Column by Dr YRK Reddy in HRD Newsletter

COMPANIES HAVE CULTURES.
DO THEY HAVE HUBRIS?

Hubris stands for the ultimate in greed, arrogance, over-preening, unbridled ambition and, deceit. All Greek tragedies centre on hubris and the eventual retribution, nemesis, in several forms. Oedipus stands as a classic example of what hubris can do. He was so blinded with arrogance that he did not take several cues and hints that he was the cause of the misery in his kingdom. He was so full of himself that he fell prey to what was indeed a prophecy that he well knew but could not realize that he was actually a part of it. Begetting children of his own mother, he was eventually to gorge out his eyes and roam in the streets as a mad man. It is for this reason that the old saying goes that those whom the Gods would destroy, first make them proud.

Mankind has been told, through the ages, the consequences of hubris and have been advised moderation, concern for others and humility (sophrosyn). While Hitler symbolizes the former and its consequences, Gandhi tells us of the might of the latter. Do these qualities figure in the culture or character of an organisation? Do we see less hubris in the Indian Railways, DRDO, ISRO, or the academia than say, big corporates, religious places or the district administration? If hubris portends doom, should we measure it? Benchmark it?

Hubris in a corporation is not divorced from its leaders. In fact, it arises from them and spreads throughout to give a feeling of invincibility. The statements of the leaders, the way they actually relate to the society, and the manner in which the employees behave in relation to other stakeholders, give indications of its level. Such arrogance in some organisations may not be loud but yet conveyed by its conduct, if not apparent behaviour. Hubris leads to a learning disability in critical areas like positive culture, professionalism, ethics, and social responsibility while learning may be high in deceit, chicanery, stealing of intellectual properties, creative accounting, smothering competition illegitimately, and the like.

In the case of Enron, the CEO, Jeff Skilling, a “professional”, probably typified the arrogance required for driving the company to its bottom. When people raised questions he accused them of not going through sufficient details and in turn called any line of enquiry, as being “unethical”. Skilling believed Enron to be a nimble success story against the conservative, slow-moving traditional corporations. While addressing a conference of utility sector executives, he told them that he “was going to eat their lunch”. The company’s arrogance arises from a spectacular growth from dealing in natural gas and power in 1985 to trading exotically devised intangible products and services by 2000. Over a period of 15 years, the company started trading in 1800 products that included commoditising advertising space and trading in weather forecasting. Some of these products were named from fiction, again showing a streak of arrogance. The names of stock entities Raptors I, II, and III were straight from the Jurassic Park. The names of off-shore special purpose entities – there were about 2800 of them – included “Jedi” and “Chewco” from the Star Wars.

It is rumored that the company quickly developed a culture of flouting the rules at every level of financial reporting, disclosures, accounting, and worse still, even in personal lives. The rules were reportedly broken even to accommodate sexual pleasures and inappropriate expense accounts that became permissible in the new culture. Every one was lulled into believing that making as much money as possible is the secret of corporate success. The top managements’ conduct was described as “so disgusting and base” that they cheated even their own employees into buying the company’s stock even as they were offloading theirs. Currently, employees of Enron are discovering that employment doors are quickly closed on them for no other reason than the notoriety of the once famed but fallen company. This happened to the employees of BCCI as well during the early 90’s, which again was a victim of hubris.

Jim Alexander, the former CFO of Enron Global Power & Pipelines, is reported to have compared Enron with Drexel Burnham Lambert Inc which is now a well known case study of fraud that led to the demise of this investment banking marvel of the 80’s. Jim has been quoted in Fortune: “The common theme is hubris, an overwhelming pride, which led people to believe they can handle increasingly exotic risk without danger”.

It is not difficult to detect hubris in the Indian corporate world. Some of India’s leading companies probably suffered from this ending up with the nemesis of court proceedings and jail terms. A feeling of invincibility creates adventurist tendencies coupled with a learning disability. In such companies, the manner in which the vendors/suppliers, auditors and applicants for jobs are dealt with gives the first signs of hubris. In some cases, the arrogance is unmistakable at their pre-placement talks in campuses when there is over-preening by exaggerated images that are far from reality. There is an affected style, an unnatural slang, a borrowed and familiar refrain that should actually sound hollow, except for the aspiring and glamorized listeners.

The value statements of the companies suffering from this disease will nevertheless be spotless. They will talk about gender equality, treating human resources as valuable assets; being a good and environmentally responsive corporate citizen; striving for customer care at all costs, etc. However, a company with widespread and deep-seated arrogance can never find these value statements in the work place. The company may have an exponentially growing profit line and a solid balance sheet with none of the stated cultural attributes. The sure sign of an impending doom for a corporation is such a disconnect between the intent in the value statements and the actual behaviour of its key employees and their families. While some organizations, such as the government may never collapse, the individuals can be visited by nemesis in one form or the other.

The traditional bureaucracy also often reeks of arrogance with the several deprived and distressed citizens having to suffer the callousness and humiliation from the time of seeking an appointment to making a representation. The manner in which the common man is shooed away from the path of the “omnipotent” official is sufficient to put the oppressive colonialism in better light. Cringing, crawling, pandering to the bloated egos by respectful body language and slavish language are protected as valuable heritage. Rank and cadre differentiation has to be underscored at every stage to feed the fast eroding ego and fuel the arrogance.

Such arrogance begins in the shortsighted employees who believe that they indeed are the system. They derive it by virtue of the position which they believe is an endowment of a property than an implicit contract with the society. When officers/executives mistake the organizational power as their congenital endowment, they transmit around the signals of arrogance than of their duties, responsibilities, and importantly, obligations.

The body language, the way of communicating, and the manner in which one relates to others is under constant watch by juniors, subordinates and members of the family. Arrogance can spread to all these around who will carry it in their own way – if by providence it is not the wife who carries this around, the secretary does. Such arrogance feeds on the ego and eats away any potential for humility. Thus, the arrogant manager and his family will not be easily satisfied with common courtesies. They will need servitude and a sense of control to pamper their egos and a state of well being.

Yes, such a hubris-hit manager, his secretary, wife, and children may periodically exhibit humbleness and humility which appears awkward as it is often practiced as a feed to be able to say that they actually have such virtues (like fraudulent companies financing social causes for reputation reasons). As Swami Chinmayananda commented, such a “virtue” is a strange thing - the moment one believes that he/she has humility, it is gone!

In the study of hubris and nemesis in recent times, Hansie Cronje, the great cricketer from South Africa, stands up as an example. Hubris went to such an extent that he played every trick of misdirecting the attention to saying that it is the ubiquitous greed, tempting money, the sleazy Asians who are to be blamed, not he. Surprisingly, this worked for a while at least. He indeed portrayed himself as a deeply religious person including with a wristband he wore that says WWJD (What Would Jesus Do?). He tried a series of tricks arising from a feeling of greatness that can somehow smudge opposition into confusion through glibness and manipulation. Alas, even his mother, Ann-Marie, had to tell him before he stood in the witness box that “there will be no place in this family if you lie again son, I won’t call you son again if you do”. Despite this, his hubris reportedly remained undiminished till the very tragic end.

Getting back to Enrons, BCCIs and many others, what was the HR man doing? Was he happy to be part of this culture that felt good as it lasted or did he run away? Did he fail his profession and the employees in not trying to influence the corporate culture? May be there are lessons now that the HR manager should watch for elements of hubris in his organisation. He should know and warn that hubris attracts potential risks for the company arising from adventurism mistaken as strategy; flouting rules terming it as flexibility, innovativeness and pragmatism and aggrandizement believing it to be a motivating incentive. It may be time that I build a Hubris Score Card to be able to measure periodically! Of course, an assailable assumption is that the HR managers have not actually been recruited to facilitate hubris!



Sepember, 2003 Issue


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