Friday, August 13, 2010

To err is human; forgiveness is not an option

You may have followed the drama of Mark Hurd's exit as the CEO of HP; if you haven't, here's a good summary of what happened.

Hurd was very successful  at least in Wall Street's eyes, as HP's boss. All numbers, by which Wall Street judges companies were up and markets loved Hurd after the seemingly chaotic Carly Fiorina. But its rumoured that Hurd was despised by many of HP's employees, not least because while he was cutting costs brutally, he was awarded an annual compensation in the range of $50m. HP seems to be lurching from one disaster to another. After all the drama of the Compaq acquisition and the public ouster of Fiorina, sometime ago a scandal broke out over the investigation of press leaks from insiders that  led to the ouster of the then Chairman Patricia Dunn. Now Hurd is gone in another messy saga.

But this post is not about HP. Its about how even very smart people do very silly mistakes.Harvard Business Publishing carried this very good article of what makes people do such things. The amounts involved in Hurd's expenses fudging are sums like $ 20,000. He earned more than $ 50m. Why did he have to claim such petty amounts ?

We all make mistakes. We are, after all, human. Its so so hard to keep up to high standards of integrity. If you caught every person whose expense statements fell short of the highest standards of integrity, you probably won't have a single employee standing. But its incumbent on us, as professionals, to strain every sinew, to try the utmost. The biggest danger often comes if the amount is small. Its tempting to think that its only a small amount, so it must be OK. Think of the personal call made from the company's telephone. Think of the use of the company car to drop in to see a friend. Think of the lunches or dinners which are expensed, but in which no business is done. Think of the times a secretary is asked to do something personal. I could go on and on.

I've often felt that its the small things that matter. Most of us would not commit a big sin. Either we are scared, or our sense of right and wrong preclude us from doing so. But we let our guard down when it comes to small things. I submit that the guard should be much stronger precisely for small things. Its those that show the flaws in character and integrity.

In the business world, to err is human. To understand may be possible. Forgiveness is not an option.