Stupid vs. Evil: The Only Useful Corporate Metric

Sep 17, 2005

In my opinion, there are only two important yardsticks for any corporation or corporate decision:

  • How evil is it?
  • How stupid is it?

The logic here is that corporations do evil things sometimes, and they do stupid things sometimes, and sometimes they do evil, stupid things. The goal would be to not do evil, and not to be stupid, and in particular not to be stupidly evil.

Allow me to provide some examples to help illustrate the point.

Enron: Evil, not stupid. Enron made money hand over demonic fist by completely discarding ethics and common decency. So, if you look at it in a Machiavellian sort of way, they were quite clever, but so evil that it boggles the mind.

Microsoft: Evil, not stupid. MS has had a growing stranglehold on the computer industry for 15 years, and have done plenty of evil things to get there. How do they sleep at night? "On a bed of money..."

SCO: Evil AND stupid. They initiated a slimy and questionable legal action against the supporters of a free product that has contributed enormous value to the public domain. Their reputation was tarnished forever. They are now losing customers like mad, partly due to the rising tide of disgust over their actions, and partly due to customer concern over the continuing viability of the company, given their increasing legal fees and dwindling revenues.

The preferred method of applying the Stupid vs. Evil metric is to give the corporation or corporate decision a Stupid score from 1 to 100, an Evil score from 1 to 100, and then plot those scores on a graph with a vertical axis of Stupid and a horizontal axis of Evil.

The goal is to be as close to the lower-left-hand corner as possible. If you're in the upper right...

The most troubling thing about the Stupid vs. Evil metric is that, if you rate a bunch of companies according to this metric, and then you correlate that to public opinion of the company, you will find that the public generally considers Stupid to be worse than Evil. In other words, if you make shitloads of money, a little bit of bunny-boiling is acceptable.

It seems to me that this should be reversed. In particular, when considering a course of action, it seems that it should be more important to not be evil than not be stupid. Assuming that we live in an ethical society, wouldn't the right way around be to evaluate an action's evilness before you even consider whether it's stupid or not?

The classic example is the mandatory review quota policy used by such luminary corporations as Microsoft, Amazon, and Washington Mutual.

Basically, the system works like this: the employees are graded on a bell curve. In any given team, some percentage (we'll say 20%) MUST be given a bad review, regardless of performance.

In theory, this should result in the worst-performing employees losing compensation, while the highly-performing employees gain compensation. Eventually, the theory goes, the less-useful employees will head off for less-ambitious pastures, removing the dead weight from the bottom. More pressure will then be brought to bear on the higher-performing employees, incentivizing them to work even harder, and the organization will iteratively move toward a lean and mean ideal.

The problem is that this turns out to be bullshit. First of all, teamwork is out the window. Why are you going to help someone else if it means they'll get a better review and you'll get screwed? Better to spend that time kissing the boss' ass, talking shit about your coworkers, and avoiding any kind of difficult project.

Second, the people at the low-end aren't necessarily going to be shuffled off. The thing is, you need those people to stay around, because otherwise who will you stick with the bad review? Ultimately, that end of the totem pole will be filled with people who are plainly incompetent and despondent, lacking the strength of will to quit and tell the company to stuff it.

Third, your truly high-performing employees are not necessarily going to be mindless participants in this system. Some of them will consider this unethical, and look for jobs at companies that aren't so draconian. Some of them will develop friendships with people who get crushed by the system, and will lose morale as a result. Others may feel that they could be more successful at a company that truly compensated performance, rather than using a quota.

So, let's review:

  • You're losing your elite employees.
  • You're retaining the worst of the bad employees.
  • You've structurally eliminated teamwork.

Your corporation is now just a collection of mediocre individuals, all working at cross purposes, even if they are under the same roof. Self-interest is the rule of the day.

It probably will take a few years for the damage to become clear, and in the meanwhile you'll have some cost savings, so the HR hatchetperson who came up with the policy looks like a rock star. They get a fat bonus, quit before the long-term debt comes due, and leave the squabbling masses to fight over the scraps as the ship goes down.

In other words, this plan is Evil, and it is Stupid. Now, it's not Stupid on the face of it. You can see why this plan would appeal if you didn't really think through the ramifications of it — it seems like it ought to get rid of bad workers and reward the good ones. But it is plainly, obviously Evil. People who don't deserve it are going to be screwed. That's how the plan is designed to work.

Given that, shouldn't someone in charge have taken one look and said, "We can't do this. It's Evil"? Even if it was the most brilliant plan in the world, it relies on being profoundly shitty to people. It conflicts with the most basic principles of human decency.

And, given that, what kind of sympathy can we have for these corporations? Stupid is forgivable on occasion; people make Stupid mistakes all the time. Stupidity is not intentional.

Evil only comes through conscious choice. And if a corporation consciously decides to go down the Evil path, only to find that that path was also the Stupid choice?

Well, then it's hard to have much pity.


If you liked this, you're welcome to read more of my blatherings.