The Lazy Skeptic woke up and blinked at the bright sea of clouds through the flight window. He had dozed right after settling in and missed the take off. He turned left as the man seated next to him pulled out the in-flight magazine from the seat pouch in front.
He did a double take. He knew this elderly gentleman. The long clean shaven face with a sharp nose, sporting a white handlebar moustache, was often seen in the business media. He made news recently when he retired after being the long time chairman of his multi-billion dollar business empire, handed over the reins to his son, and decided to focus on philanthropic efforts.
The LS could not contain himself. He had to make conversation.
LS – Excuse me sir. Good Morning. I am your ex-employee and a shareholder of your technology business. Pleasant surprise to meet you here.
The Retired Business Legend turned to return the smile.
RBL – Thank you.
LS (gushing with excitement) – I have read you flew economy. But never in my wildest dreams I thought I would get a chance to meet or talk to you.
RBL (calmly, with a bemused smile) – It happens, young man.
(The flight loudspeaker crackles up, allowing passengers to relax their seat belts. LS & RBL push back their seats)
LS – I read you retired from business. As an ex-employee & investor, I hate to see you go. At this stage in your life, I guess philanthropy is more important and exciting to you.
RBL (fumbling with his seat belt) – You can say that
LS – You created billions of dollars of wealth and now are giving it all away. Thats inspiring.
RBL (accepting the hot towel offered by the stewardess) – Well, there is much one can do to improve lives and the world around us…
LS (waving away the hot towel offered, still excited) – You’re right. So many people across the country want to emulate you. Do good for themselves and for others. You are a modern Robin Hood.
RBL (turning sharply, with a quizzical look) – Robin Hood?
LS – You help many poor people
RBL (pulling himself up in his seat) – Robin Hood robbed rich people. I don’t do that.
LS (stuttering a little) – I know you ran a fair, less corrupt and transparent business keeping high standards of corporate governance. I guess it is difficult to run a totally honest business.
RBL – I ran an absolutely honest business. All wealth i helped create was fair & honest. And now I intend to give most of it back to the society.
LS – Redistributing wealth, or can I say reallocating capital in a business-like manner in the social sector?
RBL – Yes
LS – In a way, you are doing something similar to what good governments do with taxes they collect.
RBL – Yes, that’s one way of describing it. The government is unable to do so many things. As a philanthropist, I try to allocate capital to projects, sectors, and ideas where government efforts are missing or lacking. I try to supplement government work, building momentum where it is required.
LS – Thats indeed wonderful. But some parts of the business world are corrupt and the way wealth is created is not entirely fair.
RBL – Yes, you are right.
LS – Do you agree that some, if not a major, portion of corporate wealth is created through dishonest means, exploiting some people, society at large, the environment etc?
RBL – Yes, that cannot be avoided. That’s business reality. I ran a tight ship with high ethical standards. There are many other businesses and businessmen who are lax.
(The stewardess serves breakfast. The two of them eat in silence. Soon coffee is served)
RBL (taking a sip from his cup, turns to his companion) – I think something is bothering you, young man. What is it?
LS (putting his cup down, and taking a deep breadth) – When a businessman creates wealth through dishonest & unethical means, and then, after he retires, when he does philanthropy, what really is the net result? Does society really benefit?
RBL – You got a point. Life is not completely just. We got thieves. But we also got good men. Look at the good people in business. See what they do. Their philanthropy makes a positive contribution to the society. Their collective work, over time, may even overshadow or make up for all the ills brought about by dishonest businessmen.
LS – Thats a positive thought and quite encouraging. But sometimes even honest businesses such as yours may indirectly impact society in negative ways.
(The stewardess interrupts to collect breakfast trays)
RBL – How do you say that?
LS – Your technology business has clients in many industries such as defence, banking, manufacturing etc. I know you provide business critical services & solutions.
RBL (with a touch of pride) – Yes, we do. Our technology powers many of our client’s businesses, makes them efficient and profitable.
LS – Lets consider a defence client who makes weapons & military equipment. You help your client, make them more efficient & profitable, right?
RBL – Yes, of course
LS – Your defence client’s business success depends on selling more weapons & military equipment. They lobby governments worldwide to sell more weapons. Wars and conflicts are good business for them. By helping them become more efficient & profitable, aren’t you indirectly contributing towards making the world more weapon-rich, prone to wars & conflicts, and a more dangerous place to live in?
RBL – That’s a convoluted argument. We are just a supplier. We only provide technology solutions & services. We don’t make weapons. What our defence clients do with our solutions is not our business. We don’t interfere in their business strategy, product manufacturing, sales, marketing etc.
LS – But you just agreed that your solutions & services are business-critical. And, that you make your defence clients more efficient and profitable in their business.
RBL – Yes, we do. But you don’t understand. We make their business more efficient. But they make weapons & sell them. We are not involved in that.
LS – But, by helping them, say by streamlining their operations, making their employees more productive, implementing software solutions etc., aren’t you indirectly assisting sales of more weapons & military equipment? If your defence client who makes & sells weapons is an accused, aren’t you an accomplice?
RBL (sharply) – You have got it all wrong.
LS (speaking excitedly) – You got banking clients. Many of those banks have had a hand in many crises, scams, frauds, and so on. Some of them have have paid billions of dollars as fines. Many banks and bankers have been bailed out or escaped prosecution. By helping to make such banks more efficient & profitable, aren’t you indirectly responsible for those crises, scams and frauds?
RBL – (silent)
LS – I am sure some of your manufacturing customers got factories which pollute the environment, perhaps use child labor, flout other norms, and aren’t very friendly to the society.
RBL – We aren’t their only suppliers. They got many. Even if we refuse to supply, somebody else will.
LS – But that doesn’t absolve you. It doesn’t absolve other suppliers.
RBL – As I said before, we are just a supplier. We cannot be held accountable or responsible for the social outcomes or impact of our clients’ business.
LS – We may not have regulations to monitor such second-level effects. But what’s your opinion? Aren’t you indirectly contributing to the social impact, positive or negative, of your clients’ businesses?
RBL – Such thinking will lead us nowhere. A businessman cannot be held responsible for the negative social or environmental impacts of his clients.
LS – But you just said you help shape business outcomes of your clients. You boast about positive results, but disown, ignore or choose to remain silent about negative results.
RBL – I think you are confusing yourself. Thats not what I meant.
(A suited man walks down the aisle, looks at RBL, stops to say hello, and continues to the toilet)
LS (not letting go) – So you don’t help make your clients successful in their chosen businesses? What exactly do you do then?
RBL (in a calm & sincere tone) – Let me give you an example. Let’s take your own case of a defence client. Let’s say this weapons manufacturer is facing a challenge in their sales & marketing organisation. They got diverse products, globals sales teams, marketing campaigns, customer segments, and so on. Let’s say they want to increase their sales productivity and improve customer experience. We step in with our consulting expertise and software solutions. We study their sales processes, help improve them, implement software solutions to help them make better sales forecasts and improve sales productivity, capture and study customer complaints, help them respond better to customer feedback, etc. But we don’t sell their weapons.
LS – By doing all these, you help increase their sales, create more satisfied customers, which helps get new leads, better conversion rates, repeat sales, and so on.
RBL – Yes, now you get it. Have you worked in sales & marketing?
LS – What you just said…isn’t that the same as being an accomplice, by helping them to sell more weapons?
RBL – Not really.
LS – How so?
RBL – We help them with their internal processes, efficiencies etc. We don’t sell weapons.
LS – But helping your client improve their business processes, aren’t you also helping them sell more weapons?
RBL – No. They are two entirely different things.
LS – I am surprised you don’t see the connection. Or perhaps you refuse to admit it.
(RBL looks out of the window, pauses for a while, before replying)
RBL – There is nothing to admit here. They are are not connected at all.
LS (whistles softly) – When you work with a banking client, help them improve their lending processes & systems, and the bank subsequently uses the same lending system supplied by you to sell sub-prime mortgages on a large scale contributing to the ultimate collapse of the financial system, are you not remotely responsible at all?
RBL (vehemently) – Absolutely no. I supply the system. What the bank does with the system is their own business. If they sell irresponsible sub-prime mortgages and collapse the financial system, I am not responsible for that.
LS – When you supply a business-critical solution to your banking client, who later uses that solution to lend money to corrupt businessmen and polluting industries, are you not worried at all?
RBL (with a smile) – Young man, if we think as you think, we cannot do business. In fact, no business will happen if we are worry about such second-order effects, as you put it.
LS – That’s dangerous thinking. If a responsible businessman like you is not worried about second-order effects, evils, frauds, pollution etc., we will go nowhere. In fact, we will be finished soon.
RBL – This aircraft you are flying in is a business. If businessmen start thinking like you, they cannot make steel, dig oil wells, build aircrafts, and you cannot fly. You will have to walk or take the bullock cart. You will not have modern medicines to cure diseases. You will not have conveniences like washing machines, air-conditioners, and mobile phones. We will all go back to being cave men.
LS – Is that sufficient justification for ignoring undesirable second-order effects?
RBL – We take 3 steps forward, maybe we are pulled back a step by unforeseen setbacks, but still that’s a progress of 2 steps.
LS – But they are not unforeseen setbacks. You can clearly see the indirect consequences of your business activities, even before you act.
RBL – Young man, that’s the cost of progress.
LS – Is it really progress?
RBL – Aren’t all the modern conveniences, medical breakthroughs, & improved quality of lives progress?
LS – They must be weighed by considering the negative consequences as well. Environmental degradation, climate change, modern lifestyle diseases, etc. have perhaps accelerated since the industrial revolution.
RBL – I agree. I am just saying the net result is positive. We are progressing.
LS – I disagree. I say the net result is negative. We are heading towards disaster.
RBL – You are discounting the philanthropic efforts of various businessmen. Just look at the quantum of wealth being given back to society. Consider all the big problems being solved by philanthropy. Many have pledged to return more than half their wealth.
LS – I don’t think that compensates for all the negative impacts of businesses. You are also discounting or ignoring second-order consequences of all business activities over time. The momentum unleashed directly and indirectly may snowball across the interconnected and complex business world. We may go back to ground zero.
RBL (smiling) – Young man, perhaps you are influenced by the many apocalypse movies.
LS – Perhaps you are too rigid in your ideas that you refuse to see my point.
RBL – You points are not valid
LS – In the name of progress, we are heading nowhere.
RBL – Ok, angry young man. What do you suggest? What is the alternative? Do you want to go back to the dark ages?
LS – Certainly not. It is not just two alternatives we are considering here. It is not a debate of modern progress or dark ages. We could choose a middle, slower path.
RBL – What is that?
LS – Perhaps we can grow less faster. We can reduce the pace of our progress.
RBL – Why do you want to do that when we can grow faster? When we can grow at 7%pa, why grow at a meagre 1% or 2%? We can find solutions faster, implement them faster, solve our problems faster….
LS – Thats exactly what we have been doing the last 200 years. See the accumulated & accelerating damages of growth around us. Slower & cautious growth may cause far smaller and fewer problems.
RBL – Is there any proof?
LS – Do we have any other alternative?
RBL – There is no need to find any alternative. We are doing perfectly fine, growing well, strong & fast. In fact, we should grow faster.
LS – Are you not worried about the negative consequences of growth we just spoke about?
RBL – I guess you are alluding to the challenges like climate change, pollution etc.?
LS – Yes, and more…widening income and wealth inequalities, insatiable desire to consume more, and so on. A finite earth cannot accommodate all these.
RBL – You have not understood the power of human ingenuity, our capability to innovate, the potential of the great technologies we have created and continue to create. The pace of innovation has increased. We will solve our problems sooner or later. Maybe not in my time or your time. We will turn the corner soon.
LS – But newer and more complex challenges are also hitting us at an accelerating pace. We never dreamt of threats like climate change and wide scale pollution 50 years back. Even now we are unable to get to a global consensus on how we should solve these problems.
RBL – We are digressing. We were talking about creating wealth and doing philanthropy. Now we are debating global issues, beyond either my or your control.
LS – You are right. But, they are linked
RBL – How?
LS – Even as you create wealth by running an honest business, you ignore second-order effects, thereby indirectly contributing to undesirable consequences such as financial frauds, conflicts & wars, environmental disasters and so on. These gather momentum over time to become national & global challenges, largely unmanageable. Meanwhile, you retire, do philanthropy, return a large chunk of wealth you have accumulated. But that’s not enough because you have let a genie out of the bottle. No matter how much you spend on philanthropy and innovate, you can’t put the genie back into the bottle because its grown monstrously. Rather than going 3 steps forward & 1 step back, we have gone 3 steps forward & 4 steps back. We are trying to go up on an escalator which is going down, unsuccessfully.
RBL – Wow, what a fantastic storyline.
LS – It is as fantastic as the story most of us like to believe….that we can innovate ourselves out all the problems we face.
RBL – We are innovating and solving many problems, aren’t we?
LS – We are also facing newer, more complex and bigger challenges, aren’t we?
RBL (easing himself up) – Young man, excuse me. I need to use the toilet.
(LS stares out of the window. RBL is back after a while)
RBL (settling down in his seat) – I switched from modern medicine to ayurveda upon the insistence of my wife, to control my diabetes. Am not sure its working well. But no harm trying. So, young man, what do you suggest? Should we stop doing business?
LS – No. That may not be possible. Why don’t you start by worrying about indirect negative consequences of your business activities?
RBL (sounding more relaxed) – That may just kill my business.
LS – Perhaps not. We haven’t tried, have we? Suppose you stop doing business with weapons manufacturers, banks involved in frauds & scams, industries which pollute etc. Start somewhere. Set an example. Maybe others will emulate you.
RBL – That would mean i grow much slower, or stagnate, or eventually die.
LS (shrugging) – All of us die, including businesses. The question is ‘how do you want to live?’. You already run a relatively honest business. As an ex-employee and investor, I know that. Why don’t you set yourself more stringent standards?
RBL – I will end up shrinking my business, having fewer customers, being less profitable and creating less wealth over time.
LS (animated) – By being honest and trust worthy in your business, you have grown well over the years. By setting other kinds of stringent standards for yourself, perhaps you may still grow. And you will also have the satisfaction of reducing your negative second-order effects, if not totally eliminating them. Most businessmen don’t bother to be honest and fair in their dealings because they fear they cannot survive. But a few businessmen like you have proven that being honest can actually be a differentiator and it makes sound business sense. If people like you don’t tackle complex challenges we face through different ways, who else will?
RBL – That’s a good thought, young man. But I don’t think it is practical. No businessman will commit hara-kiri. And I don’t really buy your arguments. Second-order consequences and such stuff sounds too bizarre. I prefer to worry about the immediate consequences of my actions. I don’t worry about things beyond my control.
LS – Refusing to do business with a weapons manufacturer or a polluting industry is very much within your control.
RBL – If I start refusing business opportunities in the way you suggest, I will have no clients left. Almost all my clients have some black spot or other.
LS – Start somewhere. I am not saying you should shut down your business tomorrow.
RBL – I have to answer investors, banks, & employees. It is not that easy, young man.
LS – I never said it is easy. If you agree the idea makes sense, I am sure you can find a way. You are a seasoned businessman.
RBL (laughing) – You are a good salesman.
LS (smiling) – I learnt my ropes at your company.
(The flight loudspeaker breaks out. The pilot mumbles a few inaudible comments. The seat belt sign is on)
RBL (tightening up his seat belt) – It is not easy to accept such a bohemian idea. If I were an impatient younger businessman, I wouldn’t even tolerate such a conversation. Now that I have retired, I have the luxury of time to indulge in strange thoughts. Your idea is dangerous. Outcome is uncertain. Adoption would not be easy. Majority would ignore, laugh and fight.
LS – Then, finally, you will win.
RBL (smiling) – Well, well, I don’t know
LS – Lets take one step at a time. Do you agree?
RBL – I am not sure. But i will give it further thought.
LS – Thats a good start.
(The plane hits an air pocket)