Who Says Cheaters Never Win?

by Kirk O. Hanson, MBA '71, August 2005

ILLUSTRATION BY ISABELLE ARSENAULT/ AGOODSON.COM

A nagging thought dogged me for 23 years as I taught ethics at the Stanford Graduate School of Business. What good am I really doing? Can a course in ethics equip someone to act ethically in a business career?

A few months ago, I was asked by the San Jose Mercury News to reflect on whether we live in a culture that makes ethical behavior impossible. I found myself admitting some troubling thoughts about the world we collectively have created. Here, slightly updated, is what I wrote:

It is time to face up to a dirty little secret. Players who use steroids in professional baseball, college coaches who have others take exams for their star athletes, high school students who cheat on the SATs, scientists who fake the results of their research, and CEOs who cook the books in American corporations all may be acting rationally.

With Major League Baseball feeling the heat for the first time from public disclosure of steroid use on its playing fields, much attention has been focused this summer on whether Barry Bonds and other baseball stars may have knowingly taken illegal steroids. If they did, there could be a simple reason why: It was worth it.

How can this be? The answer is that today there is so much to be gained by being just a little better than others-by hitting a few more home runs than any other professional baseball player, by getting to and staying at the very top of the modern American corporation, or by being the absolute best in any other field.

Salaries and rewards for those who come out on top have gone crazy. The highest-paid baseball player earned $2.3 million in the 1988 season, $6.3 million in 1994, and more than $20 million last year. CEOs got 40 times what the average employee in their company earned in 1980, and 400 times by 2000. The Olympic gold-medal winner who won a nation's praise and an endorsement or two in the 1970s became an endorsement bonanza by 2000. Who would settle for less when they are bombarded by ads like Nike's during the 1996 Atlanta Olympics: "You don't win silver. You lose gold.''

The winner-take-all culture exists in almost every area of American life. Science magazine, the most prestigious in its field, has reported that in bioscience, what economists call a "tournament market'' exists: The first to make an extraordinary finding reaps a hugely disproportionate share of the fame and future grants.

Ahead of the Pack

Tempted by these rewards, some people climbing the ladder may do almost anything to get to the top, and some who already have made it there will do almost anything to stay. Athletes turn to performance enhancers to remain superstars as they age; corporate executives falsify the books to retain their regal perks and immense pay. Former WorldCom CFO Scott Sullivan testified recently, for example, that executives at his company fraudulently adjusted the books to please Wall Street, which presumably would help keep the executives secure in their jobs.

The superstar culture has seeped even into our middle and high schools. Michael Dillingham, the 49ers team physician and a crusader against drug use by athletes, says parents of high school athletes are sometimes the most eager to try any drug that will give their child an edge.

Some children and their parents have convinced themselves that they have to be superstars and go to Harvard, Stanford, or Brown to have a worthwhile life. This attitude leads to cheating by the most qualified, not the least qualified, students in some schools.

Adding to the temptation, athletes, high school students, and scientists may convince themselves that anyone who is on top has cheated to get there, and therefore they rationalize it for themselves.

So, we have become a society captivated by "the winner.'' We have made the one who dominates the box office, comes out on top in sports, or rises to the peak in business a new kind of royalty. It is no wonder people cheat.

Cheating has always been with us. But is it worse now? Unfortunately, there are no reliable measures of the level of cheating. There were baseball and business scandals a century ago, and card cheaters were a fixture of the Old West.

What seems new to me is that cheating has gone mainstream. It shows up in almost every corner of American life-from professional athletics and Wall Street businesses to high school SATs. And it is tolerated more. There is less outrage and a more forgiving attitude when a baseball player is found with a corked bat or a student is caught cheating on an exam. Have we accepted at some level that cheating is reasonable? I hope not.

We would have to delve deeply into the national psyche to determine why we need heroes and celebrities so badly. I suspect it has to do with a spiritual crisis in American society-a search for what has real meaning. Worshiping heroes and celebrities can be a substitute for finding fulfillment in our own relationships and service.

On a more practical level, I blame both the media and our brand of competitive capitalism. Olympics coverage focuses on events where an American may win a gold medal, ignoring those where a great effort produced a silver or bronze. And the media dedicate a disproportionate number of column inches or broadcast time to one member of a nine-member baseball team. Driven by the media attention, fans flock to the ballpark where the superstar is playing, and the superstar demands a huge salary based on the tickets he or she sells.

Competitive markets, so effective in the allocation of resources in the U.S. economy, have also led to a frantic bidding war for certain types of top talent. Companies bid excessively for graduates of prestigious MBA programs. CEOs have enough market power to negotiate contracts that enable them to walk away with millions of dollars even if they fail.

Role of Media

The media have cooperated fully in creating this "great leader'' or rock-star model. Scanning the covers of business magazines, you might think General Electric employed only its former CEO Jack Welch or Hewlett-Packard, until recently, only Carly Fiorina.

Ironically, the media even love the celebrity who is caught cheating, making Martha Stewart a strange kind of icon for her noble prison behavior.

The emergence of a "superstar society''-and the "cheating society'' that has resulted from it-is bad for all of us. Of course, cheaters make a competition unfair for everyone else.

Beyond that, if everybody is tempted to cheat-and if a significant number of people do-it weakens our trust in everyone around us. How can you build friendships with other parents when they are helping their kids cheat in Little League baseball? How can a company build a culture of trust when employees suspect others are trying to cheat to get ahead of them?

Cheating also costs more. Every society depends on a mix of enforcement and voluntary compliance to make its businesses, its tax system, and its communities work. If we have to use constant surveillance, drug tests, and threats of severe penalties to restrain cheaters, it will be costly.

There are long-term effects, too. For one thing, if deceit were widespread, it would be the people who are the most proficient cheaters who get ahead-not something we want to reward. More serious, though, is that if people don't trust the system, if they believe everyone else is cheating and they cannot get a fair shake, they will refuse to play. Fewer companies will be started by entrepreneurs; fewer kids will try out for competitive athletics. A few years ago, the World Bank developed quantitative proof that cheating and corruption in business was holding back the economic development of emerging economies.

Must we accept that America has become a winner-take-all society and that cheating works? I don't think so.

The answer is not just more enforcement and tougher penalties, though they are necessary. In the long run, only a commitment to different values and to raising our kids in a different way will contain the power of cheating in American life.

We have to value "doing your best,'' not just winning. Only a few high school basketball players will make it to the NBA. We can't have the vast majority believing they are losers. Only a few business people will be CEOs. The rest are not failures.

New Value System

Encouraging "doing your best'' will require all of us to compliment and celebrate the efforts by those we know and love. The spouse who works hard but doesn't get the promotion deserves a dinner out. The child who studies diligently but gets a C grade should be praised.

Above all, we need to raise our children to resist the temptation to cheat. There is no way to make a rational case for honesty when getting that extra edge may help you come out on the top of the heap. My colleague and character education expert Steve Johnson says honesty must be instilled as a habit from an early age.

We should demonstrate to our kids that we adults abhor cheating. We should refuse to honor those who cheat-perhaps by boycotting certain baseball games or the stock of an errant company. Let's tell our kids cheaters are jerks. We should support the efforts our schools, sports leagues, and courts take to punish cheating.

And, of course, our children must never, never see us cheat.

The question I am asking now is how might I have better prepared our graduates to live in a world that says in so many ways that it is worth cheating to get ahead. And how do you and I prepare ourselves to resist that message in the years ahead. The editors of this magazine and I welcome your thoughts.]

Kirk O. Hanson, MBA '71, is a university professor and executive director of the Markkula Center for Applied Ethics at Santa Clara University, and formerly a senior lecturer at the Stanford Business School. This article originally appeared in the Perspective section of the San Jose Mercury News on March 6.