#171 - The Delicate Art of Bureaucracy and Adaptive Ethics - Mark Schwartz

[00:01:03] Introduction

Henry Suryawirawan: Hello, everyone. Welcome back to another new episode of the Tech Lead Journal podcast. Today, I’m very excited to actually have a chance to talk to Mark Schwartz, the author of multiple books from IT Revolution, including his latest two books which we are going to cover a lot today in this conversation. So Mark, thank you so much for coming to the show. Looking forward for our conversation.

Mark Schwartz: Thanks for having me.

[00:01:22] Career Journey

Henry Suryawirawan: Right. Mark, I always love to ask my guests first to probably introduce yourself a little bit by sharing us your highlights or turning points that you think we all can learn from.

Mark Schwartz: Sure. Well, let me start with what I’m doing now, which is what we call an enterprise strategist at Amazon Web Services, AWS. Which means I’m part of a small team of former C-Suite executives of big enterprises. And what we do is we try to help senior leaders, large organizations with the usually the non-technical aspects of digital transformation. I mean things like cultural change and organizational structure and governance models and investment strategies, change leadership, things like that that often turn out to be unexpected challenges.

I came to AWS after spending a little time in the U. S. government. I was the CIO of US Citizenship and Immigration Services which is part of the Department of Homeland Security. That was my only time in government. Before that, I was CIO of a company in San Francisco. I was CEO of a software company. I made this strange move of going into government. And the reason why I did, I’m not entirely sure, but I think what happened was I was reading an article on how bad technology was in the government, how many projects were running behind schedule and over a budget and how the features couldn’t keep up with the private sector.

And I really love hard problems. That’s me. I like, you know, it’s no fun if it’s not a really hard problem. And so I thought, I wonder if I could do something about this. And somehow it all worked out, and I wound up in this government role. And I spent seven years there, and I really learned a lot about people, about organizations, about technology, about how to cause change in an organization. And I loved it. And so the advice I would have for people is actually go into government. It’s really worthwhile. I’m not there now, but I miss it a lot.

Henry Suryawirawan: I think that’s pretty interesting, right? So sometimes when you work in the more constraining environment, right, you will learn a lot. And you’ll probably enjoy that kind of challenge if you love to solve hard problems, right? And sometimes the hard problem is not just technology, but also the people side, the policy side, and thinking about the impact of the things that you’re doing. So thanks for sharing that tip.

Mark Schwartz: Yes, it’s all. That’s all true. And you’re doing very important things in the government. You know, you feel like you’re making a difference.

[00:04:33] State of Digital Transformation

Henry Suryawirawan: Looking from your books, articles, resources, and things like that, you seem to deal a lot with digital transformation, including in your current role at AWS, right? What is the current trend of digital transformation? We have been talking about this for, I don’t know, many, many years now. Is it that people are still kind of trying to do digital transformation or are we in a better stage now?

Mark Schwartz: That’s a great question. Well first, as I’m sure you realize, digital transformation means different things to different people at different times. And so, I think the idea really is about transforming the way organizations use technology and transforming the way that they respond to change around them. Those are really the two things. And responding to change has always been a problem in technology and information technology, because we’ve always set ourselves up to do these big projects, big bang projects, where not only do we start with a fixed set of requirements and a project plan and try to deliver things.

But actually, what I found is that there’s a lot of time spent on preparing that big plan and approving it, and a lot of other things that are not technology related. And the result is that we’re very slow when it comes to creating technological capabilities. Especially if you measure it right. You know, I think it’s tempting to start the clock ticking when you start programming something. But the truth is, you should really measure the lead time of what you’re doing from the time when you have a need until the time when you satisfy that need. And that total time is your lead time. And I say we’re slow. And I insist on it, really. If you look at the way organizations have traditionally done IT, they have set up lots of ways to make that slow on the theory that you reduce risk, if you go slowly and do lots of documentations and lots of gate reviews and checks and stuff like that.

So one of the big transformations that has to happen is that entire process has to be reimagined as a fast process, a fast response to change. And that’s a big change for most organizations. Technology change is a very small part of it. You know, you can do DevOps and have other fast ways of delivering, but you don’t really get the business results from it unless you change the entire process around it. So that’s the speed side of things or the cultural change, the organizational change.

I think as we see generative AI and machine learning in general becoming more and more important, I think we’re starting to conceive of a big change in how we do technology. With machine learning, we really go from programming logic and business processes into the code to an arena where we’re working with data, we’re letting the data drive the functionality that we want. We can’t any longer necessarily test against required functionality. What we do now is a little bit more like experimenting with models to see what’s going to happen, you know, without really knowing. So I think it’s a very different way about thinking about technology and we’ve yet to understand the implications of it.

Henry Suryawirawan: I feel that what you said about we are still kind of like slow in terms of, you know, responding to change, even though there are so many techniques like Agile methodology, DevOps, and then you have cloud as well, and you have generative AI now. It seems like many people still focus a lot on the technology part, but probably has a little bit of challenge in transforming either the processes or the mindset or the culture part. And I think today we are gonna talk two aspects about it. The first one is about bureaucracy and the other part of it is the ethics.

[00:08:31] Bureaucracy

Henry Suryawirawan: Maybe let’s start with bureaucracy first, because I think one of the biggest challenge of digital transformation is, I think, about that bureaucracy, right? And especially many change agents, people who try to change the culture and the process always seems to get hampered by this bureaucracy. But let’s first define what is bureaucracy in your view, because I think you have a pretty unique perspective about it.

Mark Schwartz: Yes, I do. I think I do. It’s one of my favorite topics. I don’t understand why everybody else isn’t as fascinated as I am with bureaucracy. Part of the problem is definition. I think, you know, people use the word bureaucracy when things are in their way. That’s the only time it comes up. People don’t think about bureaucracy when it’s not in their way. So the definition sort of incorporates being frustrated. Now, one of the reasons why I wrote that book, really, is because in government, I saw a lot of people who became not just frustrated by bureaucracy, but they they developed this sort of learned helplessness, you know, like, well, the bureaucracy says no, there’s nothing we can do. And what I learned is actually there is something you can do. There are lots of things you can do. So I wanted to write a book to sort of give hope to people who were frustrated by bureaucracy. So that’s the background.

Of course, we have to start by defining bureaucracy and defining it in a way that’s emotionally neutral. So I used more or less the definition, the famous academic definition from the sociologist Max Weber, who was writing in around 1920. And the way I define bureaucracy is, it has six characteristics. It’s a social organization that has these six characteristics. And the six characteristics are, I’m gonna give you the first three together as a unit, division of labor, a hierarchy, and what Weber calls technical competence which just means that for each position in the hierarchy, there are specific skills required. And so you have somebody in that position who has those skills. So that’s division of labor, hierarchy, and technical competence. And if you think about it, that’s just an org chart. You know, that’s another way of saying you have an org chart. So the first three are easy. We recognize those right away.

The second set of three is a little more interesting and has a lot more implications, I think, especially when we talk about ethics. So the other three are rules, and a flow of paper, and impersonality. So, rules, obviously, we know what it means. I’m gonna extend the concept of rules and speak of it very broadly to also include things like processes, standardized processes, you know, here’s how you do things. The flow of paper today generally is electronic, not paper, but it fulfills the same purpose. The idea of what Weber was thinking of was paper triggers the processes in the organization. So for example, you receive an order from a customer. That triggers a bunch of things that happen and the paper flows through a workflow. So that hasn’t really changed, it’s just electronic.

And then impersonality is the really interesting one. This is what makes a bureaucracy unique. Impersonality means that people in a bureaucracy follow the rules and they don’t bring their own prejudices or ideas or biases or anything else to work. They do what the rules say. In a way, they are mechanical. They’re a cog in the wheel of the bureaucracy or whatever you want to call it. But that’s emotionally loaded language. So let’s say the idea of impersonality is you leave yourself at home. You don’t bring your personal self to work. You treat everybody fairly according to the rules and you do what the rules say and you don’t make up stuff yourself. So that’s impersonality.

So those three again were rules, a flow of paper, and impersonality. And when you add those six things together, you have a bureaucracy. Whether it’s, you know, good, bad, in your way, not in your way. That’s what a bureaucracy is.

Henry Suryawirawan: Right. I think it’s a very interesting definition. And I think we can see it in almost every, not just organization, right, in any kind of a social construct, maybe be it a team, a group. Not just organizations, traditional organizations, even the startups also have this kind of structure, right? And I think you mentioned in the book that we are all actually natural bureaucrats, like we like to think in terms of bureaucracy, even though we associate that words with negative things or frustrating things.

[00:13:14] Bureaucracy and Process Improvement

Henry Suryawirawan: But also another aspect that I find really interesting in your book, right? You mentioned that bureaucracy is actually kind of like the result of memorization of best practices or process improvement. Means that bureaucracy actually comes up from process improvement. So tell us more about this part and how come that people tend to associate good practices to become something frustrating?

Mark Schwartz: Well, I said before, when I talk about rules, I sort of extend that to include formal processes and things like that. Things that say, do things this way, you know, here’s how you do things. And it arises sometimes when you optimize a process, you work hard to perfect it. It’s very typical of so called scientific management, you know, Frederick Taylor and his idea of mapping out exactly what people do in order to load iron onto a truck or whatever the situation is. And that has all the characteristics of bureaucracy. It’s rules. You do things this way, you don’t bring your own personality and decide you’re going to do it in a different way.

What I’m trying to get at really is that bureaucracy, by that academic definition, is neither good nor bad. It’s a way of doing things. Let’s say in technology, we standardize a lot. That’s a very common thing in technology. And so standards say, here’s the architecture you use, or here’s the tool you use, or whatever it is. And we consider that to be valuable. Sometimes, you want to standardize things. But by definition, it is bureaucracy. You know, it’s making rules and trying to make everybody the same, you know, the impersonality factor.

Now why does it get in the way? Well, when you’re trying to do something new, it necessarily goes against the bureaucracy. So in the book, I say there are two different kinds of bureaucracies, essentially. There are the ones that get in your way when you’re trying to do something new and there are the ones that don’t. And a bureaucracy could be either one of those. And really your goal is to turn the bad kind of bureaucracy into the good kind of bureaucracy. And I talk about some of the characteristics of each of those kinds of bureaucracies.

[00:15:30] IT as the Biggest Bureaucrats

Henry Suryawirawan: Yeah, so you mentioned that in technology, in IT departments, we actually like to come up with a lot of standards and a lot of tools, processes, right? And in your book, you kind of like call it out, right? Like the IT is actually the biggest bureaucrats of all. Even though I think many people in tech, in IT departments would like to think they are the change agents, right? They like to think we are against the bureaucracy. So tell us a little bit more, because this is kind of like enlightenment for those people who think they’re like the change agents, but actually they’re introducing more bureaucracy.

Mark Schwartz: Yeah, when we talk about how to defeat a bureaucracy, I’m going to talk about provoking, and I think provoking is very important. So I was trying to provoke people, provoke my best friends really, of course, because I have a lot of friends in the IT world. I think it’s true. If you look at the academic definition of bureaucracy, and you think about what we do in IT, you’ll realize that we’re really in many cases applying bureaucracy, because we need to, which I think is common. So for example, we have a ticketing system for, you know, requests or for help desk issues or something. And we say to people, you know, if you want our help, you got to put a ticket in. That’s the flow of paper. That’s, you know, exactly from bureaucracy. And we have a process for handling the tickets, they go through a well defined series of steps. And when you put in the ticket, it is meant to be impersonal. You’re not talking to a person, you’re putting in a ticket. And that way, anybody on the back end can take that ticket and process it. It doesn’t matter who does it, essentially. So it has all the characteristics of bureaucracy. And we do it because we need to keep track of things, we need to have a standard system, you know, we have to be able to scale our support. So that’s one example.

I think security is filled with bureaucracy. And I think if you talk to people, employees outside of the IT organization in any business, they’ll tell you that it’s really bureaucratic. I can only use this piece of software and this piece of software. And I have to, I don’t know, hide my badge when I go outside. And I have, you know, there are all these rules that security is imposing. And it seems like basically security’s job is to put restrictions on what people do. Now, we all know that there’s a good reason for that. There’s a reason why security puts those restrictions there. So I like to give those sorts of examples to IT people, so they understand that we very deliberately create bureaucracy and in a way it adds business value. It’s a good thing for the business when we do that.

[00:18:09] Bureaucracy Creates Business Value

Henry Suryawirawan: Yeah. So you mentioned about adding business value. So this is also another thing that I think is also like a different perspective, right? You mentioned bureaucracy can actually add business value. So tell us when bureaucracy can actually add values, because a lot of people, again, associate bureaucracy as something that is not adding value, like mostly are like process driven, and have to be, you know, following flow of paper, right? And following rules and things like that. So tell us when bureaucracy can add more business value.

Mark Schwartz: Yeah. Well, a very typical scenario is compliance frameworks. So when you have to comply with something, you make bureaucracy, because that’s almost the only way to make sure you stay in compliance. You make up rules. You make up auditing procedures, the flow of paper again. You make the rules universal so everybody has to follow them. The first three aspects of what I said, bureaucracy is about the org chart pieces, very important in compliance frameworks. You often have to have people at a certain level in the hierarchy signing off on things. You need to delegate accountabilities through a hierarchy. So compliance more or less requires bureaucracy.

Being able to comply, obviously, adds business value. If you can’t comply with the frameworks you’re required to comply with, you’re out of business. So it adds as much business value as you can imagine. I think making things auditable often has value. But when we come to security and privacy and things like that, pretty much they’re based on bureaucracy in most organizations. They’re based on rules that get applied.

Now an interesting area that I go into in the book is one very good technique for improving bureaucracy is to automate it. And I think in the technology world, we try to do that as much as possible. We spare people the burden of doing lots of paperwork by having automated processes for auditing. You know who made what change and when and that kind of thing. It’s an output from your version control system. You don’t have to fill out pieces of paper or anything like that. So, uh, it’s possible to automate bureaucratic controls in many cases. Controls is another good word to use here, right? I talked about rules before, but really controls are what we call the rules essentially when it comes to compliance. So bureaucracy is a very powerful tool for accomplishing certain organizational results.

[00:20:40] Characteristics of Good Bureaucracy

Henry Suryawirawan: Yeah, so I think when we talk about security, privacy, right, and all those things about compliance. We understand that actually, yes, it is adding more rules, more constraints, more processes, more chain of approvals, and things like that. And it actually adds value to the business, right? It’s not only just adding processes without any kind of benefits. So I think in all other aspects of the organization, I think when we look at bureaucracy, this conversation is to enlighten people, like you should not just associate bureaucracy with just negative and frustrating things. But also there are good aspects of bureaucracy, right? And these aspects, actually, you kind of, like, mention it as the characteristics of good bureaucracy. And there are three of them. I would like to invite you probably to talk a little bit more about these characteristics, so that we can kind of like create bureaucracy that is good, not the bad bureaucracy.

Mark Schwartz: As you said, really, what I’m trying to convince you of is that bureaucracy in itself is neither good nor bad. However, it often becomes bad and gets in the way and prevents important things that you need to do. So the next step in my train of thought was what makes a bureaucracy bad and what would it look like if it didn’t have those characteristics and was a good bureaucracy. So it occurred to me that really there are three things that make for bad bureaucracy.

A bad bureaucracy: Number one is bloated, meaning it’s got lots of waste in it, right? The controls are heavy handed. There is lots of stuff you need to do. So a bad bureaucracy is bloated. Second characteristic of a bad bureaucracy is that it’s petrified. It doesn’t change. So bureaucracies always have rules, but that doesn’t say that the rules shouldn’t change. You can have a bureaucracy where the rules change easily, but a bad bureaucracy petrifies. The rules stay the rules long after they’re useful. And then the third bad characteristic is what I call coercion or coerciveness. A bad bureaucracy is all about saying no and enforcing it with power. It typically has gate reviews, for example. That’s the old way of doing IT. We’re gonna review and see if we give you permission to move on to the next step. But really, the purpose of the review is to say no, you can’t move on to the next step to find problems, you know, things like that. So coercive.

So bad bureaucracy is bloated, petrified, and coercive. And those are the reasons why it drives us crazy. And if you think about why you’ve rebelled against bureaucracy in the past or found it an obstacle, it probably comes down to those three things. But those three things aren’t core to the idea of bureaucracy. In fact, there are bureaucracies that demonstrate the opposite characteristics. So what are the opposite characteristics?

Well, bloated, the opposite to me, is lean. You can make a bureaucracy lean. You can take each control and say, what’s the best way to implement this control so that it doesn’t get in the way? And I talked about automating before, there are other techniques, but how can you achieve the controls you want but do it in a way that isn’t burdensome? So lean is number one.

I said bad bureaucracies are petrified, so a good bureaucracy learns. It’s a learning bureaucracy. The rules change. There is, in fact, sometimes rules about how to change the rules. You know, there are processes set up sometimes for learning and adjusting the rules, so that they keep pace with the real world around them. And there are good examples of learning bureaucracies as well, as well as petrified bureaucracies.

And then the third one, coercive, the opposite to me is enabling. Some bureaucracies use the bureaucratic rules as a way to make it easier for people to get things done. And remember, I mean processes as well as rules. But if you have a central organization that sets up required ways of doing things, but those required ways of doing things actually speed everybody up and make it more possible for them to do their jobs, that’s an enabling bureaucracy. Or if for example, you’re in customer service, it might be that you have a bunch of tools at your disposal for serving customers. And those tools have to do with engaging other parts of your company and helping the customer. And those processes are already set up for you, that’s an enabling bureaucracy. It helps you serve customers better by sort of engaging these formal processes.

So a good bureaucracy is lean, learning, and enabling.

Henry Suryawirawan: Right. I find these characteristics really, really useful when we kind of like put a frame on the bureaucracy that we are talking about, right? So maybe the next time we talk about bureaucracy, first, we can kind of like analyze the characteristics first, right? So for example, if it’s more about the rules doesn’t change for a long, long time, right? So I think we can kind of like pinpoint that. And maybe raise the point where things have changed, and we need to update the rules, right? Because a certain condition doesn’t meet anymore. So I think we can kind of like have more productive discussion to actually improve the bureaucracy, right? So that we can turn the bad bureaucracy to good bureaucracy.

[00:26:05] Leaders' Roles Towards Bureaucracy

Henry Suryawirawan: And I think many aspects of this kind of change actually falls into the leaders, right? Or maybe if we talk about the org charts, the people at the top of the hierarchies. They might have more responsibility to actually do this kind of change. So maybe if you can have advice or tips for leaders, you know, IT leaders or organization leaders out there, how can we bust more bureaucracy and turn bad bureaucracy into good bureaucracy?

Mark Schwartz: That was the point of writing the book, right? You know, I wanted to give hope to people who are facing a bad bureaucracy. And the bureaucracy is not necessarily bad on all of those characteristics, right? Bureaucracies have some of both type. But in my situation in the US government, it really had a lot of those characteristics of the bad bureaucracy. And one of the things I had to do was understand better why. There are reasons why a government has those characteristics of bad bureaucracy. So, for example, the rules don’t change. - Well, changing rules is really hard in a government. You might have to, we had to go to Congress sometimes and get Congress to vote new laws. And, you know, those are processes that are set up not to change very quickly.

And bloated, well, you know, over time, the government has added controls and controls. Every time something goes wrong, they add some more controls to make sure it never happens again. One of my co-workers gave the image of, let’s say you’re hiking up a hill, and you’re a rock collector, you love nice rocks. And so every time you find a nice rock, you toss it into your backpack. And as you go up the hill, you keep tossing rocks into your backpack, and eventually, you can’t climb anymore. That’s government bureaucracy. You know, that’s an accumulation of controls.

So how do you fight these sorts of things? It took a lot of experimenting for us to find the ways to do it. In my book, I break it down into three categories or three personalities, as I call them. Three personas: the monkey, the razor, and the sumo wrestler. So I give about 10 tricks each of those personas can use to break through bureaucracy. So about 30 plays altogether.

The monkey is the provoker. The key thing that a monkey always does is provoke and observe. You know, let me try doing something that’s maybe not acceptable or on the border of acceptable and just see what happens. Because then you learn what the real impediments are. And sometimes we learn that actually people were fine with it. You know, we did something we weren’t supposed to do and nobody complained. So the monkey is the playful trickster. There are a lot of different monkey techniques for almost toying with the bureaucracy. For example, you know, we had documents we were supposed to write. In fact, for every IT system we developed, there were 87 required documents. I counted them from the official policy. And some of them were very long documents.

So in our monkey way of doing things, we started to write shorter documents. We said why should it, you know, be book length and cost us a million dollars to write this document? How about if we just give really short answers to all the questions in the template or all the sections in the template? And we thought, well, we’re going to get in trouble. Let’s see what happens. And not only did we not get in trouble, but we got encouragement from the bureaucracy. Like we don’t have time to read those long documents, anyway. This is great! And then we started to just leave out sections of the templates that we thought weren’t useful. And again, the feedback was pretty good. We didn’t mean for people to write stuff that wasn’t helpful. So that sometimes happens when you’re a monkey. Otherwise, you know, you do something, and somebody tells you you can’t do it. And you listen carefully to why exactly you can’t do it, and then you craft a strategy based on that. So that’s the monkey.

The razor is lean. Lean techniques, like Lean Six Sigma, Lean Manufacturing. We found that you could actually take a lean approach to bureaucracy when it’s bloated. And so that means map the value stream. In a way, you can think of control or bureaucracy as an output of a manufacturing process. The output of the manufacturing process is compliance. What is the manufacturing process for compliance? Well, in this case, we had to write 87 documents. That was part of the manufacturing process. And so the lean approach says where can you take waste out of that and still produce the same thing? Where can you take the waste out? And so maybe instead of 87 documents, we could achieve the same amount of control with just 15 documents, which is actually what we did. 15 is still a lot, but you know, it makes a big difference between 87 and 15. And then we could make the documents shorter.

We could do all these things that would accomplish exactly the same control objective. And that’s the name of the game. Auditors love their control objectives. And you can always ask, what’s the control objective when you’re dealing with an auditor? What are you trying to accomplish with this control? And then you can propose alternative controls. You know, if we use this control instead, it’s going to accomplish the same objective, right? And sometimes you can convince people. So that’s the technique of the razor.

And then, the most subtle, let’s say, the real discovery for me is the technique of the sumo wrestler. So I lived in Japan for a year, and if you lived in Japan for a year, you necessarily become a big fan of sumo wrestling, because it’s so much fun, really. And the idea of sumo wrestling is you have two really big people, and they go, you know, crash into each other. And the object is either push your opponent out of the little circle you’re standing in or force them to touch the ground with something other than their feet. In other words, make them fall.

So that’s the objective. And if you think about it, you’ve got these two humongous people smashing into each other. Now, if your opponent smashes into you too hard, all you have to do is don’t resist, and they’re going to go flying out of the ring, right? On the other hand, if they, uh, try to twist you to the left, well, you twist even further to the left and they go flying. So the idea of the sport really is to use your opponent’s strength against them. And that is the sumo wrestler approach to bureaucracy. Use the bureaucracy’s strength against itself.

And that was funny when we learned how to do that. You know, there were policies that were constraining us. And so we wrote our own policies. And we wrote them in beautiful bureaucratic language. And once they were written, it was very hard for people to say no, because, you know, it was good bureaucracy. So we used the bureaucracy’s strength against itself. We even found, in the end, the way we had framed everything, we essentially had a policy that said everyone has to use DevOps. We didn’t name it DevOps, we gave the characteristics so very frequent deployments with an automated deployment pipeline and so on. And our policy required that everybody in IT do those things. And we had another policy that made sure they did. We essentially set up auditors that in beautiful bureaucratic function style, we set it up so that the bureaucracy actually worked in our favor. So that was the technique of the sumo wrestler.

But as I said, it breaks down into about ten different techniques for each of these three personas.

Henry Suryawirawan: Wow, I think it’s really funny the way that you put the analogy of this monkey, you know, the razor and the sumo wrestler, right? So for people who would like to get tips on how to bust bureaucracy, use those techniques that Mark just mentioned. Please check out in the book, right? I think there are so many plays. 30, Mark said, right? So there are 30 different places that you can probably try in order to improve your bureaucracy so that it’s not just bad bureaucracy that people are talking about in your organization. But also you can turn it into good bureaucracy.

[00:34:10] Writing About Ethics

Henry Suryawirawan: So maybe let’s move on to the next conversation. It’s not as if like bureaucracy is very easy to write. You decided to actually write another topic, which is kind of like equally hard to me, if not harder, which is about ethics, right? So tell us why you suddenly decide to move even deeper into an area where people less talk about in the tech world or maybe in large, right?

Mark Schwartz: Yeah, I said I like hard problems. And actually, this was the hardest book to write for me. Because especially in business, I’m writing for business leaders typically, right? So senior executives, they in general don’t have good frameworks for thinking about ethics in business. It’s very hard to conceptualize ethical decisions as a business leader. And I say that very deliberately. I think every time you try to bring up an ethical issue, it will get turned into a legal issue or a compliance issue. And that’s different. That’s different. You know, there’s overlap, obviously. But what is ethical is not the same as what is legal, and it’s not the same as what the compliance frameworks say you have to do.

Hopefully, you know, if the laws and compliance frameworks are well set up, you know, maybe they correspond pretty closely. But what I learned is even if you follow the rules, often knowing how to apply the rules, even if you accept them, is not obvious. You still have to make hard decisions when you’re making ethical decisions.

And so, as a former executive, I know it would be great if somebody told me with AI, for example, what are the rules? Nobody’s going to tell you, really, for a couple of reasons. One is that it’s a very new area and so it’s hard to say what the rules are. They’re changing and emerging as we find what the ethical issues are. And the second reason is that it’s such a complex subject that even if you had rules, you still wouldn’t know exactly how to apply them. So this makes it a very hard problem to solve, I think, for a leader who wants to be ethical. Let’s start from that assumption.

The other thing that I noticed coming fresh from a book on bureaucracy is that bureaucracy is a problem here. Let me start from a different place for a second and I’ll come back to bureaucracy. I find that most ethical decisions that you have to make as a leader are not these big good versus evil sorts of decisions. You have to make a lot of ethical decisions that are practical, everyday sorts of decisions, that you have to bring an ethical lens to. And often you find that you have competing imperatives. You have something that tells you you must do A, and you have something else that tells you you must do B, and somehow you have to arbitrate. You know, you have to figure out which it is.

So I gave three examples in the book, but I’ll mention one of them now. So the situation was that I was working In a big complicated organization with a lot of complicated political dynamics. It was sort of a toxic organization in many ways, there were a lot of dysfunctions. And I was working with a peer and she and I would share information in that toxic environment. You know, whatever one of us learned, we would tell the other so that we could both cope with it. And we supported each other and so on. And we had that relationship for a while.

And then at some point, one of the senior executives called me into her office, and she said that they weren’t happy with how this peer of mine was conducting a project and they were going to remove her from the project and put me in charge. And she said, don’t tell her. I want to be the one to tell her and I want to tell her when the time is right. So you keep quiet about this, I’m just telling you so you can prepare. So this put me in a horrible position. I said, please tell her really soon, you know, because I have this relationship with her. But my peer assumed that I was sharing information with her, just like we always had shared with each other. And I was deliberately not telling her something that was very important to her. And eventually, she found out and she was really angry, and it destroyed our relationship.

So, think about the ethical decision I had to make there. There were two things I absolutely had to do. I had to honor a personal relationship that I had. And the expectations of this person. And I had to obey a superior. And I had to keep something confidential that, you know, she was right in asking me to keep it confidential until she could tell my peer. So I had two conflicting imperatives there. You know, one side said absolutely tell her and the other side said absolutely don’t tell her. And I had to make a decision between the two. You might agree with my decision or not agree with my decision. I don’t know if I had to do it again, I don’t know if I would do the same thing. But I think this is the typical situation with ethical decisions.

If you look at ancient Greek dramas, for example, you see that this has been a persistent theme in literature. Often somebody has to make a decision and one god wants them to do such and such, and another god wants them to do something else. And they make a decision and then they get in trouble for it, because they dissatisfied one of the gods. Common theme. And that’s the way it is, I think, in ethical decision making. So it’s not good versus evil. It’s applying conflicting imperatives.

Now, back to bureaucracy for a second. I say in the book that bureaucracy is actually an ethical framework. It’s a guide to how you should behave, and I will explain that in a moment. And leaders today have one foot in the world of bureaucracy, one foot in the world of digital transformation. And digital transformation has a different set of ethical values. And so you’re stuck in this situation, like I was, where you have the demands of bureaucracy that say you have to act in this way, and you have the demands of the digital world that say you have to act in a different way. And executives have to somehow sort through that and make good decisions. I say executives because that’s my primary audience, but I think it applies to anybody who has to make decisions.

Henry Suryawirawan: Right. So thanks for sharing your personal story. I think, yeah, there are three examples. When I read them, I could really relate, you know, because sometimes as managers or leaders, right, you’re always faced with this kind of challenges, right? What you said is like competing imperatives, right? So you have to do sometimes two things that seems to be opposite of each other. Both are equally good, but you kind of like have to arbitrage in between, right, and make a decision. And we are not given any guidance for making the decision, right? The framework you can think about it, but almost equally you will have something that is negative out of your decision, right?

[00:41:12] How to Make Ethical Decisions

Henry Suryawirawan: So I think all these kind of ethical decisions these days, it seems plenty, right? People start to talk about, for example AI. The impact of AI with the ethics, right? And then the corporate governance, right? The sustainability aspect. Security and privacy, because we collect a lot of data these days, sometimes without the consent of the users and use it for our benefits. And maybe even like the layoffs that is happening in tech industry, in general, right? Because sometimes people could ask, is it even ethical to do a mass layoff? In your experience of facing with all these kind of a new ethical decisions, right? Maybe give us some guidance like for leaders here, because like you mentioned, we didn’t have any kind of guidance. Any kind of guidance you can give us to actually make better ethical decisions?

Mark Schwartz: Hmm. I think you have to read my book, really. I’m kidding, though. Well first of all, let’s think of some examples where the frameworks give us conflicting ways of doing things. So I said in bureaucracy, one of the most important characteristics is impersonality. And I like to go back to that one a lot. If you think about it, a bureaucracy is it attempts to be fair by making sure everyone follows the same rules. That’s the idea of a bureaucracy. The rules apply universally to everyone. And if you’re in a decision making position, you have to make your decisions based on the rules.

And in order to create that sort of an environment, bureaucracy says do not bring yourself to work, leave yourself at home. You’re a different person when you’re in the office or when your bureaucracy was really developed for factories. So when you’re in the factory, you’re a different person. You’re mechanical. You do what you’re told. And you don’t bring any of your personal biases or opinions or experiences or anything else to work with you.

I think that fundamentally conflicts with the digital way of thinking, which is oriented around diversity and inclusion. And we want people to bring who they are to work, because having a diverse team is good. It creates a very good dynamic. It makes you more innovative. And it makes for a stronger organization. So the bureaucratic imperative is make sure everybody is just a machine when they come to work. The digital imperative is cultivate people’s personalities and what they bring to work so that you can make more of it.

Bureaucracy, because of this impersonality, it is intended to be very fair. So don’t bring your biases to work, follow the rules, etc. And in the digital world, you have to find something that substitutes for that notion of fairness. You know, you have to be fair in a different way. You find that bureaucracy is applied for fairness in lots of different types of situations. There are rules that are meant to apply equally to people you don’t like and people you do like and so on. I found I had to negotiate agreements with our union when I was in that government job. And unions try to create fairness to employees through creating new bureaucracy.

You’d be a little surprised, right? But for example, the union contract would say, the collective bargaining agreement would say, employees of such and such a level should have a cubicle that’s at least this many square feet and have this kind of a desk and whatever. And the idea of that is to be fair. You know, everybody who makes it to that stage in their career should get treated the same. The collective bargaining agreement said that if we’re going to make any material change in working conditions, we have to create what we call a 9A notice, essentially a notice to the union that we’re going to make this change. And then they had the ability to bargain on that change. This is pure bureaucracy, right? You have to use this forum to do this. But again, the intention was to be fair. I could give you lots of examples of bureaucracy being created in order to enforce fairness.

One thing bureaucracies can’t really enforce very well is equity. When you think in terms of equity, you want to treat different groups differently in order to level the playing field and get equal outcomes. So the bureaucratic way of thinking about impersonality conflicts with the digital way of thinking about diversity, inclusion, and equity. Bureaucracy is all about deference to people higher than you in the hierarchy. That’s why you have a hierarchy. The digital world, we shoot for flattened hierarchies, participation by employees, decentralization, and empowerment of teams, and so on.

One fun area to play with in your head is the question of owned time. In a typical bureaucratic working environment, the company owns your time while you’re at work. So based on a factory model, that’s where bureaucracy became important in business. You come to work at 9 am, you leave at 5 pm. In between those hours, the company owns your time. And if you’re not productive in that time, then you’re stealing from the company. It’s theft. Because they own your time.

In our world today, especially after the pandemic, we realize that people are not necessarily working exactly those fixed hours with complete dedication. They might work longer. They might need to work with associates who are in different time zones. They might find that they’re more productive at different hours of the day, and they want to work those hours. All of these things are very possible, especially if your intention is to satisfy the company’s needs and do the best job you can. Those are just a few examples of where things conflict.

I’m avoiding the elephant in the room, really, which is the big imperative that has come along with bureaucracy. It’s not part of bureaucracy, but bureaucracy takes its goals from outside the bureaucracy. Bureaucracy is about efficiently accomplishing whatever goals you’re given. And the goal that everyone has understood of corporate bureaucracy. I shouldn’t say everyone. That, at least in the U.S., has become the dominant way of thinking is this Milton Friedman economics idea that you have an ethical obligation to your shareholders. It’s a fiduciary duty, and your ethical obligation is to maximize their returns. And that’s complicated, let’s say, when you try to apply it to a lot of the decisions of today. Because sometimes you’re trading off their returns for some other goal. Sustainability or privacy and so on where you are consciously making a trade off. Or as an executive, you have to consider a trade off. And the old way of thinking says you must make that trade off in favor of the shareholders.

Now, some people are probably thinking, well, it’s in everybody’s best interest if you’re ethical. You know, if you’re sustainable, customers will demand it and so on. And I think that’s the case in many cases. But again, that’s not the ethical decision. The ethical situation is when it does conflict which it sometimes does. So that’s really what I’m talking about. You know, if you can be sustainable and it’s also in the interests of your shareholders, then you probably have a no brainer of a decision there. That’s not hard. I’m talking about the hard ones.

So how can you have both? This new way of thinking that you have to satisfy a lot of stakeholders and this old way of thinking that says you have to maximize returns to shareholders. To put a very fine point on it, maximizing returns to shareholders, which I think is what people believe the obligation is, means that if you have a business idea on the table and it will increase shareholder returns, you have to do it. You have to maximize. And that includes, perhaps, unethical or questionable behavior, as long as it’s legal. It depends on how you read Milton Friedman exactly. Sometimes he says it has to be legal, sometimes he says it has to be in conformance with ethical custom or something. I don’t know, he has some tricky wording around that book that most people ignore.

But let’s say you can make money by selling the information of your customers, the personal information. And you can do it legally, because you didn’t promise to protect it or they opted out or whatever. Or opted in. The idea that you have to maximize returns to shareholders means you have to sell their information if it’s gonna make money, even if you’re not comfortable with that for other ethical reasons. So these are just examples of the situations where you’ve got your foot in two worlds, and you have to make hard decisions. Now, I’ve said before, that’s what ethics is all about. It’s about making really hard decisions. And it always comes down to you have to make a hard decision. There’s nobody who’s going to tell you what the right thing is to do. So that’s the introduction to my answer to your question. Now I’m going to answer your question.

What I learned is there are different ways of thinking about ethics, and the primary way that we think about ethics in the Western world has become this rule-based ethics. Deontological ethics, duty-based ethics, where there are rules. Do this, don’t do this, kind of rules. But that’s not the way people thought about ethics before the Enlightenment. Let’s say Aristotelian ethics and Medieval ethics and, you know, everything essentially that came before the Age of Enlightenment. And it’s not the way that other cultures typically think about ethics or did before they got very influenced by Europe and the US.

Generally, ethics has been about what does it mean to be a good person or what does it mean to lead a good life. It’s not about, in a specific situation, the rule says you should do X and Y. It’s about how do you define a good person, how do you become a good person? And then when you’re in a specific ethical situation, then you have to figure out yourself if you’re a good person, what’s the right thing to do? So in other words, you train yourself to be a good person. And then you make a good ethical decision, accepting the fact that it’s really hard to make these decisions and situations get very complicated, like the one I told you about with my peer employee. So that’s called virtue ethics. It’s a old sounding name, but it’s, you know, still valid.

Confucian ethics, for example, are obviously virtue ethics. Confucius was talking about what is a good person, a morally superior person. You find in Buddhist ethics and Hindu ethics, even in Western religions, a lot of it is about what is a good person? How does a good person act? And I found that that maybe is a much better way to think about those ethical decisions we have to make today in a very fast changing environment, where there just are no good rules for you. You know, you have to think, what kind of person do I want to be? What kind of company do I want my company to be? And based on that, what’s the right action to take? Even, you know, sometimes it’s really hard to make that call even. But that’s the right way to think about it.

So what’s a good person? Well, you can decide what the virtues are or, you know, society tells you. But one virtue, for example, is care about other people. You know, you care about your customers. And so you make decisions in accordance with that. Now you might also have, you know, a good person to you might be one who assumes those fiduciary responsibilities and returns money to shareholders. And in that case, you have your two virtues, maybe suggest different courses of action in a situation, and you still have to make that really hard decision of how to apply them. But your care for people should be part of making the decision. And then you have to use what’s called practical wisdom or practical judgment in figuring out how to apply the virtues that you have. That’s a better way to think about it to me.

Henry Suryawirawan: Right. Thank you for such an elaborate answer. I think just like the topic itself, right, it’s really, really actually difficult to find the best framework to actually make ethical decisions. And especially, it makes it even harder these days that people are more aware about such ethical decisions, right? You mentioned in your book, there’s this marketplace of morals where people demand companies, organizations to actually start acting to become more ethical. Things about sustainability, for example, diversity, inclusion, and many, many other aspects, which probably are very, very complex.

But I think you summarized it beautifully, in my opinion, right? So think about good virtues, think about being a good person, and use that as one of the lenses in your decision making framework. So it’s not all just about, for example, maximizing profits for the shareholders. Or maybe like good for the business but not good for the people, but you also include the good people aspect, the good virtues inside your decision making framework. So thanks for explaining that and giving us that tips.

[00:54:21] 3 Tech Lead Wisdom

Henry Suryawirawan: So unfortunately we have to wrap up pretty soon, but I have one last question for you, Mark, which is what I call the three technical leadership wisdom, right? So probably if you can think of it just like an advice that you want to give to us. I know you have plenty of advice from our conversation so far. But I think if you can summarize three of them, what would that be?

Mark Schwartz: Okay. I’m going to rise to the challenge here. Well, the first thing that I often advise business leaders is you should have a very compelling vision for where you want the company to go, but move towards it in very small increments. That balance is critical. So if you have a vision, and nothing happens on it for a long time, then it just goes away, you know? If you keep doing things quickly without any vision, then you wind up who knows where. Not only are you undirected, but people who are following you, people in the organization, don’t know what you’re trying to do so they can’t take it upon themselves to advance the goals. So, a good leader, and here I’m talking about any kind of leader, senior executive, technical leader, or even just individuals. A good leader has a vision that communicates where they’re trying to go. And at the same time insists on short, iterative, incremental movement towards that vision. And the combination is very, very powerful.

Second thing is, in the end, it all comes down to human relationships. Like I said at the beginning, fix your technology, deploy rapidly, you can make all sorts of change really quickly technically, but is it going to actually have an impact on the business? No, not unless you also fix the things like the 87 documents and all of that. And doing that usually involves doing things that are outside of your span of control. And so it’s all about whether you can influence people. And I think technologists are led to believe that they don’t have to deal with the people side of things, but guess what? They discover invariably that they do. You know, everybody’s a person and they have to develop their own style of how they influence other people. That virtue of care is an important one to cite here. One way or another, you can’t avoid it. You have to manage people and influence people.

And then the third lesson is definitely do go and work for the government or for a nonprofit. It’s not for everybody, obviously. But I had never thought about it before I actually went and did it. It never entered my mind that I would want to work for a government. And I found that you’re working with passionate people doing important things. Learning a lot. And it was a wonderful experience. So if you haven’t thought about it, at least think about it a little bit. Contributing to society, contributing to your country, contributing to maybe nonprofits and organizations you believe in.

Henry Suryawirawan: Yeah, a little bit unexpected, the last one. But I think it’s also very good advice for people, right? So do contribute to community, right? Maybe do join government organization or maybe non-profit organization. I’m sure there are plenty of things that you will learn, not only from the technical aspect, but the people side of it, right? Just what you mentioned on the second wisdom, because technology at the end is like a sociotechnical aspects, right? So there’s the social part where I think leaders have to master as well, including both what we have talked about so far, the bureaucracy and ethics.

So thank you so much for this conversation, Mark. So I really love the conversation, right, especially the insights that you gave. But if people want to connect with you or ask you more about these topics, is there a place where they can reach out online?

Mark Schwartz: Yes, LinkedIn is the place.

Henry Suryawirawan: All right.

Mark Schwartz: My alter ego is my profile on LinkedIn. We have a complicated relationship, but it’s close enough.

Henry Suryawirawan: Right. So I’ll make sure to put it in the show notes. So I’m also looking forward for your next book, because it seems like there’s a theme recurring from one book to the other. So hopefully we can see the next book as well. So thank you Mark for this conversation.

Mark Schwartz: Oh, thank you very much. I really enjoyed it. – End –