Business as
Usual
With the passing of the dot-com bubble, traditional
businesses are breathing more easily and reaffirming the
importance of fundamentals. Even the surviving high
technology and Internet companies are repentant, spouting
the litany of cash flow, market share, and earning first
and spending later. These are signs that things have
returned to normal—it’s back to business as
usual.
What is the Rule and the Exception?
I find this a little disturbing. This new “business
as usual” cycle—where we recover our
senses—has been ushered in by the Enron story (a
new version of an old story). It will be blamed for
manipulating its earnings statements. Its key executives
will be held accountable in some mild way, as if they did
something atypical and morally offensive. Ken Lay will be
the sacrificial lamb, particularly tender and juicy
because he had friends in such high places. But was Lay
really such an exception, or was he “the
rule” (business as usual) that went a little too
far? Business as usual may give us more cause for concern
than for relief.
Perhaps Lay and Enron’s real sin was not in
avoiding certain disclosures, but that he met or exceeded
the expectations of the game we call business. It may be
that this game by its very nature exploits and
manipulates stakeholders, employees, communities, and
foreign marketplaces—all for the sake of growth and
meeting earnings projections. Don’t forget that
Enron won awards as one of the best-managed companies on
the globe. How could it be an award winner one day and be
a collapsing house of cards the next? Was it the way it
played the game or the game it was playing? Was the fault
in the winner of the award or in the mindset of those
giving it?
Another casualty of our moral indignation is Arthur
Andersen. It is taking a major hit for destroying
documents. In this strange business as usual tale, we are
being urged to think that obstructing
justice—tearing up documents—is a more
offensive sin than the questionable actions that so
desperately needed to be hidden. The immediate belief is
that Andersen was covering up its own questionable
business practices, but perhaps Andersen’s real sin
was its loyalty to the client. Could it be that it was so
committed to protecting Enron that it sacrificed itself
on the sword of its shredding machine? And do we really
think that what Andersen did for Enron was one of a kind,
something it did not do for any of its other clients? Are
not consulting firms major league defenders of the
business game?
A Flaw in the “Business as Usual
Soup”?
It is also not incidental that the Enron disclosure was
followed by several other companies that were forced to
admit that their practices, while seemingly legal, could
not stand up to public scrutiny. My point is that what
Enron may have exposed us to is the somewhat flawed
nature of business as usual. Business as usual has an
element that may be more unsettling than the dot-com
illusion carnival. That element is the exclusive and
unwavering commitment to economic value. We have come to
accept that the sole purpose of the private sector, once
you get past the rhetoric of vision and values, is
economic success—period—to the exclusion of
most other values, no matter how well-articulated they
are.
Enron is not the first company that has moved into
markets, using economic and political muscle, to fix the
playing table to its advantage. It is not the first to
use its power to damage local economies in the process.
Enron is not the first company that cared more for its
earnings and cash flow than the pensions and welfare of
current and past employees. It is not alone in spending
vast sums on political contributions—claiming its
intent was only to perform its civic duty. Lay and his
team are not alone in amassing enormous personal wealth
from compensation that they had a hand in
engineering.
The Highest Value is Served First
These practices grow directly from the belief that the
primary business of the private sector is financial
success. Values about employees, community, the
environment, and social issues are, at this point in
time, peripheral and secondary to the business community.
We care about these things when it’s expedient to
do so. This is in no way the result of flawed people
running our companies; it arises from the way we have
constructed the game.
If it were up to me, I would pardon Lay and his team.
Their only real sin was losing a lot of money. They would
never have been called to account if their balance sheet
stayed healthy. Theirs was a reporting mistake, born of
hubris and ambition. Andersen’s sin was a
reluctance to report a mistake, born perhaps of its own
in wanting to protect its client and itself.
Business as usual carries its own set of costs that at
some point we will seriously question. We give lip
service to questioning business values, but at the end of
the day, the Dow Jones industrial average is still the
lead story.
Plus, each of us is part of the problem. We glorify the
private sector. We think it is fine if an assistant
product manager makes more than $100,000 a year and then
complain about how teachers, police, government, and
not-for-profit employees are “overpaid” when
they make half that amount. We romanticize our business
leaders and pay Jack Welch millions to tell his story. So
why complain about Lay when we helped create him?
At least the dot-com companies were really having some
fun and brought a certain innocence to the business
world. So what if they spent their venture capital on one
Super Bowl ad and lost it all? They were simply foolish
and I would take foolishness any day over the
often-romanticized traditional values of the way our
private sector does its business.
I would like to start a business as unusual movement that
is not so easily seduced by wealth and power as
statements of value. Until we see that the values of
business are a social problem, we will occasionally
sacrifice a few executives and consulting firms, make
some noise about reform, all with the effect of little
fundamental change to—business as usual.
Peter Block is author of the best selling
books, The Empowered Manager, Flawless Consulting,
Stewardship, The Flawless Consulting Fieldbook and
Companion, The Answer to How Is Yes: Acting On What
Matters and Freedom, and Accountability at Work: Applying
Philosophic Insight to the Real World with Peter
Koestenbaum. Peter Block can be reached at pbi@att.net.
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April 2002 News for a Change
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