Why Do Idealistic People Sometimes Act Unethically?

 I often tell people that, for purposes of the discussion I’ll agree to presume, whether true or not, that regulators, academics, and non-profit people are generally more ethical than businesspeople.  (I am inclined to believe that it is true that idealistic ethical young adults are more likely to choose regulator, academic and non-profit careers than young adults who are less idealistic and ethical.)

Nonetheless, regulators, academics, and non-profit people often perform unethically in ways that businesspeople might not do (examples below).  Why is that?

Most businesspeople govern their behavior, questioning themselves to assure that they are acting ethically.  They do so because:

1. They are aware of their potential conflicts of interest.
2. They are fundamentally ethical as are most people.
3. They want to avoid legal, regulatory, etc. problems.
4. They want to avoid customer backlash.

Unfortunately, it is less common for regulators, academics, and non-profit people to apply such governors to their behavior.  They view themselves as “the good guys” who are trying only to help people.  People with that mindset are less likely to question their actions, as they “know” they’re acting ethically.

Furthermore, most people in our society are quick to justify actions based on “the ends justify the means”.  If my end is “to help people”, then how can it matter what steps I take to achieve my goal?

Lord Acton is typically credited with the following quote, which I have found to be predictive: “Power corrupts; absolute power corrupts absolutely.”  I believe that a benevolent dictatorship can be the most effective government in the short-term.  For example, in a crisis (e.g., on the battlefield), someone must take charge and others must cooperate to avoid disaster, if there is not enough time to discuss alternatives.  The problem is that the longer a benevolent dictatorship lasts, the more likely it is to get corrupted (due to his/her corruption or to the corruption of her/his associates and certainly after the benevolent dictator is gone).

It is important to stress that I am not maligning regulators, academics and non-profit people.  Au contraire, I’m crediting them with being more ethical than the typical person.  I’m simply saying that even idealistic, well-meaning people are human.

When the government runs a program, we lose oversight.  Regulators in charge of a program want the program to succeed.  That’s generally their job description and certainly is beneficial for their career.  Consider state long-term care insurance programs.  The impetus is to help people plan effectively for LTC needs in their family.  If they can do a better job with private LTCi, that should be fine.  However, if people use private LTCi, the public program gets smaller.  Focusing on the success of the public program, rather than on how best to achieve the broad goal, can reduce success in achieving the broad goal. 

I believe “checks and balances” (separation of powers) is the primary reason for the historic success of the USA.  It is important for government to create rules and to monitor performance, in order to maintain a fair market; that is, to provide such a check and balance.  When the government runs the program, we lose the independent check and balance.

 

Examples

Note: In examples #2 and #4, I use quotation marks to make it easier to read.  The commentary does not exactly quote the participants but conveys my understanding of the conversation faithfully.

The Affordable Care Act (ACA) included a long-term care insurance (LTCi) program: the CLASS Act.

Example #1: Secretary of Health and Human Services Kathleen Sebelius declared repeatedly that the CLASS Act was fundamentally sound despite her staff (as well as industry experts) telling her that it was not feasible.  I defended Sebelius at the time, saying that it was her responsibility to state her belief, even if it differs from her staff’s advice.  However, I was shocked when, about a week after the ACA passed, Sebelius matter-of-factly stated that it wouldn’t work.  I concluded that she had been deceiving the public, legislators and other regulators, in order to help get the ACA passed.

Example #2: At an industry conference, I participated in a private meeting with about a dozen people in the LTCi industry and two federal employees working on implementing the Class Act.  It is important to stress that I admire both of these people who worked on implementing the Class Act.  I’ve known them for decades and they are bright people with integrity.  However, they kept defining the law in ways that were absolutely contrary to what the law said.  Getting annoyed, I asked an admittedly rude question: “I’ve read the law multiple times and have been able to understand every paragraph based on my assumption that it was written in English.  But you’re describing provisions that are incompatible with English interpretation of the law.  It seems to be the most amazing document ever written!  Its entire long text is intelligible based on the assumption that it is written in English, but you seem to be telling me it is actually written in a different language which results in significantly different meaning.  Is that right?  How can you do that?”

The actuary responded first.  He said: “You’re right, but I’m comfortable doing it because we’re making it better.”  (Those are common regulator attitudes: “We know best” and “the ends justify the means”.)

The long-term public servant then said “You’re right.  We might not get away with it.”

“Group think” is a problem in all arenas, not just in government.  That’s another reason why we need broad involvement and checks and balances.

Other examples:

Example #3: I can provide a separate document in which I’ve identified some of the myriad inaccurate communications by proponents (mostly regulators and legislators) of the State of Washington’s “WA Cares Fund”, which is a state-run LTCi program.  It is mind-boggling.

Example #4: The #2 person in the California Partnership for Long-Term Care was trying to convince me to use their marketing materials (I was running an insurer’s LTCi program at the time).  Although that would have saved my company significant time and expense, I explained I could not do so because California’s materials did not satisfy my compliance standards.

He asked for an example, so I noted that their materials said that the Partnership policy would cover your LTC need for the rest of your life.

·        He: “What’s wrong with that?”

·        Me: “The longest benefit period is 5 years.”

·        He: “So what?  After that you can go on Medi-Cal.”  (Medi-Cal is California’s version of Medicaid.)

·        I was stunned that he would represent that going on Medi-Cal would mean that the Partnership policy provided benefits for the rest of your life.  I’ve never heard anybody in private industry make such a claim and we’d be rightfully called on the carpet by the state if we did so.  However, I chose not to question that unethical explanation.

·        Me: “But what if you have countable assets and the Partnership asset disregard does not cover all of them?  You could have to spend down hundreds of thousands of dollars after your 5-year benefit period expires and before you could qualify for Medi-Cal.”

·        He: “That does not matter.”  (This quote is exactly what he said.  According to him, it did not matter that the statement is blatantly false!)

Capable regulatory oversight blocks misleading private industry materials, but nothing blocked the California Partnership from distributing misleading materials.

Of course, some regulators are quite careful with the materials they develop.  Later, Sandra Pierce Miller became the #1 person in the California Partnership.  Very shortly after she assumed that position, we met at a conference.  She asked me what I thought of their marketing materials.  When I said I do not use them because they don’t meet my compliance standards, she was greatly concerned and interested.  Ms. Miller made appropriate changes to the materials.

This happens with elected politicians as well.  Consider all the “mandates” they conjure up that they’ve been given by voters in close elections.

I sometimes select Hillary Clinton as an example.  Most people seem to either adore her or hate her.  My position is different.  I respect Hillary because she is smart, hard-working and I believe means well.  However, over the years she seems, in my opinion, to have developed the viewpoint that she and her close friends can solve all our problems and that if she is not in control, we’ll all suffer.  Therefore, she believes that anything that helps her accomplish her goals is necessarily good for the country.  I think if Hillary and I had known each other in college, we could have been close friends and in great agreement.  But over time, I’ve become disenchanted with central control and Hillary has conflated her success and what’s good for the country.

How to Retain Staff

I recently came across the following note: "I would like to express my sincere thanks for everything you have done for me over the past few years.  I wouldn't be here without you.  Thanks for your friendship and your professional advice and counsel.  I've never worked harder or enjoyed it more than with you.  Thanks for setting high standards."

Many of my staff have told me similar things over the years, albeit in different ways.  My point is not to brag, but rather to simply demonstrate that it is much too easy to receive such appreciation.  True, some people might tell me things like that to curry favor, but there clearly are a number of people who, years after they work with me, still feel that was their favorite job.  While I take some pride in my work, I fear that I receive plaudits because I have done a good job compared to others.  The standard that managers set is too low.

Here are a few examples:

· During my management career, I was criticized several times by my superiors for "caring too much" about my employees.  To put that in better focus, I was rarely complimented by superiors for the concern I had for people reporting to me.  But I and the company gained tremendously from their hard work.

· One of my staff and I had a repeated conversation in the years before she retired. Recognizing the inevitable (despite my best efforts to dissuade her), we would discuss who would be a suitable replacement.  We always came up with the same name -- a young lady we had hired upon her graduation from college and who handled each job eagerly and well.  But there was no way that I could hire that lady to replace this staff person because she clearly would be too advanced in her career.  To my surprise, when I sent out an email asking contacts to introduce me to people who might fill the vacancy that was about to be created (we planned a long overlap), the young lady that we had discussed responded that she was interested in the position.  Why?  Because her manager was more concerned about her own career and actually blocked this young lady's advancement because if this young lady moved to another position, her manager felt it would be damaging to the manager's success!  (In contrast, I had several situations in which it was difficult for me to persuade someone to leave my staff when I knew it was important for them to do so to achieve their career goals.)  My experience is that great staff get so job-oriented that they often don't consider their careers.  Even with the advent of job-posting (which I think is great, but did not exist when I was young), such staff often don't take the time to look at the available jobs because they are too busy working.  Managers should be on the look-out for opportunities for their staff.  If they do so, their "alumni" will repay them with referrals, business opportunities, etc.

Any topic has a lot of different perspectives, but my theory of staff retention can largely be boiled down as follows: 

1.      Develop a mission that people believe in

2.      Show them that the organization is making progress toward achieving the goal

3.      Make certain that they realize the contributions they are making

4.      Help them to grow

Expanding further on these topics:

Develop a mission that people believe in

People are motivated by achieving a mission.  Nearly everybody wants their job to be meaningful and those who don't seek a meaningful job usually have developed their attitude due to the past discouragement of people who should have inspired them..

For example, when I led a LTCi unit that included a lot of administrative staff, I tried to have a weekly luncheon with 3 front-line staff from different departments.  "Expert" managers told me that such people were simply putting in 8-hour days and would not respond to inspirational mission, but I found the reverse was generally true and was convinced that the people who reflected the "experts" expectations only needed more time to trust a different approach.

I asked each person to explain their job to me and the other attendees and to explain what they had done previously.  I expressed (if others did not do so promptly; if they did, I concurred) how critical their work was to the success of our division.  Frankly, I did not know their jobs well enough to always understand what was going on, but there were a lot of comments such as:

* Wow! I did not realize how many different roles I've held in such a short time and how much I have learned.

* You're from that department (said to an attendee other than me)?  We rely upon you for...  Did you know that we could be more successful if you...?  How can we be of better service to your department?

Unfortunately, our senior management decided to re-organize, meshing our administrative units in with the administrative units of other lines of business.  When these staff no longer reported directly up to me, the luncheons fell apart because:

· Primarily because short-sided managers who did not report up to me were unsupportive, requiring their staff to change plans, thereby missing the luncheon they had agreed to attend.

· Secondarily because the front-line staff no longer perceived a reason to join me for lunch.  Not being in their departments, I did not completely understand how the attitude changed, but it seemed to be related to the previous bullet.

It wasn't long before I discontinued the luncheons in sympathy for my assistant who was unable to get them scheduled.

It is important to make the mission clear, to repeat it consistently and to demonstrate that it is a true mission, not just lip service.

When I moved to Kansas City, people kept telling me that I should be prepared to lose staff to the "boats".  The "boats" were the local casinos.  I could not imagine why I would lose staff to the boats, but they assured me that it would be frequent.  I am not aware of ever having lost a staff person to the boats.  I suppose that somewhere down the chain that might have happened but I am not aware of it.

Our immunity from the boats started with our employment interview.  I asked each candidate with whom I spoke "Why is Long-Term Care Insurance Important to You?"  All the answers I ever heard could be placed into one of three categories:

· Two candidates were unable to answer the question.  We did not hire them.

· Many candidates gave what I called the "MBA" answer.  They cited statistics showing the need.  Sometimes they had binders or flip charts to show me.  These were good answers but not my favorites.

· My favorite answers all took the same initial form.

My favorite candidate responses always:

· Started with a long inhale.  At that point, I already knew what was coming.

· The long inhale was followed by a long exhale.

· Then the first word was always either "Well" or "My".  If the first word was "Well", the second word was "My".

· They then described someone who was important in their life ("mother", "grandfather", "aunt")

I knew these people would be passionate about our mission and our clients.  You think they'd want to go to the boats????

Many of my staff worked really hard.  Occasionally, I worried that they were working too hard and encouraged them to take things a little easier.  When I took over responsibility for the LTCi division, conventional wisdom, with very good reason, thought the division would be closed down within a year.  I thought so too!  But I worked hard and we started to make progress.  Our staff was excited when apps started to come in.  So they worked hard.

At the time, my best way to get messages to my staff when I was away from the office was via voicemail.  So I'd make a list over the week-end and then on Sunday afternoon, I'd call in and leave 15-25 messages for staff.  Before I got done leaving the messages, I'd often start getting responses.  I'd learn that my staff was in the office working overtime and had not even told me!

Show people that the organization is making progress toward achieving the goal

It is important to show staff, but also management, suppliers, etc. that you're making progress toward the goal. 

In today's world, people create "dashboards" that track critical measurements of success.  What is the purpose if you’re not making progress toward the goal?  Why bother?

Regardless of how you do it, with reports, anecdotes, etc., it is important to let people see the success to which they contribute.

In the LTCi area, we started predicting how many apps we’d get the next week.  No money changed hands, but it was a fun contest to see who could get closest.  Some people would say, “I know I’m going to lose, but I hope we get xx apps.”

Of course, the fun put more focus on the number of apps and made staff very aware that the number was increasing.

This led to another great incident.  When the mail arrived, often one or more staff would rush to the in-box to see how many apps had arrived.  The lady who delivered the mail had been employed by the company for many years (more than 10 years, perhaps).  One day, I was there when she dropped off the mail and a claim person picked up an envelope announcing that it was an app from “Bud McQueen”.  The mail lady was stunned! 

I immediately realized that she had worked at the company for such a long time but had no idea how we transacted business.  Sure enough, she thought consumers just sent in apps so was totally blown away that our staff knew the person who sent it in.

This gave me an opportunity to explain our agency system to the mail lady and explain how various people relied on her work.  She was so appreciative and excited to learn that.  We became her favorite route stop because she understood the importance of her work and felt so energized by my staff’s excitement when she delivered apps.  If I remember correctly, she started telling us how many apps she had.

To help advertise that we had a LTCi unit (most people probably did not know), I started reporting our sales to other people in the company on a monthly basis, adding anyone I could justify to the distribution list.

Well, I did not really report sales.  Our sales numbers would have looked to low.  So I simply sent a message reporting the increase in sales from the previous year.  One of my friends challenged me, noting that I was probably reporting percentages because the numbers themselves were low.

So I had to start reporting sales numbers.  When I did that, I started reporting that these sales were 1/3 of the sales we would have next year.  Instead of reporting a huge increase over a small previous year, thereby focusing on this year’s and last year’s small numbers, I wanted to focus on next year, because that would be a bigger number.

We tripled sales two years in a row and grew 5 times as fast as the industry grew in each of three consecutive years.  I was looking forward to the day when I could report that claims we were paying!

Make certain that they realize the contributions they are making

Of the four principles that I am describing here, I think most managers fall short in this area more than any other.  They presume that good staff know they are doing well.

But many good staff take their successes for granted and focus on their failures.  It is very common for good staff not to appreciate the great impact they are having on the organization.  If they’re not having a strong impact, they should go somewhere where they will have a strong impact and those jobs will appeal to them.  You risk doing great harm to your goals if you fail to assure that staff you want to retain know the value of the contributions they are making.

Early in my management career, I asked my staff to do their own self-reviews.  I was stunned at how negatively the best staff saw themselves.  Of course, such efforts are skewed by people’s expectations of what they think the manager wants to hear.  But I do believe that many outstanding people focus on their weaknesses and failures, ignoring their strengths and successes.

Spencer Johnson and Ken Blanchard wrote an excellent book called “The One Minute Manager”.  One of the things they recommended was to invite staff to visit you (the manager) at their volition in order to seek a “One Minute Praising”.  The idea was that if they weren’t feeling good about their work, you could encourage them when they most need it and it would be easy and fast for you to do so.

The One-Minute Praising is a great idea.  Managers should proactively give one-minute praisings to their staff.

People who assume responsibility need to be “rewarded” psychically.  Money is not the primary driver of job satisfaction or job changes.  Financial reward must satisfy a threshold, but the psychological rewards are more meaningful.

Help them to grow

This fourth principle is less important than the other three only because there are some people who don’t seem to care much about growth.  They have a narrow vision of their role and are content to stay within that role.

Even if that is the case, such people still take pride in their contributions to a mission and the success of that mission.

I can think of staff who were content to stay in their existing roles.  They resisted opportunities that I wanted to provide to them to have broader input or responsibility.  I tried various approaches at various times, to make sure that I was not missing something.  I figured I needed to find the fear that caused them to resist change.  But I learned that I, at least, was not able to inspire some excellent employees to be ambitious.

But I could still help them to find their job very satisfying!  All I had to do was to show respect for our mission, that we were making headway toward our mission and that they were contributing mightily.

Some ways of helping people grow include sharpening their strengths, helping them turn weaknesses into strengths and finding support that covers their weaknesses.

I love to build long-term relationships.  Only once did I hire someone into the company with an expectation that the person would not stay two years.  (He actually did stay more than two years and is another person who commented that he could not believe how hard he was working.)  There were important industry changes occurring which were requiring new legislation.  I hired this person to influence the legislation, so he traveled to Washington DC a lot.  After 2-3 years, he left our company and formed his own consulting firm.  He has been very successful and I take pride that we had an excellent win-win relationship.  He grew and developed his consulting opportunity while on our staff.

Another employee was a home-run hitter.  He had big ideas.  His mind was amazing.  It seemed as though he was always slowly rotating matrices in his mind until they suddenly lined up, unveiling a previously-unknown principle that united various seemingly independent businesses.

This particular employee was not having the success that he should have.  The reason was that his managers were not interested in his ideas and burdened him with less substantive work that they wanted done.

I tried to keep work away from this fellow and used him as a core asset in initiating and growing a true research department. 

Later, when I was assigned the responsibility to develop our first “universal life” policy which would be, I believe, the first ever insurance policy linked to an indexed return rate, I pressed management to allow me to have this fellow work on my staff again.  (I guess you could say I poached him, one of only two occasions in my career in which I                                                      remember doing that.  I was more interested in finding and building new staff than in poaching people from other areas.)

People were surprised that I felt so strongly that I needed this fellow on my staff, which made it easier for me to succeed in securing his services.

To my surprise, he seemed reluctant.  After I secured his services, nothing much happened for a few months.  I was having a hard time defending my decision to the doubters.  But I KNEW he could do it.

Suddenly, inspiration hit him.  The tumblers suddenly lined up and over the course of a weekend, he documented a whole slew of unifying concepts.  Eventually, he and the person I mentioned above who formed a consulting company co-wrote a paper on the topic, which paper was awarded a prize from the Society of Actuaries as being the best paper over a three-year period.

One of the main differentiators between outstanding and mediocre performers is that the strengths and weaknesses of an outstanding person tend to be the same characteristic.  The reason is that outstanding people develop outstanding skills, which they then use in most all situations.  For example, someone who is a skilled logical debater will try to settle all issues with logical debate.  Having had success with this approach in the past, he/she is likely to try to use it all the time, but that might not be the most persuasive approach in a particular circumstance. 

A mediocre performer has not had such strong success, hence has not developed a successful skill set to over-use.

If you can help that successful person learn when to use that skill and when to rely upon other approaches, the results can be amazing.

I find that like sports analogies help people understand this principle.

A well-known sports story is the “Ted Williams shift”.  Ted Williams was one of the best baseball hitters of all time.  He was a “dead pull hitter”.  As a lefty, he “pulled” everything to right field.  His great eyesight and bat speed allowed him to “get in front of” even the fastest fastballs.

One day, Lou Boudreau, all-star shortstop and manager of the Cleveland Indians, came up with an unusual idea.  When Ted stepped to the plate, Lou placed his first baseman near first base, his second-baseman in the hole between first and second, his shortstop behind second base and his third baseman where the shortstop would normally play.  Similarly, his right-fielder was placed near the foul line, his center fielder played in right center field and his left field played in left center, leaving left field exposed.

Ted responded with determination.  He was going to blast the ball right through those fielders.  But after a few games in which scorching drives, that normally would have been hits, were turned into outs, Ted learned to hit the ball to left field, thereby destroying the strategy and improving his skill set immensely.

Another example is a left-handed basketball player who succeeds early in his/her basketball life because his defenders all expect him to go to his right.   He will often rely too heavily on going to his left until taught to expand his repertoire. 

One of our best home office sales people was always criticized for his lack of organization, failure to file reports and the like.  I could never understand why management would want to take this stallion and tame him to do tame timid tasks.  I would have wanted to give him the support he needed to unleash his talents.

Similarly, we entered a relationship with a very small company and I was assigned to be the main liaison.  The president of that company turned out to be amazing person.  It took me a while before I learned to appreciate him, but now he remains a favorite decades later, although we have not communicated with each other in years. 

He was one of the best deal-makers I ever worked with, but our management was always after him for mundane things.  We negotiated an unwise relationship, setting high expectations for him but failing to give him minimal administrative support that would have enabled him to blast through the expectations.

I hope that I have helped you understand ways that you can help grow and retain staff.  You don’t really have to be their manager to do this.  You can do it with associates who do not report to you.

Simply:

1.      Develop a mission that people believe in

2.      Show them that the organization is making progress toward achieving the goal

3.      Make certain that they realize the contributions they are making

4.      Help them to grow