News Release: Faculty Experts, Finance and Economics, Research

Mar. 18,  2009

Difficult Times Require Courageous Solutions

From Knowledge@Emory

In late February government officials reported the U.S. economy shrank by a dizzying 6.2% in the fourth quarter of 2008. It was the steepest quarterly drop the nation had seen in more than 25 years. With job losses mounting, the stock market sagging, real estate reeling, and consumer confidence shattered, economic officials issued forecasts that provided little improvement in the outlook for 2009.

In the midst of this chaotic time, the nagging questions about how these factors came to be so severe remain unanswered. According to Monica C. Worline, the whole mess might have been avoided—if only enough people, in enough places, had simply had the courage to question the shady business decisions, improper trading practices, and illogical lending that sparked the recession.

"When you're not questioning something that everyone else seems to be doing, that's a classic setup for conformity," says Worline, an assistant professor of organization and management at Emory University's Goizueta Business School. "We know quite a lot about conformity from social psychology. And when people hold the perception that, 'Well, everybody else is making these loans,' that becomes an escape from taking responsibility—the conformity to what others are doing provides a justification for doing the same thing yourself, even if you as an individual don't think it's right."

Worline studies the importance of courage in the workplace, and how courageous employee behavior—whether it occurs in the executive suite or on the front lines of customer service—can help companies operate more efficiently, generate more profits and, maybe most importantly, avoid crisis situations. After years of research into the topic, and after interviewing hundreds of employees about the courageous acts they’ve witnessed at work, Worline has concluded that companies and organizations stand to benefit from policies that encourage employees to question organizational practices and strategy, even if it involves openly criticizing high-level decision-making.

Looking for proof? Well, Worline says, one need look no further than the sad state of a thoroughly depressed U.S. economy that is the result, in part, of countless poor decisions made at the highest levels of government and top financial institutions, many of which were not challenged in any meaningful way.

"I imagine there were people at the lower levels in these financial organizations and banks—maybe the people processing the paperwork or doing the nuts and bolts work on the loans—who did ask the questions, or who said to their supervisors, 'This doesn't seem quite right,'" Worline says. "But they weren't heard." The same is true, Worline notes, in the collapse of organizations like Enron or WorldCom, where we find evidence of lower-level employees who were ignored, or even fired, for asking about or objecting to questionable business practices. “I think one of the problems that the current situation points out is that if an organization is truly committed to this idea of courage among its employees, we have to actually manage differently."

The Risk of Conformity

Worline's interest in workplace courage dates back to her days as an entrepreneur.

Before beginning graduate school at the University of Michigan, Worline joined three friends in launching a business. And one of the group's top priorities, she says, was making sure their workplace was a comfortable one that allowed employees to excel.

The challenge, of course, was figuring out how to make that happen.

"We really tried to make that company a good place to work," Worline recalls. "But then how do you do that when you're growing the business, answering the telephones, and just trying to keep the organization running? It ended up being much harder than I thought it would be. I became curious and began wondering if I went to graduate school and studied organizations up close, perhaps I could find out more about how to build organizations that are truly good places to work."

That’s exactly what she did. But the more she examined organizations, she says, the more she understood one of their inherent flaws: Organizations function mostly as "systems of control." In other words, Worline says, companies tend to operate with the goal of conformity—keeping workers in line, keeping people on point, and systematizing expectations so that people are doing what the company needs to get done.

What Worline realized was that while conformity might serve companies well in some situations, it certainly did not serve them well in all situations.

"Organizations are designed to systemize and routinize behavior, but organizations and leaders also need to want people to do the right thing, which isn’t always the routine thing. They need people who have the courage to keep their eye on the bigger picture, and keep the company in line with its mission."

That's where courage comes in, Worline says.

Even great companies sometimes lose their way. Even wise executives can make poor decisions. So it takes a special kind of employee to step up and speak out when that happens, and it takes a special kind of executive or leader to listen to what the whistleblower has to say.

"When I think about this crisis, and how so many financial institutions got into trouble, I think about the lack of challenge and candor through the organization—especially a lack of challenges flowing toward the top of these organizations," Worline says.

Listening Matters

So how can companies create courageous cultures?

According to Worline, one way it starts is with communication—and, more specifically, managers who are willing to foster it.

"Communication and information generally flows out from the center of an organization, or from the top of the organization downward," she says. “But it's much more difficult to get the information to move from the periphery or the bottom to the top. I think we can easily sit back and condemn these people and say, 'Well, somebody should have stepped up.’ But there's a more complex way to think about it, which is to realize that there probably were people who were challenging and asking questions and standing up. But quite often the managerial response was probably something like, 'I don't care what you think about it. Just do what I told you to do.'"

Which, in the long run, is a terrible mistake because it silences productive dissent and encourages conformity, even with faulty business practices.

As Worline has learned in her studies of courage, employees quickly take cues from management about the acceptability of candor. Therefore, if supervisors routinely rebuff questions or constructive criticism from staff, they shouldn’t expect anything but silence going forward. By the same token, managers can foster a much more open atmosphere by listening to their workers’ questions. Sincerely listening—and sometimes acting on the information, too.

"Managers have to take these questions [from critics] seriously, and then they have to raise the questions to other people higher up the ladder, too," she says.

That may be truer now than ever before.

Though the mistakes of the past obviously can’t be undone, Worline says we can learn lessons from the current economic crisis. Just as conformity got financial institutions into this mess, so too can similar mistakes keep them mired in it.

What these institutions—and, by extension, the entire U.S. economy—need right now, Worline says, is a big shot of courage. Otherwise, the sagging economy may not escape anytime soon what Worline calls “a kind of paralysis."

"The challenge is to restore the movement of money and the movement of credit, but to do it in a responsible fashion," she says. “You have the same exact dynamic playing itself out now as we did [at the start of the crisis], but now it’s just a dynamic of conformity to not doing anything, not lending even to qualified borrowers. Instead of these banks all making bad loans, now they’re not making any loans. One role of courage in difficult times is that it prompts people from across the organization, at higher and lower levels, to ask themselves, ‘What is this organization intended to do? Why does it exist?’ And how can we fulfill that mission in the best way possible?’ … I think in a situation like this, part of the role of courage is to help employees and companies, and even entire industries, to re-focus on their core priorities and their ultimate mission."

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