Laura Nash: Religion Offers Value(s) for Business

Laura Nash is senior lecturer on the faculty of Harvard Business School where she concentrates on values and ethical influences in business leadership and corporate culture.

Her most recent book, co-authored with Professor Howard Stevenson, is Just Enough: Tools for Creating Success in Your Work and Life, (2004). She is author of six other books, including Good Intentions Aside (1991), Believers in Business (1994), and Church on Sunday, Work on Monday (2001). Ms. Nash received her B.A. magna cum laude from Connecticut College and her M.A. and Ph.D. in classical philology from Harvard University.

After teaching the classics, she began her career in business ethics in 1980 as a post- doctoral fellow and then assistant professor at Harvard Business School. Prior to rejoining HBS in the fall of 2000, Ms. Nash was program director on Business and Religion at Harvard Divinity School’s Center for the Study of Values in Public Life. She also served as adjunct associate professor for 10 years on the faculty at Boston University’s Institute for the Study of Economic Culture.

Ms. Nash was president of the Society for Business Ethics in 1998, and a member of the judges panel for the Better Business Bureau’s National Torch Award for eight years. She currently serves on the Advisory Council of the Business Roundtable’s Corporate Ethics Institute and on the editorial boards of “Business Ethics Quarterly” and “Religion & Liberty.” She has been a frequent commentator on business ethics for CNN, CNBC, ABC Nightly News, The New York Times, The Wall Street Journal, Newsweek, and other media.

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Ethix: What conclusions have you drawn from the business ethics scandals of the past five years?

Laura Nash: The problem of ethical choice will never go away. When I started working in business ethics in the late 1970s, right after the passage of the Foreign Corrupt Practices Act, people said, “This is career suicide; this is all going to go away as soon as they clean up audit committees.” But we’ve learned it’s not just about laws; laws can’t keep up with behavior. There is an ongoing set of choices that stem from character and ultimate values, and we are not able to legislate that. I saw in the scandals a wonderful demonstration of the core factors in business ethics—the rules of the system, both formal and informal, the cultures in corporations, and personal character. All three are issues right now.

Religion is the source of right and wrong for many people. And yet religion is often seen as being at odds with business.

I think that dilemma is very real, and it comes down to a clash of worldview—what you assume are the ultimate purposes of life. If you’re a business person, your worldview says business has some purposes about profit, about providing services, and about creating prosperity. Those are all legitimate purposes.

Religious people are concerned with issues of poverty, with the human spirit, with things beyond money such as God. These worldviews are not completely at odds with each other; it’s almost as if they’re just two worlds that operate in separate universes of an individual’s attention. That’s why I wrote Church on Sunday, Work on Monday. I think people experience that kind of double worldview, with no crossover. But those who take their faith seriously must address bringing these purposes together or they will compete for time and energy in an unproductive way. They have to ask where profit fits in this view of a larger religious purpose, for example. For many in business, that’s not an acceptable question.

Achievement Limits

In your most recent book, Just Enough, you addressed this question by recognizing that all human beings must balance the aims of legacy, happiness, achievement, and significance.

Right. Once you accept that we have multiple purposes in life, that we’ve been made with a number of callings and tasks to accomplish, you have to set limits on any one. There’s also this issue of humility, of understanding your role in the universe, a kind of surrender. I think most religious worldviews require a surrender of ego to something larger, and this leads you to setting limits in each area, but especially in terms of material achievement. Ironically, you actually are more effective emotionally when you do that, and the world works better that way.

Even business works better when we place limits on hours worked, productivity, and profits?

We know that creativity, for example, doesn’t happen in the achievement mode, which is about solving business problems through mastering, domination, and problem-solving. Rather, in the happiness mode, when you are letting yourself go to the moment, is when people experience creative insights. When you are taking a walk or riding a bike, suddenly you get that creative spark. Now to make something of the idea, you must ultimately carry it back to the achievement mode. But that’s not usually where the idea starts.

The same is true with taking time in significance. Significance is drawing on that ability to care for others, and it is very much a religious perspective, a “do unto others” attitude, a service attitude. And that too leads to better innovation. The source of that innovation is not trying to squeeze out another bit of profit to extend your own power and wealth, but trying to do something for others. So this myth that business is better off when you put your head down and drive the bottom line is simply false.

What reaction have you had from the business community to Just Enough?

It’s been extremely positive. I think a lot of people are really sick of this “never enough,” over the top ethos, especially in terms of working solely for a material reward. It never satisfies. They recognize something is wrong. I hear them say, “I have to be this way, but I don’t want my kids to be like this.” Just the suggestion that there may be another way to look at success beyond simply driving achievement really resonates with them.

Is this a universal response, or only from those who call themselves religious?

The book is overtly secular, with very little said about religion. But people have commented that they see a great deal of spirituality there, primarily because the ideas beyond achievement—the areas of legacy, significance and happiness—are often left out of business discussions and relegated to the spiritual corner of life. We can’t properly think about the stewardship of resources without thinking about all four categories.

You’ve coupled the idea of stewardship to a religious view, but it is often the central argument for businesses to maximize shareholder value and profits. Because businesses are stewards of investors’ capital, other people’s money, they should focus only on giving a return to those investors.

But this leaves out the human factor. Are you willing to maximize profit and burn out all your people? I don’t think that’s good stewardship. Would you invest your money in a business that is absolutely out to maximize profit? They might build incredible financial incentives and keep people at the office day and night, with energy towards maximizing profit. But, it’s very unstable. And what’s more, it’s creating a human condition and a business ethos where the greed can’t be controlled. Greed is addictive and if you try to go for maximization of anything, there’s always the tantalizing prospect of getting more. There’s never enough. And that’s what got people into so much trouble during these financial scandals. They forgot the service and sustainability goals of stewardship.

Faith Makes a Difference

You did a study on Christian CEOs for Believers in Business. Did you find that the integration of their faith and their work led to any positive business value?

Absolutely, depending on how they approached their faith. If their faith was limited to private confessional realities, then they didn’t seem to realize any crossover in business. But when their faith was an integral part of their whole life, then it seemed to make a difference.

For example, in a negotiating situation you’ve always got this tension between protecting your own interests and the interests of the other party. Some people with a very personalized faith felt that to make a good deal for their company, they had to be very canny at looking out for their own interests, even if it involved “harmless” deception. But this did not feel right to them as Christians or as reasoning business people. If you’re going to be in a continuing relationship, you don’t want to cheat or destroy the other person’s ability to thrive.

But we’ve learned [business ethics is] not just about laws; laws can’t keep up with behavior.

I found those who allowed their faith to penetrate deeply in their lives would look for a creative “win-win” solution. That sounds very Pollyanish, but they did it even when the rules didn’t require this. In one case, a woman had sold her company to a Christian CEO, and he thought he’d paid a fair price. A month after she walked away from the table, she said, “You know, I don’t think the price was right. I think it was worth a lot more.” By any negotiating rules, it was over; they’d signed the deal. They’d both operated in good faith. She came back to him and said, “I’d like you to listen to me. I think you should pay me a little bit more money. And actually I need it to get going in my next business.” So she appealed to his conscience. He listened! That was the first place his faith kicked in, when he respected and dignified her. As he listened, he agreed that she had a point. They renegotiated the deal, he did give her a little more in return.

This might seem like a very bad business practice! But she went away and called all her past clients, and recommended they work with his business. It didn’t occur to him to make her reciprocal effort part of the deal, but it paid off. It made good business sense. Did he do it because it made him more money? No. Was he against making more money? No. But something else very special was going on: in this human interaction, faith was inspiring a creative economic solution. And I think that is a hopeful message. There is a confidence in faith that leads to realistic generosity in the marketplace, and it is the opposite of fear, which causes people generally to close down and obsessively look after their own interests.

Policy for Religious Expression

We’ve talked about why integrating faith into the whole of your life can be good for the person and even good for business. But of course there are significant pitfalls as well. What advice would you have for a company leader in making policy about this issue of religion and business?

There have to be some agreed-upon rules of conduct. The most obvious starting point is that any religious expression in the workplace must not be construed, or reasonably construed, as silencing or denigrating another person’s religious expression. The question is, how do you carry that out? People are not always sensitive, so I think you must take some time walking people through what is reasonable.

Let’s start with religious symbols. It is easy for people to take offense at somebody’s symbol, so we need to ask why this might be offensive. If it’s a personal expression, we should give some room. If someone wears a cross, they’re not saying they’re anti-Semitic. If someone’s wearing a Star of David, they’re not saying they’re anti-Christian. A symbol supporting a right-wing Nazi Fascist group is another matter. The difference is, symbols should not carry specific political agendas that silence or are in conflict with other groups. But personal expression’s great.

Greed is addictive and if you try to go for maximization of anything, there’s never enough.

Second, honest information should be fine, for example, notices about activities. In one company I know, through a notice board a Christian group and a gay activist group realized they were both trying to support the same charity. Even though they disagreed on the gay issue, they were able to work together on a charity issue, and this built some understanding. Information can be valuable and it needs a place to be shared. I think corporations can play a strong role in creating opportunities of mutual buy-in to ethical and charitable practices among employees with differing religious views. This gives more people an opportunity to live their faith at work. But if you tie every action to a fundamentalist or all-encompassing set of religious rules and symbols of a personal confessional nature, you run a great risk of creating religious strife or an abuse of power over other people’s professed practices.

Third, there must be a business point about sharing in the workplace. We owe employers our time and energy, so we shouldn’t expect to lead our whole religious life inside of work. We need to invest our own time and money in our religious life if it’s really important to us, draw boundaries and not waste the employer’s investment in you and the business.

Why do you think it’s so difficult for businesses to embrace this kind of expression? I’ve heard many companies trying to rule out any religious expression within the company.

I would say they assume it’s easier not to deal with it—religion is a volatile force. They’re afraid of the potential conflicts. Also there is a fear that being religious means you can’t be rational, economic, or analytical. They see the little old lady who gave all her money to some charlatan because he told her Jesus wanted it, and conclude, “Religion just invites completely illogical thinking! We don’t want people to be doing this with our funds.”

But that’s not what religion is really saying. Business people have to come to terms with the fact that they’re dealing with real human beings who have ultimate concerns. The good news is that as a business culture we seem more ready to do that. Businesses have started to address work-family life balance issues. And I think they are starting to recognize the need to address the whole person in other areas as well. The problem is, you have to be prepared for messiness.

A Worthwhile Risk

Let’s look at the flipside. What are the arguments for willingly entering into this messiness?

It’s partly an issue of honesty. People are religious, so the issue is already there. If work is really devoid of meaning, including religious meaning, people walk away as soon as they see an opportunity. That’s pretty costly. The job of the business leader is to work this to everyone’s advantage, rather than having religious sentiment be a disadvantage. That’s what entrepreneurs do; they turn disadvantages into advantages. The advantages are pretty obvious. People who are empowered with a sense of meaning or purpose, who deeply respond at their core, are very motivated. And just watch any business in an emergency, where people are motivated to serve other people, and they suddenly say, “That was the best experience I ever had in this business, the most meaningful moment.” You need to build that impulse to serve and to effectively deliver value into your business strategy.

I prefer to express my faith through actions and keep my own religious life private. I grew up in a Congregationalist tradition where there was a lot of silent prayer. We didn’t do a lot of vocalizing or wear a lot of symbols, and so for me it has been very difficult to ask people to comment on their religious worldviews. However, when I share my observations about various people’s religious experience and concerns, that recognition of diversity and respect gives them permission to talk about their own religious life.

It’s important to know the basics of various religious worldviews, and knowing these helps me listen to what people are really trying to do in business. For example, evangelicalism emphasizes a personal relationship with Christ. This helps explain why an evangelical may weight his or her faith at work on relational issues such as employee benefits rather than, say, the fairness of access to capital in global markets. Allowing a little bit of that sharing helps people communicate, helps people anticipate where they’re going to be putting their energies, what’s going to turn them on and where they might be less sensitive to ethical needs. And that is just invaluable.

We see business organizations spend a great deal of money taking a team out into a wilderness to get to know each other and to break down barriers. But we don’t want to allow these barriers to come down with natural conversation.

That’s right. Let’s face it, some people have abused their religious expression. There’s nothing worse than having someone bash you over the head with their religious worldview, particularly at work. For example, what do I do when I call somebody that wanted to do business with me and they say, “God must be blessing this project because you called and I wanted you to call.” That may not be comfortable for me.

Wouldn’t it be easier if we just said, “We don’t talk about that?” But the more we avoid the issue, the more we divide ourselves from each other and the more we’re going to start working at cross-purposes. So we have to develop an etiquette for these conversations, and equally important, an open mind to differences because I don’t think we can afford to cut ourselves off from various peoples’ diverse worldviews.

Alan Kennedy, in The End of Shareholder Value, argues that companies should look at more than the bottom line because it works, not because it is right or wrong. Right and wrong is the province of religion, not business, he says. How would you respond?

Corporations don’t only operate just as legal entities, they operate as communities of people. Economics is primarily a social construction, no matter how much the economists would like to make it a theoretical construction. The rules are never clear enough that they don’t require some kind of human discretionary judgment. You can call it market savvy, you don’t have to call it religion, but everyone is making discretionary decisions within these rational parameters. The world is not neat enough to make this sharp separation between the people of the corporation and the legal entity. Once you admit that, then it’s not so hard to recognize the role of moral discretionary judgments. In Kennedy’s system there would be no internal “brakes” on the temptation to feed the bottom line by, say, deliberately withholding information about a product that would clearly cause consumers to choose otherwise were they to have access to this information.

Further, most companies seem to have policies that reflect past bad behavior. You can find policies on sexual harassment in companies that have had past abuses there, policies on financial fraud in companies that have had fraud cases to deal with. So the policy question alone is often looking backwards, rather than forwards.

Right. But the leaders of the best companies look forward and ask the question, “What are the opportunities to make this world work better?” Ethical companies keep their antenna out to be pro-active on these questions. You can’t do that simply with a reactional economic calculus. You have to have a social calculus. The best CEOs understand this. This is a matter of conscience rather than law.

They’ve done studies of why people fail to obey their conscience. And they have found it’s often an incremental process. The failure doesn’t start the day you poison somebody, it starts with the day you forgot to check with the supplier and you just thought, “It will be OK.” Beech-Nut ended up selling 100% chemicals as 100% apple juice because they had a supplier who was basically cheating. They had lots of signs along the way, and yet incrementally, it had to do with change in ownership, change in strategy, loss of marketing power, and each one of those little pieces just created a perfect storm. The only thing that’s going to hold us to ethics in business is to pay attention to those small decisions.

Two Big Challenges

Any final comments you would like to make about the intersection of religion and business?

We have two big challenges ahead. One is understanding the similarities and differences between the world’s great religions and the political implications of these religious positions. It’s one thing to understand the wisdom text of Buddhism, it’s another thing to understand some of the political struggles between Tibetan Buddhists and China, or between some Muslims and Christians. As a global business person, you will need to understand where religion has taken people politically and culturally, and yet also understand that every individual knows God in a different, unique way. In the United States right now we need to understand where religion is taking us politically. I believe it’s going to impact every aspect of economic life starting with our understanding of who should fully participate in top levels of management.

The second is this crossover issue that we started with: how do you combine this rational real-life economic world called business with this otherworldly aspect of spirituality that helps define our sense of self and power. Where should the crossovers take place? We have so much to learn about that process. And the way we’re going to learn about it is to ask people to be self-reflective and self-critical about how their religion affects the workplace. I think it’s a very important process. That’s why I’m pleased to be a part of this special issue of Ethix.