The CEO As Social Agent: History, Ethics, and the Disappearing Moral Fence

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In 2016, Chuck Klosterman published a book called, But What If We’re Wrong? The subtitle of the book is really what it’s about, however: Thinking About the Present As if It Were the Past. Klosterman’s book is a neat intellectual puzzle, in which he tries to find a way to think about our present world as if we were looking back at it from far into the future. Focusing mostly on literature and the arts, he wonders, for example, who among today’s writers will be considered the greatest writer of our time hundreds of years from now. It’s a good book, and I recommend reading it for many reasons, not least of which is that it will make you question the conditional nature of what we call good and great today. Indeed, when I finished the book, I started to think about business and who is a “great” CEO today and how those people, or the companies they run, might be seen fifty or a hundred years from now. That line of inquiry took me to another set of questions: What leadership traits seem unimportant today but might be absolutely critical in the future? What should we be teaching in business schools that were are ignoring? Is there a great CEO today, whom no one has heard of, who embodies those missing traits?

One of the more interesting aspects of my job at World 50 is that I get to speak with C-level executives from across many industries and from different parts of the world. From my position, it’s interesting to see how the role of leading a global corporation is evolving, and how these evolutions impact the skills needed to lead in today’s corporate environment. Some of the emerging skills are well-documented. Being innovative and inclusive, for example, are two characteristics that appear on almost any CEO search committees’ desired traits list. However, there are other traits that are not so obvious, and there is one pair of attributes in particular that, while not a part of any business school curriculum (that I know of), will one day be critical skills for any global CEO. Those skills are (a) the ability to understand history and (b) the ability to think critically about ethical choices.

Non-business people may imagine that part of business school is learning the history of business itself and wrestling with ethical dilemmas, but this is hardly the case. Even at the best schools, the focus of the education is on learning the language and tools of business and management. Below, for example, is the Fall 2017 course schedule at Harvard Business School:

As you will note, only one class, “The Moral Leader,” seems to be related to ethics, and it is, but not in the way you might imagine. The description for the course from HBS.com is this:

Leaders of groups and organizations face moral decisions throughout their careers. These may entail operational issues where the boundary between right and wrong is blurry, changing, or hotly debated. They may involve the moral propriety of an enterprise or undertaking. Often the hardest cases are those where conflicting obligations, all legitimate, are at stake.

This course looks to the arts – principally novels, plays, and biography – to illuminate how such issues may be responsibly understood and managed. Dr. Robert Coles, of the Harvard School of Education, launched the initial version of this course almost 30 years ago. He observed that: “Novels and stories are renderings life; they can not only keep us company, but admonish, point us in new directions, or give us the courage to stay a given course. They can offer us kinsmen, kinswomen, comrades, advisers – offer us other eyes through which we might see, other ears with which we may make soundings.” When such works are read and analyzed in class, students and teachers alike learn from one another’s perspectives.

The course is an attempt to understand “moral” dilemmas but its foundation is artistic rather than in formal ethics or logic. Indeed, one former HBS student described it thus:

This course uses works of literature, primarily novels, in place of case studies. Its aim, as a former student put it, is to show “how people develop the skills, courage, and perseverance to use power, money, and influence in constructive ways.” 

It’s interesting that the description uses words such as “boundary between right and wrong” and “moral propriety of an enterprise,” which is a particularly quaint-sounding description in this day and age. Also of interest is that rather than base the class on serious texts in the fields of ethical philosophy or even jurisprudence, the class uses works of fiction as its basis. This seems like an odd choice, given the nature of the M.B.A. degree, which is supposed to be professional training for future managers. With that said, my intended critique is not of this one class specifically, but of the fact that there is nothing on HBS’ Fall curriculum that focuses teaching tomorrow’s business leaders rigorous historical or ethical analysis. This is a problem for CEOs of the future for one big reason: the “moral fence” on which CEO’s traditionally liked to sit is getting thinner as time goes by and may have disappeared completely by the time HBS’s Class of 2018 takes over.

A quick glance over the headlines of the past few years serves as ample support for my claim. From the LGBT issues in North Carolina, to social debates about minimum wage and universal incomes, to the Brexit debate, to the role that CEOs should play in the current administration, to the ethical issues raised daily by working with or against the Chinese government — CEOs find themselves at the center of controversies that go way beyond the realm of management and economics. Of course, companies have been part of large social debates since their origin, but in the past those moments were seen as exceptional in the tenure of most CEOs. Indeed, I have listened to many corporate leaders of the last twenty years talk about these moments as occasions when they had to “leave their normal world” and “take on a new role” as they lead their companies through a crisis or scandal. If this past were the future, we could go on training leaders the same way, but it is not. In two or three decades, what used to be “exceptional” moments will be quotidian. The role of historical and ethical analyses will not be to get a CEOs through a tough moment but to inform and even determine almost every major management decision they will make. I see several forces driving this change, and it’s worth noting the most important:

  • The polarization of society, which places companies in the cross-hairs of critiques on all sides of an issue.
  • The increase of identity politics, which forces companies to tailor products and services to specific consumer social and ethnic identities.
  • The rise of millennial culture, which demands social purpose and position from brands.
  • The rise of AI, which will raise the ethics of robotics from the factory to the C-suite.
  • The increasing dominance of China, and its insistence that companies divorce ethics from business.
  • The decline of traditional morality-defining institutions, which leaves a moral vacuum into which companies are entering both willingly and unwillingly.
  • The decline of globalization, which gives rise to regional identities and conflicts, often based on long-term historical perspectives and identities.
  • The impact of climate change on society, which, as we saw this week, will create both crises and scarcities, into which companies will be drawn consistently.

Whether it’s a reaction to a presidential tweet or a race-based protest, today’s corporate leaders are often quickly, and without historical and ethical preparation, forced to take and defend personal and company positions. Sometimes they get these decisions right. Too often they do not. This is not a critique of these specific leaders but simply a recognition that the way in which business leaders are educated and selected for their roles is outmoded, based on a world-view of corporations as politically-neutral agents that is slowly coming to an end as a result of the forces outlined above.

Returning to the issue of business school education, the HBS class noted above is a good illustration of what is missing from courses on ethics in graduate business curriculums. The few classes that exist are almost always “dialogues” where cases are reviewed and discussed. I don’t know of any business school class where a formal ethical system for the management of a global corporation is presented, sought or tested. This is a serious failing, and its impact is being felt today. To take but one example: consider the debate around data privacy taking place in Europe and the U.S. today. Anyone following the discussion knows that the two regions are headed in very different directions and will land in different ethical places on this topic. But who is right and who is wrong? Are CEOs even thinking about this issues in the right way? What moral and ethical framework should CEOs use to develop and constrain the collection and use of what I call “hyper-personal” data such as employee DNA and neuro-imaging patterns (which will both be part of employee files in the future)?

Turning to historical analysis, consider the role that companies take in support or denial of political processes such as Brexit or immigration reform. Taking management positions on such issues without a clear understanding of what can be centuries-old debates and divisions is dangerous ground on which no CEO should want to stand. Yet how many classes in business school teach managers how to analyze the political and social contexts in which companies operate or the social implications of managerial and economic decisions made by CEOs, boards and shareholders? Sure, one can find courses that look at global economic trends, but rarely are those courses taught from the point of view of a historian who is able to teach not just a series of historical events but (a) the ability to put them into their full context and (b) to analyze their meaning on a larger social scale. Indeed, I was thinking of this problem recently when reading a feature on the documentarian Ken Burns and his plans for future projects. He listed a dozen or so topics, and yet none of them were about corporations and business, even though one could argue that these topics are more important to our conflicted society than many of the topics that did make his list.

Klosterman makes another point in his book that, to me at least, supports the proposition that a great CEO in the future will have be a historian as well as manager. The internet, he notes, has fused the past with the present. When we see an image or video from thirty or forty years ago alongside something that happened this morning, a strange kind of parallelism begins to take hold. What is old is again new and what just happened is instantly old. The effect if this temporal synthesis of past and present changes how we see both:

The result is a perpetual sense of now. It’s a continual merging of the past with the present, all jammed into the same fixed perspective. This makes it seem like our current, temporary views have always existed, and that what we believe today is what people have always believed. There is no longer any distance between what we used to think and what we currently think, because our evolving vision of reality does not extend beyond yesterday.

If history is now the present, at least in perception, then no one can manage in the present without a clear understanding of the past. A CEO who will have to decide if her company will take a political stand on Issue X must understand now just the position for and against that stand today but what they were in the past. In other words, in the future all CEOs will manage not just in their time but in ours as well.

About half-way through his book, Klosterman makes an interesting statement: “History is defined by people who don’t really understand what they are defining.” I don’t agree with that as an absolute position (though I get his point). I think a lot of people who define history know that they are doing so at the moment they are working. In thinking about the future of corporate leadership, CEOs who are pushing their companies into moral positions in 2017 are, in fact, defining the history of the future corporation, and some of them are doing so willingly and knowingly. Indeed, returning to Klsoterman’s basic question, today’s greatest CEO is probably not anyone we have heard from or spoken about. It’s someone who is quietly building a company around a whole new way of organizing, a whole new way of thinking about purpose, and who is building a company that is more and more a who than a that. Maybe it will be an evolution of new companies with innovative people models that — like Buffer, Chuffed, UltraTesting and august —are just taking off today.

Personally, I have always been against the anthropomorphization of the corporation. Companies, in my view, are legal structures that should not have “ethics” or moral obligations — these are traits only of the people who inhabit those structures. (For me, holding a company ethically responsible is like blaming a house for what people do within it.) My view, however, is not the one prevailing in society, and it is certainly not the one most people will hold a century from now. As our society evolves, companies are increasingly thought of, and treated like, people. This is the future as well as the present. Therefore, tomorrow’s CEOs will have to define not just a management approach or “culture” but a corporate ethical model within a past/present historical continuum that will evolve with the business and society with which it will have to co-exist.

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