Put human nature back in business

By Ralph Gomory, Published: June 29

Ralph Gomory is a research professor at New York University’s Stern School of Business and a recipient of the National Medal of Science. He is a former president of the Alfred P. Sloan Foundation and past director of research at IBM, as well as a former director of The Washington Post Co.

When two bombs exploded this spring near the Boston Marathon finish line, many rushed to help those who were hurt. We read about their actions with approval and admiration, but not with surprise. On some level people understand that it is human nature to try to help, even if doing so involves risk or sacrifice.
This part of human nature is largely absent in business, a world that believes almost entirely in motivation through self-interest and even in the social good of self-interest. This viewpoint was famously summarized by Adam Smith: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.”

 

Smith, however, was also conscious of the power of altruism. He could have been describing the scene in Boston when he wrote in 1759: “The plaintive voice of misery, when heard at a distance, will not allow us to be indifferent about the person from whom it comes. As soon as it strikes our ear, it interests us in his fortune, and, if continued, forces us almost involuntarily to fly to his assistance.”
Smith devoted a book, “The Theory of Moral Sentiments,” to explaining why widespread altruism is the natural and unavoidable consequence of the human ability to empathize with others.
A century later, Charles Darwin laid out a theory of natural selection based on the struggle for individual survival. However, in “The Descent of Man,” Darwin also described what we would call group selection: “An advancement in the standard of morality will certainly give an immense advantage to one tribe over another. A tribe including many members who, from possessing in a high degree the spirit of patriotism, fidelity, obedience, courage and sympathy, were always ready to aid one another, and to sacrifice themselves for the common good, would be victorious over most other tribes; and this would be natural selection.”
More recently, research by the distinguished Harvard biologist E.O. Wilson has shown the importance of group selection; he attributes the dominance of man and the success of certain social insects to their social capabilities. In “The Social Conquest of Earth,” Wilson writes of humans: “An unavoidable and perpetual war exists between honor, virtue, and duty, the products of group selection, on one side; and selfishness, cowardice, and hypocrisy, the products of individual selection, on the other.”
Evolution has produced two sides of human nature: the more self-centered and the more altruistic. Different training and circumstances can bring out in us more of one or the other, but they are both in our DNA.
Different situations demand more of one aspect of human nature or the other. We may be satisfied with relying on the self-interest of the butcher or baker, but who really wants a doctor who views his patients as a way to make as much money as possible? People want doctors who care about their health and intrinsically want patients to be well. We want doctors who use the other half of human nature. Many, if not most, doctors go into medicine so they can do just that.
In business, however, human motivation is thought of mainly in self-interested financial terms. Chief executives are supposed to be motivated by stock options to make as much money as possible for shareholders, because they will also make the most money possible for themselves. In almost every aspect of business, people identify simple, measurable goals and try to tie self-interest to them.
Often, however, it is not easy to find simple goals in complex situations, and sometimes simple goals can be attained in undesirable ways. It is also unrealistic to think that human motivation can be reduced to individual self-interest. In doing this, we neglect the part of human nature that is altruistic.
We might all benefit from more organizations with goals and practices that enlist both sides of human nature. A company can regard providing its service as just a way to make money and be willing to cut corners as long as it doesn’t interfere with profit. Or its goal can be to be viable and provide an outstanding service. People in such an organization will feel more pride in their work and satisfaction in contributing to something worthwhile. They will think of more ways to contribute. This approach might well improve both the economy and its distribution.
The laws of evolution and the experiences of daily life suggest that humans have an inherent desire to contribute to others. Organizations that take this side of human nature into account may well function better than those whose single goal is profit. And the people in those corporations, using both sides of their natures, will also lead more fulfilling lives.