“For an ethic is not an ethic, and value not a value, without some sacrifice to it. Something given up, something not taken, something not gained. We do it in exchange for the greater good, for something worth more than just money and power and position. The great paradox of this philosophy is that in the end it brings one greater gain than any other philosophy.”
This quote comes from Jerry Kohlberg‘s speech at his retirement in 1987 from the firm he co-founded, Kohlberg, Kravis, Roberts and Company. Oddly, the firm that pioneered and revolutionized leveraged buyouts would be so altruistic. It was not. The firm benefited from asset stripping, layoffs, and bankruptcies.
Point by point
Nonetheless, Kohlberg’s points are well-taken and worthy of exploration. Let’s take them one at a time.
“For an ethic is not an ethic, and value not a value, without some sacrifice to it. Something given up, something not taken, something not gained.” Sacrifice makes intentions real. That is, you can talk about it doing with less, but when you do it and integrate it into your operational outlook, sacrifice demonstrates seriousness.
“We do it in exchange for the greater good, for something worth more than just money and power and position.” It’s easy to talk about making things better. The challenge is how and how it will always require a degree of investment – time, money, and, yes, even sacrifice.
“The great paradox of this philosophy is that in the end, it brings one greater gain than any other philosophy.” This statement reminds me of something James Stockdale, one of the longest-serving prisoners of war at the Hanoi Hilton, wrote about power. Admiral Stockdale, who studied and wrote about stoic philosophy, opened that leaders gain authority by giving it away. Instead, Kohlberg speaks of the greater good and shows that sacrifice is necessary for achieving.
Some might be skeptical of Kohlberg’s lofty words. After all, he was at heart a corporate raider, though he was at odds with many of his firm’s practices, which was the reason he left the firm he co-founded. Kohlberg personally was very generous with his wealth, funding many philanthropical ventures. His message is sound. It is a clarion call for a limitation on having everything your way. It is a demonstration that giving up something can lead to something better. This tenet is fundamental to every religion but needs to be spoken more institutionally.
Acting for others
The four tenets of Stoic philosophy, according to mega-selling author Ryan Holiday, are:
Courage. Temperance. Justice. Wisdom. Acting with courage means making a positive difference when the odds are against you. Promoting temperance means, in an organizational sense, creating win-win solutions, or a minimum leaving something on the table for the next person.
Justice becomes the lodestar because it points us in the proper direction. Wisdom will be the outcome of acting on these three virtues.
Girding each is the notion of grace. When you act for others, you may take less for yourself, but you are working for the greater good.
NOTE: The author is indebted to William Magnuson, author of For Profit: A History of Corporations which includes a case study of KKR and cites Kohlberg’s retirement speech.