One of the most fascinating things I read this week was an op-ed in The Wall Street Journal by Douglas Hodge, once CEO of investment giant PIMCO – and one of the dozens of parents who got arrested in last year’s college admission cheating scandal. Hodge paid $850,000 to get four of his children into Georgetown and USC under the false pretense they were athletic recruits, and now he deeply regrets it.
What was fascinating about the op-ed? It was that Hodge didn’t realize he had done anything wrong until he was arrested last March. When the FBI called him, he thought it was a mistake and was certain he hadn’t committed a crime. It’s stunning, really. How do you pay $850,000 in bribes and still think you’ve done nothing wrong?
But Hodge’s op-ed is worthy of some reflection. Yes, it may be an attempt to rehabilitate his reputation — but it also reveals a person genuinely baffled by his own behavior. It’s fascinating. And I believe Hodge when he says he always has tried to live an ethical life — because really, who thinks they aren’t trying to live an ethical life?
Everyone has good intentions. Even Bernie Ebbers, who recently passed away as a convicted felon for presiding over one of the biggest corporate accounting scandals in history as the CEO of WorldCom. And yet, Ebbers probably wasn’t a simple “greedy corporate villain.” This week, Financial Times columnist Andrew Hill wrote that Ebbers was mostly obsessed with cost-cutting and then somehow slipped over the line. In fact, fewer than 10% of white-collar criminals are motivated by greed. It’s more that they “sleepwalk over ethical lines.” And they often do so while doing what they’ve always been good at – but then it’s already too late.
Clayton Christensen, the deeply revered guru of industry disruption at Harvard Business School, who also passed away recently, said ethical lapses are easy because they usually start out small. In his book, How Will You Measure Your Life? he writes, “Most of us think that the important ethical decisions in our lives will be delivered with a blinking red neon sign: CAUTION: IMPORTANT DECISION AHEAD . . . Almost everyone is confident that in those moments of truth, he or she will do the right thing.” But life is not like that. It is the small decisions when you think “Just this once” that are trouble – it’s a slippery slope.
Over the course of his career, Christensen watched some of his Harvard Business School classmates thrive while others got into trouble. One was Jeffrey Skilling, the convicted felon who brought down Enron. Yet Skilling didn’t start out that way. Christensen says, “The Jeffrey Skilling I knew from our years at HBS was a good man. He was smart, he worked hard, he loved his family.”
And Hodge? He himself finds it incomprehensible that he committed fraud to get his kids into college. He writes: “Looking back, there wasn’t one moment when I decided to abandon my principles. Rather, it was a series of small steps.”
