"Nice guys finish last" the kind of hoary business proverb that makes me grind my teeth. It immediately drives me to run through the list of highly successful CEOs who seem genuinely nice, simply in order to prove the proverb wrong.

Unfortunately and realistically, though, I can the "nice" billionaires on the fingers of one hand and still have a finger left to express myself. A few, like Bill Gates, become forces for good but most "self-made" billionaires are selfish and--how to put it?--ethically challenged.

Don't get me wrong. I love writing about Tim Cook, Elon Musk, Mark Zuckerberg and all, but I've recently noticed (as perhaps you have, too) that they seem to coming off nowadays more like supervillains than superheroes.

Part of this is probably the simple result of acquiring great wealth. There's ample scientific evidence that the richer people are, the worse they treat other people. Rich folk are more likely to break laws and generally treat us mere mortals as bits of trash.

This is one of those things that I wish weren't true. It would be so wonderful if people who acquired great wealth through innovation ("change the world for the better") were the very people most likely to actually, well..., change the world for the better.  Not the case, alas.

So much is clear to the open-eyed observer... but why is this so?

Turns out that, according to science, a key personal characteristics that makes entrepreneurs successful metastasizes when they become successful, and then drives them to behave selfishly, ignore laws and regulations, and generally become a force for evil.

That characteristic? Hubris.

Miriam-Webster defines hubris as "exaggerated pride or self-confidence" but that doesn't exactly capture the entire picture. According to research and analysis conducted at the University of Colorado, Indiana University and the University of British Columbia:

"More confident actors are moved to start ventures, and then act on such confidence when deciding how to allocate resources in their ventures.... Founders [have a] propensity to be overconfident to their decisions to allocate, use, and attain resources. Founders [who lack hubris] tend to deprive their ventures of resources and resourcefulness and, therefore, increase the likelihood that their ventures will fail."

In other words, an "entrepreneur" without hubris probably won't start a business anyway, and if they do, they'll probably fail because they'll behave too conservatively.

In early stage companies, founder hubris is actually a bit charming. You look at the contestants on Shark Tank, for instance, and even though you know they're tilting at a longshot windmill, their enthusiastic overconfidence is contagious.

However, once an entrepreneur becomes successful, that erstwhilely charming hubris goes sour, according to business ethicist Joseph McManus of Monmouth University. In his landmark 2016 study "Hubris and Unethical Decision-Making," he writes:

"Earnings manipulation is more likely at firms led by CEOs influenced by hubris [which] leads managers to invoke an amoral decision process which causes a higher incidence of unethical behavior among these individuals."

In other words, the very overconfidence that causes an entrepreneur to launch and grow a business eventually creates the internal emotional justification to cut corners and do whatever it takes to be successful, even if that means damaging society at large.

This causal relationship between hubris and unethical behavior explains why so many high tech entrepreneurs--even those who originally seemd to be motivated by altruism--end up with business models that destroy privacy, abuse workers, help dictators, and damage democracy.

Given that relationship, it's completely unrealistic to expect those companies, or their management, to rein in their behavior of their own accord. Absent government regulation or public boycotts, they'll continue to wreak havoc... because that's how they became successful in the first place.

Published on: Feb 18, 2019
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