Tuesday, September 25, 2012

Values on Holiday

Values on Holiday

The numerous interviews given by Holden Thorpe, who is resigning as Chancellor of the University of North Carolina at Chapel Hill, have been nagging at me for the past couple of weeks.  For those not familiar, Chancellor Thorpe tendered his resignation after the university’s chief fundraiser, Matt Kupec, and another fundraiser, Tami Hansbrough were implicated in billing the university for non-business related travel.  I don’t know Chancellor Thorpe, but from what I can tell from reading the newspapers, he is a dedicated teacher and much admired administrator.  I’m not weighing in on whether he should stay at UNC or go.

What’s bothering me is what he said and what he did not say, because I think it points to a big problem in all our institutions – not-for-profit, government and business.   In commenting on the two fundraisers, the Chancellor lauded the amount of money these folks had raised for the university: billions in the case of Mr. Kupec and millions in the case of Ms. Hansbrough.  He also promised that the university would look into and then tighten its policies and procedures.  What’s wrong with these statements?

Napkin #4 (1999)

Like all too many leaders, the Chancellor was too focused on goals (money raised) and process.  What I couldn’t find was a statement about values; in this case something like integrity.  If you go back and read Rector Dragas’s comments after President Sullivan resigned at the University of Virginia this past summer, it was all about goals (US News and World Report rankings, financial needs and something called the 21st Century Academical Village [Thomas Jefferson envisioned UVA as such a village]) and how Virginia should get there (process).  In restoring President Sullivan to her position, UVA has also restored a discussion of values into their conversation about how to move the university forward.

Our educational leaders aren’t alone in focusing on goal and process-driven rhetoric.  You’ve heard red and blue politicians intone that they will create millions of high paying jobs (goal) by cutting taxes on the job creators (process) or enacting an infrastructure program (also process).   Our corporate CEOs talk about increasing earnings (goal) by investing in R&D, closing plants, or buying back shares (all processes).  What’s lacking is any statement of values; getting to our goals in the right way.

Money management and Wall Street, my former places of work, are the finest examples of what happens when people strive for goals and rely on procedures without caring much about values.  We aspire to the goal – higher profits, bigger bonuses, larger market share -- and we don’t worry about whether what we are doing is right or wrong, so long as it allowed by the procedure or isn’t covered (a loophole).  Unfortunately, you cannot write a procedure manual or set of government regulations detailed enough to create ethical behavior.  Without values, the policy manual becomes the sole determinant of what is allowable and what is not, which is not the same as right and wrong.

You can see this behavior at work in the battle over the regulations of the Dodd-Frank financial reform bill.  The SEC has developed detailed procedures to govern business activity, and the financial services industry is proposing amendment after amendment to create even more exceptions and loopholes so they can continue to pursue their financial goals.  In the end, we’ll have thousands of pages detailing when something is or is not allowed (and we may need thousands of pages as the areas of regulation are complex). 

However, the value of protecting the integrity of our financial markets and the wellbeing of our citizens has been totally lost.  And no matter the final version of these rules, some clever investment banker bent on making a ton of money will find a path through the thicket of procedures.  If that banker had to balance his goal against a set of values, he might think it was wrong to apply his cleverness to exploiting a weakness in the regulations.  However, that’s not how Wall Street works, and we have not changed its culture or its values. 

Sadly too many other institutions have borrowed the goal-procedure paradigm and pared back the attention paid to values.  It might take a little longer to get to our goals if we paid attention to values, but we’d be far better off.

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