Last week, I attended the 15th Annual Compliance and Ethics Institute, held in Chicago by the Society for Corporate Compliance and Ethics. I love going to professional events like this, and I love helping to put them on even more, because it affords the opportunity to get out of the office and immerse oneself in the art and science of their profession for a few days. (Which reminds me, if you haven’t yet registered for the upcoming Compliance Week Europe conference in Brussels, Belgium, this November 7-9, make sure to do so!)
One of the things I was especially interested in seeing at the SCCE event were the keynote addresses, and they were pretty compelling. However, I am not sure I agreed entirely with the points raised by the first one.
Kicking off the show was a presentation by Francesca Gino of the Harvard Business School, entitled, “Why our decisions get derailed and what to do about it.” She was a terrific presenter and described numerous instances where the intersection of desire, incentive and opportunity ended up producing bad behavior. People often make good plans, but then those plans get derailed, usually by emotions fostered in the heat of the moment.
By way of example, Gino cited how, in 2003, Ducati decided to field a motorcycle racing team with the idea being that the better their team fared, the more motorcycles they would sell. Their first racing season was meant to be a learning exercise, but the team did surprisingly well, and came in second place that year. As they did, the taste of victory sidetracked the team, which stopped emphasizing the collection of data, and focused on winning their next season. They overhauled their racing bikes based on intuition rather than data, and their second season was a disaster. Emotion defeats data every time.
And so does our own personal decision-making ability. Gino cited examples of how everybody in the room thinks they are in the top 50 percent of a particular group—which of course, is impossible. She noted how people will think they are more likely to get into Heaven than Mother Teresa. And sadly, we all see examples of this every day don’t we? One is reminded of the old George Carlin joke about how everybody who drives slower than you is an idiot, and everybody who drives faster than you is a maniac.
She spring boarded from this to how and why people decide to cheat and what can be done about it. She noted a certain college testing experiment in which students took a test, reported their results, and were rewarded financially for how many answers they got right. Under the right conditions, people found it a lot easier to fudge the answers and collect more money than they were owed. She noted that a lot of this hinges on perceptions of how fairly they were being treated. If one is in a rigged system, well, then why not cheat, if only a little? She played a famous video of an experiment involving capuchin monkeys being paid unequal rewards for doing the same task. Predictably, the monkey getting shortchanged wasn’t too happy about it.
The upshot here, Gino argued, is that ultimately, because we are emotional beings, and because we often find ourselves in imperfect conditions, we are, on a long enough timeline, all going to cheat at least a little. We will all break our own code, if not the codes of others, and the way to deal with this best is to accept that reality and somehow build a system that takes that into account. We need to take into account how we let emotions sidetrack us and craft some way to be ready when that happens.
That’s pretty reactive, though. As a counter, I might offer a simple solution crafted by my alma mater, Washington & Lee University, which employed an honor system. No lying, cheating, or stealing. You signed an honor pledge on all texts, exams, projects, and papers. Honor violations merited immediate expulsion. No second chances. You could take your case to a court made of your peers, but that was pretty uncommon. There was usually about one honor violation per year. And about one honor trial about every four. And the school kept its computer lab open and unlocked 24/7 and didn’t have to worry about missing computers.
The Honor System is as harsh as it is simple, but it is also deeply effective, even now. I am sure plenty of W&L grads have gone on to lie, cheat, or steal, so the system isn’t a magical cure for what Gino suggests lies within us all. But when you are within that system, it does work; a strict lesson in compliance can deliver some pretty amazing results, and it doesn’t really matter why one might want to break the system. Do it and pay the consequences. Do it not and graduate. Worked for me.