What corrupts our institutions over time, and what are the implications?

The source of our discontent is the corruption of purpose by our institutions.  By institution, I mean every organization that provides value to people.  This includes government, healthcare, education, religious institutions, and any business with more than a few employees.   Regardless of their intended purpose, they may become corrupted in this purpose, and by this, I mean they no longer successfully deliver the services we expect and/or are fair to their constituents, and employees.  In essence the bureaucracy is failing in its established purpose.

I believe there are three ways that organizations lose their way.  One, which is the most important to consider is the relentless need to be in, and stay in power; two, the constraint of rules that manage behavior but create a moribund bureaucracy in the name of controlling risk; and three, shortcuts to judgement in order to drive efficiency.

Power

At some point all institutions deal with threats from the inside, or from the outside.  Consider, democracy and capitalism; much has been written about the threats from other forms of government, fascism, and communism.  Our democracy was recently threatened during the 6 January insurrection, this was an autocratic existential threat to democracy.  One would think it vitally important to address, yet for the sake of retaining power one party is willing to ignore the threat and embrace a great lie.  This is a not so subtle example of power corrupting purpose.

In business there are many threats of new competition, or a new technology,  or new regulations (consider the threat of gun controls to the gun industry)… in medicine, new medical technology, or possibly illegal activity by members of the organization, as in the Catholic Church pedophile scandal.

Almost all institutions will seek to protect themselves from external threats.  More importantly every leader will be tempted to use all means at their disposal to retain power.  They justifying their hold on power for the good of the institutions.  The greater the threats, the greater the risk of an organization being driven by the personality of the leader.  She or he will find it necessary to protect their power.

Leaders will see threats to their power as something to put-down immediately.  Attacking the whistleblower, or the “perceived” enemy or competition.  It is a natural progression of highly driven and competitive individuals to demonize the threat and to rally the troops against the evilness of the threat.  In order to keep power and to control the organization, especially over those that may start questioning if the king is wearing clothes, the leader battles within and without the organization.  Eventually they see themselves as infallible.  They’ll fight to retain power, for the good of the institution, when it is really for their own benefit (power) that they come to this wretched state.  Good institutions root this out and force a change before it becomes a cancer that eats at the original purpose of the institution.   Core values can be recovered by those that remember the purpose, that believe in the purpose and are willing to fight the good fight.

Bureaucracy

Over time, many organizations deal with problems within the organization by creating more rules, more oversight, and as a result more bureaucracy.   Rather than deal with inadequate performance directly, they build more barriers to keep people aligned with the operation of the business.  Every time there is a failure another rule, or oversight or other constraint is added.  Over time this becomes all burdening.

One can see oversight as valuable in avoiding the corruption of purpose that can destroy an institution.  However, it would be better to educate, train, develop people and give them tools to be successful within the charter of the institution and its mission and minimize oversight and approvals.  Moribund bureaucracy is one that can no longer perform its mission, can no longer be true to its purpose, because it is too busy with infighting, too busy with checking each other, and slowing the process.  The US Senate and Congress at the time of this writing is more interested in checking the other party and the Executive branch than they are in serving the American people.   The filibuster had it purpose but is overused today to just say no.  Healthcare is more about avoiding liability and avoiding extensive payouts through checks and double checks than ensuring the health of patients… I know, I just went through the process of trying to buy insurance on the market. And I’ve seen this in business, when business cannot get out of its own way to serve customers.  They sometimes spend more energy serving their internal checks and balances than the customer, and then they are failing their shareholders and employees as well.

Labeling

This might seem like a strange one, but I’ve noticed that for the sake of efficiency, institutions have started using “labeling” as a shortcut.  Labeling can be something as simple as separating high risk and low risk patients, customers, suppliers, etc.  It can be labeling a patient with a diagnosis that cannot be undone.  If for example you get a diagnosis of cancer, and it turns out to be a less stage, or not cancer at all, insurance could be a problem in the future.  If your child is labeled as a slow learner,  what prospects do you have to change this and over what time and what is lost, if you later learn she or he has a hearing or vision deficit?

If you are labeled as a risk because of identity theft, you may not be able to get a loan through no fault of your own.  And in the worst case, if you are labeled as living in a high-risk zone (such as a minority community) you may find yourself paying more for a home loan or having your house appraised lower than is justified.  Labeling for the sake of efficiency is a way to undermine the purpose of an institution and can destroy value and destroy people.

Each of these means of corrupting the purpose of an institution, has the effect of damaging people’s faith in institutions. Furthermore these failures (especially leadership – personality cult) can result in institutions becoming a tool of destruction and damage if they are not checked.   Understanding what has happened to an institution whether it be Leadership failure, Bureaucracy, or Labeling, is necessary to understand our reaction to institutions and how to make them once again serve our purpose.  To be the tool they were intended to be.