The Ethical Breakthrough: Ditch the Dead Weight or Die Trying
The hard truth: Evolve or become extinct
In our last piece, we explored how organizations fall into dysfunction, much like the South Indian monkey trap—trapped not by external forces, but by their own unwillingness to let go. Now, let’s talk about how to escape and go on to thrive.
The mistake most leaders make isn’t blindness—it’s arrogance (fueled by self-deception). They see the problems, but they refuse to change (or even to see) what’s keeping them stuck because it’s comfortable, familiar, and feels like control. What is unsafe feels safe becuase it is familiar. So, they hold onto outdated strategies, failed cultures, and misguided loyalties, fearing that releasing their grip means losing everything. But letting go isn’t just about surrender and accepting what is true—it’s about survival.
The organizations that break free and thrive are the ones that take only what (still) serves them and advances their mission and abandon (quickly and with purpose) what doesn’t. This is what separates the businesses that adapt and thrive from those that collapse under their own weight.
The Netflix effect: Does anyone even remember they made DVDs?
If you need proof that letting go leads to success, look no further than Netflix. Once upon a time, Netflix was a DVD rental company—yes, actual physical DVDs that were shipped to your house. It was their entire business model, the core of their success. But the future was shifting, and clinging to the past would have been their downfall.
Imagine Netflix as a monkey in the trap, gripping a DVD and trying to pull it through a hole too small for it to fit. They had a choice: keep struggling with an outdated model or let go and grab something better.
And then, they made a move that seemed insane at the time: they walked away from their original business model. They saw where the world was heading and bet everything on streaming—even when it meant losing their core DVD customers and facing massive resistance.
Now? Netflix is one of the biggest media companies in the world, worth over $200 billion. And DVD rentals? Most people don’t even remember that’s how Netflix started.
The lesson? The real trap isn’t failure—it’s refusing to adapt. If Netflix had clung to DVDs, it wouldn’t just be irrelevant today; it would be dead. Organizations that break free are the ones that let go before it’s too late.
Three conditions for ethical breakthrough
Organizations don’t fail because they lack intelligence or resources—they fail because they’re too stubborn, too slow, or too proud to pivot when the world around them shifts. They fail because they refuse to change their decision-making structures. If you want to escape dysfunction, you must commit to a new way of thinking.
1. Release the Illusion of control
Dysfunctional leaders hoard power, believing that centralized control equals stability. But in reality, concentrated power is what creates fragility. Organizations that thrive operate on distributed leadership, transparency, and accountability.
How to Implement This:
Build leadership structures that rotate authority and decision-making rather than consolidating it.
Ensure that critical decisions undergo independent oversight—don’t let a single voice dictate strategy.
Embrace transparency—hiding information breeds fear and misinformation.
2. Let go of legacy thinking
One of the biggest reasons organizations fail is their commitment to outdated ideas and past successes. Just because something worked before doesn’t mean it still works now.
How to Implement This:
Regularly challenge foundational assumptions—what would you do differently if you were starting fresh today?
Adopt an experimental mindset—pilot new approaches instead of clinging to tradition.
Measure success through impact, not history—don’t defend an idea just because it’s been around for years.
3. Prioritize truth-telling over ego
Dysfunctional cultures punish dissent and discourage hard conversations. But strong organizations reward truth-telling, even when it’s uncomfortable. Leaders who can handle criticism create teams that solve problems before they turn into crises.
How to Implement This:
Establish a culture where feedback is actively sought and valued.
Protect and encourage dissent—make challenging the status quo part of leadership expectations.
Create safe reporting mechanisms for ethical concerns, ensuring that whistleblowers are protected, not punished.
Organizations that win ditch their baggage before it sinks them
In the monkey trap, the smartest animals don’t just let go—they do so before they’re caught. The same is true in business. Organizations that break free don’t wait until dysfunction is undeniable. They act when the first warning signs appear.
So ask yourself:
What am I holding onto that no longer serves my organization?
Where am I resisting change out of fear, rather than strategy?
What structures do I need to put in place to make better decisions moving forward?
The organizations that survive and thrive aren’t the ones that play it safe. They’re the ones that burn the dead weight, pivot hard, and move fast. Continually.
The question is: Will yours be one of them?
The South Indian Monkey Trap: How Leadership Biases Corrupt Decision-Making
Leaders cling to bad ideas, dysfunctional cultures and failed strategies when stakeholders ignore red flags and early opportunities to prevent a decline into “normal” human group behavior.
The Hidden Traps of Dysfunctional Organizations
The story goes that in South India, a simple but cruel trick was used to trap monkeys. This classic example, referenced in Zen and the Art of Motorcycle Maintenance, illustrates how the real trap isn’t physical—it’s mental. Villagers would carve a small hole in a coconut, place a tempting piece of food inside, and chain it to a tree. The hole was just big enough for the monkey to slip its hand in—but not big enough for it to remove its fist while gripping the prize. Trapped by its own mind holding firm to the treat, its desire, the monkey remained stuck, unable to free itself, even in the face of a longer term existential danger, as its captors approached.
Leaders fall into the same trap all the time. They cling to what are now clearly bad ideas, dysfunctional cultures, and failed strategies, even when the escape route is obvious. The result? A few rounds of “the emperor has no clothes” followed by collapse, scandal, or a slow, grinding decline to irrelevance.
Consider Theranos, the biotech darling that promised a medical revolution. Despite red flags, investors poured in billions. The culture? Obviously dysfunctional. Information was controlled, dissent was crushed, and leadership surrounded itself with loyalists. Employees who questioned the science were dismissed. The result? Mass deception, regulatory fraud, and a total collapse.
Or take WeWork, where a charismatic CEO manipulated his board, siphoned millions in self-serving deals, and drove the company into near bankruptcy—all while insiders ignored red flags in favor of hype.
These aren’t outliers; these are patterns.
Organizations don’t fail because of one bad decision—they fail because of institutionalized dysfunction. For your refrigerator (yes, we’ll make magnets…) here are the warning signs:
Five Warning Signs that Your Organization has Institutionalized Dysfunction
Information is controlled – Key insights are restricted, creating information bottlenecks.
Selective loyalty reflects gatekeeping – An inner circle forms, shutting out dissenters.
Resistance to oversight is institutionalized – Audits, evaluations, and restructuring efforts are undermined.
Resources are monopolized – A small group controls access to power and opportunities.
Dissent is discouraged – Intimidation, discrediting, or subtle punishments silence critics.
If you've witnessed these patterns, you know the danger they pose. The question is: why do these failures keep happening? Surprise! Its about how we interpret risk as individuals and in groups and how we’re built to pursue short term risk avoidance/safety and not long-term wellbeing, which requires more rationality and a more enlightened self-interest. More to come on that, but first, why do organizations, made up of many decent people, end up in such a terrible place?
The Psychology of Dysfunction: Our Biases Lead To Bad Decisions
Humans lead with our egos, prioritizing risk reduction and self-interest, making our minds fertile territory for self-deception and irrationality. Long-term cooperation is best for us, but we aren’t built to ensure it. What we have are our instincts and desires. We all want to be safe; some of us seek safety in control, most in submission (fight, flight, fawn). In the absence of positive controls represented by shared values, adopted first and foremost by leaders, (transparency and accountability for starters), that protect people to speak up, dictators or manipulators with superficial charm will soon arrive to control increasingly dysfunctional organizations. Poor decision making will become the norm. Soon it will be counter-cultural to make common sense objections. This should sound familiar. We have all seen it.
Why does this happen? Because left to our own devices, people make poor decisions by design. It is natural for humans to act out of ego/fear/desire. Sadly, our own mindsets keep us from acting on higher/bigger/better long-term goals.
Long-term rational cooperation depends on embracing the discipline of higher level rules, like shared values, rather than responding instinctively to desire and fear. Our greatest successes come from thoughtful approaches to alignment allowing us to collaborate, disagree, and ultimately build together. Our failures arise from ego shaping our environments into fear based hellscapes characterized by insularity, groupthink, and, finally, cult-like control.
The Biases that Shape Poor Decision-Making
Behavioral economics has shown that as individuals, we are each prone to cognitive biases—glitches in our thinking that distort reality and lead to bad choices. Common examples of cognitive biases:
Confirmation Bias – We seek out information that supports our existing beliefs.
Anchoring Bias – The first piece of information we receive has an outsized impact.
Availability Heuristic – What we already know feels more relevant than what we don’t.
Dunning-Kruger Effect – The less competent we are in an area, the more confident we feel.
Fundamental Attribution Error – We blame others' failures on character, not circumstances.
Hindsight Bias – We assume past events were more predictable than they were.
Loss Aversion & Sunk Cost Fallacy – We overvalue what we've already invested in.
Self-Serving Bias – We attribute success to ourselves but blame failure on others.
Negativity Bias – We weigh bad experiences more heavily than good ones.
Group Biases Make Bad Decisions Even Worse
When we operate in groups, our biases don’t disappear—they intensify. Poor group decision-making is predictable based on these common group or collective biases:
Groupthink – Consensus is prioritized over critical thinking.
Authority Bias – People accept decisions from authority figures without question.
Conformity Bias – Individuals conform to the group even when they disagree.
Escalation of Commitment – Groups double down on bad decisions due to past investments.
Common Information Effect – Groups discuss what they already know instead of new insights.
Polarization Effect – Groups push each other toward more extreme positions.
Diffusion of Responsibility – No one takes ownership because “someone else will.”
The bigger the group, the worse the decision making, as individuals make little effort to participate authentically. These predictable failures are patterns and explain why companies become toxic, risk-averse or intoxicated by risk, and prone to collapse, in the absence of positive approaches—but this can be prevented, and even turned around.
The Sting in the Tail: If You Think This Doesn’t Apply to You, You’re Already in Trouble
Every failed company, every toxic workplace, every scandal-ridden institution once believed they were the exception—until reality proved them wrong. Dysfunction isn’t something that only happens to other people—it happens to every organization that ignores the warning signs.
So ask yourself:
Are dissenting voices truly welcome in your organization, or just tolerated until they become inconvenient?
Are you tracking decisions and their outcomes, or just assuming the right choices will emerge?
Do you and your leadership team regularly challenge your own assumptions, or do you expect your perspective to be self-evidently correct?
If you’re not actively fighting against dysfunction, you’re passively enabling it. And dysfunction, left unchecked, always wins.
Like the monkey clinging to its prize, most organizations, having declined into this “natural” state, won’t let go of their dysfunction until it’s too late.
In our next piece, we’ll examine how organizations can institutionalize good decision-making rather than dysfunction.
ESG is on life support— time to pull the plug or change approaches?
Reports of the decline of ESG have been coming for some time. In the last year, the WSJ has reported on an exodus of asset managers from ESG, companies pulling back on communications around “sustainability,” and now we hear that even (Lady) Lynn Forester de Rosthchild has adjusted her rhetoric to focus on doing what's right because it's good for business. What gives? Doesn’t anyone want to save the planet anymore?
While it may not feel safe to say, the current political climate has forced the most liberal among us to inject some rationality into a movement founded on validating and stepping into teenage girl level existential panic. ESG was a movement born of “something must be done – we’re all gonna die” fear and fueled by “don’t worry honey mommy and daddy will save you” do-gooding sanctimony. Grownups invested huge sums in ESG as governments created a regulatory structure that ensured this was the best way for companies to look good. Now companies are looking at their bottom lines and what they’ve gotten for their efforts and seeing a mismatch. Did they actually do good? Did investors? What grown-ups are forced to acknowledge here and now is that ESG efforts that we should be pulling the plug on are stumbling along based largely on regulatory intransigence and our own fears and unwillingness to tell the truth. What is it we don’t want to say?
Carbon reduction isn't king. Most efforts to reduce carbon emissions were not real, but carbon tax payment schemes. Even if carbon emissions reduction were a magic bullet, which seems not to be the case, you buying yourself out of your carbon use doesn’t work when so many others don’t care. We have a global free rider problem. As long as jetsetters, including corporate execs heading to climate summits, not to mention China and India, continue as they have, nothing much will change. And China and India will continue until it becomes cheaper to do otherwise. So, surprise, we need to build real business solutions.
Building a new energy infrastructure takes time and requires tradeoffs and integrated efforts of different businesses on a global basis. Case in point - lots of people put solar panels on their houses before there was a good way to store and use and share that energy. In some cases, this lowered the value of the house! Why? Because we liked the idea of solar (who doesn’t like the sun) and people sold us those panels and there were government subsidies to use the panels. Meanwhile, we all know that the greenest energy is nuclear, and we’re afraid of it because of the China Syndrome, Chernobyl and Fukushima. So, we need integrated business solutions that make sense given the infrastructure we have in place.
The rise of ESG created a stampede to calm panic, and to look better. Caring isn’t a problem so long as it isn’t a cover up for not actually doing. As grownups, we need to distinguish between our desire to look better and actually doing better. Which of the regulations and guidelines and reporting requirements are actually making a difference? Are any? What has the regulatory environment accomplished? What are the corporate box-checkers and standard creators actually creating? We need to take account of what works and what doesn’t and stop focusing on what used to look good.
The solution is best practice capitalism that is socially responsible. Hey there should be an acronym for that! (Ummm….how about CSR…) The best and most cost effective solutions must be implemented. Businesses with expertise need to do what really works and explain why. We need to take the right risks for good reasons. The simple truth about ESG is this, giving into panic and putting government regulation before business innovation never solved a hard problem. But supporting the ingenuity and talent of people working together – socially responsible capitalism -- it works.
Lead with your Values, Follow with your Capabilities
Lead with your values, follow with your capabilities: Communicating and developing your risk management strategy
For those who believe that political initiatives and three letter words (ESG, DEI, etc.) will save us from the risks we face, please consider that political thinking is not the best kind of thinking we humans do. Adam Grant, Harvard’s best-selling organizational psychologist, recently shared a pyramid chart showing a “Hierarchy of Thinking Styles” that locates “Cult leader” as the only form of thinking lower than “Politician,” with “Contrarian” dead center and “Critical thinker and “Learner” on the top of the aspirational chart. All is not lost if we are willing to think clearly and learn together. Margaret Mead’s words come to mind: “Never doubt that a small group of thoughtful committed citizens can change the world; indeed, it’s the only thing that ever has.”
Risk management communication to stakeholders in business at present has reflected a gradual but definite shift (the frog was in the water as the temperature was turned up) toward the bottom of that pyramid as national and global businesses have moved away from thinking, learning, and prioritizing issues where they can be most impactful and toward checking boxes they were told to check to manage risk. I’m not alone as an executive who watched with real concern as optics and the voices of the crowd took over a process of communicating a thoughtful approach to risk management. Great risk management may be happening, but if so we are not effectively communicating what is most important about what we are actually doing.
How did so many global businesses decide to adopt one size fits all approaches to stakeholder engagement in risk management that were not the best they could do? Simple - we are almost all impacted by the power of the loudest voices in the room, the push of the crowd; we give up making arguments because we know that no one is listening anymore. Don’t we all “know” what we must do? (We’re not idiots!) If the choice is between the hard work of critical thinking and the easier work of going along with the crowd, and you will put yourself at the risk of social ostracization and worse if you don’t go along with the crowd, then wouldn’t you be crazy not to go along? Never mind that no one can say for sure what progress toward that standard you’ve adopted means. If you can create a DEI initiative that shows you care about diversity (in the most diverse nation on earth where all your stakeholders are all about it) - how much easier then doing the hard work to make your business actually more diverse and inclusive? We’ve got a program! We invested millions! This appeals to politicians, but it rarely achieves results.
Thoughtful approaches produce better results because they are all and only about results.
Good risk management requires looking at your specific business situation, then identifying specific initiatives and disciplines, based on independent analysis and with an emphasis on your capabilities. Within this context, commitments to ongoing action to protect the downside and make things better to improve upside are judged based on what can be measured and reported. Simple, but not easy. Specific disciplines must take into account short-, medium- and long-term factors in order to be relevant. And analysis and action must include transparent, clear dialogue with stakeholders about the process to ensure accountability.
Here are the most important non-negotiables for effective risk management:
Adopt a culture of transparency
Transparency and accountability create integrity, making risks apparent to decision makers as a shared language and culture is created among stakeholders
Lead with your values, follow with your capabilities
Only within an ethical environment can your outputs can be aligned to consider how better to invest in risk mitigation strategies for the difference that you can make
Build the upside of risk management into everything you do
Turning downside protection into upside potential will help your stakeholders to build their tolerance for talking through the good, the bad and the opportunity of doing better.
The challenge right now is to make the move from box checking to real outcomes that make our world better. In many businesses, the best thing to do at present is simply to tell the truth! We know that stakeholders want to be engaged transparently and honestly. Lay out the challenges of what you have been doing, and let’s begin to discuss the best way forward to manage your most pressing risks. There is a real opportunity now to unearth the good things you have been doing all along, but not talking about.
How to begin? Start with stakeholder engagement on pressing short term serious risks and go from there. This is a good mental exercise – imagine a simple chart– risk level on one side, time frame on the other - ask each stakeholder group to rank the issues on the horizon. This will help you to identify actions you need to take now and commitments that you should make for the future. Extra points for managing risks that also improve results. Through critical thinking and learning, thoughtful people can and will make a difference together.
Transparency: the Road to Success
Transparency: the Road to Success - Secrecy: the Road to Ruin
The core values of any successful business must include transparency and accountability; in fact, the integrity of any business depends upon it. When stakeholders (employees, customers, business partners, regulators, etc.) share a sense of a business's integrity from their different, and often conflicting, perspectives, this fosters engagement and enthusiasm, which, in turn nurtures the business's authenticity. This dynamic, and all its inherent (and healthy!) conflicts are the heart of successful business cultures and brands. Transparency and accountability are enshrined – and enforced – through best practice governance structures in any mission-driven organization (for-profit or non-profit). Successful governance protects stakeholders rights to true and transparent communications– and their responsibilities to demand and provide the same.
When governance fails, and trust is lost, stakeholders abandon ship. Disaster is not far behind. And as your mind turns now to examples you know that seem to refute these truths -- examples of businesses that have "succeeded" despite clearly unethical practices and behaviors -- remember that we're all programmed for survivorship bias. You're remembering the “how did they go on as long as they did” exceptions. You rarely hear about the overwhelming majority of relatively boring examples that reflect the rules for success. When businesses are working, the fact they are nurturing trust and authenticity through transparency and accountability is not noteworthy, no more than the good health of a person is noteworthy. When you hear about credibility issues, it usually means that big, avoidable problems have already become public.
One way or another, if organizations are not built on a foundation of good governance and ethical conduct, they must commit to change and overhaul their governance and culture or they must accept predictable decline. Leaders must commit to transparency and shared goals, or commit to being figureheads presiding over the withering and death of their organizations.
So how do successful companies ensure transparency and accountability? They implement straightforward tools for reporting and communications processes from the boardroom to the mailroom. Strong leadership and shared goals throughout the organization must be embedded in practices and principles that maintain clear communications and transparency. Success depends on disciplined reporting of progress – and lack of progress – toward goals. Holding ourselves accountable and allowing others the information to do the same is key. This is much harder to do than it seems, particularly when a business or unit of a business has run into culture trouble.
The critical insight here - good process, best practice and rigorous discipline when it comes to transparency and accountability is necessary to protect businesses from the people that run them.
Why would this be true, you ask? Aren’t most people well-intentioned and good? Can’t we rely on one another to do what is right? Don’t people almost always tell the truth and look out for their co-workers and communities? Don’t people care about their reputations enough to be reliable and trustworthy?
Unfortunately, sociology and psychology tell us that people are not trustworthy in these ways. Our memories are inherently flawed and people are not naturally truth tellers. By nature, people will tend to deceive themselves and each other, often unintentionally, because of social pressures, avoiding stressful conclusions and decisions, or present bias (prioritizing immediate rewards over long-term benefits). People lie and misdirect for all kinds of reasons and often justify it to themselves so quickly that they are not even aware they have been unreliable. People in groups, and especially where they have power and their self-interest is at stake, are the most notoriously unreliable. Self-deception is a feature of human beings, not a bug. Truth-telling must be trained, encouraged, and enforced.
Businesses cannot afford to let well known ordinary human failings sabotage results over and over and over. People on a mission must be brave enough to share the data and relevant developments and subject themselves to scrutiny. When you share the facts you take a big step towards eliminating the most obvious cause of failure, human weakness. Business cultures have to work to create disciplines and expectations around transparency and accountability. There are tools to use to get this done, from performance reviews to quarterly reports, to a wide range of stakeholder communications approaches. It’s difficult work but these disciplines are the only way to build (or rebuild) a foundation for growth and success.
If you want to learn more about ways to build transparency and accountability, and put your business on the road to greater success, please email “tools for transparency” and I will share with you some frameworks I’ve developed to help you see where FosterChance can help your business “Do better by doing good.”