Brian Gallagher's blog

The Psychology of Ford’s Fiesta and Focus Cover-Up

It started with a trail of car owners bringing their Fords to repair shops. Eventually, it escalated to an out-of-control hemorrhaging of warranty costs and legal bills. Now Ford faces a federal criminal fraud probe into its conduct. Did the company know that the DPS6 dual-clutch “PowerShift” transmission it installed in its Focus and Fiesta cars was defective and could not be fixed? Did it ignore key internal warnings that the faulty transmission couldn’t comply with warranty obligations and car owners’ reasonable expectations? If so, why wasn’t the underlying problem ever addressed? A whistle-blowing investigation by the Detroit Free Press, which includes the accounts of seven former and current Ford employees involved in the planning and manufacturing of those car models, suggests that several layers of management may have known all along.

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Here Is What Replaces Shareholder Primacy

One day, about a decade ago, an evolutionary biologist from Binghamton, New York, made a decision: He’d use his knowledge of humanity’s social nature to try to understand and improve its social life, especially in his hometown. This lead him to, among other things, help create a school for at-risk youth that substantially boosted their performance. It got kids who flunked most of their courses the previous year to perform much better than a comparison group, in a randomized control trial. The school even brought the performance of at-risk youth on a par with the average Binghamton high school student. In The Neighborhood Project: Using Evolution to Improve My City, One Block at a Time, the scientist chronicled his efforts to better Binghamton. That Binghamton native is David Sloan Wilson, author of more than a few books, including Darwin’s Cathedral: Evolution, Religion, and the Nature of Society, and best known for showing how prosociality—behaving for the sake of others’ or society’s welfare—can evolve in a Darwinian world.

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The Problem with Hiring Algorithms

In 2004, when a “webcam” was relatively unheard-of tech, Mark Newman knew that it would be the future of hiring. One of the first things the 20-year old did, after getting his degree in international business, was to co-found HireVue, a company offering a digital interviewing platform. Business trickled in. While Newman lived at his parents’ house, in Salt Lake City, the company, in its first five years, made just $100,000 in revenue. HireVue later received some outside capital, expanded and, in 2012, boasted some 200 clients—including Nike, Starbucks, and Walmart—which would pay HireVue, depending on project volume, between $5,000 and $1 million. Recently, HireVue, which was bought earlier this year by the Carlyle Group, has become the source of some alarm, or at least trepidation, for its foray into the application of artificial intelligence in the hiring process. No longer does the company merely offer clients an “asynchronous” interviewing service, a way for hiring managers to screen thousands of applicants quickly by reviewing their video interview —HireVue can now give companies the option of letting machine-learning algorithms choose the “best” candidates for them, based on, among other things, applicants’ tone, facial expressions, and sentence construction.

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Do Traditional Compliance Efforts Weaken Workers’ Moral Motivation?

How can organizations actualize their employees’ ethical potential? It’s a question Carsten Tams has been tossing around recently. In his time helping companies with organizational design and cultural change, among other things, he’s come to believe that, in the right environment, people are quite capable, even eager, to conform with and uphold ethical norms. Behavioral science, specifically motivational science, offers valuable insights for how to harness employees’ best intentions. Research shows, for instance, that using coercive tactics to impose compliance can often be counterproductive—people become less motivated to act ethically. What sort of environment causes ethical behavior to flourish? One key ingredient, he says, is the support of people’s freedom. 

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Can Business Schools Have Ethical Cultures, Too?

Early in Managing Business Ethics: Straight Talk About How to Do It Right, I had to wonder whether an anecdote the authors share was apocryphal. It comes in a section of the book’s seventh edition (published in 2017) called “Moving Beyond Cynicism.” It’s not that the authors, Linda Treviño and Katherine Nelson, both professors of business ethics, think cynicism about business is outlandish. “After multiple waves of business scandal, some cynicism (a general distrust) about business and its role in society is probably healthy,” they write. What Treviño and Nelson urge their readers to move beyond is the disconcerting, some might say depressing, levels of cynicism that can crop up (even among business students). 

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Salon Recap: Want an Effective Business? Foster an Ethical Culture

Update: The video of our discussion with David Sloan Wilson, Erika Cheung, and Toby Shannon is now available for viewing! Watch it here or below.

 

On a trip to Ottawa, a few years ago, I got to tour the offices of the e-commerce company Shopify, courtesy of a friend of mine I was visiting who works there. Shopify makes and updates a platform over 800,000 online stores from around the globe use to sell their products, which in 2018 amounted to around $41.1 billion in sales. I remember the workplace looking immaculate and like a fun and exciting place to be. My friend, whose “discipline” at the company is user experience, said he’d been loving it. Shopify has a culture of constant and constructive feedback—posters on the walls say, “Feedback is a gift”—and annual in-company conferences offer employees opportunities to level-up their skills or learn new ones related to their work. He knows that his growth and development matter to the company and, as a result, he feels not only a strong sense of identity and purpose, but also autonomy. He, like many of his coworkers in the R&D department, are given space to make their own decisions when it comes to completing tasks managers assign. It’s a consequence, among other things, of the company taking seriously the thesis of Drive: The Surprising Truth About What Motivates Us, a book that’s visible on hallway bookshelves. When I told my friend recently that one of Shopify’s executives, Toby Shannon, the company’s chief support officer, would be part of an Ethical Systems panel on how evolutionary thinking could foster more ethical and effective cultures, he said he wasn’t surprised. Shannon, he told me, often gives inspiring talks that weave in ideas from psychology and anthropology.

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A Theranos Whistleblower’s Mission to Make Tech Ethical

Several times in conversation people have asked me whether I mean Thanos, the Marvel villain, when I bring up Theranos. “No,” I say, “I mean Theranos, the tech company once valued at $9 billion before it imploded due to scandal—haven’t you seen the ads for the HBO documentary? They’re everywhere.” I add that Theranos of course wasn’t Thanos-level bad, but still pretty bad. Anyone can get the gist of what went wrong from little more than headlines: “Theranos Founder Elizabeth Holmes charged with massive fraud,” from CNN, or “What happened at Theranos is a dazzling story of deception,” from the Chicago Tribune. But it’s an advantage and a pleasure to hear what happened at Theranos from someone who blew the whistle on its duplicitous conduct: Erika Cheung.

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Business Roundtable Wants Fair Employee Payment, But What About Agency?

Well into his 30s, my father ran a pool-plumbing business that just got us by: Sometimes clients wouldn’t pay, and when they did, it wouldn’t be uncommon for checks to bounce. His workers would demand higher wages while he would often have to fix poor work on-site, which would cut into his budget and time. I remember my father feeling despondent and trapped in this job. He got out, though, in the early 2000s, when he discovered the stock market. In those days it was easy, if rare, for a novice day-trader to make tens of thousands of dollars, at home, in a few hours. It could be stressful work—he’d sometimes lose thousands quickly, too—but he enjoyed it. He loved the freedom. He worked for and with no one but himself.

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Evolutionary Thinking Can Help Companies Foster More Ethical Culture

Charles Darwin ended The Origin of Species, his argument for evolution by natural selection, on a note of celebrated eloquence. “There is grandeur to this view of life,” he wrote, “with its several powers, having been originally breathed into a few forms or into one; and that, whilst this planet has gone cycling on according to the fixed law of gravity, from so simple a beginning endless forms most beautiful and most wonderful have been, and are being, evolved.”

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Does Ideological Diversity Makes Teams More Effective?

As I was watching The Expanse, a science fiction TV series, I realized that the show demonstrates, perhaps without meaning to, the value of ideological diversity within a team. The story follows the small crew of the Rocinante as they stumble into a solar system-wide conspiracy that threatens a fragile peace among a United Nations-led Earth, an independent Mars, and the volatile factions in the asteroid belt and outer planets. Two of the crew are “Earthers”—one with a much more privileged upbringing than the other—one is a Martian, and the other is a “Belter,” raised on mining ships. They not only have radically different backgrounds but also diverging ideological orientations and opposing political allegiances. Yet to survive, and successfully expose an existential conspiracy, they overcome and exploit their differences in making wise and creative choices.

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