Carrie Tolstedt of Wells Fargo is as close to a comic villain as you're going to get, designing a system which forced multitudes of employees into unethical actions. And even after clawbacks Tolstedt ended her career tens of millions of dollars ahead.
Executives are already so coddled and protected from failure that terrible actions are rewarded and inevitable.
Speaking practically, treating execs as comic villains gets in the way of actually fixing their behavior. There are a variety of ways to force corporations to behave differently, but they all start with actually figuring out why they act this way in the first place. Otherwise we end up making the same mistake as Wells Fargo and Boeing: if we apply pressure on them to act better without clearly understanding why they’re doing what they’re doing, we’re just going to incentivize them to misbehave differently to get around the new rules.
I take you at your word. It's just hilarious that a post urging empathy for executives floats to the top while it's bootstraps for everyone else. [EDIT: in other upvoted HN posts, not necessarily yours.]
> There are a variety of ways to force corporations to behave differently, but they all start with actually figuring out why they act this way in the first place.
It starts with whittling down the outrageous soft power enjoyed by corporations, their owners, and their agents — and which you are contributing to by delaying, denying, and softening accountability for the most outrageous of executive actions.
- I believe that "understanding your enemy" ("Empathy") is absolutely positively crucial in successfully fighting your enemy
- This frequently gets interpreted as "Sympathizing with your enemy", being too soft, making excuses,etc; by those who want simple action.
So for example, I think we need to understand what makes a terrorist, how they come to their beliefs and motivations, and what we can do to prevent that. Others interpret that as being 'soft on terrorism', and we just need to 'bomb them into oblivion'; whereas I fear that while actual physical fighting is definitely a critical part of the overall campaign, there's a tremendous danger it'll just create more terrorists because we haven't eradicated the actual root source.
To me, striving to understanding an enemy doesn't prevent direct, firm action, if that is then convincingly found to be the most effective and efficient way of fighting them. In turn, I feel understanding your enemy prevents random, ineffective, emotionally-satisfying but results-lacking action. Others, of course, will disagree.
So - to the point of the article and discussion: I agree with op, if that is their intention, that you have to look at incentives; I've worked in corporate world for decades and I fully agree that you can have whatever value pledges, official goals, mission statements, and even official rules you darn well want to; and they're completely irrelevant if actual incentives, when summed out, reward a different behaviour. External and internal rules, and power, and statements, and goals, are all factors in incentives; as are the more subtle, emergent incentives. Going for a blunt approach may shift those incentives insufficiently far, or in an incorrect direction.
...My 2.4 Canadian Pennies :-D
> “The real crime here is that low-level retail bankers set up fake accounts in order to scam Wells Fargo out of their modest paychecks” just doesn’t work as a story of the scandal, even if there is a certain partial truth to it as a mechanical matter.
Meanwhile, the upper managers who put in place the incentives that guaranteed fraud would occur by low-level bankers are only guilty of "mismanagement":
> In the case of Wells Fargo, though, I suppose it’s possible that the attorney general thinks the shareholders really were the victims. They didn’t benefit from the fake accounts, and it is not crazy to say that they were harmed by Wells Fargo’s mismanagement.
Carrie Tolstedt took home tens of millions of dollars for inducing fraud, but only the scapegoats who did the dirty work for her are held morally culpable. The author doesn't even notice that just like those low-level retail bankers, Tolstedt scammed shareholders out of her (enormous) paycheck.
It's a perfect example of extending excessive empathy to executives while hypocritically withholding it from others.
And that is exactly what's happening in this thread. Executive malfeasance gets endlessly excused away as the product of poor incentives, because in your quest to humanize executives, you succumb to the perfectly natural human foible of "to know all is to forgive all".
Now, I'm not saying you're a mustache-twirling villain. But people who are unable to apply their principles when the chips are down and hold executives accountable are at the root of the problem.
Your comment again points to some perceived inability on my part to “hold executives accountable”, citing some flaw with my principles. I’d invite you to review the site guidelines and my comments: at no point have I suggested that the executives aren’t culpable in both the Boeing and Wells Fargo examples. You seem to be inferring that empathy is incompatible with judgement, and that misconception is basically the heart of what I’m trying to call attention to in this exchange.
Why is it a given that low-level retail bankers wanted faked accounts for the sake of their income, yet it is outside the realm of possibility that Carrie Tolstedt wanted faked accounts because they led to income for her — to the tune of tens of millions of dollars?
Why is it utterly inconceivable that Carrie Tolstedt is corrupt?
I guess we’ll have to agree to disagree about the strength of my principles.
In some ways, having empathy (or even sympathy) for executives in situations such as this is a more damning call to action.
If a problem is a result of evil people doing evil things, then the obvious solution is to punish the evil people. If instead a problem is a result of good-natured people following a system with broken incentives, then the only effective response would be large-scale, systematic change.
Unfortunately, we don't often see things this way as a society. Our drive to action seems directly correlated to our sense of moral outrage, and we skip over the "broken system" step between "freak accident" and "mustache-twirling villain."
The legal system distinguishes between deliberate premeditated murder and accidental or negligent manslaughter.
Corporate ethics seems oddly resistant to understanding the distinction. If your actions cause significant harm the profit motive gives you very strong legal protection - a literal get out of jail free card. While it's not completely reliable, it's certainly more powerful than any non-corporate defence where culpability is obvious.
You're far more likely to go to jail for corporate fraud - which is an outrage against the profit motive - than for life-terminating harm inflicted on innocent bystanders.
This has the predictable effect of selecting executives who either don't understand that their actions cause harm, or don't care.
The system selects the people, and the people propagate its values. Neither is wholly innocent.
Every so often someone with a genuine ethical sense says "I'm not doing this." And they often lose their job when they do.
So it is with businesses extracting value (/making as much money as possible).
It's like the idea of "pot odds" in poker: Boeing here wasn't just looking at the marginal return on investment, it was looking at the cost of essentially deprecating an entire line of aircraft. It would lose value from its entire "installed base" of customers, as competition from Airbus would become more viable.
In economic terms, the marginal value of the investment was probably close to nil, but it protected profitable infra-marginal investments. Interestingly, this seems like a problem that large companies face far more often than startups, which is perhaps why conventional wisdom thinks the latter are far more 'agile'.
I really dont believe that someone having fought their way up to a job that pays a 7 figure number per year actually cares about normal human people anymore. I just dont.
What I've always wanted to know is: do psychopaths make better managers? Do they somehow gravitate towards management positions in some other way? Or is it the management position that brings out the psychopath in people?
> do psychopaths make better managers?
I've had 2. No, they're horrible to work for. Indifferent to you as a human, bullying, lying, destructive (edit: and manipulative). The best bosses I've had, the ones that got the most out of me, were humane and decent (Also 2 of them).
> Do they somehow gravitate towards management positions in some other way?
I guess so. Power, control, money (all of these really boil down to power).
> Or is it the management position that brings out the psychopath in people?
No. A psychopath is a definite mental phenomenon that AFAIK is something you're born with. It is thought to be perhaps made worse by bad childhoods, but it certainly isn't something you develop if you weren't born with it.
What I do see in those psychopaths that I recognise as such is that they often really driven for money/power. They're often great fun to be with because they're so impulsive, but wear you down with constant demands.
Above is just my personal understanding and experiences.
We are aware how the hierarchies function: "I was just following the orders"
https://en.wikipedia.org/wiki/Superior_orders#Nuremberg_Tria...
I agree with you that it doesn't have sense trying to discuss about the abstract evilness, but I claim that the Boeing's top brass should be brought to the court!
If those who make decisions aren't held accountable, the results are provably terrible.
"I was ''just'' securing the profit for my shareholders" shouldn't be an excuse.
They might not be clapping hands at the death of few humans, but they would not be crying either.
That's the real corporate evil: losing sight of the big picture of what your product is supposed to accomplish in the world, and see it merely as a vehicle for profit, where the regulations are merely obstacles you need to bypass, rather than a necessary good that ensures your product is safe and provides real value to the world.
And I fear this kind of thinking is incredible common in large corporations. It doesn't always lead to disasters like the 737 Max, the VW emission scandal, or the Fukushima or Deepwater disasters, but losing sight of the larger context of what you're doing does enable those kind of disasters.
After the mortgage crisis and other banking misbehaviours, all people working at Dutch banks (including developers like me) are required (and trained, to some extent) to always keep this big picture in mind: what does this decision mean for the company, the customers, the shareholders and also society in general. All 4 need to be balanced. Maybe this should be more common among all industries.
Corporations certainly do need to be held accountable for their actions, and for the corporate culture they create, because that will impact the actions of the corporation as a whole. If everybody just focuses on the immediate requirements (passing that emissions test no matter how, making the plane pretend to be the same in order to pass certification) without considering the larger picture, that is a result of the corporate culture and the way performance of employees is measured. The corporation is absolutely responsible for that, and yes, maybe it should be considered evil when upper management fosters or allows a culture of this kind of short-sightedness.
The airplane needs more efficient engines.
The new engines are physically larger and the space underwing too low.
Let's move the engines forward.
That causes the stick force curve in an uncommon region of the envelope seen mostly only when hand flying and out of normal envelope.
We could fix the stick force curve by actively displacing the horizontal stabilizer under those conditions.
We can limit the authority of the stab under MCAS to 0.6°, a figure which would only be a slight hazard to flight as pilots could easily override.
We can prevent the need to retrain pilots (even if only differences training), but this requires us to use only a single angle-of-attack sensor to drive the system. That's OK, because the 0.6° limit is safe.
Later, someone else decides to give MCAS a little more control authority. It's not clear (to me) that the 0.6° prior limit was documented as something that was being relied on by regulators or not. A "safe" system being given a little more authority in the name of safety doesn't sound so bad, after all.
No analysis appears to be done for the case of multiply resetting the MCAS system, allowing for progressively more authority.
No analysis appears to be done for the fact that line pilots were relying on the "control breakaway" to interrupt automated trim motion on legacy 737s. Pilots using this undocumented technique may have become overly accustomed to it and assumed the plane was designed that way. Of course, MCAS, being a system to protect the stick force curve during manual flight, could not reasonably be disabled by a control column breakout switch, because it's designed to protect the aircraft exactly during hand flying situations where the pilot had the column in an aircraft nose up attitude (where the column breakout switches would be activated).
I agree with your overall point that the holistic outcome was bad, that it's a systems problem, but want to amplify the fact that a great many people were working diligently to accomplish their goal(s) in the face of their constraints. Very few (to perhaps none of them), pilots included, likely realized that they were acting in a short-sighted way.
For the 737 Max, moving the engines forward meant changing the aerodynamic balance. That alone should mean recertification, and every attempt to cover that up in order to save money, is part of the problem.
Everything that adds cost to aviation has a safety balance. Why do we allow 0 and 1 year olds to fly as lap children (without buying a seat)? Because displacing the fraction of families who would substitute a car trip if forced to buy more tickets would mean greater overall injuries and fatalities. Saving money has its own real safety benefit that needs to be balanced holistically.
Yet it's entirely plausible that they were consciously making that trade off. I see a lot of similarities to cases like these:
> Ford (..) Pinto became a subject of controversy after Mother Jones magazine exposed that it was prone to deadly fires in rear-end collisions; Ford’s internal documents showed the company knew of the potential problem but chose not to fix it, calculating that it would be cheaper to pay out possible injury claims.
> The Japanese manufacturer of airbags has recalled airbags in some 19.2 million vehicles in the U.S. due to a tendency of the device to deploy with too much force, sending metal scraps flying into the passenger cabin. Eight deaths and about 100 injuries in the U.S. have been attributed to the defect. According to a New York Times report, Honda, one of the companies using the bags, and Takata knew about the dangerous airbags for years before disclosing it to the public and issuing recalls.
If I could get prosecuted for accidents my code coused I would never work which such tasks.
I mean it was pretty clear that everybody who really wanted to know could discover the cheating, but somehow it was covered up for a long time. Everybody knew about gas mileage results drifting further and further away from reality, too... And finally we got WLTP, which is somewhat less bad but still pretty bad.
It's probably quite easy to justify to yourself if you see everyone else doing it, even though it has abhorrent consequences[1]. Like people dropping cigarette butts.
[1] Which they should have known existed - the oligarchy of car companies ensures a huge impact from just one company playing unfairly.
Bosch sells engine hardware (ECU, pump, injectors etc..), but the software is custom made. The automaker pays Bosch to implement the SW they want, as a lot of features differentiating automakers are SW features that they do not want their competitors to have.
Hence it doesn't mean that every diesel engine with a bosch ECU had the cheating device from VW.
I think you're probably correct but shaming the engineers in the hopes they'll stop it has repeatedly failed to work: that's why this isn't a thread about VW. IMHO it's because actions from a single individual carry too much risk for enough to accept. It needs collective bargaining.
Didn't know that one; nice.