Cognitive Dissidence

Impact Analysis is a by-monthly newsletter published by Manzella Trade Communications (www.ManzellaTrade.com). It is private labeled by a number of World Trade Centers and Chambers of Commerce in the United States. My ethical business model message was published in its November/December 2008 issue.

Guarding Our Most Valuable Asset

Nothing is as valuable as reputation. And yet we see corporate reputations squandered daily. In truth most companies and most people spend every day trying to do the right thing and protect their reputation. Very few set out to do anything less. So how does it happen?

In a variety of ways but mostly a little bit at a time. I call it the “Paper Clip Slip.” Anyone who hasn’t walked off with a company owned paper clip hasn’t ever worked with paper clips. The problem comes when it grows to a box of paper clips, or pencils, or something else.

The process we use to justify this petty larceny is called Cognitive Dissidence. It’s a very valuable human trait that we would be whimpering wrecks without. After we choose between the alternatives we need to move on. We all know people who agonize over every choice and are filled with doubts, sometimes for days. Cognitive Dissidence is the mental function that tells us we made the right choice and we become more convinced every hour that the other options would not have been as good.

The problem comes when we have too much of this trait. We begin to justify our actions no matter how outrageous. Actually, excessive Cognitive Dissidence is often admired in the C-Suite. A decisive executive can be a real asset to any organization. However, the same strong leader can steer the ship into treacherous waters sure that they are on course to success. And when things don’t look too good it is easy for them to justify actions that threaten the reputation of the company. When it goes sour they say, “I did what I had to do.”

Others come into corporate life with a distorted view of what you have to do. They believe that you have to do what it takes to win in a dog-eat-dog climate. Where do these people, some of them the best and brightest of our youngsters, get this idea? That’s easy! Good news is not news, so almost everything they see and hear in the media involves the baddies. And it’s not just the news media. Books, movies, TV shows, it’s all about the interesting nasty stuff, in business and in life.

Doing the right thing is not always easy. Sometimes it’s not even clear what the right thing is. We face hard choices everyday. What is clear is that an ethical business model is the best choice. The research shows that companies that put the best interest of their stakeholders first –their customers, their employees, their suppliers, their communities, the environment, and finally their shareholders and lenders– win in every way.

Why shareholders last? Because if you take care of the others, profits will take care of themselves. Do ethics driven businesses always win? Of course not. But if all things are equal these companies will do better every time, and they are a lot more fun to work for, and a lot more fun to run.