Broken Business

WHY THE SYSTEM FAILS

What we are is shaped both by the broad systems that govern our lives – wealth and poverty, geography and climate, historical epoch, cultural, political and religious dominance – and by the specific situations we deal with daily. Those forces in turn interact with our basic biology and personality.

—Social psychologist Philip Zimbardo, The Lucifer Effect

If Hollywood made a blockbuster movie out of the story of Wind International, Joseph Varga would be written as a classic villain. He would appear charming in the opening scenes and gradually, over the course of film, be revealed as a ruthless criminal mastermind. The movie would culminate in a showdown with the forces of good – perhaps the plucky whistle-blower backed by an intrepid reporter and the long arm of the law – resulting in his downfall. Meanwhile, the CEO would be portrayed as a sort of tragic figure; a basically decent (if naïve) person caught in the path of destruction wrought by the monstrous Varga.

Such a depiction would be based in reality, but would only tell part of the story. Blockbuster movies tend to draw sharp lines between good and evil.

In reality, it's not so simple. While it is true that Varga is an unethical employee who corrupts those around him, there is a complex array of factors that enable him to do so; indeed, there are forces that made him corrupt in the first place. He is what we like to call a bad apple. And when things go wrong in a company, senior leaders like to ...