20 February, 2012

Why do smart people do stupid things

There's something about the corporate world that makes smart and decent people do incredibly stupid things. Maybe its the anonymity of being part of a company. Maybe its the pressure generated to perform. Maybe its the brutal focus on the ends and not the means. Don't know what .

Why else would some British honcho in Sony decide to raise the price of Whitney Houston's albums on her tragic death. There was surely going to be a memorial upsurge in sales of her records. But what sort of a decision is that to raise the prices then ? Predictably there was a huge outcry; Sony had to back down and I'm sure the guy who did it has egg on his face.

Similar is the decision by some Starbucks Manager near the World Trade Centre to raise the prices of water on that fateful day in 2001. Or the decision by the Chairmen of the auto giants to fly by private jet to Washington to plead with Congress for a bailout. Or the insistence by Jack Welch to award himself retirement benefits that included an apartment in New York and free food and wine - chicken&^%$ in comparison to his personal wealth.

Why does this happen. Unfortunately  corporate environments seem to be dangerous grounds where a decent person's normal human values have every risk of being left at the door. Perhaps there is something dehumanising about the seemingly dog eat dog environment. Perhaps people are blinkered, or even blinded, by the single minded focus on the rat race.

There is a lesson for us all here. Every action we take must be viewed through the prism of two criteria - will we squirm with embarassment if the decision were to be dissected on Breakfast TV or come in the front page of the newspaper. And secondly would we squirm if we have to explain it in the barest detail to our mothers.

25 comments:

Shachi said...

Loved the last paragraph....very well said!

Even though we have such strong ethics codes and mandatory yearly trainings, we see violations every single day. Of all things, our laptops are stolen...so many of them, every day (within work premises). And personal stuff from cubes. And then car thefts in the office parking lot. Most people are caught by cameras....not sure what they are thinking before making such attempts!

RS said...

Perhaps, there are a few exceptions: http://blogs.telegraph.co.uk/news/edwest/100079703/why-is-there-no-looting-in-japan/

//Perhaps even more impressive than Japan’s technological power is its social strength, with supermarkets cutting prices and vending machine owners giving out free drinks as people work together to survive.//

If only 'power' were measured in terms of character and not economy...

Asha said...

I have great regard for JW, would he stoop so low? Never knew GE offered Retirement benefits.

Like you said... Why does this happen?
Insecurity?

Prats said...

Loved this post and I think another area which you left out is the way we treat subordinates in our industries...

Frankly speaking there are times when we push things that hard to meet a deadline or two that if we ever had to explain it to our mothers we are going to be terribly embarrased

gils said...

being smart is tuff and boring..world wudnt be half as fun if not for the stupid things we do..

Pranav said...

As someone that sort of dabbles on the periphery of the music industry, I can speak to the Whitney Houston issue. There is no question whatsoever that raising the price of her albums soon after her demise was a "low class" action. Sadly, this decision, along with several other decisions that the major record labels make are driven by one fact - the fact that record labels are more desperate now than they ever have been. They are desperate to meet their bottom line in the "short run" and NOT in the long term. Any decision that raises margins in the short term is a good one - even though it would undermine or tarnish brand value in the long-term.

Record labels have been rocked by the transition of the music world to the world of digital downloads. The music industry almost went from a high-profit margin industry to a low-profit margin industry with people being able to buy individual songs for a dollar. Hence, any action that "moves" albums as opposed to individual songs is considered a good one. Fans of Whitney Houston belong to that generation of listeners that bought albums and still do. Hence, with her demise, it was fairly obvious that consumers would be buying entire albums and not singles by her. This was the record label's rare chance to cash in big on digital downloads. That is why they raised the prices. Sadly, record labels look at their artists as "monetizable assets" and not people. This shines true with Sony's decision to raise the prices on the Whitney Houston greatest hits album. Still, a really crap decision. Artists are pissed off enough with their record labels for the things they do. This just rubs salt in the wounds.

Ramesh said...

@Shachi - I know - there's a general degradation of values all around

@RS - Oh yes, Japan behaved impeccably after the disaster - a very cultural thing. But even the highly cultured Japanese do awful things when they enter the corporate world. But as you say, character counts above all else.

@Asha - Jack Welch was undoubtedly a titan, but he somewhat sullied his image by the messy retirement benefits issue which was actually small change in comparison to his wealth.

@Prats - Very true. Some times we treat colleagues in ways we would not imagine doing in a social circle.

@Gils - Trust you to come with an original insight in a short sentence. Indeed its true what you say.

Ramesh said...

@Pranav - Oh yes - you are an expert in this industry. Your comment proves my point. Yes, there is pressure on the profitability of the industry, but does that insensitise people to making stupid decisions like the Whitney Houston case. Wasn't it very obvious that a price increase would get negative publicity and that you'll be forced to backtrack.

TMM said...

Why,why,why?
The answer is greed! Arguably some of the pettiest corporate graft and theft cases have been done by people earning and owning millions - reminds of me of a case somewhere in the corporate world (identity, location shall remain anonymous) where we had a top honcho being sacked for an expense statement fraud - amount involved 20$ and this was a bloke who was earning a 7 digit US$ salary and possibly an equal 7 digit bonus

Pranav said...

I am quite convinced that nothing is obvious to these record labels these days. Many of the folks making decision there (including those handing out recording contracts) are epic morons.

Ramesh said...

@Kiwi - Greed is certainly one factor, but I think somehow the cloak of corporate anonymity dulls a person's values.

@Pranav - Strong words. Coming from an expert in that field, I bow to thee :)

rads said...

That's exactly what corporate life's all about: money, money, and more money.. how rich or poor you are has got nothing to do with it...nice analysis!

Anonymous said...

Morality and business in their purest forms - the twain will never meet, we can cloak it under various guises.yes, we indulge in both in dinosaurical proportions of falsitude and hide under the said anonymity. Great post and insightful comments. I am loving it.

Ramesh said...

@Rads - Yes its about money and money, but even there sensibility and reasonableness can, and should, play a part.

@Anon - I appreciate that its difficult for money and morality to meet, but I would be hugely disappointed in human nature, if they never can. I have been privileged to see quite a few examples where it did.

Vishal said...

Tweaking value chain is so easy these days, mostly to make business case for each and every thing under the umbrella of wealth creation.. it is not only business where these things happens. it happens in temples, pilgrimages and where not? Wonder where has human descended in the search of naught and naught is where it ends! Sad but true.. thanks to this lovely blog which reminds us to be simple and correct :)

Pranav said...

I'd like to reiterate. Yes it's about money - but not necessarily "more money" - just "immediate money".

Deepa said...

I guess being stupid is still pardonable, but being pathetic is unforgivable. I agree to your theory of 'anonymity'. Not only in the corporate world, even in personal lives people take advantage of any sort of anonymity from folks and friends and do things that are absolutely appalling. People can sleep peacefully after doing wrong to others these days. The regret is about getting caught, not about being wrong. Its the good people who have to come to terms with that and fight for themselves. Very depressive, but true!

Ramesh said...

@Pranav - Interesting one that - immediate money instead of more money.

@Deepa - Yes, it happens in other walks of life too, but I am amazed at the frequency with which it happens in the corporate world.

Ramesh said...

@Vishal - Yeah you are right. Many awful things happen in temples and other places which are supposed to places of worship and where you would expect to see high values.

Aarti said...

So true and something that everyone should ponder about.,..

Apparently itunes also notched up the price of Whitney's albums the day she passed away...

Ramesh said...

@Aarti - Yes, iTunes UK did that because Sony raised prices. Sony had to retract immediately and had egg on their faces.

Sandhya Sriram said...

I read this post the minute you posted it and there were zero comments on it. and i am coming now to post my comment this. obviously, i have become super inefficient :-). but i think my inefficiency has paid back. i dont think i would have got to hear such amazing views on this topic. indeed very thought provoking.

I think the music industry has still got too much ego into its head. of course, music is an art and art is a speciality, deserves the premium and i better pay 250 bucks and buy a CD. but while you sell me one piece, some one reproduces it (which you cant control) and sells 10 pieces for 25. the demand is there. but they dont need to increase whitney houstan prices. they just need to make music much more affordable. but the so called "Art Ego" will never let us do that and that is why the struggle.

Srivats said...

wow sometimes I have nothing to say, but say amen with your posts :) I think its jus the vitamin M driving the force and doing stuff which they shouldnt even be thinking of doing at all. But I bet there are businessmen who do the same thing probably in a way we cant see the values going down the drain, and they call it innovation in the niche market or some stupid crap :)

By the way I have submitted my papers, waiting for my results though :P would keep you posted

Ramesh said...

@Sri - Love the phrase Vitamin M. Only a creative guy like you can come up with something like that !

Ramesh said...

@Sandhya - Ego is another reason for stupid decisions as you so rightly have ascribed. See - even if you are the 24th commenter, you bring an original and incisive point to the discussion.