Saturday, December 16, 2017

A Chinese Look at American Business Culture

Puzhong Yao was born and raised in China. Having a difficult time in Chinese schools he was dispatched to Great Britain and eventually landed in Cambridge University.  From there he went to work at Goldman Sachs and then attended Stanford’s prestigious Graduate School of Business.

In a recent article (via Maggie’s Farm) he offered a view of American business through the eyes of someone who was brought up in China... in a filial piety culture, but also in a culture that values hard work. He disavowed the comparison with Alexis de Tocqueville, but he did allow us to hold a mirror up to our quirks and idiosyncrasies.

As it happens, it’s worse than that. Yao did not say it, perhaps because he is too polite, but at the summit of the American business education he found weakness, softness and whiny self-righteous do gooders. If he were in China asking how he can compete against America, he would have concluded that America is quickly becoming non-competitive… because it cares more about therapy than about business.

You have heard this story on this blog more often than perhaps you would care to recall. Even though Yao’s descriptions sound like caricatures, they should not be suprising. Nothing prevents the great minds of the Stanford Graduate School of Business from becoming caricatures of themselves.

For instance, Yao showed us what was taught in a GSB class about business strategy. The professor was trying to teach which corporate mottos could best inspire people to do their best. Strangely enough, making money and getting rich are not acceptable mottos or missions. What really mattered to the professor and the students was do-goodism, healing the world and making people feel better about themselves.

You might perhaps doubt my word. If so, here’s Yao’s description:

One class was about strategy. It focused on how corporate mottos and logos could inspire employees. Many of the students had worked for nonprofits or health care or tech companies, all of which had mottos about changing the world, saving lives, saving the planet, etc. The professor seemed to like these mottos. I told him that at Goldman our motto was “be long-term greedy.” The professor couldn’t understand this motto or why it was inspiring. I explained to him that everyone else in the market was short-term greedy and, as a result, we took all their money. Since traders like money, this was inspiring. He asked if perhaps there was another motto or logo that my other classmates might connect with. I told him about the black swan I kept on my desk as a reminder that low probability events happen with high frequency. He didn’t like that motto either and decided to call on another student, who had worked at Pfizer. Their motto was “all people deserve to live healthy lives.” The professor thought this was much better. I didn’t understand how it would motivate employees, but this was exactly why I had come to Stanford: to learn the key lessons of interpersonal communication and leadership.

Irony, anyone.  America’s future business leaders are only motivated by the notion that they can help people live healthy lives. It’s not about working hard to succeed. Giving alms to the needy makes them feel good about themselves. Yao is correct to note that nothing about this health craze was going to motivate anyone, but he did get to see how Americans were removing themselves from the arena of international competition.

And then there was the course about feeling your feelings. You think that I was kidding when I ridiculed this mindless exercise in learning how to wallow in emotion. Apparently, this mantra has contaminated the Stanford GSB. You might have thought that business school and Stanford in particular would have avoided this cultural poison. You would have been wrong.

Anyway, Yao likes his class where he is being taught to be more touchy feely:

My favorite class was called “Interpersonal Dynamics” or, as students referred to it, “Touchy Feely.” In “Touchy Feely,” students get very candid feedback on how their words and actions affect others in a small group that meets several hours per week for a whole quarter.

It wasn’t just about feeling your feelings. It was about empathy and microaggressions and every last piece of stupidity that we had hoped and prayed  had been quarantined in Humanities courses.

When Yao took the course, he discovered that he was not very good at feeling his feelings… because he had no feelings.

We talked about microaggressions and feelings and empathy and listening. Sometimes in class the professor would say things to me like “Puzhong, when Mary said that, I could see you were really feeling something,” or “Puzhong, I could see in your eyes that Peter’s story affected you.” And I would tell them I didn’t feel anything. I was quite confused.

But, the therapy culture has taught these professors that people who do not feel their feelings are repressing their feelings. That is why they need to learn to feel their feelings. Surely, the emotions are there, lying dormant in the depths of everyone’s soul, awaiting liberation:

One of the papers we studied mentioned that subjects are often not conscious of their own feelings when fully immersed in a situation. But body indicators such as heart rate would show whether the person is experiencing strong emotions. I thought that I generally didn’t have a lot of emotions and decided that this might be a good way for me to discover my hidden emotions that the professor kept asking about.

Not knowing any better, Yao decided to test the theory. He bought a heart rate monitor, to see whether he had real feelings that he was ignoring. Here is what happened:

So I bought a heart rate monitor and checked my resting heart rate. Right around 78. And when the professor said to me in class “Puzhong, I can see that story brought up some emotions in you,” I rolled up my sleeve and checked my heart rate. It was about 77.  And so I said, “nope, no emotion.” The experiment seemed to confirm my prior belief: my heart rate hardly moved, even when I was criticized, though it did jump when I became excited or laughed.

As you might imagine, Yao’s classmates were not amused. They were feeling their feelings and he was saying that he did not have feelings. If he was right, that made them dupes of political correctness:

This didn’t land well on some of my classmates. They felt I was not treating these matters with the seriousness that they deserved. The professor was very angry. My takeaway was that my interpersonal skills were so bad that I could easily offend people unintentionally, so I concluded that after graduation I should do something that involved as little human interaction as possible.

Pao concluded by comparing the work ethic prevalent in Communist China and the therapy culture that has even infested America’s best business schools:

In Communist China, I was taught that hard work would bring success. In the land of the American dream, I learned that success comes through good luck, the right slogans, and monitoring your own—and others’—emotions.

Yao does not consider it a total loss. He finds a glimmer of hope in the existence of his favorite store: Costco. What is the secret to Costco's success? They don't hire MBAs.


trigger warning said...

Read Puzhong's article yesterday, and, like you, I was very impressed. His take on MBA programs like Stanford (and Harvard, Penn, Dartmouth, Duke etc), as well as the idiotic use of closed-form econometric models conforms to my own. Why anyone bothers to read the Harvard Biz Review is beyond me. And the flawed use of the vaunted Black-Sholes model to force the model into the real world now has its own place of honor in the sordid history of financial legerdemain (as does the flawed use of circulation models in climate legerdemain).

sestamibi said...

More women in corporate America, more feelings.

David Foster said...

"They felt I was not treating these matters with the seriousness that they deserved. The professor was very angry. My takeaway was that my interpersonal skills were so bad that I could easily offend people unintentionally, so I concluded that after graduation I should do something that involved as little human interaction as possible."

People who talk a lot about their feelings, and people who are actually very good with human interactions, are two different sets of people, with some but by no means complete overlap.

L. Beau said...

Mr. Yao's heart-rate monitor experiment was terrific. It told us that Yao is a man willing to put is his own assumptions to the test, and seek the facts, even if those facts did not conform to his prior assumptions. In my view, this makes him a better thinker that the classmates who disapproved of his heart monitor test, or the touchy (not touchy-feely) professor.

Sam L. said...

Costco doesn't hire MBAs? Lets me out, then. But then, I got mine in '77, and I'm retired.

Anonymous said...

Yao didn’t notice that one secret of Costco’s success is they treat their employees and customers well. Did you? If so, you didn’t mention it.

I agree with you about MBAs, at least in workplaces like mine where we are forbidden by law from turning a profit. Ever since the-powers-that-be inflicted MBAs upon us, things have gone rapidly downhill.

Ares Olympus said...

I've used a HRM for exercise, but I never tried bringing it to business meetings, and see what its doing, but I would expect it to be higher when I was agitated. I admit I probably would at such moments not even think to ask the question, or whether calming down a little might help me be more persuasive to others.

His professor seemed a bit close minded against the motto “be long-term greedy”, although I might argue it doesn't really tell you how, and really its more of a warning of the opposite as "Fear short-term greed."

When I hear “be long-term greedy” it means the same as "buy low, sell high", which means if an investment has had a huge short term return, consider it may be in a bubble and that it's time to sell. And I'm sure this is difficult when you're getting those dopamine hits every morning looking at new record highs, and of course there's no way to know when to jump off a train wreck that hasn't happened yet. Market speculations have the same weakness to addiction as any sort of gambling.

But even for all that good advice to moderate your emotions controlling your higher brain function, I'd still open to argue "Greediness" of any sort is one of the 7 deadly sins, and being "long-term greedy" is still complete consistent with the problem "For the love of money is the root of all evil." So a motto take makes a deadly sin into a virtue will always look problematic, not that I want to tell anyone else what to do.