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Views from the Prairie

April 10

Power corrupts.

"And remember, where you have a concentration of power in a few hands, all too frequently men with the mentality of gangsters get control. History has proven that. All power corrupts; absolute power corrupts absolutely." Lord Acton.

We all have seen that last part of the quote. Yet, the human dynamic that occurs when someone has a position of power is something that we rarely take a hard look at. When there is a position of power, people who are corruptible are attracted to that position and those who want to corrupt are attracted to being around that position. Those who hold power face constant pressure to use that power to benefit themselves or their friends.

Every election season, we hear people claim they will not be corrupted when elected. However, over time, few can stand up against the constant pressure to compromise. When in power, people lose the ability to resist. Dana Carney, a researcher at Columbia Business School, has found that when people view themselves as having power, they do not have the physiological reactions to saying lies that people who do not have power do. In other words, people in power can violate their values and not feel the pain.

In businesses, people are trusted with power and then abuse that power. History is full of both the large scandals and the small pilfering. What retailer does not know about both shoplifting and "employee shrinkage"?

A position of power attracts those who would corrupt those who hold it. For example, remember back in your teenaged days when a friend first got a job as a store clerk? How many people you knew who would ask him to give them a "deal" or to try to get him to sell them something the law forbade? People try to corrupt those who have power.

Any capitol building is packed with those who would corrupt. One famous chicken producer caused a scandal when he walked onto the floor of the Texas legislature and started handing out $10,000 checks in order to affect some bill. Currently, it is estimated that financial institutions are paying $1 million per Congressperson to lobby for their interests.

It was after experiencing such corrupted power that the framers of the constitution put the checks and balances into that document. In business today, we still need checks and balances to keep the honest people honest.

As businesses need to be leaner and leaner to cope with the economic situations of today, we give more and more power to individuals. However, we need to verify that people are using that power for the good of the company and not taking on huge risks that will bring the company down.

The American Founding Fathers knew about corruption. They designed a system that had checks and balances. In business, we need to both trust people, but also verify how they are using that trust.

Sunk Costs

One of the biggest impediments to moving ahead is when we cling to "sunk costs". This is especially true with software systems and training. Many people get quite good with the job that they have been doing and don't want to invest the time, effort, and energy to learn a new skill. Likewise, many a company will try to continue to make money from all the effort they put into an existing product while the market is moving away from them.

During this "Great Recession", we are likely to see a lot of changes to the market place. It is during hard recessions that markets change radically. For example, during the 1930's, the styling and features of automobiles changed significantly and the number of automobile manufacturers in the US dropped from 200 to 17.

Yet, people are hesitant to make the changes that would help them survive these changes. Our first reaction is hunker down and hope that things will blow over. Yet, often, the only way to thrive is to make the investments to offer something new. We may have to be ruthless and ignore our current products and services in order to figure out where to go next.

The software field changes rapidly. One year, "Open Source" is the best way to go. The next, Microsoft may have changed their pricing so that it makes sense to use their products again. The next, Oracle may have structured things so that they are the best value. People are using their cell phones instead of buying new laptops.

All this is to point to why those who can walk away from their "sunk costs" are far more likely to be able to keep offering the products that people will want to buy.

Risky World

One of the successes in the field of web site protection are the CAPTCHA's, those curvy sequences of letters and numbers that show that a person is sending in the data instead of a "spammer". A recent check on a freelancer site showed a person from China asking for a program that would clean up a CAPTCHA image so that they could use OCR. In other words, they want to break the protection on web sites. Protection is a constant battle.


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Prior Years

  1. 2008
  2. 2009