19 Apr #169 – “Leading Faithfully” Basics – The “Way” of the World
ESSENCE: In order for a faithful leader to lead faithfully through business a better way–business God’s “way” in alignment with Biblical beliefs, principles and priorities–it is important to understand the alternative. What we call business as usual represents organizational dynamics in the “way” of the kingdom of the world, and it is the root of brokenness in work, workplaces and workers. Four key attributes of the “way” of business as usual are at odds with the “way” of God’s Kingdom: profit as purpose, a scarcity assumption, a self-interest assumption, and a “Can We” culture. Capitalism and profit are not the problems–the problem is capitalism played out through business as usual with profit as an end rather than a means. Leading faithfully through business a better way requires a faithful leader with the wisdom to recognize, and the courage to root out, elements of the dehumanizing and uglifying “way” of the kingdom of the world and re-align an organization with the humanizing and beautifying “way” of God’s Kingdom.
“Leading Faithfully” Basics is about going back and re-examining the basics of leading faithfully through business a better way–business in alignment with Biblical beliefs, principles and priorities.
To understand business a better way, it is important to understand the alternative–what we have been calling business as usual. It is organizational dynamics in the “way” of the kingdom of the world, and we believe it is at the root of the brokenness detailed in post #164 (The Brokenness of Business as Usual). Theologian James K.A. Smith concludes:
It is we who have invented the twisted cultural systems that deface and despoil this good world.
The “Way” of Business as Usual
Business has the potential to beautify the world–or uglify it. “Beautiful” was clearly God’s design when he created everything and declared it “very good”, and “beautiful” is the word that comes to mind as you read the description of the New Jerusalem that is coming–God’s Kingdom on earth.
By its very nature, business can add to the beauty of the world by creating solutions to challenges of human life, economic prosperity that makes those solutions affordable and accessible, and jobs that allow people to fulfill their humanity and purpose by using their God-given creativity and productivity to serve others.
Sadly, business as usual often brings the inherent “beauty-potential” of business (solutions, prosperity and jobs) with an ugly cost to God’s creation, particularly people.
We focus on four key attributes of the “way” of business as usual that are at odds with the “way” of God’s Kingdom:
• Profit as Purpose
• A Scarcity Assumption
• A Self-Interest Assumption
• A “Can We” Culture
When these are working together:
• Treatment of people is often less about DOING GOOD and more about DOING LESS BAD in order to increase profit. If you could work people 100+hours every week and underpay them and people still wanted to work for you (which is what happens on Wall Street and in medical residency programs), you would do it. If employees started quitting or grumbling too loudly, or if recruiting slowed, you figure out how little (i.e., LESS BAD) you need to do to “fix the problem”.
• Organizations and people operate out of fear and use fear to manage others, which leads to manipulative and dehumanizing “survival” practices. These behaviors are certainly not in alignment with the Biblical principles such as love, generosity, mutuality, flourishing and Shalom.
Profit as Purpose. Of the four key aspects of business as usual that lead to its brokenness, this is the most important. It is the idea that the primary or sole purpose of business as usual is the maximization of financial profit for the benefit of shareholders.
Without getting into a history lesson about prevailing management theories, for many years a debate ensued between “shareholder primacy” and “stakeholder” models, with the stakeholder model being predominant until a famous article by Milton Friedman in 1970 in which he said “There is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits.”
The shareholder primacy model has been predominant for the last several decades. For an excellent history of the debate (as well as an analysis from a corporate law perspective), we recommend The Shareholder Value Myth by Lynn Stout. For an excellent economic analysis of the Friedman doctrine and its problems, we recommend Completing Capitalism by Bruno Roche and Jay Jakub.
In a nutshell, in the 1970’s the debate shifted in part because of frustration with management performance; that shift led to a move to align executive pay with shareholder value; and this, in turn, led to a massive increase in CEO compensation (coupled with stagnation in employee wages) as well as an emphasis on short-term profit management. In recent years there has been a movement back toward a stakeholder model in response to, among other things, vocal criticism of corporate profits, CEO wealth (and a growing gap between CEO and average pay) and employee dissatisfaction.
Several dynamics and consequences flow from maximization of profit being the “end” to which a business is managed:
• Matthew 6:24 makes clear that “no one can serve two masters“. By definition, if profit is the “end”, people can never be more than tools of production to be managed toward that end.
• People will be valued based on their perceived profit contribution, and value is likely to be based on short-term profit or stock value. Senior management will be perceived as more valuable, particularly by senior management.
• Decisions will be made mainly based on financial metrics, because they measure profit and they are easily measurable. The includes decisions as to:
• What products to offer and where they are made and sold.
• Raw material sourcing and use and environmental impact.
• Hiring, firing and compensation.
• Because an organization manages to its purpose, a key role of the organizational culture of a business with Profit as Purpose will be to drive profit. Business culture can be designed (or will just emerge) to drive or inspire people to perform at higher levels and contribute more to profitability through mechanisms like bonuses/commissions/promotions and the fear of elimination or demotion.
Scarcity. This is the assumption that resources are scarce and everything is a zero-sum situation (my gain is your loss and vice versa).
Scarcity is at the heart of a market economy, which makes it no surprise that it is a common aspect of business as usual and a contributing factor to the brokenness of workplaces and workers. Noted economist Paul Samuelson defined economics as “the study of how men and society choose, with or without the use of money, to employ scarce productive resources which could have alternative uses, to produce various commodities over time and distribute them for consumption now and in the future amongst various people and groups of society.”
When Scarcity is the assumption, it can impact how all resources are viewed–financial resources, human resources, customers, inputs, knowledge and influence. Integriosity comes, in part, from the word “generosity” and a Scarcity mindset is antithetical to generosity. In a Scarcity mindset, you believe that there is never enough–it is a fixed pie and you need to grab your slice. There are actually studies suggesting that a Scarcity mindset reduces IQ and functional bandwidth, leaving people less rationale and more prone to bad decisions.
A Scarcity mindset in an organization can have a profoundly negative impact on how people are treated. For example:
• People may be paid what is “just enough” to keep them (rather than what is fair).
• People may be underpaid for overtime.
• People may be overworked to reduce overhead.
• Salespeople may feel like they are competing against each other.
• People may feel they must compete internally for resources.
• People may guard information and knowledge that could help others and the organization.
• People may use influence only for their own advancement or protection and not to help others.
A scarcity mindset is devoid of trust in a God of abundant provision.
Self-Interest. This is the assumption that people are self-interested and will act in their own self-interest. This is closely tied to the Scarcity assumption. In fact, Adam Smith described self-interest combined with competition as the “invisible hand” that guides economic activity. About self-interest, Smith said:
It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love.
Whatever the goal of an organization, its achievement requires aligning people’s interests with that goal. The goal of Profit as Purpose requires aligning people’s interests with the goal of profit maximization, which itself aligns with Smith’s market economy. It is based on the assumption that appeals to self-love rather than humanity will align behavior to the organization’s goal. In a business as usual organization with Profit as Purpose and the Self-Interest assumption, people’s behavior will be manipulated through mechanisms of reward and punishment:
• Morale problems will be “solved” with money.
• People will be motivated by creating a sense of competition within the organization–pitting co-workers against each other.
• People will be motivated through fear tactics.
• People will be motivated through bonuses, commissions and the prospect of promotion.
• People will be provided benefits only to the extent necessary to motivate the desired behavior toward the goal of maximizing profit.
These behaviors are not aligned with our creation in the image of a relational God or with the Biblical principle to love and care for others–to treat others as we would wish to be treated. The Self-Interest assumption does not prioritize or encourage community–it creates an environment based on competitive behavior and mistrust.
Using the Self-Interest assumption to motivate people will work–at least for awhile. But it can have unintended costs and consequences. The recent debacle at Wells Fargo is a perfect example. The extreme use of targets and incentives in its Self-Interest sales culture led to workers living in fear, mistreating each other, leaving due to stress, violating client trust, and even breaking the law.
“Can We” Culture. This is an organizational culture in which ends justify means and ethics or the law are seen as the only boundaries (or even obstacles) in the pursuit of the organization’s purpose. When faced with a choice, people are explicitly or implicitly rewarded for asking “Can We” choose the alternative that most aligns with a WHY of Profit as Purpose. Ken Eldred has observed:
Amorality is becoming more and more the predominant moral foundation in the Western world today. The question is not whether something is right or wrong but whether it’s legal or illegal.
The problems of a “Can We” Culture are many. Competition (whether internal or external) and a fear of losing sales (both tied to the Scarcity assumption) can lead to pushing (or even crossing) boundaries. It is unprincipled, condones risk-taking and has a short-term focus. It is toxic to the desire we believe is built into each human to do the right thing and glorify God.
Because moral failures typically occur through EROSION rather than EXPLOSION, a “Can We” Culture can even lead people to do things they never imagined possible and that they will ultimately regret. For example, at his sentencing for insider trading, a hedge-fund manager described the impact of the incessant pressure to deliver returns:
“I was not aware of the changes that were happening in me that blurred the line between right and wrong. They came slowly over several years. I allowed myself to slip into the world of relativism where the ends justified the means. Quite frankly, it’s very hard to imagine how I became that kind of person.”
To better understand a “Can We” Culture, let’s compare it to an alternative–cultivating a “Should We” Culture–which is an attribute of business a better way.
In a “Can We” Culture people are explicitly or implicitly encouraged to ask things like:
• “Is it illegal or does it violate any rule?”
• “Are our competitors doing it?”
• “Are we likely to get caught?”
• “Is it defensible if we are caught?”
• “Is our customer demanding it?”
By contrast, in a “Should We” Culture, people are explicitly or implicitly encouraged to ask things like:
• “Is it consistent with how we want to serve our stakeholders?”
• “Is it consistent with our values?”
• “Is it consistent with our intentional culture?”
• “Is it doing the right thing, in the right way, for the right reasons?”
• “Is it consistent with what we say we stand for and who we say we are?”
A “Can We” Culture is, in many ways, the product of Profit as Purpose fueled by Scarcity and Self-Interest dynamics. Profit as Purpose does not support enduring values because it has no moral, ethical or Biblical foundation. Although “values” may have such a foundation, values in service to Profit as Purpose become a “means” to the “end” and the “means” will always adjust to fit the “end” (never vice versa).
By contrast, a “Should We” Culture asks “Whether or not we CAN do it (or get away with it), SHOULD WE do it?” “Should We” can call people to a standard higher than merely man-made laws or the current societal ethics–it can call them to the Biblical standards that they were created to emulate, and it can call them to the organization’s values.
It is we who have invented the twisted cultural systems that deface and despoil this good world. (James K.A. Smith)
Business as Usual ≠ Capitalism
We believe it would be a mistake to equate capitalism and business as usual. But capitalism is associated with business as usual (business in accordance in accordance with the world’s beliefs, values and priorities), and business as usual has big problems.
Although “capitalism” has become a four-letter word for many people, its essential elements are private ownership of the means of production and an intention to earn a profit —neither of which inherently warrants expletive status.
Private ownership of property is a Biblical concept. If you doubt this, we recommend an article on this topic by Wayne Grudem. (We do not agree with those who try to argue that the community in the book of Acts was an example of socialism. It is clear people owned their property and voluntarily shared it–it was not appropriated and redistributed by a central authority.)
Profit is NOT bad, and the creation by business of economic prosperity is good. Profit in a business is necessary for good stewardship of the business (because it is necessary for sustainability and to access to capital), which means it is necessary for the Creation Mandate (the commandment in Genesis 1:28 about our purpose on earth), which in turn means it is necessary for business in alignment with Biblical beliefs, principles and priorities. Economic prosperity enables families and communities to flourish. Like money, profit becomes bad when it moves from being a tool to being an idol. Profit is an idol when it is the end toward which the business is managed–Profit as Purpose.
We believe the problem is not capitalism per se–it is capitalism played out through business as usual. Capitalism and business a better way are compatible, provided that the heart of the organization is changed to put profit in its proper place as a means rather than an end.
Business as Usual ≠ For-Profit Business
It would also be a mistake to equate business as usual with only for-profit businesses.
Non-profits are organizations of flawed humans just like for-profit organizations, which means that their leaders face all the culture challenges faced by any organization of humans. Although they are not driven by Profit as Purpose, their employees may become merely “tools” to achieve a social purpose. The underlying assumptions of Scarcity and Self-Interest, the goal-oriented and unprincipled nature of a “Can We” Culture, and the dynamics of power, influence and status, can exist as they can in any organization of humans.
A faith-based non-profit is unique among organizations, with business as usual attributes easily shrouded in faith beliefs. Its culture challenges can be exacerbated when compared to a secular non-profit, because the faith-based non-profit can fall back on God as the source of its vision, God as the source of authority for the leader, and “calling” as the source of unquestioning commitment from employees and volunteers–all unique “tools” that can be used (consciously or unconsciously) to manipulate (sometimes through guilt) good-hearted and well-meaning employees who are desperately miserable and disengaged.
We are not suggesting that most or even many non-profits suffer from these cultural issues to this extent, but all non-profits are subject to the unique challenges that can lead to these issues. People tolerate unhealthy cultures in non-profits because they believe so strongly in the vision or in the vision or authority of the leaders, which is why it is even more critical for leaders of non-profits to conduct an honest assessment of the organization’s current culture.
Choosing a “Way”
We believe the “way” of the kingdom of the world is business as usual, just as we believe the “way” of the Kingdom of God is business a better way. Business a better way with a WHY of maximizing flourishing of creation, particularly humans, is humanizing. The alternative is dehumanizing. In the words of cultural commentator Seth Godin, “The pursuit of profit at the expense of our humanity is too high a price to pay.”
In order for a faithful leader to make the right choice and pursue the “way” of God’s Kingdom, they need to recognize business as usual for what it is. They need to be able to recognize its assumptions and motivations in order to assess whether they have crept into the organization’s policies and practices related to areas such as hiring, termination, discipline, performance reviews, compensation, ethical behavior, training, vacation, family leave, customer service, and vendors.
Leading faithfully through business a better way requires a faithful leader with the wisdom to recognize, and the courage to root out, elements of the dehumanizing and uglifying “way” of the kingdom of the world and re-align an organization with the humanizing and beautifying “way” of God’s Kingdom:
See to it that no one takes you captive by philosophy and empty deceit, according to human tradition, according to the elemental spirits[a] of the world, and not according to Christ. (Colossians 2:8)
You are those who justify yourselves before men, but God knows your hearts. For what is exalted among men is an abomination in the sight of God. (Luke 16:15)
PERSONAL NOTE (from PM): You may have noticed that the Integrous mission makes reference to “the Way of Jesus”. Before anybody started calling anybody “Christians” (remember, Jesus was not a “Christian”–He was a Jewish rabbi and is the Messiah–THE Christ), followers of Jesus were referred to as “followers of the Way“. We see this referenced in several Bible passages, such as Acts 9:2: “If he found any belonging to the Way, men or women, he might bring them bound to Jerusalem.”
In John 14:6, Jesus famously says that He is “the Way, the Truth, and the Life.”
I included “the Way of Jesus” in the Integrous mission statement to emphasize that Integriosity is about heart and action (and an integrity of heart and action) more than it is about the theological Truth of Jesus. Leading faithfully through business a better way does not require a leader to be “saved” (or even to believe “saving” is a thing) or be a “Christian” or even to believe that Jesus is God or is the Messiah. What it requires is opening your heart and mind to allow the God of the Bible–the God of Abraham, Isaac and Jacob–to reveal the “first-order beliefs” implanted deep within every person, because every person was created in the image of God–RENEWING your mind (and heart) about God’s purpose for work, for humanity and for His creation. And then it requires being courageous enough to get on that narrow “ancient path”–the Way of Jesus.
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Photo Credit: Original photo by Matt Paul Catalano on Unsplash (photo cropped)