More on Corporate Stupidity

Ever since my previous post on Corporate Stupidity, I have received a lot of questions concerning why such stupidity comes about in large organizations. I will now explain.

The purpose of any capitalist enterprise is to make money. A company will cease to exist if it does not ultimately turn a profit. Period. A lot of people will decry the "greed" of a company and say such stupid things as "they only care about money." Exactly. Saying a company only cares about making money is the same as saying that a bird only cares about flying. This is what companies do.

This purpose is what Aristotle would call the telos or end. Every human endeavor has some end with the ultimate end being human happiness. The end or purpose of a company is to make money. Companies do this by providing products and services to customers. Customers are people who choose to achieve their ends through the use of your products or services. Companies help customers meet their end, and customers help companies meet their end. It is mutual exploitation for mutual advantage. Both sides benefit in the exchange. If they didn't, they would not agree to the exchange. Simple economics.

In order to provide products and services to customers, companies must use employees. It may consist of one employee or several. Each employee is a company in and of themselves. They each have the same purpose which is to make money. The employer is the customer, and the employee is the "company" providing a product or service to the employer or "customer." Most of the time, this will be labor.

All of economics is comprised of these discrete units called exchanges. These exchanges occur when both parties consider them to be mutually advantageous. They cease when they no longer find them mutually advantageous.

The flip side of these exchanges is theft. These mutually beneficial exchanges become strained and even break when deception, force, and theft come into the picture. If you have ever been conned out of something, you know what I am talking about. There are always people who seek to avoid mutual advantage in economics, and we call these people criminals. This can also include companies.

In the long term, theft and deception are not winning strategies. But people and companies still attempt it to their detriment. I don't know about you folks, but I cease dealing with people I don't trust. I also try to give value for the dollar in my exchanges and play fair. This is because I want people to continue to deal with me. It is pure selfishness on my part. You have to give in order to get.

This issue of trust is why we have drug screening, background checks, credit checks, security clearances, armed guards, locks, accounting controls, etc. We want to do business with people and organizations we can trust. Without trust, there is no commerce.

Companies achieve their end of profit by trusting employees to render the products and services their customers expect. Naturally, this requires people to be in charge to verify that employees are honoring their side of the deal. Slack is an almost mystical force that is a drag on any enterprise. People would rather be paid to do nothing than do something. At some point, the relationship becomes so strained that it has to end. This is why it is called "termination." The relationship has been terminated.

As you can see from these fundamentals, the most valuable economic asset you can have is trust. Character trumps talent. People would rather do business with people and companies they trust than with companies they don't trust. This is why branding is so vitally important. I'm not likely to eat at Joe's Diner in Bumfuck, South Carolina even though it may have outstanding food. This would require a risk on my part. But I will eat at a McDonald's. That is because I trust McDonald's. This is also why McDonald's takes such great pains to ensure that you have the same experience in every store you go to all over the world.

Companies become big by consistently delivering what customers have come to expect. Quality matters less than reliability. It all comes back to trust. Trust is the most valuable commodity you can ever have. This is why things such as standards, appearance, etc. matter so much.

Companies lose sight of this important aspect of trust. Trust is a two-way street. Sometimes, companies strain relationships with customers by treating them more like criminals than customers. Microsoft and Sony are two noticeable examples of this trend. Both have made it harder for customers to enjoy their products because of their efforts to combat piracy.

Likewise, companies strain relationships with employees by treating them like criminals. Honest employees feel that they are laboring in a prison camp sometimes, and the strain becomes too much. Throw in getting jerked around, and they walk. The actual bad employees are not bothered by this since they see this as normal. Good employees don't.

The fallacy in this thinking is what I call "One Size Fits All." There are always going to be dishonest people who want to abuse the trust. But these people are a minority. By their own actions, they marginalize themselves to the fringes of society. They trash their credit, lose their jobs, get evicted, and eventually end up in prison. From there, further abuses of trust result in beatdowns, anal rape, and a sharpened toothbrush in the throat.

You do not build a lasting and profitable enterprise by being dishonest. Likewise, you do not build a lasting and profitable enterprise from being a sucker either. Lastly, you do not build a lasting and profitable enterprise by treating honest people like criminals.

So, how do you resolve this? The only answer is to treat people appropriately. You should treat employees and customers with the appropriate level of respect that they deserve. This requires judgment and insight. This requires being civil and polite. This requires giving people the benefit of the doubt. But it also requires decisive action when it is needed. In short, it requires prudence.

People who lack prudence prefer the one size fits all approach. If you refuse to trust, you can never be betrayed. But how far would you make it in the world without trust? There's a reason reclusive hillbillies make their own moonshine, have few teeth, and fuck their family members. Lack of trust makes them this way.

Corporations become like these hillbillies when they employ a one size fits all approach to things. I often wonder how companies became so big with this lowest common denominator thinking until I realized that this happens as a result of becoming big. For instance, IBM became the biggest computer company in the world by having innovative people come work for it. But along the way, they became oppressive and alienated those same types of people who had made the company. Today, Apple has a larger market cap than IBM. They got there by employing the people IBM didn't trust.

So, who do you trust? That is really the bottom line. Honesty is simply fidelity to truth. What is true is what is real. Crooks learn early on that they can deceive people by telling them what they want to hear and giving the appearance of honesty and trustworthiness. And how are they able to pull this off? ONE SIZE FITS ALL.

It has been my experience that people trust the people they like, and they distrust the people they don't like. This is a generalization since not all people are like this. But confidence men con you by gaining your CONFIDENCE. This is why they are called confidence men or con men for short.

Con men gain confidence by telling people what they want to hear as opposed to what they need to hear. A con man always tells you what he is going to do. An honest person tells you what they have done or what they are currently doing. This is because the past can be verified. The future cannot. The future must be taken on faith, and con men love faith.

Honest people tell you things you don't want to hear. This is because reality is not always pleasant. People who punish candor and honesty surround themselves with crooks and liars. This is not their intention, but it is the only logical outcome of their policies. This is why organizations become populated by sycophants, brown nosers, ass kissers, etc. Eventually, reality must prevail because it always does. When this occurs, people wish to dodge the blame for that reality, and it is either thrust on someone else or someone is sacrificed. This is why those same sycophants are adept at backstabbing, blameshifting, or stealing the credit. Their skills are primarily political.

In any organization, you will have two camps. There are those who get it done, and there are those who get out of doing it. They are the wheat and tares of Corporate America. It is a sad situation, but it is what it is. Who are the winners?

In the long run, reality wins, and those who are in fidelity with reality will win. But this requires patience and diminished expectations and all that comes with that. This is hard. But I have seen the tares get chopped down, and I have seen the wheat prosper. Reality favors consistency and persistence.

Companies can live without the tares. They cannot live without the wheat. Good management consists in identifying the wheat and the tares and cultivating one while destroying the other. No manager embraced this more than Jack Welch at GE. Jack Welch embraced merit and candor while terminating the slackers without remorse. This is the way it ought to be. Jack Welch eschewed one size fits all. He treated people appropriately. He rewarded the good and punished the bad. Jack Welch took a great company and made it greater. Did he make mistakes? Absolutely, but the good far outweighed the bad. Welch was a winner.

Welch's methods may seem harsh, but reality is harsher. Welch only beat reality to the punch. This is what made him great.

This is the question I always get. What am I supposed to do? In short, should I be an asskisser or an asset? Think about it for a minute. All I can tell people is that there is no protection in silence. I am almost certain the captain of the Titanic did not want to hear about the hole in his boat. But not telling him was not going to change a thing.

In my own life, I have found you are always better off telling the truth, being candid, showing your ass if need be, etc. I'd rather be hated now and loved later. This means telling people what they need to hear as opposed to what they want to hear.

People will tell you that candor and honesty are not winning strategies. I beg to differ. There is a political cost to honesty. You will be hated by idiots, morons, and fucktards. This is a bad thing?

I'll have more in a third installment. Stay tuned. . .

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