Saturday, May 22, 2010

Better Leadership: the Danger of Corruption

The American Leadership Crisis

America's economy is broken following decades of poor leadership. An important step towards better leadership would be incorruptible leaders.

What is Corruption?


Merriam-Webster says corruption is an "impairment of integrity, virtue, or moral principle." Notice this definition presumes the existence of integrity, virtue, or moral principle. In our post-modern society I do not believe we can count on ambitious people believing in the existence of integrity, virtue, or moral principle. Some ambitious people know these words and might use these words the way adults speak of Santa Claus or the Easter Bunny to children, but they believe as little in integrity, virtue, or moral principle as they do Santa Claus or the Easter Bunny. Many ambitious people are amoral: they are outside of the moral order.

I suggest defining corruption as a betrayal of public or corporate trust. One's actions could be both legal and corrupt. In complex business and government activities it is effectively impossible to write enough laws to make all corrupt acts illegal.

When talking about corruption in business to a business owner he segued into a discussion on "gaming the system." After our discussion I agree with him: gaming-the-system is a form of corruption.

Here is a great explanation of gaming-the-system: "Gaming the System means using the rules, policies and procedures of a system against itself for purposes outside what these rules were intended for. When a system puts too many rules in place, makes them too vague, or otherwise fails to know the consequences of these rules, people who study the rules closely can then use this massive (often contradictory) rule-set to play the 'game' their own, unexpected way."

Gaming-the-system fits within the definition of corruption as a betrayal of public or corporate trust in the sense that if you join a system governed by rules and others expect you to follow the rules, then they expect you to follow the rules to meet the ends promoted by those rules. But if you game the system, then you follow the letter of the rules in a way that subverts the intent of those rules.

When a bank takes loans off of its books just before the accounting for the quarterly financial report, then puts the loans back on the books after the accountants are gone, this is gaming the system.

Now that we have a practical definition of corruption that works in our society, I suggest that corruption is dangerous to our society, I suggest we should face the problem of corruption in American society, and I suggest we strive to reduce the amount of corruption in the United States before our country is irreparably damaged by the present levels of corruption.

Corruption Causes Hardships

Corruption within business and government leads to financial losses. Lehman Brothers went bankrupt in the Crash of 2008, and America is still suffering in 2010. In October 17, 2008, U.S. News and World Report ran the article "The Crash of 2008, How bad is it, and when will it end?" by Kirk Shinkle.

We are still seeing the financial fallout of corrupt business practices. Goldman Sachs structured an investment vehicle, Abacus 2007-AC1, some say was designed to fail because it "was jam-packed with highly leveraged, exotic trades ," as reported by the Telegraph. Goldman Sachs customers lost fortunes and the Securities and Exchange Commission has accused Goldman of securities fraud.

Remember I said a corrupt act could still be legal? Goldman Sachs might beat the charges in court, but Abacus 2007-AC1 could still be a corrupt business deal. It is impossible to write enough laws to force a clever person to be honest.

Corruption Kills

When the project manager decided it was too cold to launch the Challenger space shuttle on January 28, 1986, he was told to take off his engineering hat, put on his management hat, and rethink his decision. The project manager was pressured to do what he knew was wrong -- launch the shuttle under dangerous conditions. The most common form of corruption in America is for a senior manger to pressure a junior manager into doing something wrong. In the case of the Challenger space shuttle disaster, this form of corruption killed the crew of seven, including school teacher Christa McAuliffe.

Early Childhood Training in Ethics

The key to ethical behavior is to teach it early. An essay by Drake Bennett in the Dallas Morning News on May 28, 2010, asked "Can an 'MBA oath' fix business?" The answer is, "No." Ethical behavior needs to be instilled at at young age. I have in the past recommended all the children of Plano recite the Pledge to Justice daily after the pledges to the flags.

The Pledge to Justice: "I do not cheat. I do not steal. I do not hurt other people."

Good leadership is ethical leadership, free of corruption. The foundation for good leadership is created in childhood.


Robert Canright

Wednesday, November 25, 2009

Better Leadership: the Danger of Arrogance

Good News

America has had a rough decade, but the good news is that we are starting to work on developing the better leadership America needs to turn our country around.

Rethinking Leadership


I started writing about the American Leadership Crisis back in January, 2007. This last year a friend recommended Where Have All the Leaders Gone? by Lee Iacocca, which also came out in 2007. It is an established fact that America is in the midst of a deep and abiding leadership crisis. The Wall Street meltdown is just one manifestation of this crisis.

The TEA Party movement is evidence that Americans are tired of failed leadership. A resurgent conservative movement is more evidence Americans are looking for better leadership.

The Texas Ascendancy Campaign is a plan to fix America's problems by taking action within Texas. You can follow the Texas Ascendant blog, which has a thread called The Texas Leadership Revolution.

This Timeless Way blog will focus now on rethinking leadership. Good leadership is a timeless human need.

The Danger of Arrogance

We inaugurate this new focus by examining the danger arrogance poses to good leadership. Examples of arrogance surround us. I will just pick up yesterday's newspaper and point you to the article U.K. Documents Show Friction With U.S. on Iraq by JOHN F. BURNS, New York Times, November 23, 2009.

Here is a great quote from a British Colonel about American leadership in this article:
They need to reintroduce dialogue as a tool of command because, although it is easy to speak to Americans face to face and understand each other completely, dealing with them corporately is akin to dealing with a group of Martians. If it isn’t on the PowerPoint slide, it doesn’t happen.”

Here's another great quote:
The whole system was appalling,” Colonel Tanner said. “We experienced real difficulty in dealing with the American military and civilian organizations who, partly through arrogance and partly through bureaucracy, dictate that there is only one way: the American way.”

The ancient Greeks were very familiar with the human failings of hubris and arrogance. There is the great example of hubris when Xerxes ordered the sea be whipped for disobedience.

Here is another example. When Alexander the Great first invaded Persia, that was when he was most vulnerable and most likely to be defeated. The Persian Governor had a general who him the surest way to defeat Alexander was to deprive him of foraged food: burn the crops, destroy the food. The Governor refused to listen to his expert and Alexander went on to conquer the Persian Empire.

The scorched earth policy defeated Napoleon in Russia and it would have defeated Alexander.

Arrogance shuts off good advice. Good leadership requires expert advice, but arrogance renders good advice worthless.

It is during the formative years of character formation in elementary school that lessons about arrogance and hubris must be taught. An ethics seminar in the Harvard Business school is too late to form good character.

Robert Canright

PS:
Please submit your comments in English. Thank you.

Saturday, June 27, 2009

Dante on Leadership

Confucianism, an ethical system, offers much to America because it teaches governmental responsibility for the prosperity of its people.

Dante's masterpiece, The Divine Comedy, has an excellent assessment of the importance of moral leaders. The Divine Comedy is comprised of 100 cantos arranged in three parts: The Inferno, The Purgatorio, and The Paradiso. In the middle of this massive work of poetry, over 14,000 lines, is Dante's assessment of leadership.

In canto XVI of the Purgatario, Dante asks Marco Lombardo for the source of the world's ills in verses 59 to 64. Dante asks if it is our fate, determined by the stars. Lombardo says no, that we have free will (verses 65 to 79). In verses 80 to 84 Lombardo says the problem is not in the stars, but in ourselves. Then in verses 97 to 109 Lombardo says the source of mankind's ill fortune lies in corrupt leadership, not in an evil human nature.

Mankind's ills flow not from our evil nature, but from our sovereigns who break the laws and strike at the good, according to Dante. This message echoes in Confucianism: (Analects, Book 12, Chapter 18) Chi K'ang Tzu was troubled by thieves, so he asked Confucius for advice. Confucius replied, “If you were not so covetous, people wouldn't steal even if you paid them to steal.”

If corrupt leadership is the source of the world's ills, then moral leaders are the source of peace an prosperity, which is a Confucian teaching. If moral leadership is vital for our safety and prosperity, then obviously morality should be a vital part of the eduction for our young.

Robert

Following is the pertinent text from the Purgatorio. The translation is from Francis F. Cary in the 1800's

Here is the question put to Lombardo:
59 The world indeed is even so forlorn
60 Of all good as thou speak'st it and so swarms
61 With every evil. Yet, beseech thee, point
62 The cause out to me, that myself may see,
63 And unto others show it: for in heaven
64 One places it, and one on earth below.

Here Lombardo says the answer lies with us:
80 To better nature subject, ye abide
81 Free, not constrain'd by that, which forms in you
82 The reasoning mind uninfluenc'd of the stars.
83 If then the present race of mankind err,
84 Seek in yourselves the cause, and find it there.

Here Lombardo accuses our leaders of corruption:
97 Hence it behov'd, the law should be a curb;
98 A sovereign hence behov'd, whose piercing view
99 Might mark at least the fortress and main tower
100 Of the true city. Laws indeed there are:
101 But who is he observes them? None; not he,
102 Who goes before, the shepherd of the flock,...[skip 103]
104 Therefore the multitude, who see their guide
105 Strike at the very good they covet most,
106 Feed there and look no further. Thus the cause
107 Is not corrupted nature in yourselves,
108 But ill-conducting, that hath turn'd the world
109 To evil.....

Thursday, June 11, 2009

Review: Moment of Truth by Marc Nuttle

I was impressed by the book Moment of Truth by Marc Nuttle. His book is written to the Christian audience, but is well suited for most conservatives and for all people who believe in limited government.

I see three major themes in this book. (1) He believes a conservative era based on Reagan has run its course and it is time for conservatives to rebuild the conservative movement. (2) He believes people are strongly motivated to improve their world for the sake of their children. (3) He believes it is time for more people to become involved in politics.

On page 25 of his book he has a graph of the 40 year long influence of Ronald Reagan. He discusses the birth of that movement and describes the impact small businessmen had in politics when they felt their businesses were threatened by Hillary Clinton's plans for health care reform.

He has traveled the world working with incipient democratic movements. He found a recurring theme in people involved in politics to give their children a better future. His comments on China were very informative. The Chinese rulers were motivated to improve the lot of their people and they saw Christianity as a positive influence.

If you can get a copy of the book, look at pages 220 -222 for an excellent summary of the book. He has a 3 point call to action: (1) Define yourself and your values, (2) Prioritize your issues, and (3) Communicate your values; lead others in your sphere of influence; illustrate your confidence.

I feel America is in peril because our leaders have lost their way. We must discover or rear-up a new generation of leaders.

All people of good will should be working to fix this country while here is still time to repair it. There is much wisdom in this book applicable to Christians and non-Christians alike.

Robert Canright

Friday, January 30, 2009

Faithfulness and America's Economic Collapse

The Five Virtues of Confucius include "faithfulness," according to some translations. When I first read faithfulness in this list, I wondered what the translator meant by "faithfulness." The only occasions I have heard "faithfulness" mentioned was in the context of marital faithfulness, but that is not a topic in the Analects, so what was meant by faithfulness?

When I read Cicero's "On Duties," I saw that Cicero meant "constancy" when he said "faithfulness." Then I ran across this quote from Cicero: "The great foundation of justice is faithfulness, which consists in being constantly firm to your word, and a conscientious performance of all compacts and bargains."

Wow, faithfulness is the foundation of justice!

Is faithfulness of practical import today? Let's consider the story, "A Money-Fund Manager's Fateful Shift" by Steve Stecklow and Diya Gullapalli in the December 8, 2008 Wall Street Journal (front page). This article describes how Bruce R. Bent started the Reserve Fund, a money market fund, with a commitment to avoid "commercial paper," unsecured short-term corporate debt. Bent started the Reserve Fund, the 1st money market fund, in 1970.

Then Bruce Bent broke faith with his guiding principle and bought commercial paper from Lehman Brothers, a lot of it. Then Lehman Brothers went bankrupt, and in 2008 the Reserve Primary Fund "broke the buck:" its share value dropped below one dollar and its investors lost money. The China Investment Corporation, CIC, lost $5.4 Billion in the Reserve Primary Fund. Even today the website for the Reserve Fund advertises, "Security, liquidity, and peace of mind in one account," but how can you trust them when they have been unfaithful to their guiding principles?

America's economy is in trouble today because too many businessmen have not been faithful to what Walter Lippmann called the Old Gospel of Success. Lippmann quotes Benjamin Franklin as an example of the Old Gospel of Success: "prudent management and frugality will increase any fortune to any degree." (Page 167)

Lippmann's book, The Phantom Public, describes from pages 163 to 168 the complexities of modern business. He describes the business world as a complex, interrelated system. It is a "tangle of distant human relations," "invisibly managed markets," a chain stretching beyond the horizon, an "invisible environment," making impotent efforts to succeed by work and thrift.

Lippmann says these complexities lead to a concentration of economic power that needs to be commanded by a single source. He quotes Goethe's Faust: "And then a mighty work completed stands, one mind suffices for a thousand hands."

This line of reasoning explains Lippmann's New Gospel of Success: "for business success a man must project his mind over an invisible environment."

If there is one thing the Postmodernists have gotten right is that it is dangerous to place too much trust on the power of men's reasoning. Relying on calculated self-interest instead of morality as a compass has crashed our economy.

To restore our prosperity we must rediscover the classic virtues that made us a successful society and hold onto them.

Faithfulness is a timeless virtue.


Robert Canright


PS: At the end of Plato's Republic, Socrates says,
"I advise that we hold fast to the heavenly way and always seek justice and goodness..."
"Holding fast" is faithfulness. The "heavenly way" is the Dao of Heaven. There are Confucian ideas in the Western classics.

Wednesday, January 28, 2009

The Four Step Process and the Four Greek Virtues

In Chapter 3 of my book, Achieve Lasting Happiness, starting on page 65, I describe the Four Step Process for Self-Transformation.

Plato listed four cardinal virtues in "The Republic." Cicero discussed these virtues in his book, "On Duties" (De Officiis). I have noticed these 4 virtues relate to the Four Step Process for Self-Transformation. Notice I said they are related, that is not to say they are equivalent.

4 Step Process ----> 4 Greek Virtues
============================
"Seek truth" -------> "Wisdom"
"Commit yourself" --> "Courage"
"Live joyfully" -----> "Moderation"
"Share hope" ------> "Justice"

In our postmodern society, I think it is important to realize there can be no wisdom without a belief in truth that exists outside the human mind. Some postmodernists believe there is no truth, that what we call truth is something we create and accept, a social construct.

When our leaders believe they can mandate reality through sheer will power, that is a serious problem, as I mentioned in this blog on January 1, 2009, "Leadership Crisis: Mandating Reality."

I believe a society cannot long endure if it does not believe there is truth in this world.

Robert Canright

I last mentioned the 4 step process on June 29, 2008
The Four Step Process and the Eightfold Path

Thursday, January 01, 2009

Leadership Crisis in America: Mandating Reality

NASA engineer Jeffrey Finckenor was quoted in the New York Times saying,

At the highest levels of the agency, there seems to be a belief that you can mandate reality,” he wrote, “followed by a refusal to accept any information that runs counter to that mandate.”

This refusal to deal with reality has been a long standing feature of our Leadership Crisis. When I first started working as an engineer, decades ago, I was surprised by the gap between reality and the corporation's business plans. I have seen this refusal to deal with reality at many companies.

I remember trying to talk to a corporate vice president about problems with one of his projects, but he refused to listen. A couple of years later that project was shut down, the $25 million expense was written off, and many of the engineers and programmers were laid-off. This failure could have been avoided if problems were faced and solved instead of being ignored. What a waste of time and money that was, but this kind of waste is common in American business.

When leaders refuse to listen to the experts working for them, their projects will either be deficient or will utterly fail. Many of our executives and political leaders believe they can command unrealistic results and force success by sheer will power. NASA lost two satellites to Mars, the Mars Polar Lander and the Mars Climate Orbiter, because Vice President Al Gore decided to just order NASA to cut their budget and shorten their schedule. These failures were caused by the Faster-Better-Cheaper program pushed down NASA's throat by Al Gore. The Challenger Space Shuttle disaster was also caused by willful management.

The U.S.S. Scorpion submarine was lost at sea with 99 crew dead because management decided to use a drastically shortened overhaul schedule, as described in the book, "Silent Steel: The Mysterious Death of the Nuclear Attack Sub USS Scorpion" by Stephen Johnson. I could go on and on, describing wasted money, wasted opportunities, and wasted lives, but the point is made and a question must be asked.

How can smart people be so stupid?

Hubris, I think, lures our leaders to believe they have god-like powers over the universe.

Hubris wrecked the American economy in the Fall of 2008. The destructive power of hubris is plainly evident, and a willful disregard for reality is symptom of hubris.

The ancient Greeks learned about hubris through plays and historical accounts. The example of Xerxes whipping the sea was an example of hubris. We can teach our children about hubris the same way the ancient Greeks did: though drama, literature, and historical accounts.

It is imperative we include moral instruction in the education of our youth, educating them to be aware of hubris, to be aware of its destructive power, teaching them to recognize hubris in others and in themselves.

Robert Canright

The NYT article referenced was "The Fight Over NASA's Future" by John Schwartz, Tuesday December 30, 2008. It is a good article about NASA's future missions and replacements to the Space Shuttle.