Monday 13 July 2009
About ten years ago I happened to have lunch with Eric Schmidt. The CMU board of trustees was visiting the School of Computer Science and they had lunch with some of the CS grad students. Our table was just Mr Schmidt, me, and a couple of other students. At the time he was CEO of Novell. I was feeling cantankerous and took the opportunity to ask Mr Schmidt how he managed when the imperative to maximise shareholder returns required unethical (but legal) behaviour. His answer was that this never occurs. He suggested that ethical behaviour always, in the long run, maximises returns.
I thought (and still think) this was grossly wishful thinking. It would require extraordinary luck or divine providence, and even for a theist like me I think it's clear that God has not always arranged for profit and ethics to be perfectly aligned (end sarcasm). A company truly focused on shareholder returns will sometimes, probably often, be obliged take advantage of unethical opportunities. Fortunately, Mr Schmidt's wishful thinking seems very common. People want to do the right thing, and convince themselves and each other that it's going to be best for the company too. They cheat the shareholders and do the rest of humanity a favour. Bravo!
I saw a lot more of this at IBM Research and (from outside) other labs --- publishing corporate research labs depend on corporate vanity mixed with altruism, and a desperate wish to believe against all evidence that they're an acceptable return on investment. It's a relief to work for a non-profit where we can be honest about such things.
Of course back at that lunch at CMU I had no idea that Mr Schmidt would go on to become CEO of the world's newest corporate superpower. Keep the faith, Mr Schmidt, and may the scales never fall from your eyes!