But choices of good or bad do not hinge on economic value as the sole criteria of judgment.
Economics has no language for morality, but more and more consumers and employees seek human institutions, businesses, that serve society rather than just a few shareholders and excessively paid executives who cite “market forces” to defend such excess (a most convenient tautology). Faced with the blatant exploitation of a ravenous trading mindset brought on by economic pragmatism, we resort to long-term vs. short-term arguments to resist, and they have been helpful in this regard, though the real issues are much deeper.
However, we need a language to help us pursue and deliver “better” in other dimensions than mere economics. If our business institutions are to be trusted, it will be because they are not only competent at their task of customer service delivered in an economically sustainable manner, but because they also act morally in service to humanity, and therefore their character warrants a bestowal of trust. In our previous post
, I suggested that a purposeful enterprise is one that increasingly exhibits more of the four cardinal virtues: prudence, justice, courage (or fortitude) and temperance. As my CFO friend and I sit together inside the intense dilemma of “the box”, I wonder how the first of these four virtues, prudence, might guide our choices.
At the very least, prudence sounds old-fashioned, like something that ought to be festooned with lace and contextualized with the other deep bowing, polite accompaniments of a Julian Fellowes-led British historical drama. Anachronistic sounds of the word aside, we quickly recognize that “prudence” is far from irrelevant, for what lies beneath is piercing clarity. Prudence is practical wisdom, or more specifically, as Timpe and Boyd suggest in Virtues and Their Vices
, “the acquired disposition to reason well about what courses of action and emotion will best bring about our own and others’ well-being.” Practical wisdom, not old-fashioned idealism, is what we in business find we need as we navigate the unresolved tension between the traditional demand for more growth (mostly to create wealth for a few) and the countering notion of what is enough (mostly, a sustainable supply/demand equilibrium).
Some years ago, I had the opportunity to ask a wide range of senior directors – individuals who had spent years serving thoughtfully as directors (governors) of public companies – what qualities were most desirable in fellow directors on the boards where they themselves served. Their simple answer was nearly unanimous. They did not seek smart people who could provide expert knowledge or insight about an industry or a business, but rather looked for prudent governors who found themselves commanded, “to act toward morally appropriate ends, and to devise the best means of achieving those ends.” They would trust someone, they revealed, who knew right from wrong and would act upon that insight. In other words, prudence – a moral framework and the wisdom to act according to it – is what makes a great corporate director.
In practice, the exercise of prudence requires three essential elements: deliberation, judgment, and action. Deliberation demands consultation with others, to seek wise counsel. Judgment demands that we choose, that we get off the fence, even to overcome fear. Urgency helps when we need a push, but prudence simply demands that we choose. Then, lastly, we have to act—to move toward the good ends, to move the walls of “the box,” as it were, and to move them either towards “better” or to let them press in upon our moral framework and become accomplices as it deteriorates toward “worse” along with that of the business we are part of.
So how does prudence help the CFO, the musician, the analyst, and the salesperson I introduced earlier? How do they push the walls that box them in towards “better” lest they each inevitably migrate towards “worse”?
Unlike more intellectual forms of wisdom, there is no formula for success. My friend the CFO considered his options, pounded the table, and suggested to his boss that he talk to the board. His pushed against the box. It moved for the better. The musician emailed the ethics hotline and the organization is now healthier. The marketing analysts did not wait to be asked, they got together with a few friends and now fortify their bean-counting with “make-a-difference” projects on the side. The salesperson missed the quarter but won a loyal customer. So, perhaps we should, with the Beatles, wish, “dear Prudence, won’t you come out to play…” and then with Oliver Twist ask, “please sir, may I have some more?”
Of course, not all moral “boxes” are confined to the organizationally lofty ground of the “C-suite”. Most are not. Consider the musician who, faced with the often abusive excesses of an artistic director must navigate the bulldozing pressures of artistic genius and imminent unemployment and the safety required by artistic expression. Or the marketing analyst caught in between meaningless number-crunching and the deep desire, shared with colleagues, to make a real difference. Or the financial services manager hemmed in by a real passion to lead and drive the business and the sometime stultifying consequences of excessive, though necessary, risk avoidance. Or the salesperson, faced with month-end targets, wanting to close the deal but not at the expense of a negative buyer experience that would soon be all over social media. Business (and life) constructs boxes – tough trade offs demanding practical wisdom.
In the presence of such boxes, pure economic rationalism is convenient because it feels like an amoral arbiter. “The models tell us it’s just bad economics to lend in this area,” the mortgage executive might say, as she recommends significantly higher lending controls, including charging higher interest, to a whole neighborhood of people who really can’t afford it.