Quanta Corporate Citizenship 
 
 
Some of the wisest advice an organisation can receive was summarised back in 1944 by William Donovan:
  • "Insist on doing everything through the right channels.
  • Talk as frequently as possible and at great length, illustrating your points by anecdotes and accounts of personal experiences.
  • Never hesitate to make a few appropriate "patriotic" comments.
  • Refer matters to committees, for further study and consideration.
  • Attempt to make the committees as inclusive as possible, and never less than five.
  • Demand use of precise wordings on communications, minutes, resolutions.
  • In doubt, refer back to matters decided upon at the last meeting and re-open the question of the advisability of that decision.
  • Be cautious.
  • Be reasonable and urge your fellow-conferees to be reasonable and avoid haste, which might result in embarrassments or difficulties later on.
  • Be sure about the propriety of any decision. In doubt, raise the question whether such action, as is contemplated, lies within the jurisdiction of the group or whether it might conflict with the policy of some higher echelon."
What you might not expect is that all of these very clever advices came from the now declassified booklet called Simple Sabotage Field Manual, by the US Directorate of Strategic Services (OSS), where Donovan was a director during the II World War. It was a clever text that taught employees in occupied Europe to sabotage their companies if their employers were cooperating with the invading forces. In short, it is a summary of how to make sure your organisation will fail.

Interesting enough, it is exactly the (if not all of) advices above that still guide many companies and leaders till this day.

The advices above, obviously, look very inoffensive. No employee could ever be fired for following it. If anything, an employee could certainly be fired for not following it. As the small booklet reminds the reader, “simple sabotage requires no destructive tools whatsoever and produces physical damage, if any, by highly indirect means. It is based on universal opportunities to make faulty decisions, to adopt a non­cooperative attitude, and to induce others to follow suit. Making a faulty decision may be simply a matter of placing tools in one spot instead of another. A non-cooperative attitude may involve nothing more than creating an unpleasant situation among one's fellow workers, engaging in bickerings, or displaying surliness and stupidity.

The danger of these advices is that any manager can use them as tools to stop any process, and that was the whole idea behind the booklet. All it takes is to remove the goodwill and common sense of any intervention and a single employee can disrupt any new initiative, stop any work from progressing, any change from happening, and any objective from getting achieved. And, if anything, those pressing for change, for results and for new ideas end up being the ones who look uncooperative, dysfunctional and intractabl, and will be the ones most likely to be forced to leave, or who will leave out of frustration for not getting anything done.

How many times have you heard a company saying it could not initiate this or that project (CSR-related or otherwise) because it was unreasonable, because no one had done it before, because the decision hasn’t been signed off by all levels, because an obscure committee didn’t have time to analyse it, or there was still uncertainty about the outcome? These might all be genuine concerns, but if goodwill and commonsense are absent, they are perfect snipe-and-hide platforms for saboteurs.

Here is the booklet:
simple_sabotage_field_manual.pdf
File Size: 2283 kb
File Type: pdf
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Jenna Jordan, from the University of Chicago, has written a very interesting paper called When Heads Roll: Assessing the Effectiveness of Leadership Decapitation.

She analysed 298 cases of leadership decapitation around the world from 1945 to 2004 in order to understand whether eliminating a leader results in the dissolution of their organisation. She also analysed whether eliminating the leader increases the likelihood of organisational collapse over time, and if it does not result in the group collapse, if it hinders its future progress.

According to her findings, “the data indicates that as an organisation becomes larger and older, decapitation is less likely to result in organisational collapse”. Furthermore, “it does not increase the likelihood of organisational collapse (…). The marginal utility for decapitation is actually negative. Groups that have not had their leaders targeted have a higher rate of decline than groups whose leaders have been removed”. To her third question, where she qualitatively analysed only three cases, the results are mixed.

Does it sound familiar? How many times have you seen an organisation – formal or informal – having its leader removed and the organisation getting stronger? How many times have you heard about stories where union leaders were fired, whistleblowers were put aside, environmental activists were put under pressure, and consumer groups were ignored and their causes only grew stronger? How many times have you read articles about a company where terrible or great CEOs were removed and their companies still carried on with dodgy or outstanding practices? How many religions do you know where the leader is prosecuted and the belief only grows stronger? Sounds like the common Hollywood movie script where the leader is removed but the cause – for better or for worse – is carried on by the followers.

By the way, I should have said before, her brilliant paper is not about firing CEOs. Her paper is about killing terrorists and other non-friendly leaders.

Accordingly to her findings, killing someone is simply not a good tactic. If anything, it generally makes the cause even stronger. Larger and older groups are particularly more resilient to the loss of their leaders. Furthermore, accordingly to her findings, religious groups are more resilient than ideological ones in terms of losing their leader. Contrary to the belief that “religious organisations are (…) more likely to have charismatic leaders who are essential to setting and maintaining organisational goals [and] according to theories of charismatic leadership these groups should be weakened by decapitation”, actually, removing leaders of religious groups often makes attacks fiercer and the group stronger.

If we link her results with our own quantitative analyses about the motivation driver behind people’s actions, we can infer that the major difference between ideological and religious groups is that, in the first, the followers are driven by the need to be accepted by a group while, in the second, they are driven by reward & punishment (in the case of religious terrorists, from their god).

The reason why I’m writing about a paper on terrorism in a CSR blog is that we see very similar patterns in the way organisations deal with their ‘enemies’ and some very relevant lessons they can learn from Jordan’s paper.

First, once you have a problem, deal with it. The sooner you solve it, the lower its impact on your bottom line. If you are faced with whistleblowers, intransigent union leaders or dissatisfied consumers, it is better to address the issue earlier on and try to bridge the relationship before things escalate. You don’t want a consumer writing a blockbusting song about how your company broke his guitar. Even if a compromise hits the profits now, it is likely to be much worse if you wait to deal with it later. Think about it as a decision making tree. Although you will certainly incur a cost now, it is much lower than the likely (although less certain) cost you will incur in the future not only to fix the relationship, but also to rebuild your damaged brand.

Second, do not transform your opponent into a martyr. Firing, sidestepping, muting or taking off the gloves will only increase the likelihood that your opponent will get greater attention and sympathy, and therefore create a more institutionalised cause that is much more difficult to change.

And, finally, if the situation has already escalated, understand what drives the followers. If it is a desire to be accepted by a peer group (often the case with staff), than removing a few key people is more likely to result in positive results than if it is a more external set of incentives and the followers actually have something to lose (or gain) if they pursue their cause (often the case with consumer and environmental groups).

- Gus

 
 
Have you ever wondered why successful people look good? An ever increasing pile of scientific literature is finding that actually, there is a cause-consequence: good-looking people tend to be more successful. Not because they are necessarily more intelligent, talented or any other attribute, but simply because our primitive brains are wired to accept the prominence of better genes, which, for millions of years, were expressed primarily by physical attributes. As Harvard professor Nancy Etcoff, author of Survival of the Prettiest put it, “beautiful ornaments develop not just to charm the opposite sex with bright colors and lovely songs, but to intimidate rivals and win the intrasex competition”.
 
Needless to say that, although our primitive brains tend to default to judgments made on the 'blink of an eye', as Malcolm Gladwell famously named his book, that does not mean that better looking people are better people. For instance, Mary Collins and Leslie Zebrowitz have found that, although baby-faced individuals are deemed less intelligent by our primitive brains, they are actually, on average, more intelligent. As a matter of fact, they are not just more intelligent, but also more assertive, brave and aggressive, which are all elements that one would not expect from a docile-looking person.
 
Other researches, such as Daniel Hamermesh and Jeff Biddle, have found that physical beauty is also closely related to wages and career progression.
 
Now, research entitled A Corporate Beauty Contest, by John Graham and Manju Puri, from Duke University, has turned its attention to the faces of CEOs, their paychecks and performances.
 
They looked at four different facial attributes of CEOs – attractiveness, competence, trustworthiness, and likability - and found that CEOs tend to have facial characteristics linked to the perception of competency and beauty and, at the same time, generally have faces considered to be less likable or trustworthy. Among these four characteristics, the two that standout most are likability and competency, both directly opposite attributes displayed by baby-faced individuals. In other words, boards tend to select individuals who ‘look mature’, i.e., with facial traits that give them an aggressive look. As they put it, “individuals who appear more competent and less likable are more likely to be CEOs. We similarly find these two traits are also significantly related to the CEO heading a larger company.”
 
Furthermore, CEOs looking mature simply make more money for themselves than those looking less mature. “We find that CEOs who are judged to be more competent-looking tend to also earn higher wages”, “Our evidence supports the idea that in the market for CEOs there is a ‘competent looks’ wage premium”.
 
But could the higher wages be linked to the fact that the ‘mature looking’ CEOs produce better results for their companies?
 
Not really. Graham and Puri also tested for that, and concluded that they do not produce above-average results. “We examined the performance of the firms run by CEOs to see if facial attributes are related to performance, by running regressions similar to the ones for CEO compensation. We find no evidence that competent looking CEOs demonstrate better firm performance.”
 
And what does this have to do with CSR? Simply put, if strategic social responsibility involves taking rational rather than emotional decisions in order to generate higher impact and above-average outcomes, leaders need to be self-aware about the frames they are using to take their decisions. As Graham and Puri put it, “inferences from facial appearances can be misleading, i.e., having the appearance of a facial trait does not mean one will actually display that trait”. And promoting and paying higher salaries based on facial appearances (and not on outcome) is not the best way to be socially responsible towards employees and shareholders.

- Gus
 
 
Have you ever heard stories of someone who wouldn’t leave their job even when offered a significantly higher salary? Or people who would switch jobs for much lower packages? Have you ever heard about friends considering leaving the corporate sector to work for charities? Have you ever wonder why?
 
A purpose in life certainly plays a big role on it, but have you ever considered what ‘purpose in life’ really means? The methodology we developed at Quanta divides it in 3-dimensions: an utilitarian one (‘what makes me happy?’), an ideological one (‘what the world needs?’) and a pragmatic one (‘what can I do about it?’).
 
A recent research called Trust and Well-being, by professors John Helliwell and Shun Wang, from the University of British Columbia, in Canada, have revealed some very interesting facts about the first dimension. They were able to establish strong statistical links between trust and human well-being.
 
Accordingly to their findings, individuals living in what they believe to be a trustworthy environment have much higher levels of subjective well-being. For instance, worldwide data shows that living in a society where you believe a stranger will return your wallet if you lose it represents “the same increase in subjective well-being that would be associated with an increase of household income of about two-thirds”. Let me repeat it again: living in a place where you trust strangers represents in terms of your overall well-being the same as almost doubling your whole family income.
 
If this is not a striking enough fact, this one certainly is: using Canadian data, they found out that “having high trust in co-workers, which we find to be the largest of all the specific directional trust measures, is associated with 7.6% higher life satisfaction. This is followed by trust in neighbours (5%), confidence in police (3%), and a belief that a stranger would return your lost wallet (2.5%)”. In other words, trusting those you work with represents an increment on well-being more than 3 times larger than trusting that your wallet will be returned by a stranger.
 
That means that working with people you trust could generate, in terms of wellbeing, the same positive impact as an increase of 200% on your whole household income. Now, imagine two companies: one paying an average salary of US$100k per year and another one paying an average salary of $300k per year, both generating exactly the same well-being to their employees. Or, as they put it, “these effects are all very large when measured in terms of the income changes that would produce the same consequences for life satisfaction.”
 
And how you build trust? In the words of Helliwell and Wang, “trust is built on a base of shared positive experience, and is nurtured by continued connections”. Improvements on education, membership to social groups, personal background, time working for the organisation and how easy it is to meet and interact with peers in a friendly way are all paramount to building the sense of belonging, which is directly correlated and a trigger for trust. Or as they put it “more attention [should] be paid to creating the time and spaces for social connections to flower. Since more and more people are living in large urban areas with mobile and sometimes rootless populations, it is ever more important to design and manage urban areas in ways that foster levels of engagement that support mutual trust and hence well-being”.
 
We can easily apply their recommendations to the corporate reality, where companies are becoming larger and more multi-cultural, and where employee tenure is reducing drastically, and physical fragmentation hinders daily contacts.
 
We often hear that CSR is an add-on, a ‘fluffy’ subject, a PR exercise. Except if an organisation is prepared to live with payrolls that are three times larger than their competitors to generate the same level of employee engagement, it is not. And trust is just another jigsaw piece in a very large CSR puzzle. The numbers above show very clearly how simple aspects of social responsibility can completely change the competitive advantage of an organisation.

- Gus

 
Blame culture 04/02/2010
 
We have all heard about organisations with blame culture problems and we all intuitively accept that we won't learn from our mistakes if we don't recognise them in the first place. Now a study from Nathanael Fast and Larissa Tiedens called Blame Contagion: The automatic transmission of self-serving attributions, has shown that when we perceive others trying to shift blame we also start doing so. Once staff perceive colleagues trying to blame others for their mistakes, they mimic that behaviour.

Their findings reflect our experience to date: it is not just the case that work colleagues and subordinates know when someone is trying to blame someone else for his or her own mistakes, but because no one enjoys being at the bottom of the food chain, they start mimicking the behaviour that they perceive to be implicitly or explicitly authorised within the organisation. People trying to transfer responsibility see their own behaviour as negative and understand it to be unacceptable, but feel a stronger pull to preserve their own status.

So we know it is natural that people don't want to be blamed for someone else's mistake, but they also start blaming others for their own mistakes. Interestingly, however, our experience also shows that individuals adopt a more generous attitude towards people who take ownership and show remorse for their own mistakes.


In organisations where people accept their own mistakes, these errors and their self-image are not linked. Therefore the mistake does not erode the image of the employee and, by consequence, there is no incentive to blame others in order to preserve one’s self-image. On the other hand, when a mistake is treated as diminishing an employee's individual value, the organisation starts to create an incentive for employees to find a scapegoat for their own shortcomings.

Our experience is that the best way to avoid this problem is by instituting a culture of open acceptance of mistakes, focusing on lessons learned and potential improvements; combined with disincentives for anyone trying to avoid his or her own accountability. Here, as in many other areas, the shadow of the leader has a disproportionally high impact in setting the organisational culture: a leader who is perceived to blame others for his or her faults (or finger pointing the mistakes of others, for that matter), is more likely to create a negative culture than a leader who accepts the mistakes and tries to foster a learning and mutual support environment.

- Gus