The headline, "AIG Plans Millions More in Bonuses...Troubled Insurer Is In Talks With U.S. Over $250 Million" stared back at me as I viewed the front page of today's Washington Post this morning. After reading this article's portrayal of the insurance giant's alleged plan to, for the second time, pay hundreds of millions of dollars to its executive team prior to paying back the $180 billion Federal bailout, I found myself more than a little incensed. I mean look, why should we reward the leadership team of a primary contributor to one of the largest financial disasters in U.S. history before they have rectified the problem they helped to manufacture? Isn't using this insatiable degree of financial reward the same motivational platform that got us into this mess to begin with? And how long can we continue to operate where the chief motivational factor on Wall Street is financial remuneration on the scale of alcoholism and kleptomania? If you're wondering what the leadership topic of my blog posting is this week, it's individual and collective values.
OK, so don't stereotype me as a radical whose feet haven't touched the ground since the Bretton Woods Agreement. I've studied the economic models of John Maynard Keynes and Friedrich Hayek and knew that we lost a brilliant economic mind when Milton Friedman passed away three years ago. I'm absolutely a social and political moderate who believes that within any field of study, deeper understanding of the topic's complexity grows out of rich and rational analysis of competing theories. Still, I don't think that Adam Smith's original portrayal of the invisible hand included unbridled gluttony by the wealthy and inadvertent sadism upon the poor. So, if the problem is one of values how do we sort this out?
One of the factors contributing most to this problem is the individual adoption of alien values to the detriment of one's own. In other words, we disown (or never claim) our own values in pursuit of collective values and encounter difficulty maturing intellectually and morally. The result: lower order thinking, loss of broad rational thought and abuse to self and to others. Leaders in today's workforce contribute to this phenomenon by not supporting values development through effective application of sound leadership and management principles...but I'll get to this later. For now I want to make my point more clearly by using a long established psychological model, Abraham Maslow's Hierarchy of Needs (additional link).
The first four levels of Maslow's hierarchy contend with human beings meeting some basic human requirements (food, safety, love, respect). These needs, pursued and attained to avoid psychological or physical pain, are commonly referred to as deficiency needs because during the process of attaining them we see ourselves as deficient in comparison to those around us. Once these needs are met, we naturally begin pursing Maslow's fifth level, self-actualization. Dissimilar from the first four needs, a person pursuing self-actualization (and the sixth level Maslow later added termed self-transcendence) is less concerned about other's opinions of them and more concerned with their own authenticity, potential and compassion for others. Pursuing this level of needs, which Maslow referred to as growth needs, allows an individual to become more aware of self and appreciative of others.
Understanding that one has to satisfy the prior level of need to move upward to the next, it's common knowledge today that supporting the masses as they move through the deficiency phases helps both the individual and collective society. But what if one, or more, never moves past the first four levels of pain-avoidant needs toward the upper growth-oriented levels? What if organizational and societal norms reward competition and status more than human development and appreciation? What if graduate schools start measuring success through the yardstick of first-year salary and health-care institution's care for those who are healthy and can pay while refusing service to the destitute and the dying? And, of course, what if I can get a job as an economist on Wall Street and rationalize almost any strategy to become wealthy even at the expense of those who are supposed to benefit from my economic toils?
Exploration of our values includes the delicate process of intentional deliberation, practice and reflection, a process that needs to be understood and supported. Workforce leaders are responsible for choosing sustainable and humane practices in support of value development and they have ample resources to help them. Theory based resources, such as classic theories from Frederick Herzberg and Douglas McGregor and more current theories such as Appreciative Inquiry and Emotional Intelligence can help them to understand these practices. Cultural shaping resources such as modern performance management theory, 360 degree assessments and personality assessments can help enliven the necessary environmental trust and curiosity that are essential to the process. Leaders in today's workforce need to then be held accountable through a peer-enforced system of professional ethics similar to the professions of medicine and law, a system which sadly does not exist today.
Today's leaders, whether in the financial sector, the not for profit sector or the federal sector can support value development by seeking their own self-development and deciding to support the value development of those around them. These practices have yielded indisputable results in the form of improved ethical outcomes and increased bottom-line earnings and have been adopted by the most profitable and ethically aware organizations around the globe. The only reason a leader wouldn't support these practices would be, well, developmental in nature.
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