Recovering from Christmas with the Channel 4 documentary on the collapse of Carillion, I found myself reliving Groundhog Day. All the familiar ingredients were there: a 'strong' leader who ruled by fear, too many negligent or willing accomplices, a system geared toward the pursuit of narrowly-framed goals that harm the wider system, activities monitored by self-serving private interests and toothless regulators, all sponsored by a government that is seemingly incompetent, corrupt or negligent - possibly all three.
As ever, in the posthumous hand-wringing, there will be attempts to vilify the prominent culprits - finance director Richard Adam and CEO Richard Howson - but when the dust has settled we can expect nothing much to have changed. The problem is endemic and it is a consequence of common evolutionary pressures on organisations, their relationship with the primary motivators of individuals (as reflected in their values) and the cognitive biases associated with these. Large organisations, whether they be casualties like Enron, Lehman's and Carillion, or viable concerns such as Tesco, VW and Facebook, are prone to suffer from the same thing: a need to maintain and improve their status, out-compete others and do so quickly. In this they have much in common with political parties. This need corresponds to the personal values of power and achievement.
Consequently, often the people most attractive to large organizations appear to be those most driven by power and achievement; i.e. those that put competition before cooperation, who put self-interest before those of others, and who believe that somehow they drag the rest of society behind them so that they too can pick up pieces of gold that would otherwise have been denied them. Those who tend to migrate to the top of such organisations are those most driven by power and achievement; those who are the most focused and uncompromising in their pursuit of narrowly-defined goals. For such people, long-term benefits may as well be invisible, while some short-term benefits prove too difficult to resist. Consequently, while few of the leaders of large organisations would regard the strategies they pursue as amounting to Ponzi schemes, sometimes this is what they are. In the case of Carillion this was (transparently for those who cared to look) the most important corporate strategy of a company which, in 2017, had the 10th most bought shares in the UK.
That few could see the problem until it was too late, including its directors, its government sponsors and its auditors KPMG, resonates with the old maxim that 'there are none so blind as those who will not see'. Those who will not see tend to be those driven by the values of conformity, because they don't feel able to question, security, because they follow the rules blindly, and power, because they have their noses in the trough and don't want to interrupt their meal. While organisations continue to play lip service to values, ethics and long-term concerns, this is often just so much baloney; deemed to be an essential component of their personal and corporate brand-building.
As those with an IQ above 50 and sufficient curiosity to look beyond their next bonus already know, it is cooperation not competition that is most responsible for generating efficiency, innovation and performance. Competition serves only as a form of waste-disposal: getting rid of the least cooperative entities. Until large organisations realise that real, personal values (rather than espoused BS) are the key to corporate performance, so the cycle of deception and collapse will proceed.
If your organisation would like to have its values and those of its employees audited, and learn how they can develop cultures based on values that support transformational leadership and organisational agility, please let me know. I am currently carrying out research with Royal Holloway and Bournemouth Universities into decision-making biases and as a thank you to participants we are offering a free profiling service.