a way to smooth it over. Google, Facebook, etc sell customer data all the time. It’s how so many make their money and no one seems to care.

I know HIPPA is supposed to prevent this stuff, but I’m sure companies are getting around that, too, they just haven’t been caught, yet.

That’s the key, not being caught.

Every company that is caught, or just challenged, cries that they take their customer’s privacy seriously or that that’s not what their culture stands for, etc.

But only when they are caught.
I sincerely hope you are correct and that Tanium takes a major blow and, more importantly, that the CEO is forced out, but I’m not holding my breath. I guess I’ve finally gotten pretty cynical about this stuff.

So now I’m trying to decide if Miki’s cynicism is warranted or if I’m right and the publicized results of Tanium’s actions will have the effect they should.

I’ll keep you informed as there are more developments.

Image credit: Wikipedia

I received an email yesterday morning from the CEO of a well-known growth company. He wrote regarding yesterday’s post about cheating.

I asked why he wrote instead of leaving it as a comment.

He replied, I would rather avoid having it associated with me. If you want to write a post and have anonymous attribution, that’s fine. 

It’s an important observation and one that is especially applicable now. I’m sharing it with no additional comments from me.

Anything I tried to add would be superfluous and detract from its importance.

When there are strong incentives to cheat and large negative consequences if one avoids cheating (since everyone is doing it), what should be the inducement for not cheating?

Where cheating is rewarded, truth and uprightness has potentially large negative consequences.

An organization or society built on fraud, trickery and deceit will eventually descend into chaos and anarchy.

Without leadership among both common people and the privileged, this is inexorable destiny.

Whenever there is a trend toward something, there are significant costs associated with changing the trajectory.

Who can or should be willing to bear these costs?

Image credit: Abi Skipp

What do Hampton Creek, Theranos, Zenefits, Lending Club, WrkRiot, ScoreBig, Rothenberg Ventures have in common?

They all channeled the “fake it ‘til you make it” ethos of Silicon Valley.

Only they didn’t make it.

Previous well-known cheats include MiniScribe, WorldCom and Enron and they’re only the tip of the iceberg.

Cheating is the getting of a reward for ability or finding an easy way out of an unpleasant situation by dishonest means. It is generally used for the breaking of rules to gain unfair advantage in a competitive situation. — Wikipedia

Yesterday’s post focused on the prevalence of cheating at all school levels and its acceptance as a laissez-faire, “everyone does it” attitude.

Of course, cheating isn’t new, but the more ubiquitous it’s become the more it’s been shrugged off.

And it’s this cheating mindset that has shaped Silicon Valley over the last decade or so.

Along with faking it is the “do whatever it takes to win” form of cheating as exemplified by Uber’s Travis Kalanick.

Cheating on ideas, such as meritocracy and fairness, has certainly contributed to the rise of the bro culture, also exemplified by Uber and recently documented by Susan Fowler. However, as Uber engineer Aimee Lucido points out, Uber is far from being alone.

It does seem that a large percentage of the egos that drive, and aspire to drive, innovation, along with the egos that fund that drive, have lost touch with the society they claim to serve and, instead, bought into an attitude espoused by Donald Trump.

“And when you’re a star, they let you do it. You can do anything.”

We would be better off if they would channel Sophocles, instead.

Image credit: Sean MacEntee

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

From Napster to Uber and Airbnb, I’ve never been partial to startups whose success was based on cheating, AKA, breaking laws.

And the explanation that the law(s) are outmoded, even if true, doesn’t change my opinion.

Airbnb just introduced a new logo that was jumped on in the Twitterscape for its blatant sexual innuendo.

But that pales in comparison to its apparent theft.

 Airbnb’s new logo is an exact copy of the Automation Anywhere logo, as Jay Yarow pointed out on Twitter

Automation Anywhere started life as Tethys Solutions, LLC in 2003 and rebranded as Automation Anywhere in 2012.

Perhaps Airbnb sees appropriating a logo in the same light as moving into a community and ignoring its laws.

It should be interesting.

And with a client list that includes Cisco, Harley, MasterCard, Coach, Boeing, Oracle, Intel, Virgin and dozens of others, I doubt Automation Anywhere is going to roll over any time soon.

Image credit: HikingArtist

I expect stupid from teens; it’s not really their fault, since brain science has proved that teen brains are in a process of change and during that time the frontal cortex isn’t functioning.

The frontal cortex is where ethical judgments are made, along with connecting cause and effect.

Middlebury College has always run on an honor code, as do many colleges and universities, but it is giving in.

“So the whole idea of an honor code is very honorable, quite evidently. But there’s an issue of it being actually implemented. I think there are a lot of reasons, both internal and external to Middlebury, why it’s problematic to assume that such an honor code has a degree of credibility.” –Ronald Liebowitz, Middlebury’s president

Jessica Cheung, a junior at Middlebury College who wrote this essay, sees what’s happening and isn’t happy.

“Ethical judgment, it seems, has been supplanted by our need to succeed. (…) The honor code is a model of a world I wish to live in: one of honesty, personal responsibility, learning for the right reason, choosing right in a moment of temptation. These are the very deepest and most literal things we ask a school to teach us. If all this dies, what else can survive?

Just as critical, those who aren’t cheating are loathe to report cheating when they see it.

And it isn’t just Middlebury; the problem is rampant in colleges and universities across the country, including the most elite, like Stanford and Princeton.

Granted, brain maturity doesn’t happen overnight; research says that the brain continues maturing into the twenties, but based today’s ethical attitudes and watching AFV brain maturity is occurring well into people’s forties and fifties—if at all.

The stupid and unethical things, such as cheating, that we do as children and continue to do as teens and young adults don’t suddenly stop when we hit adulthood nor do the factors that motivated their doing—competition, the desire to succeed and peer pressure.

Food for thought as we enter another election year full of lies and cheats—on all sides of the table.

Flickr image credit: Kevin Tostado

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

Cheating is rife across the board, so seeing more of it shouldn’t come as a surprise.

I think what does surprise is not how overt it is these days, but the assumption that everyone will participate.

Especially when money is involved.

Recently the CEO of soon-to-go-public Arista Networks offered Fortune Sr. Editor at Large Adam Lashinsky, who had written about the company previously, ““friends and family” shares in Arista’s upcoming initial public offering. The offer was explicit….” (He declined.)

Lashinsky saw similar acts before the last tech bubble burst and sees this as a sign that there is indeed a tech bubble that will soon blow up.

When times are so good that executives are willing to disregard the difference between ethical and unctuous behavior, it’s just one sign that the end, relatively speaking, is near.

I’m not sure unctuous applies as an alternative to unethical, but there is no question about the ethics of trying to bribe anyone in a position to affect an IPO.

It’s cheating, plain and simple and the SEC tends to frown on it. 

Sadly, many don’t see it as an ethical lapse, let alone cheating.

They see it as reasonable business practice.

How do you see it?

Image credit: HikingArtist

Research by two economists at Kellogg Turned up an interesting insight.

“…CEOs with a military background are much less likely to engage in corporate fraud compared to their civilian-only peers—up to 70% less likely, in fact.”

The problem, to my way of thinking, is that those studied came from a different military culture than the current one.

“…biographical data on chief executives from the 800 largest US firms each year from 1980 and 1991 and from approximately 1500 publicly traded US firms from 1992 to 2006.

The current military is a bit different than the one they were a part of; you might even say it’s not your father’s military any more, let alone your grandfather’s.

The Air Force cheating and drug scandals come at a time when a large number of senior officers in other branches of the military have been investigated, penalized or fired in connection with allegations of sexual improprieties, sexual violence, financial mismanagement or poor judgment.

None of this means you should avoid hiring ex-military, since cheating is just as, if not more, prevalent in the civilian population.

What it means is that you should interview everyone, at every level, carefully and not make assumptions based on generalizations or previous positions.

Flickr image credit: Mike Baird

Many managers I’ve known see themselves as coaches building winning teams and often base their management style on coaches they’ve known or who are known to win—not always a good thing.

Now there is yet another coach who is anything but a role model.

But more far more deplorable than Rutgers’ Mike Rice’s actions are outside lawyer John P. Lacey’s comments about the abuse and the message they send.

On Friday, the university also released a 50-page report that John P. Lacey, an outside lawyer, prepared last year in response to the abuse allegations. It made clear that Rutgers officials were aware that Mr. Rice’s outbursts “were not isolated” and that he had a fierce temper, used homophobic and misogynistic slurs, kicked his players and threw basketballs at them.

But it described Mr. Rice as “passionate, energetic and demanding” and concluded that his behavior constituted “permissible training.” It found that he aimed to “cause them to play better during the team’s basketball games.”

His methods, “while sometimes unorthodox, politically incorrect, or very aggressive, were within the bounds of proper conduct and training methods,” the report said.

Since when are adults kicking kids and throwing things at them “within the bounds of proper conduct?”

It’s bad enough that abuse happens, but far worse when the very people charged with evaluating it give it a stamp of approval.

More proof, if anybody needed it, that winning is everything and anything done to increase the odds of winning is OK.

So thought the banking managers whose actions brought down the global economy.

So believe all those, students, as well as adults, who cheat to get ahead.

Anything goes, just don’t get caught.

And if you do, blame it on your passionate desire to win.

YouTube credit: Ron Goldstein