Marc Le Menestrel

The Wise Power of Utopian Thinking

Marc Le Menestrel — 2019-05-10T01:57:00Z

Imagining an ideal world is a powerful tool for enhancing proactivity and leading organisational transformation.

Today's shifting global dynamics have increased the pressure to navigate into the new and the unknown. Alas, afraid of how the world is evolving; eager to keep for ourselves what we have; willing to preserve the certainties that we have built in our heads; enticed by a new philosophy where we are supposed to maximise happiness — we continue to resist and reject change. Why embrace the future if it is this painful? Why become aware that our world is collapsing?

To avoid a growing sense of helplessness and despair, we then run faster towards that light at the end of the tunnel. Instead of embracing the unknown, we become even more blinded by what we think we know.

Companies only learn agility in order to increase productivity, grow their revenues and make more profit. Governments engage in stakeholder consultations but their conclusions, coincidentally, always happen to confirm the initial intentions of those in power. People are concerned about plastic in our oceans but they ignore why this issue has become so salient. We change in order to remain the same and this is not good enough to meet today's challenges.

As Einstein wrote in 1946, “A new type of thinking is essential if mankind is to survive and move toward higher levels.”

Utopian rationality

Business rationality is at the core of how leaders think. Yet, it has to evolve. In my teaching, I invite executives and directors to become smarter than rational. I do not propose to throw out rationality. Rather, I want to overcome a rationality that imposes itself upon a complex reality in a totalitarian fashion.

To identify a goal, choose the best action to reach it, then measure the consequences and finally claim success once the task is done is not smart enough. In a world full of surprises, we need to dream beyond our goals if they are to have meaning. A sense of purpose is essential for long-term value creation, as the dream that drives our goals will ensure the relevance of work beyond the next quarter or business cycle. We also need to realise that we may not attain our goals, and that can be an opportunity because they may need to be changed. We should never be prisoners of our goals. In a world ready to be deeply disrupted, we need to love what we do right now. Anchored in our values, we can appreciate where we are at present and have our eyes fully open. Instead of serving a system that is at risk of destroying our humanity, we should make sure to put the framework of rationality to the service of our values and dreams.

The ability to dream our future world into being can help us survive. It is also a powerful strategic exercise. At INSEAD, my experience is that the building of a utopia allows executives and directors to free their minds from confining intellectual prejudices. The method draws from the three core principles of Wise Power: duality of mind, emotional maturity and generosity of soul. It is a way of thinking, feeling and dreaming that enhances our ability to meet the world half-way. It is especially useful for important and difficult decisions. Wise power consists of the ability to face surprising, even unpleasant truths bravely and honestly, although they may directly contradict our firmly held beliefs and preferences. Wise leaders are much less susceptible to the fear of the unknown that underlies defensiveness, because they perceive the deeper dynamics of the landscape around them. Instead of being fixated on the light at the end of the tunnel, they learn to pause and see that the tunnel is in fact made of beautiful trees, each of which is also a door to another space where they can discover, learn or just be.

How to generate a utopia?

Now more than ever, strategic business decisions must be taken in light of other realms of power. It is thus essential that utopias encompass the political, social, technological and natural spheres, as well as business. This allows leaders to embrace the growing expectations of multiple stakeholders across myriad issues.

Complex, ambiguous grey zones have a perfect right to exist in these utopias. For example, you do not have to choose between business having freedom to operate, and governments possessing scope to regulate – you can have both.

As participants present their utopias in class, it is liberating for them to express these contradictions. Executives are typically constrained in a discourse where business interests dictate everything. However, they are also citizens eager to exist more fully and freely at work. As they share their utopias and listen to others', they become conscious of common predominant themes: a form of social equality, a government that cares for the common good, technology at the service of humans and not the other way around, and harmony with nature, among others. These commonalities transform what might have seemed an exercise in fanciful idealism into something highly relevant to the everyday exercise of executive power. The unthinkable suddenly becomes almost feasible. The lines between utopianism and executives' habitual “realism” begin to blur.

Why utopia?

Peel back the layers of realism, and you will often find cynicism and pessimism feeding fear a steady diet of rationalisation, e.g. the world is so corrupt, boldly engaging with it is useless. Some cynicism and pessimism can also be valuable. Life is not black and white — and we also need to tame some messianic tendencies that bring us back to the authoritarian form of leadership that we want to transform.

Utopian thinking enables us to perceive the big picture, including the things that upset or even repel us, in a usefully optimistic light, in terms of what could be. It gives us the courage and confidence to see the distance between reality and our dreams as a space of opportunity rather than ipso facto defeat.

Applications of utopia

Utopian thinking can be open-ended, but it can also be tailored to address specific business problems. I have used it to find solutions for a multinational energy company facing a disastrous situation. The company was heavily criticised in the media for its role in the environmental devastation and worsening quality of life of local communities. In response to being painted as villains in the press, executives had adopted a stance of denial of their responsibility. Their relationships with community leaders and government officials were at an impasse.

By inviting participants to conceive of the best resolution imaginable for such conflicts, we foster within them an appetite for the unknown. They start envisioning ways to use their companies' wealth and power for mutual value creation, together with locals on the ground. Most importantly, they become more aware of the pitfalls of a confrontational non-market strategy. Instead of maintaining the belief that they can save the world if they become a force for good (another way to remain in the ego-driven authoritarian form of leadership), companies can cultivate a global vision in which they interact with other forms of power in a more respectful and harmonious manner.

Imagining utopias can also be useful for established organisations in the midst of market flux. For instance, a session on utopian thinking applied to the future of mobility allowed executives of a car manufacturer to better appreciate the multiple facets and layers of their situation. Rather than being constrained by the established discourse and culture of their company, they could engage at different levels and discuss the deeper changes driving the shifts in their industry. They were developing a sense of where they stood within this larger ecosystem and could find new levers to shape their culture and their identity. Instead of nurturing fear and helplessness, their uncertain future provided meaning.

Developing utopia

You do not need to wait for other people to apply utopian thinking. You can start yourself as an individual. Just think of a high-level challenge facing your organisation, industry, or even the nation or region in which you do business. Then apply your imagination to the problem, working through the different perspectives of the relevant stakeholders. Do not fear contradictions and allow space for the commonalities of good intentions and diversity of values. As a transformation of your own mind-set, the exercise will teach you to fear less and embrace more. You can scale up the benefit by involving your team – sharing your ideas with them and adding their contributions until a collective utopia emerges. This dream will help you select your objectives and identify the key stakeholders that can help you. It will also change your attitude to the world. Less afraid to envision change, you will look for opportunities to contribute to a better world beyond strict business objectives.

Marc Le Menestrel is Visiting Professor for Corporate Governance and Sustainability at INSEAD.

I thank Benjamin Kessler, editor at INSEAD Knowledge, whom I met when I arrived in Singapore. It has been the start of a productive and pleasant collaboration, writing short pieces for this online outlet.

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Three Inconvenient Truths about Corruption

Marc Le Menestrel — 2019-01-29T02:53:00Z

Having honest, adult conversations about corruption requires accepting that none of us is ethically pure.

These days, I sometimes begin my classes on corruption with an unusual admission. I announce to my students – who may be judges, police officers, military investigators, bureaucrats or any other variety of public official – that corruption is not a problem removed from me. I am corrupted too.

This is only partly a gesture of humility. It is also my attempt to initiate a dialogue on business ethics that is honest, for a change. The common thing to do when the subject of ethics comes up is to grandstand and make sweeping moral declarations, as though combating corruption were simply a matter of finding the “bad”people in an organisation, agency, justice system, etc.

But corruption has always existed and goes on everywhere. It is indeed very likely that it will always exist. Why not also in myself? Of course, I can avoid thinking about it. Even more convenient, I can choose or invent a definition of corruption that does not include my actions. In doing so, however, I am indulging a self-protective fantasy in which corruption has lost some of its most valuable meaning.

Most of us are very uncomfortable when confronted with the truth of our unethical behaviours. Since we tend to think in exclusive categories, we fear being bad because we think it implies we are not good. However, the truth is that ethics is a grey zone. Each one of us is both good and bad. We are not saints.

In my experience, the more I know the extent to which I am corrupted, the better I am at navigating the grey zone of my own ethics. Finding moral orientation in the grey zone sometimes entails resisting my own imperfections and striving for something higher. At other times, it is a matter of accepting some of my own “badness” so that I can keep my attention focused on the real world, on things as they actually are.

It can be difficult to determine what to resist and what to accept. Here are three ideas that I have found useful in my moral and ethical decision making.

A zero-tolerance stance towards corruption is neither necessarily honest nor desirable

When I invite business executives and civil servants to consider “accepting” their own corruption, it is not an invitation to moral nihilism. Instead, it is a reminder that none of us is perfect. We all have flaws and blind spots that we must be willing to face head-on if we are to learn and improve. If we adopt an unrealistic standard for ourselves (and others), we will be incapable of choosing our moral battles wisely.

For my part, I am trying to embrace the fact that, as a Western male individual, my thinking is biased by an education, a culture, social norms and habits that constitute my identity. This has both good and bad ramifications. Teaching all over the world, I have come to realise that some of my attitudes could be perceived as discriminatory, even racist sometimes.

When a student points out some hidden negative bias in my teaching, I strive to show interest and curiosity. Then I can learn, instead of pushing away any information that contradicts the temptation towards self-conferred sainthood.

So overall, I have very good reasons to have some tolerance about my ethical vulnerabilities. As I am intolerant of the aspects of myself that I really want to fight, I can be tolerant of the aspects that I accept as part of my fallible humanity. I can bring those aspects to a clearer and more peaceful conscience.

Abandon the business case in order to re-invent it

Being clear-headed and emotionally mature – i.e. adult – about corruption means confronting the tensions that can arise between moral and profit-making imperatives or, if you like, between business value and stakeholder value. These are both moving targets, and it is a rare moment indeed when the two are aligned such that they can be pierced with a single arrow.

Yet executives persist in the belief that they can popularise anti-corruption by stressing the “business case” for doing the right thing.

I believe that an insistence on the business case contains fatal contradictions. The search for profits – i.e. the core cause of corruption – cannot also be the core of anti-corruption. Treating anti-corruption like a strategy that must yield financial returns is like treating a disease with its very cause. It almost ensures that we will miss the most meaningful opportunities for positive change. Yet this is the situation we face today, in which anti-corruption itself risks becoming corrupted. If, however, we submit our way of thinking to principled self-scrutiny, positive change can be the catalyst for improving all stakeholder relationships and, ultimately, achieving sustainable and meaningful business success.

As corruption begins with temptation, it is important to promote anti-corruption for moral reasons, not just self-serving ones. It is only to the devil that ethics can be sold.

In my own teaching, I have had to abandon the business case. I needed to be prepared to teach outside my students' comfort zone instead of always telling them what they preferred to hear.

With time and hard work, I built sustained and profitable client relationships. Still, I continue to navigate the grey zone between my intellectual honesty and my own success. It is only because I am not confined to the business case that I can incrementally invent mine.

Altruism is not always ethically superior

Ethics and altruism are often wrongly conflated. Especially when it comes to corruption, doing what is best for others does not equate to acting ethically. In my experience, it seems that my students are spending a great deal of their time and effort pursuing goals – or working around constraints – other than their own. In many cases, their unethical behaviour serves the interests of their company. It may also stem from deference to authority, blinding them to the risks they personally incur by disregarding ethics. Hence, paradoxically, a deeper anchoring in their own self-interest could indeed promote more ethical behaviour.

Embrace paradoxes, not platitudes

Paradoxes can be unpopular in the boardroom. Nonetheless, they are essential because we do not live in a black and white world. Rather, we are complex beings navigating an even more complex world. An ethics suitable for such a world will be more tolerant of paradoxes than of the platitudes that too often dominate discussions about corruption in the corridors of power.

To be sure, complexity and contradictions are difficult to embrace and require a new way of thinking. But accepting them allows us to navigate the ethical grey zone in a way that avoids categorical judgments while acknowledging that some behaviours are more ethical than others.

It also clears the ground for more adult conversations about ethics and especially about corruption. These conversations are urgently needed today, as anti-corruption is at risk of itself becoming corrupted – converted to a moralistic mask designed to prevent us from looking unpleasant realities in the face.

Marc Le Menestrel is Visiting Professor for Corporate Governance and Sustainability at INSEAD.

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The 3 Principles of Wise Power

Marc Le Menestrel — 2018-09-27T01:48:00Z

If you know how to harness the power of your mind, heart and soul, you will be wiser in the face of surprises and disruption.

One of today's damaging and common leadership misconceptions is the confusion of power with external control. All too often, we think of power as the ability to direct or influence the behaviour of others, or to force the course of events to conform to a predetermined scheme.

But there is an equally necessary kind of power, which is exerted inwardly. It turns out that power is as much about the ability to adapt to the world around us as it is about shaping the world. As the global business landscape becomes increasingly complex, our ability to develop our presence and gravitas has become an indispensable companion of authority.

A harmonious balance of inward- and outward-directed power is what I call wise power. It is the embrace of dualities that helps us meet the world halfway: in between what we want and what is offered to us. Beyond the illusion of full control, wise power is an art of surprise.

So what is wise power? Fundamentally, it is the ability to master the deeper dynamics – not just the surface phenomena – affecting the world, an organisation, a team, an individual, a conscience. Leaders developing their wise power train their attention towards the underlying forces shaping their environment and themselves. They are not as easily blindsided by threats or challenges. As their thinking is not beholden to entrenched prejudices and patterns of behaviour, they can devise more effective and more meaningful solutions.

The first step towards cultivating wise power is to loosen our mental and emotional grip on the tools that enabled our success thus far: our knowledge, experience, skills, philosophy, etc. These dependable tools can still be retained – actually, they are part of us and could not be discarded anyway – but we must be prepared at any time to stow them and grab hold of the new. Especially for high-achieving leaders accustomed to emphasising the will, wise power requires letting go.

Three principles

Three principles in particular are key to developing the self-mastery that nurtures wise power.

First, a duality of mind that comprehends multiple sides of an issue, rather than being restricted to the side that conforms to our pre-existing vision of things. With wisdom of the mind we can go even further, overcoming the mind's natural tendency to create inflexible oppositions. We learn to see a world large enough to hold contradictions in tension without forcing resolution – i.e. a both/and instead of either/or mentality. By being conscious of the way we look at things, we also develop our ability to choose how to look at things.

Second, an emotional maturity that allows us to cope with distasteful things just as well as we naturally warm to other things. The world, after all, contains plenty on both sides. The tendency to shrink from things we dislike diminishes our sense of reality and, by extension, our cognitive agility. Emotional maturity develops our ability to know both our likes and dislikes and to recognise them as feelings that we project onto the world, not innate properties of things. We needn't abandon, nor even resist our natural judgements of goodness and badness. Instead, we need to be fully aware of them so that we can create some distance. Because we can feel without being controlled by our feelings, we learn to influence our emotions while we are influenced by them.

Third, a generosity of soul that feeds on dreams to inspire and motivate real action. When we are well connected with our fundamental dreams and aspirations, we are more susceptible to shift an unexpected turn of events into an opportunity. Instead of reacting to all the things that can make us fail to reach our goals, we learn when and how we must change our goals to succeed in life. Loosening our grip on transitory goals reduces fear of failure and discomfort with the unknown. Instead of being prisoners of our goals, we dream beyond them and learn to master the art of surprise that life can be.

The principles in practice

Let's take a practical example. How could we apply the principles of wise power to a business problem involving, say, technological innovation? First, the cognitive agility that comes with duality of mind allows us to better understand why innovation could be both a blessing and a curse. Indeed, innovation is a major source of competitive advantage for business, yet it can also pose a risk for the environment or for society, locking us into technological choices that are in fact detrimental over the long term.

Moreover, new technologies can often be frightening, as they carry the threat of our own obsolescence. Emotional maturity helps us recognise that the fear of technology has good sides, e.g. sensitivity to early warning signals, consistency of identity, healthy scepticism toward fads, etc. By accepting these emotions, we can avoid becoming the prisoners of innovation. Facing our fears thus feeds the process of cultivating wise prudence.

So what is the purpose of technology? What is the dream beyond innovation? These questions are of crucial importance. As leaders, our ability to answer them with a vision is a powerful asset for organisations. It creates motivation and develops passion for the future. It attracts and retains talent. The power of a dream helps us find a genuine purpose and a meaning in technology. It guides our technological innovation towards a better world rather than making innovation an end in itself.

A wiser approach to crisis management

Wise power also helps in managing potential ethical crises. In the face of a serious accusation of organisational wrongdoing (e.g. corruption or illicit business practice), the first principle – duality of mind – compels curiosity. Rather than immediately dismissing the accusation as inconsistent with what we know of the organisation, we need to seek out all available information. Instead of resorting to reflexive denial, wise leaders may ask the company's accuser, “Oh, if you know something that I don't, tell me everything. I may not be fully aware.”

The second principle – emotional maturity – encourages compassion. Instead of reacting in outrage, we might say to the accuser, “What you tell me makes me feel very bad. I want to do something about it.” Acknowledging and making space for the emotion not only establishes common ground, but it also builds credibility. This breaks the feedback loop of violence (verbal or otherwise) that can make a bad situation even worse.

The third principle – generosity of soul – points the way forward. As wiser leaders, we train ourselves to give substance to responses such as, “What we ultimately want is for the company to be useful to society.” If the accusation proves to be true, action can be taken to bring the organisation's culture and conduct back in line with its original ideal. The crisis can become an opportunity to return the purpose of the business to its rightful place at the very core of organisational activity. The organisation is likely to emerge from the firestorm both stronger than before and with a renewed sense of purpose.

With wise power, we care for end results while learning to forge our own path, aligned with what is most important to us and with a vision and purpose beyond the immediate goal.

Marc Le Menestrel is Visiting Professor for Corporate Governance and Sustainability at INSEAD.

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The Key to Cultivating Agility in Decision Making

Marc Le Menestrel — 2018-06-25T01:44:00Z

How do you think? Can you be aware of your thinking? Can you choose how to think? In this piece, I introduce my way to teach people to choose how they think about things.

Decision-making excellence requires self-awareness and the ability to choose how to think in different situations.

Let's say a store has been selling large snow shovels for $15. The morning after a major snowstorm, the store raises its price to $20. Is this acceptable?

A large majority of business people in my seminars answer that yes, it is acceptable to raise the price of shovels after a storm. They invoke the law of supply and demand; they quote the example of street selling of umbrellas when it rains; they explain that the competitive context would not let them survive otherwise; they blame the customers for not having anticipated the storm, and many other reasons that resemble excuses.

In reality, they don't really think about whether it is acceptable or not for the store to raise its prices. They react, and then they think about how they can justify their “choice”.

Their reaction mostly comes from an implicit and unconscious identification with the business owner. From this perspective, they expect that raising the price of the shovels will help them make more profit. This is the way they think.

But a seminal study found that 82 percent of people (not business people but a representative sample) do not think it is acceptable to raise the price of the snow shovels after a storm. If the local customers are similarly minded, they are likely to be angry and lose trust in the shop if it does so. They will certainly refrain from buying anything else they do not absolutely need, and will consider that the shop is out to exploit them as much as it can.

Over the long term, then, it could be bad for business to raise the price of snow shovels after a storm.

It is thus crucial to realise how business leaders tend to be conditioned to think a certain way, e.g. the idea that they should exploit all available opportunities for profit maximisation. When this way of thinking directly clashes with the ethics of their customers, respect for nature or the will of their government, it can lead them to take wrong decisions and eventually destroy opportunities and lose profits.

Thinking about how we think

The way we think is a part of our experience of life, but also helps shape it. It is what makes us smart, or not so smart after all.

Each one of you has a very unique way of thinking. I do too. No two people's minds operate in precisely the same way. Furthermore, each of us is capable of many different kinds of thinking, not only depending on what we think about, but also depending on what we want to do, say, understand, or even who we want to be.

Being aware of our way of thinking, of its uniqueness and at the same time of its commonality with others' ways of thinking, helps us exercise one of our most critical abilities as decision makers: namely, choosing the way we think.

At the global level, our historical moment demands that we make this choice carefully, because new technologies and political events are critically altering our world, including how we do business. Such sweeping transitions are dangerous and we often prefer not to think about them. Still, they can also be an opportunity to make things better. Above all, we need to adjust our ways of thinking to meet the fast-changing world around us. As Einstein put it, “A new type of thinking is essential if mankind is to survive and move toward higher levels.”

Of course, we know that we are free to think what we want. But choosing how we can think about something is difficult. Often, we believe that there is only one way to think about something, as in our example of business owners esteeming five additional dollars per shovel above their most valuable asset: customer relationships. However, there are always many ways to think about something.

Consciously choosing the way we think is the expression of a unique freedom that human beings possess and can nurture. It is a way to be free, at the most evolved and beautiful level.

In my teaching, I invite participants to learn different ways of thinking in order for them to nurture their freedom and their power. With freedom and power comes responsibility. I am inviting them to be responsible for what they do with this thinking agility. They can use it to think more, or less, to think in a more altruistic manner, or in a more self-interested direction. They can use it to better understand the world of business and be more agile in their way of thinking.

Decision making for leaders

This is a crucial skill for today's leaders. Being able to understand different perspectives helps to anticipate the reaction of customers and to evaluate ethical risks in decision making. It is also critical to genuinely assess how various options align with the values of the organisation and of its people. Business people need to be trained not to make decisions blindly, especially decisions where core values are implicated. They need to learn to avoid the trap of justifications, to analyse and to think about all dimensions of a decision before acting, and especially before communicating.

For example, if you owned the store that sold shovels, the better business decision might be to lower prices after a snowstorm. How many more customers may come as a result? What would be the effect of securing their trust? How would this newly generated goodwill impact sales more broadly, beyond the snowstorm emergency? There is no definite answer to whether one should raise the price or not after a storm, but we should not simply react because there are compelling reasons to think seriously about both alternatives.

Leadership is an art as much as a science. It can be learnt by nurturing conversations where the mind is not necessarily driving the decision, but where the heart and the soul help remind it to stay open to other avenues of thinking.

Marc Le Menestrel is Visiting Professor for Corporate Governance and Sustainability at INSEAD.

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Is Anti-Corruption Corrupted?

Marc Le Menestrel — 2018-02-15T03:01:00Z

After some classes that I taught at the Lee Kwan Yew School of Public Policy in 2017, I developed my approach to corruption with an analysis of anti-corruption. I compared the narratives of Danold Trump and Xi Jinping to unveil how the bad can be seen in different guises depending from where you look at it. I also introduced the reasoning of day and night, inviting each one of us to vary our perspective. Once again, in ethics, we need to spuspend our judgement in order to complete our analysis. It is when we act that we draw a line in the grey zone.

This piece is a significantly longer and more developed version than the one published on INSEAD Knowledge. It has been published on global-is-Asia, the online outlet of the National University of Singapore.

Anti-corruption is becoming a strategic item in the agenda of countries, of international institutions, and of business organizations.

We need to approach anti-corruption with the wisdom of the time: complexity, systemic understanding and, most importantly, survival instinct.

For corporate boards, corruption can no more be addressed as a legalistic or compliance issue. It is neither enough to look at it as an ethical issue. Righteousness is not and will never be a guarantee for directors.

Corruption has to be treated as strategic; anti-corruption too.

Both have the power to disrupt a corporation by destroying its reputation, revoking its license to operate, infringing colossal fines, sending director or directors in jail, or even worse. Corruption and anti-corruption threaten lives.

And corruption is one of these complex notions for which no simple reasoning can do much more than giving an illusion of understanding.

For directors and boards to be really smart in the face of corruption and of anti-corruption, they need to think at another level.

The seriousness of this topic was explored during one of the courses held for the Corrupt Practice Investigation Bureau (CPIB) in Singapore where the LKY School and I delivered a programme on Ethics, Governance and Corruptions for 25 government officials from 14 countries. Especially in Asia where cases of corruption continue to hog headlines and where many countries are not well-ranked by Corruption Perception Indexes, questions of good governance and corruption remain global concerns and demands for rigorous discussions surrounding them are welcomed and encouraged. There is no better way to move one level up than expressing dualities and transcending them.

I will illustrate my method with a metaphor: corruption is to integrity what night is to daylight.

Daylight can be defined rigorously as the time between the sun rises and the time the sun sets.

But who would deny that dusk is already the night coming, that the crepuscule holds some daylight in it or that dawn announces the inexorable coming of the day?

Despite any of its definitions, corruption will remain a grey zone.

And if one wants to approach corruption in a dynamic sense, one has to remember that seasons affect the length of the day.

There are cycles and what is day today may be night tomorrow: a practice that is acceptable today may be considered corruption tomorrow.

Whether it may become acceptable again in the future is relevant. The damages may be done. Anti-corruption is also part of the system of power.

Anti-corruption is also a grey zone.

And for those who believe that anti-corruption should be a matter of principles, alas, whether what you are accused of is carried out by many others is also irrelevant. You will just lose.

When anti-corruption is a matter of competition, the issue is who is targeted.

And if one wants to approach corruption in a globalized world, one has to take into account that night and day, in practice, depends on where you are.

When the sun sets in the west, it rises in the east

There are different perspectives to look at corruption and at anti-corruption. They emanate from different historical, cultural, ideological, political, economic contexts and lead to different definitions and different priority actions.

They are perspectives of power driving the explicit and hidden dynamics of global governance.

These different approach to corruption and anti-corruption shape the agendas of countries, organizations, agencies, political and business actors depending on where they are, what they believe is right and for what they fight.

And this takes place at the highest level.

To illustrate my point, take for instance the discourse of Xi Jinping at the 19th National Congress of the Communist Party of China and contrast it with the National Security Strategy of the United States of America by Donald Trump.

Having both appeared at the end of 2017, these are two strategic documents directly implying their authors and their country in a high level formulation of national priorities.

Both documents use corruption as a central notion for their formulation of risks and indication of policies and actions. Let us first point out the commonalities.

Both documents consider corruption a governance issue.

Both documents embed the idea that corruption is antagonist to the rule of law which is formulated in both documents as a fundamental value.

Both documents refer to the benefit for the people to justify their priority against corruption.

Further, their perspective on corruption is like day and night with, of course, shades of grey.

For Xi Jinping, corruption is the greatest threat our Party faces. It is one of the tests confronting the party as they relate to governance, reform, opening up, the market economy, and the external environment.

Imbued in a long Chinese history of rise and fall of central governments, Xi Jinping wants to make sure that officials are honest, government is clean, and political affairs are handled with integrity.

The integrity of party officials will improve the political ecosystem of the party, strengthen[s] internal oversight as well as its close ties with the people.

Xi Jinping advocates anti-corruption to make the Chinese Communist Party better so as to contribute to the long term stability of the country.

For Donald Trump, corruption also arises from weak governance and the failure of the rule of law which serves to protect the individuals from government corruption and abuse of power, allows families to live without fear, and permits markets to strive.

In the search of a global environment based on democratic institutions, corruption is perpetuated by Transnational Criminal Organizations, corrupt foreign officials, corrupt elites, repressive leaders [who] often collaborate to subvert free societies and corrupt multilateral organizations.

Anti-corruption includes priority actions at the political, diplomatic, and economic levels which are aimed at fighting authoritarian states and allow U.S companies to compete fairly in transparent business climates.

Donald Trump advocates anti-corruption to influence the global playing field, protect the U.S. interests and contribute to political freedom and fair economic competition.

These two perspectives on corruption highlight two sides of what corruption can be.

On the one hand, corruption refers to the loss of integrity of a political system because of inappropriate economic incentives.

On the other hand, corruption refers to the loss of integrity of an economic system because of inappropriate political influence.

To fully understand the system composed of these two perspectives, one has to adopt higher level conceptual framework and then analyze the different dynamics proper to corruption and anti-corruption.

To this aim, a social interaction must be conceptualized as a mixture of a relation and a transaction.

In a relation, two identified parties cooperate to benefit from their joint activity. Most importantly, these parties share a common identity and exist together as a collective. It is this collective that they intend to protect by promoting the integrity of the relation.

The relation is a perspective on social interactions that is eminently subjective. It has value because it depends on parties who are who they are because they share something. Implicitly or even secretly, a relational perspective promotes the values of the parties, their agreed processes, their emotional engagement and even their spiritual co-existence.

In a transaction, two anonymous parties compete to benefit from an exchange. The object of the transaction is what is important because it is its attributes that makes the exchange beneficial for each of the party. It is this individual benefit that is the driver of the exchange and needs to be protected by the integrity of the transaction.

The transaction is a perspective on social interactions that is essentially objective. It has value independently of the parties because of what has been exchanged under specific conditions such as price and quality. Explicitly and preferably transparently, a transactional perspective promotes the value of what is exchanged and this is considered the guarantee of integrity.

For instance, a family relation can be enhanced with a transactional aspect, but would be perverted by the inappropriate influence of material aspects when they become excessive.

Similarly, a commercial transaction can be enhanced with a relational aspect, but it would be perverted by the inappropriate influence of relational aspects when they become excessive.

Corruption is not a one-way street where either the relational or the transactional pervert the other taken as a reference for integrity.

Integrity is not about purity. It is about the drawing of a line in the grey zone, a dynamic process that engages the actors, their references and their context.

The relation lies at the heart of politics like the transaction is at the core of economics. The value judgments that drive perspectives on corruption are thus reflecting ideological frames of references.

Whether economics or politics should drive global governance is the question of power that is coloring the perspectives of Xi Jinping and Donald Trump on corruption.

These two perspectives embed a major geopolitical debate about global governance and the appropriate path forward.

In the game for righteousness, these two perspectives will be used in turn to attribute responsibility and blame and to choose who to point at as good and as evil.

But the reality is that corruption and anti-corruption are inherently complex. Oppositions as much as commonalities should pave the way for a smart analysis of what is going on.

It is necessary to study the policies for fair competition promoted in Chinese laws to also understand how liberal capitalism, with Chinese characteristics, also shape the economy.

It is necessary to study the relations among individuals, families, institutions and corporations in the United States go also understand how relational structures of different sorts also shape politics.

A major difficulty lies in the need to express frames of reference as absolute, thus negating the complexity of the issues at play and their grayness.

There is a need for disentangling the multi-faceted aspects of corruption. And the search for establishing appropriate thresholds of discrimination suffers from simplistic discourses.

Because corruption is a grey zone, the inconvenient truth is that corrupted behaviors are not entirely evil. Similarly, those that are not corrupted may not be paragon of integrity either.

Unfortunately, zero tolerance discourses about corruption do not give credit to this complexity.

This is not to excuse the petty corruption or all the forms of relations or transactions that are so perverted that they should rightly be called crimes and punished for.

It is to avow that corruption and anti-corruption necessitate an acute analysis of the good and evil of social interactions, and that such an analysis will lead to necessarily contradictory judgments due to the complexity at hand.

A transactional perspective on anti-corruption bears the risk of dehumanizing social interactions. It somehow assumes global governance could rely on an objective system of anonymous actors exchanging good and services for defined price and qualities and under a transparent set of rules.

A relational perspective on anti-corruption bears the risk of idealizing social interactions. It somehow assumes global governance could rely on a community of actors sharing the same values, the same objectives the same methods and the same manner to find meaning in existence.

Social interactions are a mixture of relations and transactions and should be treated as such. Competition and cooperation are only the two sides of a mental model and should not pretend to capture the full reality alone.

Like many of the fundamental notions that shape the dynamics of the time, corruption and anti-corruption require navigating the frontier between day and night with full conscience.

And it is useful to recognize that such a full conscience embeds significant psychological and emotional attitudes.

For instance, whether corruption is intimately construed as coming out of one-self (reflective stance) or from others (projective stance) will shape the framing of the analysis and the assessment of risks.

The management of corruption and anti-corruption is not just a rational exercise. It requires the careful identification of dualities and their irrational counterparts.

If corruption is to integrity what night is to daylight, we humans know that our risks and our fears increase with our shadows.

The strategic approach to corruption and to anti-corruption requires a very careful analysis is how this impacts a company, its board and its directors in each of the environments they operate, including at the very personal level.

It is with such a complex, systematic and integrative approach that one can understand better what is happening in terms of political and economic dynamics of anti-corruption

Geopolitical, financial, legal, moral, rational, emotional, cultural, ideological, or even spiritual, there are a number of considerations for the teacher to share in order to help companies board to deal with corruption and anti-corruption.

What is essential is to understand that the context in which targets of anti-corruption efforts are chosen is biased. We can then develop the skills to address this multi-faceted complex issue at the board level.

About the author:

Marc Le Menestrel teaches and coaches senior executives and board directors on high level performance and leadership as well as the exercise of wise power in governance, sustainability, anti-corruption and risk management. Leading companies and academic institutions are using his expertise and innovative pedagogical approaches to inspire leaders in search of both performance and meaning. He is advisor to the World Economic Forum on its Partnering for Anti-Corruption Initiative. He was also a key facilitator for one of LKY School's Executive Education Programme on Ethics, Governance and Corruptions. For more information about Executive Education, pls visit http://lkyspp.nus.edu.sg/executive-education.

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Corruption: Drawing a Line in the Grey Zone

Marc Le Menestrel — 2018-01-25T02:33:00Z

In this piece, I introduce one of my preferred model of ethics: a grey zone between night and day. Inspired by Escher, it helps to understand the very special reasoning pertaining to the frontier between good and bad. I also develop a comparison between the anti-corruption of Xi Jinping and Donald Trump.

Corruption can no longer be addressed as a legalistic or compliance issue by executives and directors.

Nor is it enough to regard it as an ethical issue. Righteousness is not and will never be a guarantee for directors and executives.

Corruption is one of these complex notions for which simplistic reasoning can give no more than an illusion of understanding.

Consider the following metaphor: Corruption would be to integrity what night is to day.

Day can be defined rigorously as the time between sunrise and sunset.

But who would deny that dusk is already the night coming, that twilight contains some daylight in it or that dawn announces the inexorable coming of day?

Moreover, seasons affect the length of the day. There are cycles and what is day today may be night tomorrow: A practice that is acceptable today may be considered corruption tomorrow.

And if one wants to approach corruption in a globalised world, one has to take into account that night and day, in practice, depend on where you are.

When the sun sets in the west, it rises in the east…

Xi and Trump

I'll illustrate my point with a concrete example – China's President Xi Jinping's speech to the 19th National Congress of the Communist Party of China, contrasted with the National Security Strategy of the United States of America by President Donald Trump.

First, let's consider the commonalities between the two leaders' statements. Both documents consider corruption a governance issue. Both embed the idea that corruption is antagonistic to the rule of law, which is formulated in both documents as a fundamental value. Both documents refer to the societal benefits of combating corruption.

Further, their perspective on corruption is like day and night with, of course, shades of grey.

For Xi Jinping, “corruption is the greatest threat our Party faces”. It is one of the “tests confronting the Party as they relate to governance, reform and opening up, the market economy, and the external environment”.

Xi wants to ensure “that officials are honest, government is clean, and political affairs are handled with integrity”.

The integrity of party officials will improve “the political ecosystem of the Party”, “strengthen internal oversight” and protect “its close ties with the people”.

Xi Jinping advocates anti-corruption to make the Chinese Communist Party better so as to contribute to the long-term stability of the country.

For Donald Trump, corruption also arises from weak governance and the failure of the rule of law. But he fingers a quite different set of culprits: “Transnational Criminal Organizations”, “corrupt foreign officials”, “corrupt elites”, “repressive leaders [who] often collaborate to subvert free societies and corrupt multilateral organizations”.

Trump's anti-corruption agenda is aimed at fighting “authoritarian states” and allowing U.S companies to “compete fairly in transparent business climates”. In other words, Donald Trump advocates anti-corruption to influence the global playing field, protect U.S. interests and contribute to political freedom and fair economic competition.

These two perspectives on corruption highlight two sides of what corruption can be.

On the one hand, corruption refers to the loss of integrity of a political system because of inappropriate economic incentives.

On the other hand, corruption refers to the loss of integrity of an economic system because of inappropriate political influence.

The question of whether economic or political power should drive global governance frames both Xi Jinping's and Donald Trump's perspectives on corruption.

Between the extremes

It is risky for globalised companies to make business decisions – such as which non-market strategies or sales practices to employ abroad – through one of these perspectives alone. We need both to cover the full spectrum of corruption.

Some theoretical input can help define the different forms of corruption and anti-corruption.

A stance towards corruption that stresses politics at the expense of economics, as in Xi's discourse, is relational. In a relation, two identified parties cooperate to benefit from their joint activity. Most importantly, these parties share a common identity and exist together as a collective. It is this collective that they intend to protect by promoting the integrity of the relation.

A stance emphasising economics at the expense of politics, like in Trump's National Security Strategy, is transactional. In a transaction, two anonymous parties compete to benefit from an exchange. The object of the transaction makes the exchange beneficial for each party. These individual benefits drive the exchange and need to be protected by the integrity of the transaction.

Both of these stances have an absolute definition of integrity that is both culturally grounded and philosophically sound. Each has its own values, and its own value.

However, social interactions are a mixture of relations and transactions, and should be treated as such. Transactions or relations, economics or politics, competition or cooperation represent extremes that should never pretend to capture the full reality alone.

Integrity is not about purity. It is about the drawing of a line in the grey zone, a dynamic process that engages the actors, their references and their context.

The limits of “zero tolerance”

Because corruption is a grey zone, the inconvenient truth is that corrupt behaviours are not entirely evil. Similarly, those that are not corrupted may not be paragons of integrity either. Unfortunately, “zero tolerance” discourses about corruption do not give credit to this complexity.

This is not to excuse the petty corruption or all the forms of relations or transactions that are so perverted that they should rightly be called crimes and necessitate punishment.

It is to acknowledge the need for an acute analysis of the good and evil of social interactions, and that such an analysis will lead to necessarily contradictory judgments due to the complexity at hand.

Accepting the grey zone doesn't mean denying that some acts are darker than others. It is because you accept it that you can aim towards light with full conscience.

So for corporate leaders, effectively combating corruption is, first and foremost, about a critical attitude to one's own perspective on corruption. Do not hold the idea of corruption at arm's length, as though it were a problem too sordid to soil your hands with. Question your notions of what integrity looks like; consider the possibility that, in the complexity of business relationships, integrity sometimes shakes hands with corruption.

The first step might be creating the space in your organisation for uncomfortable conversations and questions. Instead of trying to ensure your company isn't corrupt from your usual perspective, assume – as a thought experiment – that it is corrupt, according to an alternative mindset. Then thoroughly examine your business practices with that shadow perspective in mind. Outside of your comfort zone, you may discover surprising truths about your practices and unleash a new motivation to improve. And you will certainly be better prepared in the event of an accusation.

Marc Le Menestrel is Visiting Professor for Corporate Governance and Sustainability at INSEAD.

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From Unethical Business to Ethical Selves: How to eat to be yourself? (Monday June 12th 2017)

Marc Le Menestrel — 2017-05-31T09:47:48Z

Each participant prepares something about the Food Industry (a fact, an experience, a photo, a video, something to eat or drink, anything...) that he/she finds of relevance in the context of his/her learning process.

We share our contributions and experience how such issues can have a direct implication for our life and, most importantly, for our own behavior.

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Voicing your values (Thursday 8th of June 2017)

Marc Le Menestrel — 2017-05-31T09:44:19Z

How to disobey when appropriate?

Watch this 40 min video about the Milgram Experiment.

Reflect on it and look for additional information about the experiment and obedience in general.

Assignment:

Describe for yourself who you tend to be when you fail to act upon your own values and reflect about how you would resist to obedience when it means acting contrary to your values. Write one sentence that empowers you to be the one you want to be in these situations.

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Business, Corruption and the Individual (Tuesday 6th of June, 2017)

Marc Le Menestrel — 2017-05-31T09:42:10Z

Summary

As a newly appointed manager of a pharmaceutical company in China faces the issue of kickbacks to Doctors in order to boost sales, he is not very sure about the practices and the consequences of carrying out what could be interpreted as a form of corruption. How should he behave in such a situation? Why? We follow this case study with a discussion on corruption, its perception, methods and consequences.

Required reading

Butler, Charlotte & de Bettignies, Henri-Claude. “Blue Monday (R)”, Insead and CEIBS Case Study, 2009.

Watch this 40 min video about the Milgram Experiment.

Reflect on it and look for additional information about the experiment and obedience in general.

Assignment: Answer the two questions at the end of the case.

Advice: Think a bit by yourself and then browse the Internet to learn about what happened in the recent years to pharmaceutical companies in China about corruption and use it to build a more refined assignment.

Optional Readings

De George, Richard. “ Ethics, Corruption, and Doing Business in Asia”, in Asia Pacific Journal of Economics & Business, Vol. 1, No. 1 (1997), pp. 39-52.

Anand, V., Ashforth, B.E., and Joshi, M. (2004) “Business as usual: the acceptance and perpetuation of corruption in organizations”, Academy of Management Executive, 18 (2): 39-53.

Slides of the Session

Next Session

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Corruption & Obedience (Case Study and Discussion) (Seminar 9, June 7, 2017)

Marc Le Menestrel — 2017-05-31T09:32:59Z

Summary

Required reading

Butler, Charlotte & de Bettignies, Henri-Claude. “Blue Monday (R)”, Insead and CEIBS Case Study, 2009.

Watch this 40 min video about the Milgram Experiment.

Reflect on it and look for additional information about the experiment and obedience in general.

Assignment: Answer the two questions at the end of the case.

Optional Readings

De George, Richard. “ Ethics, Corruption, and Doing Business in Asia”, in Asia Pacific Journal of Economics & Business, Vol. 1, No. 1 (1997), pp. 39-52.

Anand, V., Ashforth, B.E., and Joshi, M. (2004) “Business as usual: the acceptance and perpetuation of corruption in organizations”, Academy of Management Executive, 18 (2): 39-53.

Slides of the Session

Next Class

Back to the course