Serving To Win

Which of these statements resonates more with you?

1. I try to win, because losing sucks.

2. I try to serve my clients, because then I win too.

3. I try to serve my clients, which generally works out best for me as well.

If you chose #1, OK, I get it, I like competing as much as the next guy, but come back another time, we’re not talking to you today.

Today we’re talking about service, winning, and the link between them.

Do you serve to win? Does serving cause winning? Or is winning an occasional byproduct of serving?

What it comes down to is: Why are you serving?

Does Doing Good Cause Doing Well?

There’s a myth being perpetuated by well-intended, wishful-thinking, creative, holistic people out there: the myth that if you do right, you absolutely will do well.

In its more extreme forms, this belief would suggest that all highly ethical and socially responsible companies always make more money, every quarter.

Of course, there’s no shortage of cynical, embittered, hard-bitten “realists” who just can’t wait to whump the idealists upside the head with a good “oh-yeah-take-Bernie-Madoff” or two.

Who’s right?

Prisoner’s Dilemma

Social scientists and game theorists are enamored of The Prisoner’s Dilemma, a two-person game about cooperation and competition. In each game, each player can choose to cooperate or compete.

  • If one chooses to cooperate and the other to compete, the cooperator gets 10 years in prison, while the competitor goes free.
  • If they each choose to compete, they each get 5 years in prison.
  • If they each choose to cooperate, they each get 6 months in prison.

The person economists assume we all are—rational maximizer of self-interest—will rationally choose to compete. So will his competitor. Boom.

That approach sums up approach number 1—play to win. Turns out that businesspeople in controlled tests of prisoner’s dilemma strongly favor approach number one; it fits with what they learned in business school, be number 1 or 2 in your market, competitive advantage, etc.

In a connected world: boom. So much for statement number 1 at the outset of this post. Because in the real world, prisoner’s dilemma doesn’t just get played once.

Playing the Game More than Once

Part of the “trick” of prisoner’s dilemma is to play it more than once. Over time, the optimal strategy turns out to be “tit for tat,” i.e. assume the other party will cooperate, and do likewise. This generally ends up in iterative decisions to cooperate, with only occasional breakdowns of order.

But why do people continue to choose “cooperate?” Is it because the economists are right, and we’re all rational maximizers of self-interest who look at the long run? Do we calculate the odds and figure that the net present value of cooperating is greater than that of competing? Turns out it’s a little murkier than that.

Playing the Game With More Than One Player

In addition to frequency, the game is affected by participation. If there are high levels of information, visibility and interaction about how other players are engaging in the same game, then the cooperation strategy becomes even more dominant. There are fewer defectors from the cooperative strategy trying to squeeze in that last little bit of competitive edge.

Fewer Madoffs.

But: if you have more people choosing to tweak those odds, looking for just the right moment to sucker-punch the other guy after having lulled them into somnolence by a series of apparently cooperative gestures, looking to gain that final advantage—then the system starts to fall apart.

Why We Play the Game Matters

Prisoner’s dilemma is a pretty good metaphor for life. The economists’ fiction of individual actors is just that—a fiction. Francis Fukuyama puts it this way in The Origins of Political Order:

It is in fact individualism and not sociability that developed over the course of human history. That individualism seems today like a solid core of our economic and political behavior is only because we have developed institutions that override our more naturally communal instincts. Aristotle was more correct…when he said that human beings were political by nature.

The only serious debate is between statements two and three. Do you cooperate to win? Or do you cooperate because—that’s what you do? It’s the latter attitude, held by enough people over a long enough time period, that drives economic wealth.

  • A business strategist who advises any given company to be socially responsible because they’ll make more money that way is detracting, not contributing, to social responsibility;
  • An investor looking for socially responsible companies solely in order to make more money on their investment is a risk-seeking investor;
  • A society of people who cooperate “in order to win” is in trouble.

The Paradox of Trust

Belief number two—serving your clients because that way you win—is ultimately self-defeating. Because if “to win” is your ultimate goal, you’ll sooner or later end up facing a situation where you have to choose between serving and winning. And you’ll choose winning.

And then people will stop trusting you. And that disease is communicable.

Two variables make it all work: time, and numbers. Play the game enough times, with enough players, and it works. Where it goes wrong is when we:

  • Start managing to quarterly earnings
  • Start analyzing performance metrics in the short term
  • Analyze individual psychology outside of group psychology
  • Use the language of self-interest instead of group interest.

The paradox is: economics work if we justify it ethically. But if we try to justify ethics economically, it all falls apart. Beware of those who justify ethical behavior by the bottom lines.

Answer three—serve your clients because things generally work out better that way—is the “right” answer for all of us. If we remember to keep it long-term, and keep it social, then it works.

Trust, Violence and Congresswoman Giffords

The attempted assassination of Congresswoman Giffords in Tucson this weekend is related to trust.

I’m not talking here about interpersonal trustworthiness. Nor am I talking about polls and surveys about which institutions or professions are up or down in the public’s sentiments.

I am talking about what the academics call “generalized trust.” (See interview with Dr. Eric Uslaner for more on this). In a nutshell, generalized trust means our inclination to trust strangers, or to believe that people by and large have good intentions toward us.

That kind of trust is suffering a long, slow, secular decline (again, see Uslaner). And the Tucson tragedy throws it into relief.

Politics, Psychology and Violence

Some people debate whether the killer was politically motivated or merely psychotic, or some combination of both. From a trust viewpoint, I think it’s irrelevant.

Similarly, it’s also not always useful to debate cause and effect: did the shooter react to socio-political dialogues, or are those dialogues caused by events like Tucson? Does the media merely report polarizing events, or does its reporting contribute to the polarization? The answer is yes.

We have seen in the US in recent years an increase in the willingness to trust “someone like me.” This is not a good thing; it mainly means a decline in the willingness to trust other sources—media, advertising, business, government. We are a society that seeks trust in self-defined groups (think inbound marketing), while seeking protection from ‘strangers.’

High trust people feel in control of their lives and expect well of others. Low trust people feel that others control their lives and that “they” have bad intentions.

Add it up and what have you got? A society increasingly polarized with declining social trust, increasing micro-tribal trust (and its cousin, demonization of other tribes), and declining civility. My tummy tells me the odds of a Jared Loughner are increased, not decreased, with this cultural soup.

Drivers of Social Trust Issues

I find myself linking to Professor Uslaner several times in this post. “Congress,” he says, “is much like the rest of us—the incivility in Congress reflects the declining trust among the public.” Congresspersons clearly have a responsibility to role model more trustworthy behavior. The business literature is replete with examples of followers emulating leaders’ behaviors; Congress should read it.

The media are another key constituency. The old media is under economic attack from other media—blogs, tweets, YouTube—which offer far greater immediacy. We all lose when mainstream media start playing SEO games with headlines.

Business leadership is a critical part of the puzzle. Steeped in a 40-year ideology of competition, and seasoned with neo-Randian economics, business has come to believe far too much that all business is about doing battle with regulators and customers, confusing ‘ethical’ with ‘legal.’ The belief that everyone’s out to get you is not conducive to social trust.

What Pogo said is also true: we have met the enemy and he is us. I saw a blogpost today that was critical of Francis Fukuyama’s book Trust. Except that the blogger hadn’t read the book. He was suspicious of it because he didn’t like the title of another Fukuyama book—which, again, amazingly, the blogger had not read.

We accept far too readily emotional outbursts as substitutes for dialogue. The online comment columns on daily newspaper stories are full of graffiti—a (usually venomous) opinion with a name attached.

How to Restore Social Trust

Uslaner is very clear in his prescription. What destroys trust is corruption, economic inequality, suspicion, and lack of education. You may not like it, but the data show greater economic inequality and lower levels of education lead to lower social trust.

Leaders have to step up to the challenge of acting like leaders. The US Congress and politicians in general have done a conspicuously poor job of this. That Congresswoman Giffords appears to have been an exception to that rule simply draws the irony more sharply.

The media have to figure out another economic model besides emulating the tabloids and creating blogysteria. The Shirley Sherrod case was a lesson for anyone listening. Thus far, it seems like it’s been relegated to the archives.

Business has simply got to drop the selfish ideology it has embraced. Institutions like the Chamber of Commerce need to stop fighting government and begin working with it. Business schools have got to stop teaching ethics in one classroom and contradicting it in strategy classes down the hall.

And the rest of us: we all need, in our little daily behaviors, to adopt better manners. Civility. Respect. Empathy. Listening to the other person.

The link between an uncivil society and a society terrorized by psychotics is hard to prove, but not hard to feel. Aristotle suggested that actions arose from character and from thoughts. Combative people talking hard-talk are suborning bad behavior from those around them.

There are no quick fixes to trust. Seeing this as mainly an issue of better police protection would be a profound mistake.