Conscience of Management: Conduct of Leadership, Morals and collective thought

Conscience, or the art of sieving right from the wrong, or the faculty and judgment to move from the wrong to the right, in organizations is not self-evident; the mental elation that is associated with an act of potential goodness at work and the remorse when a wrong is likely to be committed does not come as intuitively as one would have liked it to be in organizations. Management in organizations must act to build this collective conscience, so that teams and individuals can be self-directed. The quality of results cannot be estranged from the quality of the process adopted to deliver those results.

The act of creation or the potential to do good whether be it for new products (including in finance) that must satisfy a need or the construct of a process that would connect an input to an output, does not necessarily come from an ensemble of noble principles that are so directed that individuals and teams could draw from the repertoire only those that fulfill certain criteria which is entrenched in the values of the organization or its code of conduct; merely increasing the cost of doing wrong is not enough, as more and more stringent accounting standards have shown, that prompted Harold W. Williams, the venerable SEC Chairman to say, “reasonableness, rather than materiality, is the test”, Rawls’ “reasonable pluralism” is no different.

In one of the profound lectures of our times, on the ‘Role of Law in Society’, Harold Williams went on to say, “A litigious society breeds confusion, ambiguity, and lack of subtlety in the law. It impairs institutional autonomy and leadership and creates institutional paralysis while litigation winds its laborious way through the procedural maze and delay likely to characterize such a society's judicial system. For me the answer lies beyond the law in assuring that we bring a sense of responsibility -- of values and morality transcending those articulated by the law -- to our economic and political decision making; by continually reminding ourselves of the essential role of personal, internal restrictions based on ethics and morality on the part of both individuals and organizations. Such checks are a necessary complement to external restrictions. Only the combination of an internalized value system and external constraints can assure that individuals and institutions act truly responsibly."

 Those who want to read more could do so in my blog:  https://procyonmukherjee.in/article/71

If the science of management is about evaluating competing objective functions to reach a desired goal that has a balanced score card, then it must do so through planning and organization. Conscience of management makes the subtle allowance to create the consciousness of the larger issues that might tread on the interfaces where action is about to be organized within the choices offered by constraints. If the conscience is so directed that an object to be achieved must be an end in itself, the means to achieve it becomes irrelevant. Examples of such acts abound, from Enron (attempted creative overtures on the revenue side) to the more recent VW (designed to flout), but the smaller, more mundane examples in organizations could be no different in character.

But organizations are an aggregation of people, ideas and morals. How would such an aggregation withstand the test of a singular conscience, the ability to move in a direction itself being no mean task? The early philosophers, from Kant, Hegel to the great thinkers of last century, John Rawls in particular, have given a range of perspectives to the individual act of conscience, but organizational conscience is a far more unchartered territory till recently.

 Social instincts or its development if one goes by Darwin was more influenced by the imperatives of survival. Kropotkin on the other hand gave an opposite view and heralded ‘Mutual Aid’ as the harbinger of social instincts or the creation of conscience. The problem becomes acute when an act of fairness has to be conducted and the forces of self-interest must collide with the forces of rightness; this is where Hegel steps in and much later, John Rawls, whose ‘justice as fairness’ forms the basis of modern thought in this domain.

 Actually Hegel’s treatise, “by removing the veil that covers reality, trying to penetrate the things, we only find ourselves”, is no different from John Rawls and his Veil of Ignorance. Management must be under the influence of a veil of ignorance, it must be unattached to the final decisions while being part and parcel of the process that leads to the decision; such are the perils of bias and self-interest. I think both Rawls and Hegel were close to each other in understanding the deeply entrenched conflict of self-interest in decision making. Kant’s “inner court” of approval and self-doubt or Hegel’s world of reduced subjectivity, while appealing to the mind’s urge to reveal the unknown in an objective manner, got the blessings of John Rawls and his theory of justice. The human ability to rise above the pangs of self-interest and be objective in finding the right was never examined in such great depth, before Rawls.

 This becomes all the more complex in the organizational setting, when large bodies of people and groups, who could be in different parts of the world and in different cultures, have to be moved towards common goals and be self-directed in choosing right from the wrong. Many organizations have found simple solutions to these complex puzzles. The objectives of the organizations have also changed for the more complex needs of the society and there are multiple areas where action has to be directed from sourcing inputs to producing stuff and then selling them to create allocable surplus for the organization and even the society at large.

 Most organizations have a set of core Values, or the articulation of the beliefs that binds the organization to its way of life. These are further refined in the formation of Code of Conduct, which makes the mundane tasks be structured into what is bordering right and wrong. But to bind values and code of conduct to the final goals of the organization needs a far bigger step; it needs the formulation of principles and processes that would make an organization create the self-direction to do complex tasks in a range of activities that would eventually deliver the right results.

 The journey to conscience building is about forming the first small group of people who can discuss openly and without prejudice, who are diverse in their thinking and who can draw from the experience while being nimble in accepting vulnerability; without hierarchy or title they are willing to come together to discuss and debate. Such a team once formed, the first milestone is achieved. The leader is omnipresent, while being invisible, he is directing while saying the least. Such leadership is rare. The group’s critical task is to define the principles, that one must be committed to, that would translate values into objectives and results. The journey of this group starts in the framing of the principles and entrenching them in the working of each and every individual in the organization.

 When such small groups are allowed to come together to achieve a goal, where the goal itself is selected through careful discussion and then a process is followed that is observable and predictable, the collective intuition will be strong to take a direction that can separate right from the wrong. The need for making self-corrections when they become necessary would be part of this journey. Such a journey in the conduct of management is the first step towards development of an organizational conscience.

The success somewhat lies in the understanding of moral relations, work ethics and the symbolism that would bind groups together; the role of leadership is to make the subtle connections between people, to bind them to the task, to challenge them when it is necessary and to be behind the veil of ignorance when it comes to choosing one road from the many; the collective conscience is far more strong than that of the one single man or a woman.

The symbolism cannot be lost sight of, the making of one single army, or the dream of one unique product that no one has thought of needs the blessings of such symbolism that would bind disparate entities together. The journey thereafter becomes easy, when people are drawn by the symbol; the purpose of the journey is embedded in this one single relational element that could be easily referenced from within the depths of consciousness.

When principles are formed, to which each must be committed to, the journey to the results, could then be self-directed, whether for teams or for individuals.

 Many organizations miss out on the principles, and they must struggle to make the journey happen that they want it to be as collective conscience is weak and must need constant nurturing. Single minded focus on results sometimes, lead to further weakening of the conscience.

The focus on the journey, rather than on the goal, the reliance on the process than on the outputs, is what has kept large corporations in continuing to create value for the society and themselves, especially those that have lived more than hundred years.