Joseph Badaracco on making smart decisions “in the gray area”: An interview by Bob Morris

badaroccoJoseph L. Badaracco is the John Shad Professor of Business Ethics at Harvard Business School. He has taught courses on business ethics, strategy, and management in the School’s MBA and executive programs. Badaracco is a graduate of St. Louis University, Oxford University, where he was a Rhodes scholar, and Harvard Business School, where he earned an MBA and a DBA. In recent years, Badaracco served as Chair of the MBA Program and as Housemaster of Currier House in Harvard College. He has also been chairman of the Harvard University Advisory Committee on Shareholder Responsibility and has served on the boards of two public companies. He has taught in executive programs in the United States, Japan, and many other countries and has spoken to a wide variety of organizations on issues of leadership, values, and ethics. He is also the faculty chair of the Nomura School of Advanced Management in Tokyo.

Badaracco’s current research focuses on what counts as sound reflection for busy men and women who have serious responsibilities and face hard, practical problems. He has written several books on leadership, decision-making, and responsibility. These include Defining Moments: When Managers Must Choose between Right and Right (2016), Leading Quietly: An Unorthodox Guide to Doing the Right Thing, Questions of Character: Illuminating the Heart of Leadership Through Literature (2006), and The Good Struggle: Responsible Leadership in an Unforgiving World (2013). These books have been translated into ten languages. His latest book, Managing in the Gray: Five Timeless Questions for Resolving Your Toughest Problems at Work, was also published by Harvard Business Review Press (September 2016).

Badaracco has three children and lives with his wife, Patricia O’Brien, in Brookline, Massachusetts.

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Morris: Before discussing Managing in the Gray, a few general questions. First, who has had the greatest influence on your personal growth? How so?

Badaracco: I really don’t think I can pick an individual. As I started reflecting on this question, many possibilities came to mind – my parents, of course, certain teachers in high school and college, but I think my personal development has also been powerfully shaped by the various environments in which I’ve lived and worked over the years. And, since I’ve been a faculty member at Harvard Business School for more than 30 years, that may have been a very strong influence but, on the other hand, I chose to go to the School and stay there which suggests that I was already quite receptive to its way of doing things and thinking about things.

Morris: The greatest impact on your professional development? How so?

Badaracco: Again, I can’t isolate individuals but, over the years, there have been a handful of HBS faculty members whom I have admired and who, I believe, set great examples, at least for me, about ways in which I wanted to teach and do research and write. However, like me, they were also very much products of the School, so it really is hard, at least for me, to disentangle all these influences.

Morris: Years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow? Please explain.

Badaracco: As long as I can remember, I’ve wanted to be a teacher, but a turning point for me was attending HBS as an MBA student. What I experienced was the power of the case method – that is, how much students can learn, not by listening to lectures, but by engaging in an intense discussion. This can be an exciting way to learn and a powerful one, because it really gets all the synapses to connect.

Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?

It’s been enormously valuable. I say that because the teaching and the writing I’ve done have drawn, in a wide range of ways, when things I’ve learned from high school all the way through graduate school.

Morris: What do you know now about the business world that you wish you knew when you went to work full-time for the first time? Why?

For just about as long as I can remember, I’ve wanted to be a teacher, but a possible turning point – which led to my career at HBS – was probably attending the school has an MBA student and experiencing the case method. This method is slightly misnamed because it is, essentially, a discussion method in which students discuss a “case,” which is typically a short description of a manager facing a problem. The power of the case method is that, at least at its best, it elicits full, sometimes intense engagement from students. They learn from each other and from the instructor, and a lot of the learning really sinks in, because a good discussion engages everyone and really makes the synapses connect.

Morris: Of all the films that you have seen, which – in your opinion – best dramatizes important business principles? Please explain.

Badaracco: This is a tough one for me. I’m not that much of a film fan, and nothing comes to mind. It may not answer your question, but my favorite movie, by far, is the Godfather series.

Morris: Here are several of my favorite quotations to which I ask you to respond. First, from Lao-tse’s Tao Te Ching:

“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”

I think this is sound advice, at least for people who think that there is only one model of leadership, the heroic model. My own view, which I wrote about in the book several years ago, is that, quite often, it is quiet leaders who make the really big difference in organizations.

Morris: From Michael Porter: “The essence of strategy is choosing what not to do.”

Again, I agree and when organizations are successful, following Porter’s advice can be difficult. They have people with good ideas, there are ample resources, and so the risk is venturing in too many different directions, and not concentrating, and ending up being vulnerable to focused competitors.

Morris: From Richard Dawkins: “Yesterday’s dangerous idea is today’s orthodoxy and tomorrow’s cliché.”

Badaracco: I find this a little glib. I think you have to look at ideas one by one and assess whether they are dangerous her valuable, rather than looking at some sort of timestamp on them.

From Isaac Asimov: “The most exciting phrase to hear in science, the one that heralds the most discoveries, is not “Eureka!” (I found it!) but ‘That’s odd….’”

Badaracco: I’m not a scientist, but that is my sense of how science typically progresses. And it’s probably true of a lot of things. Progress usually happen step-by-step and not in huge breakthroughs.

Morris: From Thomas Edison: “Vision without execution is hallucination.”


Morris: Finally, from Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

Badaracco: I suppose it’s even more useless to do something that shouldn’t be done and do it inefficiently, but Drucker is right, and this is a reason to look up and around often and make sure you’re heading in the right direction.

Morris: Of all the greatest leaders throughout history, with which one would you most like to be closely associated for an extended weekend of one-on-one conversation? Why?

Badaracco: I guess I would pick one of the great American presidents since, as a fellow American, I have some sense of the context in which they worked and succeeded.

Morris: Most change initiatives either fail or fall far short of original (perhaps unrealistic) expectations. More often than not, resistance is cultural in nature, the result of what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.”

Here’s my question: How best to avoid or overcome such resistance?

Badaracco: I think it’s important to start with strong analysis, so you’re sure that you’re right about what needs changing or fighting. And then you have to articulate the best case you can and start working patiently to build support and to mobilize allies.

What are the defining characteristics of a workplace culture within which personal growth and professional development are most likely to thrive?

Badaracco: Basically, an environment that gives people the chance or even pushes them to try new activities and take on new challenges that build on the skills and experiences they have.

Morris: Recent research indicates that, on average, less than 30% of employees in a U.S. company are actively and productively engaged. The others are either passively engaged (“mailing it in”) or actively disengaged, undermining the success of their organization? How do you explain this situation? What’s the problem?

When this happens, I’m inclined to look first at the leadership. I think the vast majority of people want to work hard, feel like they are contributing to something worthwhile, and want to feel rewarded, financially, and in other ways, for making contributions. But often they can’t do this on their own and need supervisors, managers, and leaders who make it possible.

Morris: In your opinion, are workplace cultures today more toxic, less toxic, or about the same than they were (let’s say) fifteen years ago? Please explain.

Badaracco: I’m way out on a limb and speculating, but I’m inclined to say less toxic. And the reason is that many organizations face strong or intense competition. This means people in these organizations have to focus on getting the job done, and it may also mean less opportunity for politics, and stronger accountability.

Morris: Looking ahead (let’s say) 3-5 years, what do you think will be the greatest challenge that CEOs will face? Any advice?

Badaracco: My view is that it will be dealing with slow growth, in GDP, revenue, and profits. And this will create the challenge of motivating employees and others to work hard at steady improvement rather than exciting great leaps forward.

Morris: Now please shift your attention to Managing in the Gray. For those who have not as yet read it, hopefully your responses to these questions will stimulate their interest and, better yet, encourage them to purchase a copy and read the book ASAP.

First, when and why did you decided to write it?

Badaracco: I decided to write it roughly four years ago, partly because I was looking for a new project and partly because I had been thinking for a number of years that I should try to put in print a set of ideas I had developed giving a lot of talks to corporate and other audiences.

Were there any head-snapping revelations while writing it? Please explain.

Badaracco: There’s a huge difference between giving a good talk and writing a book.

Morris: To what extent (if any) does the book in final form differ significantly from what you originally envisioned?

Badaracco: In the case of this book, there wasn’t a big difference. I think that’s because the basic skeleton of the book had been developed and tested over the years.

Morris: Morris: According to the account I heard, one of Albert Einstein’s Princeton colleagues gently chided him because he always asked the same questions every year on his final examinations. He replied, “Quite right. Each year, the answers are different.”

Can the same be said of the five questions you pose? Please explain.

Badaracco: I think it certainly can be said. In fact, I think these five questions have stood the test of time because they are virtually inevitable questions. In other words, I don’t think any of us would want someone making an important decision to ignore or overlook any of them. It’s almost as if they have somehow been etched in our psyches as the basic framework for thinking about hard problems.

Morris: Which of the five questions seems to be the most difficult to answer? Why?

Badaracco: Probably the first question (i.e. “What are the net, net consequences of this decision?”) because it can be so difficult to see what these are. This doesn’t mean people should give up or just focus on near-term or tangible consequences, but it does mean they have to rely on what they can learn from others and then rely heavily on their own judgment.

Morris: Which of the five questions leads to an answer that seems to be the most difficult to act upon? Why?

Badaracco: I think the fourth question, “Who are we?”, can be the hardest to translate into action, mainly because the values and norms that shape organizations can be difficult to state precisely and because their implications, in particular situations, can be hard to discern. So once again, judgment, and, in particular, considered judgment, becomes very important.

Throughout your lively and eloquent narrative, you focus on several real people involved in situations that require them to resolve an especially tough problem at work. Which is the most valuable lesson to be learned from each. Here they are in alpha order. First, Aaron Feuerstein

Badaracco: Don’t assume that your personal moral compass, however admirable it may be, will always give you the right answer to complicated questions that require in-depth analysis.

Morris: Next, Becky Friedman

Badaracco: Don’t throw up your hands or abandon your values when you run into political difficulties. Stop, get a sense of the political terrain, and experiment with some ways to move cautiously forward.

Morris: Also, Jim Mullen

Badaracco: Sometimes, there are no simple or easy solutions to gray area problems. Or, put differently, the “solution” is working intelligently, with many other people, for months or even years – guided by a basic direction and a few central values that really matter to you and others.

Morris: And then Alisha Wilson

Badaracco: Pay real attention to your basic human instincts when you face gray area decisions, but also try to have a clear sense of when you have done all you can reasonably do.

Morris: In your opinion, what is Niccolò Machiavelli’s relevance to making smart decisions in gray areas?

Badaracco: I take his advice to be: make sure that you have a plan that will be resilient across surprises good and bad and that you feel you can be resilient enough to persist and adapt as you face the surprises.

Morris: Please explain why Ernest Hemingway attracted your attention.

Badaracco: It actually wasn’t Hemingway. I simply knew that he had said what I quoted in the book, and I thought he had succeeded in expressing a concern that a lot of people had or might have about the argument I was making. I think that, in general, when you want to make a case, It important to be as clear and honest and persuasive as you can be about stating the opposite case, rather than attacking strawmen.

Morris: What is “tempered intuition” and how can it be beneficial?

Badaracco: Tempered intuition is more than beneficial. It’s usually critical to resolving gray area problems. In other words, in the end, these problems are resolved by someone in a position of authority saying this is what I think we should do and will do to address this problem. But initial gut instinct or intuition can be hazardous on gray area problems. Because they are complex and uncertain, I think it’s important to follow my basic recommendation in the book: which is to work through these problems as a manager and then resolve them as a human being, by using your judgment and developing your own answers to the five questions. Once you’ve gone through this process, I think you have tempered your intuition and a much more ready to make the call.

Morris: What is “moral imagination” and what are the most formidable barriers to developing one? How best to avoid or overcome them?

Badaracco: It’s the ability to put yourself in another person’s shoes, particularly when that person and their circumstances are far removed from yours. And a big obstacle to doing this can be that, as a result of performance pressure, familiar routines, and the bubble-like existence that success can put around any of us, it becomes harder and harder to rely on our moral imaginations.

Morris: In your opinion, what do so many people find it so difficult (if not impossible) to see the world [begin italics] as it really is [end italics]?

There’s a vast literature on this. Basically her mines have lots of stuff going on in them and the result is that we see things partially, through skewed lenses, and in the light of our biases and preferences. This is why I tried to emphasize working through gray area problems as a manager, which means working with and through other people to really understand what is going on in a situation.

Morris: Which of the defining characteristics of humanism can be most helpful to the process of making smart decisions in the gray areas? Please explain.

Badaracco: Humanism has many meanings, but what attracts me about it is that it encourages men and women to take a broad view of situations and to think about them from on-the-ground perspectives rather than through theoretical and conceptual lenses.

Morris: In your opinion, which of the material you provide in Managing in the Gray will be most valuable to those now preparing for a business career or who have only recently embarked on one? Please explain.

Badaracco: I’d say it’s two things. One is the basic mantra in the book: work through hard, complex problems as a manager and then resolve them as a human being, and the other is using the five questions to flesh out what it means to resolve gray area problems as a human being.

Morris: Which question had you hoped to be asked during this interview – but weren’t – and what is your response to it?

Badaracco: These are excellent questions, Bob, and I don’t think there are any loose ends.

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Joe invites you to check out the resources at these websites:Joe invites you to check out the resources at these websites:

Harvard Business School link

Managing in the Gray Amazon link

Harvard Business Review link

YouTube videos link

LinkedIn link

Facebook  link

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