The greatest danger in times of turbulence is not the turbulence—it is to act with yesterday’s logic.
Peter Drucker
In an age where information is ubiquitous and histories are well-documented, it remains a perplexing reality that both individuals and corporations repeatedly fall into the trap of making the same mistakes. The evidence of our repeated failures is manifest in both the societal and corporate domains, highlighting a stark disconnect between knowledge and action.
- People have faced water crisis but they will not do rain water harvesting.
- People have no space for water to get into the ground but they will still contruct concrete structures without leaving even a sqft space open earth
- People experience flodd because they build their houses on low lying area or by (illegally) occupying water bodies but stil, want to build houses there
- People suffer injuries but would not wear helmets
At corporate level, we have seen the scenarios that have impacted business and employees siginifcantly. They were all cases of human failure akin to our social behavior
- Enron Case is well known case of corporate shortsightedness. It got expose to significant faws in corporate governance and accounting standards
- Bhopal Gas Tragedy is a well known case of ignoring safety and maintenance
- Worldcom got into massive accounting scandal
- Satyam Computers Services for accounting manipulations and corporate governance.
- DHFL Scandal where allegedly money was siphoned off to create private wealth.
In the ledger of human progress, every repeated error is a line we had the power to erase — and chose not to.
None of these are unknown to us, but we still continue without changing our behaviour.
Behavior in Individuals | Impact on Society | Impact on Business |
Short-term Thinking or Myopia | Prioritizes immediate conveniences over long-term benefits, such as failing to implement sustainable practices like rainwater harvesting. | Focuses on immediate financial performance at the expense of long-term sustainability, potentially leading to unethical business practices. |
Cognitive Dissonance | Engages in risky activities despite knowing the dangers, such as building in flood-prone areas due to economic pressures. | Recognizes the need for ethical practices but continues harmful policies due to conflicting goals like profit maximization versus regulatory compliance. |
Risk Underestimation | Engages in riskier behaviors when feeling protected, such as not wearing helmets while riding bicycles. | Believes existing systems or controls are sufficient to mitigate risks, leading to significant oversight failures. |
Tragedy of the Commons | Acts in self-interest against the collective good, such as overbuilding without considering environmental absorption. | Engages in practices that harm the public or environment, rationalizing that one more actor’s impact is minimal. |
In the cyclical echoes of failure, the wise find the whispers of lessons unlearned; for every mistake repeated, an opportunity is reborn to forge a wiser path ahead.
Strategies for Improvement
For individuals, education and community initiatives can promote long-term thinking and risk awareness. For corporations, stronger governance frameworks, a commitment to an ethical culture, and enhanced risk management are essential. Both spheres can benefit from:
- Promoting Transparency and Accountability: Ensuring that actions and their long-term implications are visible and that individuals and corporations are held accountable can help mitigate risks.
- Fostering Ethical Leadership: Leaders who prioritize ethical considerations over short-term gains can transform corporate cultures and influence societal norms.
- Integrating Sustainability into Core Business Strategies: Moving beyond compliance to integrate ethical and sustainable practices into the heart of business operations can ensure long-term viability and public trust.
As philosopher George Santayana famously stated
Those who cannot remember the past are condemned to repeat it.
This is equally true in personal behaviors and corporate ethics.
In the bustling corporate landscape of MetroLink Inc., a series of strategic meetings highlighted the pervasive issue of repeated corporate failures, mirroring societal patterns. The CEO, Thomas Harrow, had invited Dr. Lila Benson, an expert in organizational behavior, to address the executive team. Her task was to help them understand and rectify the cycle of repeated mistakes, drawing parallels to well-documented societal errors.
“Consider the case of Enron,” Dr. Benson began, her voice echoing in the high-ceilinged boardroom. “It wasn’t just about the financial scandal; it was about a culture that prioritized short-term gains over sustainable practices.” The room was attentive, the gravity of her words sinking in amidst the shuffle of papers and clicking of pens.
She moved on to discuss the tragedy of the commons, likening it to the corporate world’s over-exploitation of resources. “When companies act solely in self-interest, similar to how urban areas overbuild without regard for environmental absorption, they contribute to a larger systemic failure. MetroLink must consider how its expansions impact broader economic and ecological systems.”
The discussion turned introspective as Thomas reflected on MetroLink’s recent decision to bypass an environmental impact assessment for a new project, driven by the lure of quick profits. “We’ve seen this before in the flooding issues caused by poor urban planning. We chose the same path, ignoring potential long-term environmental damage for immediate financial benefits.”
Dr. Benson proposed a strategy for breaking this cycle. “It starts with promoting transparency and accountability. Every decision must be made with visibility into its long-term implications. Furthermore, fostering ethical leadership and integrating sustainability into our core business strategies are not just options but necessities.”
As the meeting concluded, the team felt a renewed sense of responsibility. They agreed to revisit their decision, this time incorporating a robust environmental and ethical review process. The echoes of past mistakes, once ignored, now served as a guiding whisper, urging them to forge a path of ethical integrity and sustainable development. This shift was a critical step toward aligning their corporate actions with a broader vision of societal well-being and long-term viability.
By understanding and addressing the root causes of harmful behaviors, both individuals and corporations can work towards a more ethical and sustainable future. Reflecting on the words of management expert Peter Drucker
Management is doing things right; leadership is doing the right things.
