Philosophers in the Boardroom
WHY YOU SHOULD CARE
Because on Planet OZY, solid philosophical fundamentals probably lead to solid economical fundamentals.
By Niamh Ni Mhaoileoin
In July 2007, Charles Prince, then CEO of Citigroup, defended his bank’s big buyout deals by insisting that “as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”
Four months later he resigned, leaving behind losses of $17.5 billion. His was one of the most striking emblems of the days and months leading up to the global financial crisis. The image could have been drawn from The Great Gatsby — brilliant young bankers spinning out of control, trying to keep time with a market that was moving so fast that no one, not even the CEO of the world’s biggest bank, could stop dancing long enough to call time.
If powerful financiers had consulted with philosophers, might they have realized that their practices were fundamentally unsound?
Could philosophers in the boardroom have helped? If the world’s most powerful financiers had consulted with its most respected thinkers, might they have realized that their business practices had become fundamentally unsound?
Alain de Botton, a philosopher, writer and director of The School of Life, suggests that although business may seem far removed from philosophy, corporations should seriously consider appointing philosophers to their boards.
The symbiosis of philosophy and power goes back a long way. In the 340s BCE, Aristotle, the greatest philosopher of the day, tutored the young Alexander, who was to become the most powerful man in the world. The relationship was mutually beneficial: Alexander drew on his teacher’s wisdom throughout his political and military career and, as a result, the impacts of Aristotelian philosophy were felt across the known world. More recently, Bertrand Russell corresponded with Eisenhower, Kennedy and Khrushchev, urging them to consider “the conditions of co-existence” and calling for a diplomatic solution to the Cuban Missile Crisis.
Today too many academic philosophers produce works that, although brilliant, are often unknown outside the ivory tower. Recognizing that politics and philosophy are rarely comfortable bedfellows — Kennedy sharply rebuffed Russell’s overtures — corporate consultation could allow philosophers to increase the social impacts of their work.
From the companies’ point of view, de Botton argues that commercial success is determined by the “accuracy with which they have discerned the true needs of those they have set out to serve.” While most companies try to achieve insight using focus groups and other forms of market research, de Botton believes that the role would be better delegated to an in-house philosopher. He or she wouldn’t dwell on how the company can make the most money but rather on how it can create products or provide services that resonate with clients psychologically, emotionally or even spiritually.
Steve Jobs — a business philosopher — believed that “people don’t really know what they want until you show it to them.” With the Mac, the iPod, iPhone and iPad, he provided clients with aesthetics and functionality that they didn’t know they craved. Apple is the most valuable brand in the world today because in the last 15 years, Apple — more than any other company — realized the true needs of the 21st-century consumer.
Unfortunately, the philosopher-businessperson is an extremely rare breed. Most corporate professionals operate, as they must, from quarter to quarter. Employees rarely catch a glimpse of the whole picture. The advantage of the corporate philosopher is that she is removed from the day-to-day of the company, and she has a position of significant authority with a direct line to the people who make the decisions.
Philosophers are trained to answer these kinds of questions by consulting with experts in humanity, from Boethius to Bell Hooks.
The CEO of a large firm in any sector has an extraordinarily big picture to size up. Free-market champion Milton Friedman believed that, as long as corporations play by “the rules of the game,” profit-making is their foremost responsibility. But in the aftermath of Enron, the BP oil spill, the global financial crisis and the Bangladesh Rana Plaza factory collapse, few executives can afford such a black-and-white attitude.
For example, corporate social responsibility has become almost obligatory, and companies must respond to crises like obesity or climate change. But business can’t stop entirely, so how should they balance the corporate and social? In the finance sector, risk is essential to corporate success, but how can bankers and investors face the devastating impacts of missing the risk sweet spot?
Philosophers are trained to answer these kinds of questions through consultation with experts in humanity, from Boethius to Bell Hooks. Their answers aren’t always satisfying, and a philosopher may get it wrong far more often than an Excel spreadsheet will, but they could help companies build stronger cultural and ethical foundations and provide us with products and services that more effectively meet our true needs.
And in case you’re worried about what Friedman would say, if Apple teaches us anything, it’s that philosophical insight can turn a pretty hefty profit.
Editor’s note: Laurene Powell Jobs, widow of Steve Jobs, is an investor, board member and contributor to OZY.
This OZY encore was originally published Feb. 20, 2014.
- Niamh Ni Mhaoileoin, OZY Author Contact Niamh Ni Mhaoileoin