We, Incorporated

"Organizations are not just places where people have jobs. They are our neighborhoods, our communities. They are where we join with other people to make a difference for ourselves and others. If we think of them only as the places where we have jobs, we not only lose the opportunity for meaning, but we endanger the planet."

Doug Smith is on a tear, and why not? Just look out the window and see, as he does, what's happening. Well, not out his window: Out there, you'll just see fields and hay rolls and, past those, the fog-shrouded hills of Dutchess County, New York. No, look out the bigger window.

All is not well in corporate-ethics land. It's not just debacles like Enron and MCI; what went on at those companies was unquestionably sinister and, probably, illegal. More telling are episodes between the foul lines, as Smith would say -- subtler organizational transactions and human encounters that don't break the rules per se, yet expose our ethical underbelly.

How, for example, could Shell Oil trumpet its commitment to corporate and environmental sustainability while lying about its petroleum reserves? Why did Google Inc. discover that its search engine was, in one case, producing a disturbing anti-Semitic result -- and then wait until someone else noticed to confront the problem?

Smith has been thinking about stuff like this for 20 years. He has seen it play out in hundreds of companies. If you have a morning, he'll explain to you, thoughtfully, passionately, what's really going on. It's not what you think. Not exactly.

Smith, a 55-year-old former teacher, lawyer, executive, and McKinsey consultant, has written a book called On Value and Values: Thinking Differently About We ... in an Age of Me (Financial Times Prentice Hall, March 2004). It's both a philosophical treatise on the nature of ethics in organizations and a call to action. His argument: We must learn to exercise our values through the organizations -- notably, business organizations -- to which we belong. It is a subtle book that, though elegantly written, is not easy to read nor to distill -- which is why it may be overlooked. And that would be a shame.

Here's why: A few decades ago, our lives were centered in places. We had the most in common with our village or city neighbors, with the people geographically closest to us. Place formed our connections to the social groups that mattered most: our tribes, churches, jobs, and schools. The defining politics -- and so, defining values -- were those rooted in physical communities.

Today, place has lost relevance for most of us in a connected, global world. We reside in places, of course, but that's basically a lifestyle choice. Rather, Smith writes, "it is in markets, organizations, and networks, and among family and friends that you spend your time, pursue your most pressing purposes, and find meaning in your life." So "Where do you live?" is an interesting question, but "What do you do?" is more telling.

Think of your kids. How much time do they spend playing near home with other neighborhood children, as you probably did at their age? More likely, they divide their afternoons among a raft of organized activities, from baseball to dance to religious studies. They have friends from any number of these groups, plus school, and their experience is a function of the amalgam. Like them, we now form myriad communities around "shared paths" -- our common interests, experiences, and desires.

Smith sees the shift in community from place to "purpose," as he says, as profound. For while place-based communities historically understood how to make the values-based decisions that shaped society, organizations -- especially corporations -- are flailing. They have the power to change the future for better or worse, but not the ethical will or know-how.

If you care about the future, that's a problem.

Smith compares his writing On Value and Values to the journey of Buddha: A privileged prince, disenchanted by the excess around him, sets off on a lonely, difficult journey into the unknown. It is an egregiously heroic metaphor for him to choose, of course, but not a bad one. For Smith, writing this book has been about finding his way back.

"Doug has always been interested in 'What can I do to make the world better?' " observes Dwight Raiford, a friend from college at Yale. So progressed a mission of sorts: a year off from Yale to teach school in Gambia; law school, to pursue the Perry Mason ideal of public service; and then a hasty abandonment of the profession. "I learned that, as a lawyer, you're guiding clients with regard to legal matters, but not with regard to purpose in the world. That's what I try to do now, to connect what goes on in organizations to larger spheres."