If we create good institutions, then we can live up to our good intentions. [MUSIC]. The song of the Sirens was said to be so beautiful that sailors would leap into the sea and drown themselves, or dash their ships on rocks trying to get closer to these beautiful women who were singing these lovely ethereal melodies. Adrienne Mayor is a Classics scholar at Stanford. She says there are two very different stories of the myth of the Sirens' song. [MUSIC]. The oldest story we have is Jason and the Argonauts. Some people think that might even be older than the story of the Trojan War and Odysseus. So Jason and the Argonauts head off in their ship, The Argo, and they have been warned that there will be dangers at sea. And one of the worst dangers is posed by the song of the Sirens. So Jason planned ahead, he invited Orpheus to join his

expedition specifically to counter the peril of the Sirens. And Orpheus, of course, is the legendary musician, brilliant singer, lyre player. And his melodies, people said they could entrance birds, fish, wild animals, rivers, streams. And Jason ordered Orpheus to start playing and singing as they were passing the rock of the Sirens. [MUSIC] >> Jason's plan was to keep his crew on track with a song even more beautiful than the Sirens'. The other famous story about the Sirens, the one that most people know, is from Homer's Odyssey about Odysseus, or his Roman name Ulysses, and his men who return from fighting the Trojan War. [MUSIC] >> They've been at sea for ten years trying to get home after that war. So as they near the rocky islands of the Sirens, Odysseus had his men block their ears with beeswax. And then Odysseus himself ordered

his men to tie him to the mast so that he could hear the song of the sirens. He wanted to hear that song, but he wanted to make sure that he didn't jump in the water or succumb to the dangers. And he told us man, don't untie me, no matter how much I beg you, until we're clear of the danger. [MUSIC] >> Like Jason, Odysseus also sailed safely past the Sirens. But Adrienne says the two stories reflect differing approaches to dealing with human behavior. >> I think both myths taken together are very interesting because the incredible commitment, binding yourself to the mast, really is so different from the proactive defense with the secret weapon of Orpheus. >> Many organizations have stated missions they set out to follow. But for leaders trying to keep people on that path, is it better to inspire the way Jason did with the music of Orpheus? Or is the Odysseus way more

realistic to create the kind of structure that shielded his men from the Sirens' song? This is If/Then, a podcast from Stanford Graduate School of Business, where we examine research findings that can help us navigate the complex issues facing us in business, leadership, and society. I'm Kevin Cool, senior editor at the GSB. This episode, we speak with Ken Shotts, Professor of Political Economy and co-author of the book Leading With Values. The focus today: if we create good institutions, then we can live up to our good intentions. [MUSIC] >> I think there's different myths that people sort of rely on, often implicitly. So I think there's a tendency to think of, especially in Silicon Valley and especially in the United States, to think of the myth of the heroic individual who always does the right thing all the time. But some people think the way that we should do this is we should get everyone on the same page, totally

aligned in terms of our values. And because of our commitment to the mission, we will just weather the turbulent storms, or the things that will tempt us to go against our values. And that's like the Jason and the Argonauts way of dealing with the Sirens' temptation, right, sort of inspiration. And I think inspiration is really important for a lot of organizations. I don't think it's enough, actually. I think there's another story about how to deal with the Sirens, which is the Ulysses story of how to deal with the Sirens, and Ulysses is much less optimistic about human nature. He's like, we're flawed human beings, we're not going to make it through unless I put wax in the guys' ears, and if I want to listen to the Sirens, so we'll tie me to the mast. And then that's how we're going to navigate this, and that's how we're going to

deal with those temptations to go against our values. And I think there's a tendency, and I have friends who like to talk about things. It should be all about inspiration, and that's what's going to get us to do the right thing. But I also think we need those binding institutions to help us live up to those intentions, actually. >> So the framing for our conversation is around good intentions and the reason to have good institutions. Let's talk about what we mean by good intentions. >> Well, I think that good intentions are things that people have as individuals. And I think it's things that business leaders talk about having for their organizations in terms of behavior within the organization. And it's something that business leaders talk about their companies having in terms of effects on society as a whole. So there's different levels that I think of when I think about good intentions. >> And what kind of institutions are we talking about, and why are they so important?

>> Well, the institutions I have in mind really vary depending on the level of analysis. It feels a little bit odd to talk about institutions because I think especially in western cultures, in particular in Silicon Valley, people tend to think of themselves as individuals. And I think what we know from psychology, and I say this, I'm not a psychologist by training, but I just have a lot of admiration for the research that people have done, is that we're profoundly influenced by the context in which we're operating. And so then if you're thinking about institutions, let's think about what are the contexts that I put myself into. How do I interact with my friends, what are the work environments that I put myself into, and assuming that those things are going to have a lot of power on shaping me is kind of the individual level on that. >> But institutions with respect to organizations, or even at the societal level, when I think of institutions, I think of the Supreme Court.

I think of Congress. I think of whatever the education system is the definition broader than that? >> Well, I'll separate it out at an organizational level and a societal level then. So I think at an organizational level, it's both the incentive structures and the sort of informal norms and authority. So it's both the formal and the informal aspects of the organization, and that's anything that the leaders of the organization are setting up. So that can include compensation systems. It can include who is promoted, how you make those decisions. It can include systems that are used to monitor what our people are doing. So those are examples of institutions at an organizational level. It also includes what's celebrated in an organization, what's honored and held up as this is what we're about. At a societal level, I really think of institutions as being about a lot of things. Outside of companies, the way it's within companies is if a company wants to deliver on stuff, it needs

to set up its own organization to deliver on those things. But at a societal level, it's also about some of the things you were mentioning, like legislative bodies, regulatory bodies, all those things that are government, and also civil society as well. But those things that place limits on and that really can channel the amazing, productive, innovative, and efficient energies of capitalism in ways that are broadly beneficial for a lot of people. And I think a lot of people in business that have talked about is like this is just going to naturally happen. Just we're going to go. We're going to make the world a better place. It's like almost a trope. It is a trope at this point. But the idea is, well, if you want to actually have the world be a better place, you need to have the things that channel that in ways that make it a better place. >> Okay, you mentioned incentives a minute ago. Is that how these institutions

exert influence on people. People like what's the magic that happens that changes our behavior because of institutions? Well, I'm kind of an economist by training, so I'm definitely a big believer that incentives have a lot of impact on things. And whatever is rewarded or punished by public policy or there's a lot of different types of incentives. And sometimes incentives are a lot more financial, some of the time they're just straight up constraints and legal rules. And I think both of those types of things matter. But yeah, a lot of it at the societal level, it's largely about incentives. How do organizations arrive at their stated values? Is that embedded in a mission statement or how does that occur? And that's a great question. And my colleague Glen Carroll does something great about this. He like reads, I don't know its mission statements or things like that for a lot of different companies or statements of their values. And a lot of the time they're

sort of indistinguishable. And-. >> Even in between the company. >> [CROSSTALK]. The company you have like, here's a list first of these statements, and here's a list of companies try to match these with each other. And what happens when people try to match like the statements and the companies, it's not clear how they match up with each other. So, I think to have it be meaningful as a statement of our mission or values, it needs to be something that's actually specific to the company. It is not meaningful if it's sort of generic, like we're good there's versions of we're good. But it needs to be something that's specific to the company, and often that means it's anchored in specific stories within the company. About this is what people in this company have done that are aligned with those things that matter that we say we really care about. So I think that's part of it. Sometimes that comes from the leaders of the company.

Sometimes that's something that organically forms amongst the regular rank and file within a company. So there's different ways that can come about. And often those are statements of intentions, actually. A lot of the statements that you read on companies' websites, those are statements about intentions. They're not statements about, here's the institutions that we're actually going to use to deliver on those things. >> You've anticipated my question because I wanted to know if I'm not part of the leadership, if I'm just rank-and-file, how can I affect those organizational values? >> That's an important question because I think the reality is there are power differentials within organizations in an ordinary rank and file person doesn't have the same level of influence as the CEO does. But I do think it's the case that there are times when people who are at various levels of the hierarchy in an organization. Have a chance to talk with and communicate with those who are above them in the hierarchy and

I think that's one way of saying this is something that I care about. This is something that matters to me. And this is how I think we should be approaching that. So that's one way of doing that. Another way of doing that is by most people have people who work for them, or a lot of people have people work for them. By asking those people to live up to the standards that the organization claims to aspire to, and that can also be done horizontally with people who are at the same level. But some of the time, the option that people have is to say, I'm in this organization and what I need to do to succeed within this organization is out of step with my values. And I think it's always important for people who are at a point of good fortune where they have exit options and they're not tied down to I have to have this job and I need it financially. But where they could choose to be somewhere else to be always willing

to do that and to say, well, if this is just totally out of step with my values. I'm not going to do it, go do something else. And maybe I'm not going to earn as much. Maybe there's going to be other sacrifices. But if that's what it takes to actually live up to one's values, sometimes that's only option. >> You're listening to if then, a podcast from Stanford Graduate School of Business. We'll continue our conversation after the break. [MUSIC] >> So, bring us down to the ground level. Okay, we're talking about this in the abstract, intentions and institutions and values and so on, but on the ground, right, day-to-day or quarter-to-quarter, how does this play out? >> One way that companies deal with this is to act as if there isn't a trade-off actually. Business leaders talk about this as if there's not a trade-off. So often when I'm teaching, and

I find this very frustrating, actually. People will make arguments of the form, well, there was a temptation to do something that wasn't quite the right thing to do for society as a whole. But if only we do this thing that's going to be good for society as a whole, then we're going to be fantastically profitable in the long run because of the reputation we've established for ourselves, or things like that. I think that is true some of the time, but it's actually somewhat misleading, and people can have principled disagreements about what direction you should go if there's a trade-off. Some people could have a principled argument that the business leader should maximize long-run shareholder value, even if that means doing things that are bad for society as a whole. Society as a whole are failing to do things that are good for society as a whole. And other people could have a principled position that it's the responsibility of business leaders not just to maximize long-run shareholder value.

But also to take into account other consequences on society. And I don't think it serves anyone. Want to pretend that there are no such trade-offs. But I think if a company really cares about a set of stakeholders, in addition to shareholders. And I don't think ever going to not care about shareholders. That'd be inappropriate to not care about your shareholders. But if they're going to care about your stakeholders other than shareholders, they need to say who those people are. And they really need to be careful about articulating, these are the set of people that we actually care about. Here's our principles that we're grounded on. >> So our employees, our community, whatever those might be. >> Yeah, our employees, our community, we care about environmental impacts. And a company could legitimately say we do care about that or we don't care about that. But then it's like once a company starts saying they care about those things then they should actually measure on whether they're doing

those things and reward people for delivering on those things. And if it's really something that the company values, and those are real intentions, and not just greenwashing, or trying to make the company look good or something like that. Then it's important to measure and to try to deliver on it. So in any workplace, there are going to be groups of people who disagree about any range of topics. And we live in a particularly divisive and fraught environment right now. If you think about the situation in Gaza or the election coming up, if you're a manager in a company, what do you do to manage a situation like that? >> I think the first thing to do as a manager is to think about things introspectively and how I myself interact with other people. To try to understand that, yes, I do have serious disagreements with some of the other people in my organization about things that are not trivial. And to try to recognize that there may be some legitimacy in where the other people are coming from.

even if I disagree with that. I think that's the first step, actually, for us as citizens, as well as managers and business leaders. And that doesn't seem to agree with them. It's just to say I have to try to understand and seek what's legitimate in what they're saying. But then the question is, how to handle the disagreements amongst people within a company. And I think it's a challenge that a lot of companies face. Are we going to take positions on lots of things? Or are we not going to take lots of positions on lots of things? And I think there's an argument that in this price varies by company, but there's an argument to be made, the company shouldn't take positions on as many things as they do sometimes. And that when they do take positions on something, it should actually be very carefully grounded in their core values and principles. People shouldn't be surprised that this is the company's position on a particular issue if it's really

coming from something deep within the company. So that's one thing is like, does the company take a position on things? But then there's the question about how to handle things internally within the organization. And I think it's asking a lot of humans to ask them when they exist within an organization, to have personal views on a lot of contentious issues. Like I don't think we can ask people to not be humans in that regard. But I think companies could say, well, the norm here is that we discuss things, we discuss them respectfully and thoughtfully with each other, or the norm here is we're not mainly focused on that. We're mainly focused on what the business is doing. And I think that's a matter that different leaders could come to different answers for depending on the nature of their business. Where the values come from, and how important is it that the people around us know what our values are? I think it's crucial that

the people closest to us know what our core values are. And I think in many organizational contexts, it's important for people to know what the leadership's values are. I'm in kind of an odd role as a professor where I think it's not my role to come in and tell my students exactly what values they should hold. And I don't always succeed at this. They probably seep in some of the time, but I try to teach my class in a way, where it's not like, this is what I can shot sync is the right thing to do about everything. So it's not the right role for a professor to have. The other question you asked is where do values come from? And so this is interesting because at the end of the class, we ask our students to write a statement of their core values. And so I see what they write in that, and I think for many students they talk about sort of their personal life experience. So that's one of the big things

that people talk about. People talk about culture. A lot of students talk about religion, and it's interesting because we're in a place that's sort of presumptively secular. The conversational norms in Silicon Valley is everything as if everyone is not religious, but there's religious convictions that are driving their core values. And I think it's appropriate to say, this is where I'm coming from if someone is coming from a place of religious conviction in their core values. What was interesting to me when I sat down to write my statement of my own core values because we figured Neil in life. Figured if we're having our students do this is my co author new Malhotra and I also teaches the class, then we should do it ourselves. And when I sat down to write my statement of my core values, I would have thought it Santi that I would have built it on the various philosophies that I had studied and maybe cultural traditions and

things like that. Maybe that wound up embedded in there somewhere. But I wound up defining my core values in terms of the roles that I play. What is it appropriate, and what are my responsibilities as a member of this organization, actually as a teacher, as a citizen in this area, and especially as a parent and as a child and as a husband. Those were the things that spoke to me most about what are my core values, which is not like a typical Western philosophical approach to thinking about this, but that's how I wound up thinking about it. >> Do you think it would be useful for other people to do that exercise, like to actually document and write down what your core values are? >> Absolutely, I think it's worth doing. And I have some people who come into the class and they've done it before. And a lot of them have done it with their spouse or partner and discussed it repeatedly over the years. So I think it's good not only to

do it, but to revisit it. And so the situation is. I find myself and when I teach the classes because I revisited at least once a year, often twice a year when I'm teaching different cohorts of students. It's useful to assess like, how am I doing? If I say these are the things that I care about, am I putting myself into situations where I live up to those values? That has to do with the individual level institutions. How do I set up my life so that I'll live up to my values? And I don't always succeed. I unambiguously fail a lot of the time, but that's because I'm a human. >> Right, all of us fail with someone. If we don't realize that, we feel about it, then we're lying to ourselves out there. There's one of our core values is honesty. >> Yeah. >> Then own up to it. [MUSIC] It may seem far-fetched to look to

ancient stories for guiding principles, but Ken suggests that mythology can be useful when designing institutions of an organization. Whether it's Jason and the Argonauts, some piece of folklore, or the founding myth of a startup, these stories can help a company navigate treacherous waters. Knowing and articulating our values is essential. But acting according to those values requires the direction and discipline institutions can provide. And as more heated disagreements emerge In a more polarized world, knowing how to grapple with them will be even more important. [MUSIC] >> If then is produced by Jesse Baker and Eric Newsom of magnificent noise for Stanford Graduate School of Business. Our show was produced by Jim Cogan and Julian that mixing and Sound Design by Kristen molar from Stanford GSB Jenny Luna Sorrell husband Stan Holtz, and Elizabeth why Lisa concern. If you enjoyed this conversation, we'd appreciate your sharing this with others who might be interested and hope you'll try some of

the other episodes in this series. For more on our professors and their research, or to discover more podcasts coming out of Stanford GSB, visit our website at gsb.stanford.edu. Find more on our YouTube channel. You can follow us on social media @stanfordgsb. I'm Kevin cool. [MUSIC]

Leading With Values: When Good Intentions Aren’t Enough, with Ken Shotts

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Leading With Values: When Good Intentions Aren’t Enough, with Ken Shotts

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