Las Vegas 2023

Adaptive Ethics for Digital Transformation (with Frankenstein vs the Gingerbread Man)

Adaptive Ethics for Digital Transformation (with Frankenstein vs the Gingerbread Man)


Mark Schwartz

Enterprise Strategist, Author, Amazon Web Services





Hi, I am Mark Schwartz. I am an enterprise strategist with AWS, and, uh, I wrote a book on ethics. I want to tell you a little bit about a train of thought I had that that kind of led to this book. Um, and it started with an envelope that I received in the mail. Uh, it looked, looked sort of like this. Um, it, uh, it says that inside the envelope, I'm going to find some time sensitive, important documents. They come from the records division, whoever that might be. Um, I find this envelope endlessly interesting. Um, in fact, I think there's practically an entire textbook on ethics just in this, uh, the front of this envelope. And I'm gonna, I'm gonna try to show you why. Um, of course, you know, we all get envelopes like this all the time, right? I certainly have a pile of them, especially since I started collecting them.


Um, when we open the envelope, here's what we find inside. Uh, this is wonderful too. Those of you who are US residents, perhaps, uh, this seems a little bit familiar. It looks quite a lot like a tax form. It's got a form number, form number in the upper left. It's got a year in the upper right. Uh, and when you actually finally read the text, you see that it's actually, uh, uh, an offer to buy some life insurance. Um, it's actually brilliantly done. It's well executed in every way. Um, when I think about it, I really, I really don't think there's any ambiguity here. This is the envelope and the way this is laid out, this is a deliberate attempt to get me to open an envelope and read something that otherwise I would not want to read. Right? Um, and, uh, there are probably no lies anywhere on it exactly, but it's clearly an attempt to mislead me.


And interestingly, it's an attempt to mislead me from a company that wants to do business with me. So this is how they want to start a relationship with me, uh, which I, like I said, I find this endlessly fascinating. Um, that word relationship is gonna come back again later in this discussion. So, um, keep in mind relationship. Um, well, you know, I, when I look at this, uh, I wonder like, who, who is sending this to me, and why do they think this is a good idea? Well, I guess the best way to start figuring that out is to think about who, who benefits when I open this envelope, because clearly that's what they're trying to get me to do, right? Uh, who does benefit? Well, maybe the investors in this company, but that's really indirect, right? Who really is benefiting? And every time I look at this, I, uh, I imagine a face behind the letter.


Um, Larry, uh, <laugh>. Oops, that's not, that's not actually Larry, this is, this is Larry here. Um, Larry, who's Larry, he is, he is, I don't know if his name is Larry. I don't know if he is male. Uh, he is a junior marketing person, right? And, uh, he's a junior marketer at this company. And, and so I wonder why is Larry trying to mislead me? Well, I, you know, it probably has something to do with the fact that he has KPIs or OKRs or something, maybe around how many people open the envelope. I don't know. I know how companies work. It's something like that, right? And Larry is being creative, and he is figuring out ways to get people to open the envelope, if that makes sense. Uh, when I ask, uh, why does Larry wanna mislead me? Well, that's, that's kind of a weird way to frame it, right?


It's not, it's not actually Larry, it's his company, and he is not trying to mislead me. He's trying to mislead a bunch of people who his database pulled up as being a possible target market or something like that. Um, but that right there is sort of interesting to think about. This envelope isn't really a communication from a person to a person. It, it's a rather, uh, kind of depersonalized sort of communication. And, uh, to the extent that you think maybe there's something wrong with it, that maybe Larry shouldn't be deceiving me. Uh, it's a little hard to say. Whose responsibility exactly is that misleading? Um, is that the person who made up the KPI or the OKR? Is it Larry himself? This is a, a characteristic of bureaucracies, actually. It's very hard to assign responsibility in a bureaucracy when you have lots of silos and they're all motivated by different goals, and they all, you know, have a little piece to play in whatever, uh, nefarious activities are going on.


Um, so, uh, thinking about this envelope leads us pretty directly to the idea of bureaucracy. Now, you might be thinking, you know, mark, why are you so obsessed with this envelope? What's the big deal? We get these all the time. Uh, let's try something else. Uh, some of you might have heard something like this. When you've, when you've dialed a phone number, your call is important to us. We're experiencing higher than expected call volumes, so please stay on the line. Your call will be answered in the order it was received. Uh, that last sentence isn't quite grammatical, actually, but, um, you know, probably it's not really true. Probably they're not experiencing higher than expected call volumes because their phone message has said this for a few years, <laugh>. Um, but what's really interesting about this one is, is actually that first sentence, your call is important to us.


Um, actually, this is, uh, one of those rare things where we can actually measure how important it is to them. We can measure it by how long they keep me waiting on the phone, right? Um, but, uh, the fact that they would say that your call is important to us, uh, is a beautiful example of something. There's a, there's a technical name, uh, for what we call this, um, <laugh>. This, this is, uh, technically bullshit. Um, you're probably laughing because you think bullshit's not actually a technical term. It is. And, and I wanna share this with you. Um, it comes from, uh, a book length essay written by Harry Frankfort, the philosopher, who is actually a, a professor at Yale. Uh, and he defines this, this thing called bullshit, which is different from lying in deception, actually in his definition. So, uh, lying, he says, is the attempt to introduce a falsehood into your belief system so that that same spot in your belief system won't be occupied by the truth?


Eh, it's a little bit wordy, but you know, it's, it is pretty, uh, it's a pretty sharp definition there. A lie is deliberately trying to mess with, with what you think is true. Bullshit, on the other hand, he says, is actually a lack of concern with whether something is true or not. So bullshit is not true. It's not false. It's, it's just words. Um, so when the company says, your call is important to us, well, I, I don't know if that's true or not true. Uh, it doesn't really matter. They're trying to suggest that there is certain kind of a company they wanna, they wanna make me feel like they care about me, even though they obviously don't. Right? Um, another great example of this one, uh, the airline that I often fly on, uh, says, always says something like, please keep your seatbelt fastened.


Your safety is our number one priority. Is it, I mean, is it, is it really their number one priority? If they, if they believe in the Chicago School of Economics and Milton Friedman and all that, probably shareholder value is their number one priority. Uh, the person who's saying it, probably their number one priority is to finally get a chance to sit down after they've been standing for a while. Uh, once again, it's, it's bullshit in the sense that it's not, it's not true. It's not false, you know, it's, it's just words to make you think that there are a certain kind of an organization. Uh, one more example, just to give you a sense of how much bullshit there is around us. Uh, most corporate branding you can think of as being bullshit. Um, I'm not gonna say it's, it's bad. We'll just call it bullshit for now.


So, I like this ad. Uh, it was a golden age of Russia and the Czar reign Supreme, uh, et cetera, et cetera. Uh, no man could match the czar's thirst for life and his drink, the toast of St. Petersburg, genuine vodka. This is, um, another actual actually brilliant piece of creativity, right? That's a, that's a, a non-sequitur, uh, his thirst for life and his drink vodka. Um, but again, the words don't really matter here, right? It's not, it's not, there's no truth or a lack of truth. It's just trying to give you a certain feel about the people who are saying this, or the company that's saying this. So bullshit today is all around us in many ways, and it's, uh, it's a symptom. I shouldn't really say symptom, that bias is it a little bit. It's it evidence of a lack of authenticity and communication, right?


Nobody is really trying to communicate, and they're not really trying to communicate with anybody in particular. It's just sort of a, a vague communication. And, uh, we we're sort of surrounded by it all the time. This, again, is a common characteristic of bureaucracy. Bureaucracies love to talk in an inauthentic way where you can't really pin down what they're saying. Um, this is a great example from, uh, what, what actually happened was India accidentally launched a missile at Pakistan, it's arch enemy. And, uh, this is a quote from a minister about what happened. He said, it is learned that the missile landed in an area of Pakistan. While the incident is deeply regrettable, it's also a matter of relief that there has been no loss of life due to the accident. Again, if you, if you look at the wording here, there, there are no people.


It's not, we learned that the missile landed in Pakistan. It's not, I learned, it is learned. It's been learned. Um, if you translated this into the way people really talk, it would be something like, we accidentally shot a missile at Pakistan and were happy nobody got hurt. Uh, but bureaucracies tend to speak in this roundabout way. So, uh, again, just sort of reflecting on that envelope somehow has led me to bureaucracy two times. Um, the first time in this sort of, uh, uh, diffusion of responsibility across the organization the second time in saying things that aren't quite true and aren't really quite authentic. Um, and, uh, I'll, I'll put a pin, a finer point on it. Bureaucracy is really all about facelessness, right? Uh, it's about not individuals speaking to not individuals. Uh, it's about Im personality, and I find that Im personality to be reflected through, let's say, this train of thought that came from this envelope for me.


Um, I wanna, I wanna draw this out a little bit, uh, and think about it a little bit more. Um, so, uh, companies in general in the past have been set up as bureaucracies. And today we're trying to overcome that kind of bureaucratic thinking. And, uh, the point that I'm gonna try to convince you of is that bureaucracies are actually ethics. They're systems of ethics. And in the digital world, we're trying to formulate a different system of ethics that's rather different. Um, so the first, the first thing I want to say about that is when we make ethical decisions in the business world, it's not generally questions of good versus evil. It's not usually big picture, you know, doing something horrible or doing something good, even though the press usually paints it that way. What you hear about is these big evil companies who are trying to suck in your data and, you know, do nasty things with it. Whatever. The truth is that leaders are making ethical decisions every day, and they're small, incremental, um, uh, decisions made where there are conflicting imperatives. There's, there is something that's pulling you this way and something that's pulling you this way, and you have to resolve that. Um, so not big picture, good versus evil. Every day decisions at, like, I mean, take that envelope, for example. Somebody's deciding what words to put on it.


Now, uh, to talk about bureaucracy for a second, bureaucracy was defined by Max Weber around 1920 or so, sociologist, and he said that bureaucracy has this set of six characteristics. Bureaucracies have a division of labor, a hierarchy, rules, functional competence, meaning that people in a role, in a bureaucracy have the skills they need to be in that role. Formal communications, and Im personality again. Uh, our friend Larry, if you think about a company, um, probably every company you can think of, certainly traditionally, every company is set up sort of like this. Here's a, an example of an org chart and reflecting on this org chart, you see it fits, it fits Weber's Weber's definition, pretty exactly. Uh, there's a division of labor check hierarchical organization. Check Functional competence. People in each of those boxes on the org chart have the competence for that box check.


Um, rules. Yeah, lots of rules. In fact, even some ethical rules. Um, you've got your, uh, uh, code of conduct and your acceptable use policies and things like that. So, lots of rules around an organization, uh, formal, documented communications orders, invoices, purchase orders, help desk tickets, that sort of thing. And then, uh, this impersonalization thing that's in many ways the essence of bureaucracy. Um, if you think about the values that are suggested by that bureaucratic way of organizing and bureaucratic way of thinking, um, this is the list that I come up with. Uh, and this set of values turns, translates into a set of ethics. A, a set of rules about how to behave. I want to take, uh, you know, we can't go through the whole list in detail, but let me just take three of these things and put them opposite the digital, uh, digital way of thinking instead.


Um, so let me start with Im personality. The idea of Im personality facelessness core to bureaucracy. The idea is don't bring yourself to work. You leave your personal self at home. When you come to the office, when you're at work, you act your role, and you do it impartially fairly, um, without bringing any of your personality to it, you are essentially part of a big machine. That's a fundamental principle of bureaucracy. It doesn't quite hold as well. Today, when we think in terms of inclusivity, diversity, inclusion, we want people to bring themselves to work. We value the fact that people have lots of differences. We think that in synthesizing those differences, we get something that's, that's much more powerful. Um, so the idea that, that we want in personality at work, that's, that's kind of breaking down a little bit. Uh, second one I wanna mention is this deference to superiors, uh, and neutrality.


So, uh, there's an org chart, and there are people higher on the org chart. And the bureaucratic ethic not only says, don't bring yourself to work, it also says, obey people who are higher than you in the organization, defer to people who are higher. And in fact, the goals of your bureaucracy, none of your business that's set outside your role is to execute well on whatever those goals are. It doesn't work quite as well today. When we want employees to take ownership, we want the work to be meaningful to them. We want them to be innovative and thinking through customer problems and so on. Um, so the bureaucratic ethic, essentially, it says, defer to superiors, defer to the goals you're given, doesn't really fit quite as well anymore. Uh, the third one that I wanna mention is the idea of owned time. So the bureaucracy is buying your efforts from nine to five, let's say, or some other fixed period of time.


And during that period of time, you are obligated to produce for the organization. In fact, if you don't produce, if you're not productive during that time, you're stealing from your employer because they bought your time. So the bureaucratic ethic says you must produce. And if you're not producing, that's theft. For us, especially coming out of the pandemic, it's much harder to say that, you know, are, are you really obligated every minute to be sitting at your desk and producing things? Is production and productivity the best measure of what you're contributing to the organization and so on? Again, it doesn't fit very well. This is a quote from the website of Progressive Insurance. Just as we're committed to bringing our name to life each day, we celebrate our employees for bringing their true selves to work in every way. So what I want you to recognize is that this is extremely unethical in the context of bureaucracy.


In a bureaucracy, you don't bring yourself to work. You really shouldn't. You should do whatever your role says you're supposed to do. Uh, but this probably resonates. I mean, this is what a lot of organizations are thinking about today, coming back to owned time and productivity. I think you find a lot of organizations today that with one foot in that world of bureaucracy and one foot in the digital world, are thinking, how do we measure bureau? How do we measure productivity, especially when people are working from home? Because productivity is our measure of whether employees are stealing from us or not. Um, which leads to funny in a way, things like this. Um, this is from a hospice chaplain organization. So, uh, the employees are chaplains, uh, in hospices. They're taking care of dying patients, and the organization measures their productivity this way. Uh, if you visit a dying patient, you get a point.


If you attend a funeral, this one's, this one's good. You, you get 1.75 points. So you should probably try to maximize your funerals. Um, now this, this put the chaplains in this odd position where, um, there were real demands of taking care of people, but they couldn't really organize themselves around doing that, around taking care of the people because their productivity was being measured in a completely different way. So what I'm getting at is that organizations, leaders in organizations, people in organizations are stuck with one set of imperatives that comes to them from the world of bureaucracy and another set of imperatives that comes from today's digital world and how we like to think about things. And those two are often in conflict, and it's very hard to make good decisions reconciling those two things. So that's a dilemma for leaders. And, uh, in, you know, I said it's not about these big good versus evil things is how do you make decisions day to day that are ethical decisions when you have two competing frameworks that are leading you in different directions? And that's the dilemma.


Bureaucracy, interestingly, uh, it grew up with the industrial revolution, really, right? Uh, companies started to become global in scale. They started to care about repeatability because mostly they were manufacturing things. They wanted to, to have precision in their manufacturing processes. So they created this system of organization that is all about rules and fixed roles and everything you need for repeatability. Um, and because they were based on factories, it made sense to talk in terms of productivity as what they cared about, what, what constituted good behavior. Um, the, uh, what, what's interesting about this, about the fact that bureaucracy arose, arose at that time is that the idea of thinking of ethics in terms of rules arose at about the same time. So when we think about ethics, we tend to jump to what are the rules about how we should behave? You know, we have AI today.


What are the rules about using ai? That's a very modern western way of thinking about ethics. While bureaucracy was arising and becoming the main way of running companies, a rule-based approach to ethics, which also came from the age of enlightenment, um, became the predominant way of thinking about ethics. We have rules and business and rules in behavior and ethical be behavior. Uh, you might be wondering what, what the alternative is, um, because we're so conditioned to think of ethics in terms of rules about what you should do or shouldn't do. But actually through most of history, ethics was about what are the attributes of a good person? What are the characteristics that make a good person with the idea that a good person's gonna generally do the right things? You know, it's, it's not about in specific instances, what should they do? It's about how do you cultivate good people and, um, uh, develop them, train them, whatever, whatever you wanna call it, but build character as a good person.


What does that look like? What's a good person? And, uh, in fact, that that way of thinking about ethics was not only popular before the enlightenment in the western world, but it's the basis, let's say for Confucian ethics. Uh, in Confucian ethics, you're basically, um, thinking about how do you become a jut, uh, morally superior person? What are the attributes of a morally superior person? So, um, the, it's the, the bureaucratic way of thinking, the bureaucratic mindset leads us to ask at any given point, what is the rule behind behavior? Given the situation that I'm in now, there are some problems with this rule-based way of thinking, and they should sound pretty familiar, because again, they're, they're pretty common with bureaucracy and what bureaucracies look like. Rules are resistant to change, for one thing. Um, they're often gaps between rules. They don't really completely answer the questions that you have about what to do.


Um, they lend themselves to that kind of nitpicking. You know, there are technically no lies here, even though, you know, I'm trying to dece somebody. Uh, but it must be okay because the rule is against lying. Um, it's very hard for rules to foresee all the things that might happen. Uh, imagine any rule being handed down to us from the past, trying to address things like, uh, is it okay to kick a robot dog? You know, that, like, who, I don't know, <laugh>. Um, maybe that's something I'm gonna care about in the future. But it's very hard to make a rule that's going to be effective endlessly, uh, you know, into the future. And rules are generally negative. They're not about what, what is good, what, what, what, uh, what is gonna make us a good life to live. They're about things that we shouldn't do.


So, um, rules are a little bit unworkable in a time when we're changing so quickly. And the ethical problems that are being thrown at us are such new problems, uh, and we don't really have a framework to deal with them in. So, uh, again, I think the other sort of approach to ethics, the idea of, uh, making sure we're being good people and understanding what it is to be a good person maybe helps us deal with some of these situations for which there aren't any rules, uh, or where the rules are not clear or they're competing rules. Uh, so back to Larry and his envelope. Um, you know, look, there's, there's probably no lie here. And, uh, and he's probably not violating any laws, I assume, but is that, is that really the question? Or is the better question whether there is an ethical issue here?


Because it's a deliberate deception and, uh, it's, it's something that a good person should not be doing, let's say, as a different way of framing the question here. Um, when I talk to leaders of enterprises, which is basically what I do in my job, um, this is, this is kind of what, what things look like when they think about AI ethics. Um, our heads are exploding, right? What, what actually are the rules? Uh, and I hear a lot of desperation for, for rules, please tell me what I'm allowed to do and what I'm not allowed to do. Uh, and the unfortunate thing is there, actually, there, the rules don't really exist. The bureaucratic impulse tells us the first thing we gotta do is we gotta make rules about it. Uh, but with things changing so fast, it's kind of hard to think in terms of rules.


Uh, so again, what I'm suggesting is that maybe a better way to think about these things is not tell me the rules, tell me the rules. It's what I want to be a person, who cares? And what does a caring person need to do in this situation? Or, I want to have intellectual integrity or some of one of the other characteristics or virtues that a good person has. What, what actions are consistent with that, rather than waiting for somebody on the outside to tell me what a rule is. I think this, uh, becomes especially interesting in the context of relationships. I mentioned that this word was gonna come back before, uh, a lot of us think that what we really need to do, uh, it as marketers or as leaders of a company, we need to build relationships with customers. It's all about relationships. And that generates a lot of, when a customer comes to your website, they see their name all over and you know, their preferences and, and so on.


Um, this, this email came to me. Um, this is a, a company that is saying, mark, for you, we've picked out some special items. Uh, it, it says that in a couple of places. You know, this is for you. Um, this is actually a company, uh, I bought, I bought one pair of trousers from them once, uh, and it was for a trip that I was going on. So what do they know about choosing the right thing for me? This, I, I hope this sounds a little familiar. This is, this is bullshit, right? Um, they want me to think that we have a relationship, it's a friendly relationship between me and the company. Um, and this, I think is, is sort of orthodox marketing, um, uh, discipline these days. Uh, build relationships with customers, personalize, et cetera. So here we have a company that's trying to personalize this relationship with me.


Uh, and I see this from a lot of companies, um, airline, for example, that, um, that, uh, I fly on very frequently. I'm a member of their loyalty program, and I get all sorts of special benefits because of my relationship with them. Um, the thing is that relationships, especially friendship relationships, imply a lot of ethical obligations. And I'm not sure that these companies, let's say the airline or the, the company that has, is choosing these closed, especially for me, I'm not sure they're really willing to live by these, these obligations that come with friendship. It's not really friendship, even though this inauthentic language is trying to suggest that we have this special relationship with each other, the airline, you know, uh, they're not gonna upgrade me to first class just because I'm at the end of a really long, tiring business trip. Uh, and I really, really need something to make me feel better, right?


Uh, it's not, it's not actually a relationship of friendship, uh, even though they're trying to imply in every way that it is, or at least the language that's being used is trying to imply that with me. So here we have companies that are trying to create these relationships with their customers. They're doing it with sort of inauthentic language back to that, uh, envelope that I, that I started out with. Um, they're trying to create a relationship with me, and they're doing it in this really strange, bureaucratic way. And yes, a lot of the language is inauthentic, but bureaucratic ways of thinking about ethics don't really, um, can't really, uh, locate the source of that problem, right? They're not violating any rules. Um, there are no lies. Uh, there's no reason not to use my name in the communications and to say that they've, uh, selected things specially for me.


Um, but there's, there's something a little bit wrong when you think about relationships and what they're really about. There isn't that element of care that is generally in a real relationship between people. So I think, uh, this provides an in interesting context for thinking about issues of AI and privacy. Today. Privacy, we can make all sorts of rules about who owns whose data and what they're allowed to do with it. But the truth is that this company that I have a special relationship with, very friendly relationship behind my back, they're selling my data to somebody, isn't that kind of disgusting <laugh>? Um, you know, it, it doesn't quite fit with the suggestion of a relationship. And I think in many cases, that's what really troubles us about violations of privacy, is that there's a, a relationship with an online provider, um, that they're, they're sort of violating a trust on.


It's less about property ownership. So anyway, um, what kinds of relationships are you building with your customers? And are you looking for the benefits of a relationship without really being willing to do what you usually need to do in a relationship? Are you violating trust? Are you deliberately deceiving customers? I think those are the real issues of ethics today. It's not about these big, you know, good versus evil sorts of things. It's about us being in this funny world where we're transitioning from big bureaucracies where we don't really care about people, uh, where we're faceless and a new world where we're trying to have digital interactions and closeness with customers and, um, longstanding relationships and so on. Where, right in between those two worlds. And this is really where today's ethical dilemmas are coming from. So, um, here is, uh, Larry, here are some suggestions for what I think maybe are those, those virtues, those character traits that we need to be thinking about rather than the bureaucratic rules. And, uh, the thought that I wanna leave you with is let's not be sort of icky in our relationships. So please think about that and, uh, good luck grappling with being pulled in two directions at once. Thank you for listening.