Dark Patterns - Why Good Managers Do Bad Things with Guido Palazzo - OrgDev Episode 72

Business Ethics - Corporate Scandals and Failure - CEO Failings
Why do good people do bad things? What drives epic ethical failure in organizations? Have you ever read about a corporate scandal in the news and thought that next time, it could be you and your organization? Probably not. We all tend to believe that bad things are done by bad people. And since we consider ourselves to be decent human beings, we don’t believe we would ever engage in similar behavior. And yet, most of the time, it is normal people like you and me who push organizations over the ethical edge.
In this episode, we’re joined by Professor Guido Palazzo. Professor Guido is a globally recognised expert on why unethical behaviour occurs in organisations. He is author of the brilliant book Dark Patterns (also available on Audiobook!)

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We’re Dani and Garin – Organisation Development (OD) practitioners who help leaders and people professionals tackle the messiness of organisational life. We focus on building leadership capability, strengthening team effectiveness, and designing practical, systemic development programmes that help you deliver on your team and organisational goals. We also offer coaching to support individual growth and change.

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Transcript

(00:00) hi and welcome to the org dev podcast so why do good people do bad things what drives epic ethical failure in organizations have you ever read about a corporate scandal in the news and thought that next time it could be you and your organization probably not but we all tend to believe that bad things are done by bad people and since we consider ourselves to be decent human beings we don't believe we that ever engage in similar behavior and yet most of the time it's people like you and me who push organizations over the ethical
(00:31) edge now there's one man who's committed himself to understanding the mechanisms behind systemic organizational misbehavior in this episode we're absolutely delighted to be joined by Professor Gido Palazzo professor Gido is a globally recognized expert on why unethical behavior occurs in organizations his latest book Hidden Patterns explores the dark dynamics that could even cause good people to make bad decisions at work now this episode is vital listening for anyone listening in leadership HR OD because unethical behavior can occur in any organization
(01:02) gido is a professor of business ethics at the University of Lusan in Switzerland and a globally recognized voice his research spans corporate misconduct ethical blindness and the moral complexity of being an modern organization he's advised global companies spoken at the World Economic Forum and published in top academic journals and he's also delivered programs to thousands of leaders across the world to sensitize them to what patterns and help them to promote a climate of integrity in their own organizations his work has naturally been recognized with the Max Vber award for business ethics but what really
(01:34) comes out from having read his book is a burning passion to shine a light on the dark side of human behavior and fight the good fight in our behalf so thank you so much for joining us today Gita we're absolutely delighted to have you with us [Music] what inspired you to write the book why why now why did you feel sort of so motivated to write a book at this particular moment  but I'm analyzing corporate scandal since many many years and I have always been shocked by something that we normally don't see when we read about the scandals in the news take the diesel gate take the
(02:11) Boeing crushers take the Therenos startup scandal what we normally don't what we see is the surface of some illegal practices done by engineers or by salespeople or by whoever what we don't see is this immense human suffering that is happening in the background people who get burned out whose life get destroyed who often kill themselves this is in a way one of the driving forces for me to share these stories um to point at the price we pay the human price we pay when we engage in this kind of destructive toxic behavior
(02:48) and and create such organizational conditions for people um yeah in which they break  i guess when someone commits to arena and it is a really good book danny and I both read it at length and obviously for those watching it it's just me today danny unfortunately has got co so we wish her well and hope that she's back as soon as possible we've had lots of conversations about this um over the last three weeks as I've been reading it and and as you were writing it what did you hope that readers take away from the book  well this book is not
(03:15) written out of out of the blue i have done for many many years workshops with companies with leaders and companies on the dark pattern the topic of the book what I hope for is pretty much the same that I hope for when I do these these workshops i hope people as leaders realize that sometimes even against their own attention um they can push their teams into behaviors that are unacceptable and that they understand how this happens again it's very often not intended most of the time not intended it's just they do a little bit too much of pressure they exert on their
(03:52) teams under normal circumstances and then something breaks so understanding the social psychology the leader follower relationship and how that can drive people into bad behavior that's that's the first reason the second reason is that we can find ourselves on the other side as the victims of that kind of behavior so that we are pushed into wrong behavior in our organizations and that happens very often by a slippery slope with small steps so that we don't see it happening once we see it it's all too late so for both roles that
(04:25) we can potentially play in organizations I hope that this book will help us um to create a workplace with more dignity and more respect  yeah and and what is it about the human condition that that means that we're more likely to blame character for something that happens rather than kind of looking at the individual instead of looking up at the system around it  well this is a knee-jerk very human reaction to bad things around us whatever bad means for us right we we assume that if something bad is done that someone bad must have
(04:55) done it so we attribute it to character it's almost automatically done interestingly when we ourselves engage in something we find problematic and it we we we have to justify it we often refer to and that might be closer to the truth because most of the time we do something in high pressure context it's because of those context that we act not because of who we are not it's not our values it's not our good intentions that will protect us once the context unfolds its powerful dynamics  and I guess one of
(05:24) the really good things about the book is that it kind of breaks down doesn't it what are some of the ingredients or building blocks upon which bad behavior or unethical behaviors are likely to what were some of those those those nine things that came from the research  there are nine elements that together build this this this uh dark pattern as we call it the first one is what we call rigid ideology so it is the in our case mainly the neoliberal profit maximization ideology that narrows down what leaders think is their role making as much money as possible um and let the market or society deal with the fallout
(06:00) of that because it's not their role to consider ethics as an element of their decisions we teach this in business school since decades so that's number one and the more rigid you believe at that the less you can see the ethical dimension the ethical consequences of decision the second one is what we call toxic leadership so leaders that represent maybe the dark triad they are psychopath they are narcissist and they're very good in playing games behind other people back so they're malianists and they create a
(06:30) climate of fear and obedience around them in which you cannot speak up the third one is what we call manip manipulative language so there are certain ways of speaking in organizations that signal that unethical behavior is more probable than other three types of language the first one is war language so you speak as if you're in a war you have to kill the enemy there must be bloodshed some will survive and so on so you give a really violent language the second one is um cultish language so you it's very typical in startups you are there to save humanity um you fuse the mind with
(07:06) a machine so there is this transhumanism so all these kind of very strange things your your theo is the messiah can walk over water that's number two number three is what we call euphemistic language game and we know from research that if you package bad behavior in nice language it becomes easier to enact it if you call something creative accounting that is much much better than calling it tax fraud it engage much more often so that's number three number four is corrupting goals you give people goals they cannot and here again you
(07:38) have to look at the combination of these imagine you have these toxic leadership style you're pushed into your into your your um goals by this aggressive language and you know that these these goals are totally unrealistic and your boss knows it but you cannot say because of it then then point number five is what we call destructive incentives incentives can have two as two two two impacts of unethical behavior one is they can narrow down what so if you are incentivized just to build an airplane as fast and as cheap as possible the two KPIs at Boing well then you build the airplane cheap and we have seen with 737
(08:16) Max crashes on this end so the one element is incentives narrow down your perspective they blind you for other aspects of your decision that you should see but you can't and the second is that very often organizations um organize incentives as a kind of hunger game we are 10 people in the team at the end of the year two will be fired the low performers so who these are depends on how we perform so we will fight the whole year not to be these two low performers that's what I call the hunger games number six is ambiguous rules
(08:48) which means um leaders are very unclear about what the rules are for instance you are a highly high performing salesperson and seems that you have more rights than others rights for instance to ignore compliance rules and the others observe that that the ones who are high performing they're protected or they are toxic and still they are not fired because they are high performing so you understand okay in my organization there are the official rules and there are the um the informal rules and and you open a gray zone as a
(09:19) company by that in which people start to interpret what can I do how far can I go how can I get promoted what is tolerable and this is what we call this ambiguity that opens up in an organization number seven is perceived unfairness so if you think that you are treated unfairly by the competition by the government by your own superior you feel this right to rebalance things in your own favor and that includes um breaking the rules of the game number eight is dangerous groups so you all kind of group effects that reinforce the the other effects in
(09:52) their ability to yeah to create routines in entire teams entire organizations that are totally illegal but people cannot see them anymore because everyone is engaging and finally number nine is what we call the slippery slope none of these things happens from one day to the other scandals i mean the Wraith construction of this this illegal filter at diesel gate for fun or the the fraudland start up at Elizabeth Holmes nothing happens from one to the other it's in small steps one moral compromise after another and in one point you are so fast in the slippery slope down to the dark pattern that you cannot stop
(10:30) this so when when all these nine elements come together and are strong we argue the risk of moral collapse of the organization very high  yeah it was it's really as I was just was reading it I was like shiver went down like you do see these things out in the workplace don't you and it's like and and there's so much value there and sort of picking out on some of those things they're all really powerful so some of the things that really sort of resonated with me was you know the the powerful ideology
(10:57) that leads to the organization cuz if you have you talk about there being a balance as well so for example like if all you focus on is shareholder value then everything else is means and ends isn't it and then that got me thinking about sort of organizations that maybe say they have a customer obsession over the over obsession in one thing leads to a lack of care in others is that something that you sort of saw was it yes that's exactly the point it and I I always tell this my own students when I when I teach business ethics mathematically maximization means one
(11:29) simple thing it means you focus on one aspect over all the other aspects you cannot consider other aspects to maximize one the opposite model would be to balance to optimize a set of criteria or a set of stakeholders but if you do this in a maximization style you don't care about anything else and the maximization of profit is as harmful as the the customer obsession because if I'm obsessed just the word just the word dangerous i'm obsessed about customers i don't care about workers and that's the Amazon story  yeah uh and and then there
(12:02) was another one you mentioned as well the the power and the precision of language as well because you you talked about language and how it's used and there was an example that you pulled out which was about um some some experiments that were done and they were participants took part in a game one game was framed up as the Wall Street game and then the same game and people approached it in a certain way and another game was the same game was called the community game what what was about that what what what surfaced for you in that in that episode for me this
(12:30) is a a fascinating experiment because it shows that by just changing one word in a social setting you create a completely different type of behavior in groups um if you tell people to play a game where they can win by either competing or collaborating and you tell them the game's name is Wall Street they will fight if you tell another group of people giving them exactly the same explanation of the game you can compete collaborate both leads to victory potential the same rules the same explanation word by word but you call it community game they will tend to collaborate and I always tell leaders
(13:03) when I when I do trainings um you look at this story this this experiment what you see is that you as a leader by the words that you use you preframe the world for your team they will make sense of their jobs their decisions through the language that you use again coming back to the war language if you frame everything as a war against competitor do not be surprised if they behave in engag in behavior that they think is justified because there's a war  and and you start to touch on some of like the big societal narratives as well don't
(13:37) you because obviously like baked into that is a belief that competition is good and uh you talk about Darwinism and survive of the fittest the fastest the strongest whatever but you sort of contrast with that well actually the human species has actually developed well because we're actually collaborative beyond all measure and we can achieve far more as a group than we can as any individual so we we are kind of battling at much bigger narratives than any organization as well we almost have to be countercultural i mean how would you imagine to build a cathedral or an airplane if we would constantly
(14:07) fight you the human species of course we do both we fight and we collaborate but we are by default and we know this from research in psychology anthropology biologist that we are by default a collaborative speed but what we teach in business school is fighting competition social target you must crush the competition you are surrounded by enemies that's the Michael approach five forces around you they're all your enemies you must win against them and keep them away because they want something from you so if you if you see
(14:37) the world through the lens of competition and you teach that and you send people out into the world as managers well they will so it becomes a self-fulfilling prophecy imagine we would teach collaboration you would get a probably a very different type of organization  yeah and and you like how we teach and you know there's the MBA programs and the business programs around the world you know how many of them actually have ethics embedded into them because it's a huge time to to shape people's beliefs isn't it and and you are throwing all the strategic stuff at you isn't it it's uh it's it's really
(15:09) about how do you guide people to make their own mind up about their own approach  it probably is the the key message that I always give to my students in the MBA class for instance is that ethics is not just another course next to your strategy course or your whatever course tax course it's it's the foundations and you should critically ask questions to all your other professor professors about the things they say about maximization about free markets that regulate themselves um about um governance you have to create because you cannot trust people all these silent elements of an ideology
(15:40) that we have um implemented in our teaching in our theories over the last decades since uh Milton Freeman came up with his ideas on shorter value maximization that we should critically are challenged because they are probably the reason why our society is in trouble the scandals but you can also include eological crisis the social cohesion that falls apart it's all about this individualbased competition based free market based understanding of society and there was one particular burning question that I had sort of throughout the book which is you know how do we
(16:17) decide what is ethical and what is not you know you're you're a professor of business ethics but and and obviously we have our own ethical compass that they carry with us but but ethics evolve over time don't they you know the kind of ethics that drove organizational behavior and organizational principles back in the early 1900s are very different to now and those people back then felt not very sure and certain that what they were doing was ethical but that doesn't always sort of age so well does it  until the late 1990s you could deduce bribes in other countries from
(16:47) tax in Germany and in other countries so it was considered a normal business practice i remember a time when I was a child where smoking was considered not a moral issue my father was smoking in the car with three little boys one cigarette after another today that would not be possible so the there are processes as you say where morality evolves where we think something is unacceptable that was okay yesterday and vice versa so that's not that's not stable on the other side there are some core elements morality we probably would all agree that it's not
(17:19) good to push your team member into suicide we probably would all agree it's not good to have child labor in your supply chain and people tell me well but that's their culture and my question back is always tell me which culture um considers it as a value that children kill themselves through work in a mine that culture doesn't exist it's very often the question of options that don't exist but not of normative positions in one culture another so we have some core elements um that we would agree on but when we when we develop this idea of
(17:53) what we call ethical blindness so this this effect that you do wrong things but you cannot see it which is the result of the dark pattern the context pushes you into a routine that over time you lose the ability to see the warning signals you think what you do is okay so this ethical blindness when we defined it we said this is not about some external definition by someone about ethic this is you your own values your own ideas about what is right and wrong that is what you cannot see so you you you you take doping for instance as a cyclist
(18:27) and you think that's okay but then 10 years later when you look back at your life you think how could I do this i feel ashamed that's what we mean or you take the bribe or you you behave like a horrible toxic terror regime leader in your team and you get pinned afterwards by what you did so this is what you mean you act against your own values and you cannot see the same  and yeah and that's that kind of sort of slippery slope element wasn't it I think you sort of identified that a lot of the people that you know some of the a lot of the examples some of them ended up in court
(18:57) and you know before they would have known that it was a an offense or it was unethical and after they knew it was unethical but in the moment with all those contextual factors at play that ethical blindness or or willful blindness was kind of quite prevalent wasn't it yes and in some cases even more tricky thing put yourself in the shoes of Elizabeth Holmes the founder of Ferronos so she claim she claimed she had this miraculous blood testing machine that would just put a drop of blood from your fingertip and would do 250 tests so without pain almost without
(19:31) costs and you can do this every day and you you understand whether you were sick cancer for instance much earlier than under normal circumstance so this would would revolutionize healthcare there was research in that direction of how to do that it's not invented out of nothing there is serious research on engineers who work on making things smaller so she starts to develop this and in this process she has some success with her team but not much so she pushes them to work harder and more techn it's it's this fake it till you make it
(20:06) situation right so there is no clear right and wrong in most of these moments where you decide to push harder because you believe in it to say well there is one moment where it turns into fraud is not so easy even if if you lie to your customers you you overpromise something you still do this like anyone else does it in Silicon Valley with the hope that once you sell it it will be ready steve Jobs was doing it so what is what is the point where we could say Holmes does something profoundly unethical and where would we say and until that point she
(20:40) does what everyone does in the industry only with a difference that she has a healthcare product and not just a software then you're appraised by everyone around you as the new Steve Jobs you lose sight of reality  then you're projected into a role that you can't get off of then aren't you it brought back a lot of personal experiences for me something that was really deeply uncomfortable you talk about rank and yank which we have a to thank the 1980s for with some really iconic leaders at the time that we looked up to and said these are this is
(21:08) how it should be done like Jack Welsh for example where you kind of you basically rank an organization it's often 20710 isn't it that 10 is consequences happen to them as well and I was in the middle of it I I started working with a new client and my first day on site was the actual announcement of the statistics and everybody was in the room together and the 10 were identified and it's It's quite something isn't it when it happens but it does a particular thing and even though not all performance management systems will be quite as as open about something like
(21:39) that they all do a thing don't they  they devastate humans and they destroy collaboration and the cohesion the culture of an organization the inventor of that is probably not Jack Welch but some unknown Roman general who would in order to punish his army just randomly kill 10% of the soldiers right so that the others would obey better the summation comes from that from that uh practice and Jack Welch just applied this to companies by saying well in any company there are uh low performers he called that dead wood and you can know the language again the language dead wood devoid of dignity the words already
(22:17) are and he said well in any company there are these 10 20% low performers and he wanted them to be out and that's why there his managers had to buy the G curve and from then on it became a fashion the funny or the funny the sad the absurd thing about this is that research in in human resource management has found that this performance in organizations does not distri attribute along a Gaus curve it's it's much simpler you have some star performers and the rest is more or less comparable with the pure outliers but if you believe in the Gaus curve and you invent tools to measure it then you're fine of
(22:52) course the 20% local performance you fire them once per year at Enron twice a year and again we know in the long run it destroys everything because people have fear they will break rules they will harass each other they they will not collaborate there's all kind of negative effects we know this and organizations keep doing think about Ma Zukerberg who recently announced he wants more masculine energy in the company the way he does it is firing 5% of the people and you can see their their comments the people were fired on link it in where they say well was
(23:24) always getting the the best evaluations and suddenly I'm a low performer maybe because I'm a young woman with two children so you see it fires back it makes people bitter not and not only those who survive who are fired but also the ones who survive because you can be the one who is fired next time and as you mentioned this is a very humiliating process you don't want to go through this and how do you explain this to your next employer that you are no performer so it's it's a very dangerous tool probably the most toxic tool ever used in human resource management you know the universities like your own develop
(23:58) brilliant research that kind of sort of tears or disrupts these myths that pervade corporate reality you know that uh performance goes along a curve all those different types of thing as well what is why do so many of these myths pervade organizations and why do they still live on far beyond where wherever they should first of all if if certain practices have taken roots it's very difficult to get rid of them take incentives there's also plenty of research showing that the best way to motivate people is to give them a good working environment at a fair salary
(24:31) bonuses don't do that job don't lead to higher performance so if we would stop with bonuses we probably have more performance people would just consider their working conditions fair and respectful but try to um reduce or get rid of bonuses in an organization to fight back so it's very difficult to get rid of practice the Gaus curve is is very tempting for managers because it it gives them a tool where they can show I do something I act i get results I fire people if they open the form so and probably many people believe that this is motivated they have gone through the
(25:08) same themselves and they have become I don't know CEO and now they say well look I became CEO in this world so this works and now I want the others to do the same I mean the people who implemented this at Enron they all came from Mckenzie and McKenzie of course when they do this this is a very different game you can rank and yank elite people because then you send them to other organizations where they get top jobs and they become one who give you projects right so It's a very different game but try this with salespeople um who earn salaries at
(25:42) Volkswagen try this with um technicians at telecommunication company and what you get is suicide or fraud because people will struggle to survive cannot do this with everybody in the organization  yeah and and and the power of these things when they come together are quite something aren't they because they they guide employee behavior even when no one else is watching like it it's a it's a form of surveillance almost isn't it um and when you talked about there's one particular example that's quite disturbing which about Wells Fargo where it's actually you know
(26:11) unethical behavior on an industrial scale like a 100,000 employees 3 and a half million uh false bank accounts opened it's just it just shows doesn't it the scale was that was that one of the examples that surprised you the most i would say it surprised me and I know these things surprise me because the more you read on scandals the less you're But what it does is it gives me the best example for the argument that scandals are not about some bad people the top of the company as they are presented in documentaries on Netflix
(26:43) 100,000 sales people committing fraud you cannot explain this by cap unless you have an HR department that is specialized in hiring only crooks which I don't think is the case or people who are crooks think well I have to work at Wells Fargo because that's where I can live my my fullest uh uh life as a crook no that is not what drives it what drives it is situations that are so desperate there's so much pressure that one of my favorite quotes from a salesperson at so much pressure that one one of them later on I have been in the
(27:16) Gulf War so he was a veteran soldier and well Fargo was worse than the Gulf War so you imagine that we have people who say well I couldn't sleep uh on Sunday or couldn't sleep at night by thinking about the next day's shift or was hiding in a man's bathroom crying or someone says I was achieving my goals but then they were never satisfied to do more and more and more so you're always running behind your goals you get humiliated by your superior you are fired if you don't achieve your goal they yell at you so it's it's a horrible horrible situation you do what it takes to survive and then
(27:46) you observe your colleagues doing it and they get promoted and the behavior are tolerated their leaders push them to do it and then you think yeah well if they all can do that why not and then everyone does it and the same say about the doping scandal of let's Armstrong to France where everyone was taking almost everyone was taking drug to enhance their performance so you create context where everyone participates and then everyone thinks well what we do is normal it's okay  yeah and and you kind of touched on something really really important important though isn't it which is um that you talk about one of
(28:17) the things which is like you know the ambiguity and there's so many organizations with values and they're espoused and let's be honest a lot of them are aren't they um in terms of what they say and the guidance they should give yet you're seeing people being promoted for exhibiting opposite behaviors as well um does that mean that values are defunct in organizations they're they're not worthwhile or how can we actually get them to start really be meaningful and significant and to guide decisions because they're really difficult decisions as well  yes no normally
(28:49) companies define values because everyone has values and therefore they have to have values too so they have maybe a marketing agency giving them five values or 10 seven whatever but that is not values values means two things first of all leaders have to use them in their decisions they have to throw to their teams that these values are what he or she is basing their decisions on and second they have to talk about this with their team they have to engage them in ethical conversations to signal the importance of the values you have to walk the talk and the walk and if you don't do these two things you can have
(29:27) the most beautiful Enron had the most beautiful values you can imagine boeing had great values bots forget but this is completely useless if you do not use them in daily decisions as leaders  hi we're just pausing this interview for a moment have you ever finished an episode of the org dev podcast and wish you had a cheat sheet that summarizes all of the key points us two so we made one it's called From Pod to Practice and each week at our newsletter we'll share a two-page summary of the latest org dev episode and it includes key takeaways a
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(30:18) live to get the latest from Pod to Practice in your inbox and let us know what you think we'd love to get your feedback and shifting gears obviously we've sort of painted a picture of the reasons why and like how do you start and you talk about the bright pattern but I guess before we sort of move into that area one of the ways in which a lot of these scandals come about is because someone or some people blow the whistle and often for the person they are doing something out of integrity or variety of different
(30:42) reasons but often what happens to them as a result is often I guess what did your research sort of find out about people that did sort of try to stop these things as they were happening it's interesting if you look in these these stories there's always at least someone who speaks up so I make the difference between whistleblowing and speaking up speaking up means you say internally to your superiors what we do is wrong or what you want me to do is against the code of conduct or whatever you you talk about this in your hierarchy and this
(31:12) happens in all these scandals at one point some people stand up and go to their superiors and say there's a problem and then they get pushed back they get harassed they get threatened they get fired and the others observe that so who would want to speak up next that is what happens to those so you create a culture of silence that is also driven by this toxic culture that I mentioned as one of the building think about Foxswag against CEO Winterporn told his team that they had no problems because a problem doesn't exist at Hogwart if you have a problem you are a problem with your fight this culture
(31:49) where you don't have a problem is you hide problems and you try to find solutions it's the most stupid thing that leaders can say to their teams you don't come to me with a problem the second most stupid thing is come to me only with solutions because if if I have a problem I see it we have to do something i know not what to do about it then I will not say it problems must be articulated and in a culture the one that these companies that we investigate developed don't make it possible and that is when some people are courageous
(32:20) enough and go outside and talk about this to the authorities to the media and make it public the whistle and that is not what you want as an organization because this can be very very expensive yeah um it's absolutely fascinating isn't it and you I guess looking at the bright patterns um because you're in the domain of culture change aren't you um and that is a huge starting to shift cultural norms um is it only the CEO that can start to make change or can change only happen once the CEO goes or does that even not even make a
(32:52) difference because it's so endemic that that one person leaving won't make the difference but if you look at the the Boeing story for instance um where years after the two crashes of the 737 Max suddenly a door falls from the sky um and then when you read the news you find the same challenges described that were discussed during the crashes of the 277 Max as before culture of silence pressure on costs um pressure on speed um people who speak up are threatened so it's the same thing so they are not able or maybe not willing to reflect upon their culture and to change it what it
(33:30) signals to me is always well it's very easy to destroy a culture top down it's so difficult to grow it back it will take years before people speak up after a fallout because but why would they they sit and wait they have seen what happens in the past when you speak up and now they wait what happens if someone else does it well again something bad happen so it takes years before they don't trust again so you you destroy it from the top but you also have to recreate it from the top but then you have to as I said you have to
(34:01) engage in ethics you have to engage in more conversations you have as a leader to think about ethics as a key element of your job and I know very few top managers doing that if you're the new CEO coming in after a scandal your job is to look forward clean up the mess fast enough and then look forward don't talk about these things anymore you have not been involved anyway you don't want to be connected to it you are here to prove that you can turn around because we don't talk about what happened and that was the biggest mistake already right from the start of the because in there all the lessons learned aren't
(34:34) they all those moments where people saw something were on the slippery slope almost you talk about something which I thought was a great concept which is the is to develop options and to introduce some agency and choice and because again you talked about dialogue and dialogue is one of the key I imagine key levers for starting to reverse or start to shift um the patterns that you see as well what role do options play and how can people bring options into discussions to start navigating the the moral maze a little bit easier  i think the first
(35:05) aspect here is that we as individuals need to have options if if I would be fired tomorrow I would have three four five ideas about what to do next would not be nice would be totally unpleasant but I would have ideas about what to do next and you look into these scandals people who are involved and when they are asked afterwards why they participate very often the answer is I thought I had no choice i thought I had no choice which means they saw no other option for themselves than participate if I have an idea about an alternative
(35:38) career if I have some other skills I can I can do in the A or whatever to make my skill set larger when I have options I'm free because no one can force me to a behavior when I can leave and walk away from an organization but walking away is not possible when you think this job this career this life here that's all I have cuz without that I'm nobody develop options makes you free and it makes entire organization if people do that much more flexible because you don't you're not scared away from saying things you want to say anymore there are
(36:16) other ways organizations do to sort of put limit people's options aren't there yeah but that's a different type of option right this is um you get incentives to do what you do or you get money you get gifts you get less conditions that's not what what I mean as options is what do I do with my life who am I that is options if if I can give you two answers I'm a professor now but I could also be a corporate trainer i could be a book writer i could be many things that is liberated do not need this job to be someone that is the
(36:49) important  which which is really interesting because that's we're at the role of identity then aren't we a person like me does a thing like this in a way the more people work the harder they work the more they're committed the more hours they do the less of a life that they have outside of work so their world kind of closes in a little bit also add time pressure as well and people's worlds get smaller so you can start to see how people's options start to reduce quite significantly can't you  it's often the intention by the company not to let you go home so you can do the shopping
(37:20) the sports and everything on the compound of the company because the longer you stay the more you work but the the more you work in this one company the less you have a life and the less you have a life the less you can think and reflect upon yourself what you want and that is not very healthy mentally physically to be in that kind of situation  interesting and and part of that bright pattern the there was a really wonderful example that you talked around which is in Sicily where a group of young students actually started to challenge the way in which um the mafia
(37:52) operates within the community there as well what was that story  well in Sicily like in many other places where the mafia rules shop owners pay protection record and whenever people tried to change that they were killed the shops were burned down and so on refusing to pay it or fighting against it was a life-terminating move until there was a young a group of young people in the '9s and developed an approach where they convinced hundreds of shop owners to not pay the bribe to put a label out in the window say I am not paying the bribe so
(38:27) a deal pizza is the only word for racket so farewell racket and they convince thousands of customers to commit to buy especially in those shops because the the biggest fear if you do the right thing is you do it alone and and no one helps you you are isolated in the very moment where these young people could show the shop owners and the shoppers you're not alone thousands they were willing to participate and this whole process was driven by values so you take the values of the people in talk about dignity which is a strong Italian Sicilian value and you turn the meaning of the value around by by collect
(39:05) connecting it to this anti-mafia activity so a huge success story and the mafia cannot kill hundreds of shop owners so they were not able to react to that very powerful story of change change can happen even in situations where it never happened for hundreds of years still it can happen you just have to do it the right way and very powerful way of changing society changing an organization is to the value so the values that we talked about earlier which is often an organization's biggest weakness because it shows to employees every single day that they mean nothing
(39:37) actually if you use them well can mean everything and are actually a potential tool to create that culture change that you're looking to create  but managers never learned this and they are told in business schools that's not your job focus on shareholder value ethics as Milton Friedman once wrote is for your private life separate this and if you separate this and if you think um managers don't do these things and if I do it I'm considered a weak manager you don't engage in ethics and you don't have the toolbox anyway because never we're never taught so that is where you
(40:07) have to change and that change would be very powerful  and while you're writing this book you're constantly researching you know some of the darker elements of organizations like how how do you keep yourself kind of uh resourced and and and with a sense of agency and a sense of hope uh that things can change as Montuto once said I'm a prisoner of hope so I not getting pessimistic when I see these things because I also see positive change happening i see individuals standing up i see people using values um I see organizations having ethical
(40:39) cultures so it's not that we are bad as human beings it's that we just need change the conditions in a way that we can also show a better side for us so that makes me what's the alternative to cynicism and as you're sort of looking out what what what kind of emerging trends or topics are catching your attention right now what what are you starting to say you're exposed to a huge um number of uh leaders and organizations like what what's catching your attention  well I'm always asked when I when I do my workshops with companies what is next so
(41:10) if you have this dark pattern and you see these warning signals um where would you see the next candle emerging and over the last years I always had one name that I mentioned when I was asked that question and that that was uh Elon Musk and Tesla or any other company because you can Google it you can Google the dark pattern for any of his companies toxic leadership the unachievable goals the aggressive language um the the ambiguous rules rule breaking is normalized so it's it's all there i don't say this anymore because if you as a CEO can control the
(41:44) regulator and destroy it then there is no investigation so I think he's fine no scandal i now look more and more into the AI in the crypto industry because that's where typically scandals start a start in in domains where there is a hype where people claim they change the rules of everything um where you can make a lot of money and where the rules are totally unclear and that is these two domains like Enron the internet the early days of the internet in the 2000s Enron and World and the others it's the same situation the rules are unclear um
(42:20) you are considering yourself as kind of messiah and then you move forward and do whatever you want that will need it does lead to scandals right we saw FTX we saw some other cases recently so I would not be surprised if we see a serious scandals in AI crypto in the next years so I'm looking forward to that i need new stories  i think there's many coming down the pipe for that one unfortunately yeah and again part of that is framing like if you think about how internally organizations are rolling out AI in
(42:52) their organizations the framing really matters about how it's done doesn't it yes yes absolutely  um so reflecting on your your work so far what are some of the biggest lessons you've learned along the way  the biggest lesson that I learned is that nobody of us including myself can say we wouldn't do it nobody some of us would not participate in these things but most of us would under certain circumstances and that should make us all humble humble um about ourselves that we potentially can be harassers fraudsters pay bribes and and
(43:27) not feel anything about it so we should be aware of that and protect ourselves imagine the options the options is one thing if you have options in life quite protected but to develop the options you need to know who you are what are your values where do you want to go with your life what are thresholds would say I would not go beyond that so if they ask me to go further I say no and here is the sentences that I I prepared for my superior in case they will ask me to go further so what's the threshold what's
(43:58) what's the point where I would say no because you see that people who get out of these horrible context very often see something the others do not see anymore they see an end point um and that is probably not something good and they stop and they get out of the company or the speaker  and you've actually preempted by one of our last questions there which is what advice would you give to someone who's just starting to be more aware that ethics is a huge part of what they need to be aware of in the organization there's those things is there anything else that you would
(44:28) encourage someone who's just taking those first steps and or maybe starting to notice practices around them that are starting to tick off some of those building blocks of the nine that you noticed well there's there's one one thing that I would consider very important that is normally not discussed so much in all these scandals the people who are either the ones who speak up or the ones who get they are alone no one supports them on the contrary people take side of their leaders think about the scandal uh telecom where horrible change management process pushed 100
(45:02) people into suicide in three and a half years but when when the people targeted by the leaders were um collapsing on their desk their colleagues left the room and worked somewhere else they stopped speaking with them and they had even a name for them they saw the people without a chair you are alone and that is the bystander effect we don't want to be the first who helps we don't want to be the first who sticks out so we wait for someone else to speak up no one does so I am alone be an ally that's a very important thing and if you want to speak up if you need help ask colleagues to be
(45:37) allies and many people surprisingly many people will be willing to be an ally but they need to be prepared mentally and they need to be prepared what they say what they do when the moment comes um if it's happening spontaneously they will not help organizations must create a climate of allyship that is a key element of how we avoid these toxic contact  that's really powerful and we're going to make sure that gets put in a clip and sent out to as many people as possible because I think it's just such an important fundamental bit of work
(46:07) that we all need to do and a lot of the people that are watching this are practitioners and we talk about the importance of reflection and those are kind of questions that we need to reflect on and know about ourselves so that when we're in the cut thrust of the culture we we're standing on solid ground as well um G we just want to say a huge thank you for all the work that you're doing and for putting yourself in the place where you do the research so that others can sort of have that awareness as well um if people want to reach out to you if they want to follow your work we've consumed your book um
(46:37) you can buy the book we love the fact it was on audio book and it's just a great experience you know just a real because we're only just touching the tip of the iceberg of the contents of the book as well you know we just touched on the sort of the key themes but in the book is so much depth and real tactics and and challenging questions to ask ourselves as well what's the best way for people to follow you  well the best way would be to connect on LinkedIn in where I discuss these things regularly not always to the pleasure of everybody but that's just the beauty of good discussions they think connect on
(47:07) LinkedIn would be the best way and the book can be bought anywhere in Europe in any bookshop  fantastic we'll make sure all the links are in the show notes as well so we do really recommend you to read um and access Skido's book whether it's on audio book or or um paperback as well um we've loved it it's been such a good thing um Danny just is is so gutted she couldn't make it because she had so many questions but I hope I've answered as many of her questions you wanted as well um there's so many things that
(47:30) stood out for me i think some of the principles that we need really need to be mindful of are you know the slippery slope just that it's it's happening and it doesn't a crisis just doesn't suddenly happen does it it just sort of slowly happens step by step the the power of you know the ideology and you know if you are joining an organization that has a strong ideology what does that mean and what's the impact as well but also really importantly the reflection that you need to do for yourself to make sure that you are aware of where your your red lines and where your where your ethics sit as well so so
(47:59) thank you so much G we love it it's been brilliant it's been a great conversation I know that loads of people are going to get so much enjoyment out of it so thank you  thanks for having me Gary [Music]