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On Preventing Enrons in the Armed Forces

by

Dr. (Col.) Rajeev Kumar, ABC

Even as we get continuously desensitized to news of violence, immorality and corruption

in all sections of society, making us more cynical, news of such deviations by members
of the Armed Forces draws special attention due to the severe contrast that such news has
with the image of the Armed Forces as a disciplined and ethical organization. In recent
years, there have been numerous cases of unbecoming conduct and misuse of the position
held by senior Armed Forces officers. Having been a member of the Armed Forces and
knowing that it is still one of the finest institutions of our country, such news of alleged
corrupt practices by officers makes me cringe, just as it would appear shameful and
painful for all serving and retired members of the Armed Forces. I reject the argument
that it is difficult to maintain the traditional values of selflessness, integrity and morality
in the Armed Forces and lay the blame on the value system of other institutions and
society at large. We need to introspect and understand how and why unethical practices
creep into an organized, disciplined and structured force and how it can be insulated from
a decaying environment.

Even as the Indian Army, an internationally renowned fighting force, should not be really
compared with the Enron case, I see some distinct similarities between the Enron culture
and a sub culture within the Indian Army. These significant and interesting parallels
might explain the deeper systemic causes of the now rather frequent image fraying
incidents of unethical practices involving senior Army officers that come to light through
the media. What becomes known may be just a tip of the malaise. My focus is on two
comparable aspects that could reveal systemic weaknesses.

Culture and Leadership

A nation’s survival depends on the quality of its armed forces and that inevitably depends
on the quality of the leadership. The quality of the armed forces and its leadership has a
decisive influence on national power. Today, several behavioral and ethical tendencies
borrowed from the business world threaten the displacement of the military ethos.

In 1986, Gen. Sundarji as Chief of Army Staff had expressed his concern to all officers
(this term is used to include the wider meaning of leaders) of the Indian Army about how
the Army “is becoming increasingly careerist, opportunist, and sycophantic; standards of
integrity have fallen and honour and patriotism are becoming unfashionable.” Even the
current Chief of Army Staff, Gen. VK Singh, had resolved to address this issue seriously.
The crucial question to examine is that in the present climate of values and imperatives of
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the system are the officers who are successful the best or are they those best fitted to cope
with the circumstances? Survival of the fittest need not mean survival of the best. In
particular cases, survival may be achieved through degeneration or the compromise of
ethical values.

While the spectacular failure of Enron is primarily attributed to its accountancy practices,
its internal culture and leadership practices also contributed to its collapse. At Enron, the
culture was characterized by promotion of conformity and a parallel suppression of
dissent. Just as in cults, employees were so over- aligned with the company that they
never asked uncomfortable questions of their leaders. The leaders at Enron displayed
narcissism. The leaders had a strong need for power, were over confident and held strong
convictions. They tended to be very sensitive to criticism, were poor listeners, lacked
empathy, hated advice and had an intense desire to compete. Such a silencing culture
created and promoted an insular homogenous group mentality that could never challenge
the misjudgments of their superiors. Subordinates were thus made vulnerable to
manipulation by leaders of the organization through a corrosive value system.

At Enron, communication was primarily one way, from the top to bottom and used only
to reinforce the demanding goals set by Enron’s leaders. Corrective feedback was not
sought, but stifled. Dissent was considered as resistance to be overcome rather than as
useful feedback. An unwritten rule demanded ‘no bad news’. The messenger would
invariably get shot, as was evident in the case of Sherron Watkins, a senior employee in
the Finance department of Enron, who broke the hierarchical chain of command and
voiced her concerns about the financial position of the Company directly to Ken Lay, the
CEO. Soon after that meeting, Ken Lay contacted his lawyers to find ways of firing her.

In the Army too, cultism can exist in some quarters, as military ranks bestow enormous
authority over their subordinates. Conformity to rules and customs is critical and backed
by an Army Act. Newcomers are ingrained with the ethos of discipline, loyalty, integrity
and team work. They are always referred to as ‘the cream of the nation’. Compliance with
professional norms earns them rewards and recognition. The profession also monopolizes
their time. ‘You are always on duty round the clock’ is the norm. All these rituals of
integration and socializing are necessary to inculcate the desired values for a fighting
force. What goes wrong is the extent to which the norms of loyalty and obedience can get
stretched by some errant leaders to suit their own personal ends.

Many failings arrest worldly success but in the Army non availability of sufficient high
grade assignments to mathematically match the large availability of officers with a high
grade profile was a systemic problem which in recent restructuring has been corrected to
some extent. Thus, many good officers become victim of comparative merit.

The lifestyle of military leaders improves with rank as more and more organizational
resources come to be placed at their disposal. Some of the military leadership is prone to
opulence within their own domain. At higher ranks, some may justify to themselves that
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they have earned their position through relentless efforts and they must enjoy all the
possible ‘perks’ in their tenured appointments.

Also, for some military leaders, debate may be unnecessary and the only thing that they
consistently seek is enthusiastic expressions of agreement from their subordinates on
their ideas and proposals. As negative information or feedback is generally seen as
subordinates’ inability to cope and is deemed by the superior to reflect poorly on the
subordinate, much of upward communication can get distorted through filters at different
levels of hierarchy in order to please or pacify the final recipient. Only the inescapable
negative information may get fed upwards by subordinates to give leaders the illusion of
control.

Some military leaders in their appointments may seek to be surrounded by subordinate

staff with proven and tested loyalties to themselves and who will facilitate the
achievement of their personal and professional interests. Subordinates are also far too
willing to be affiliated with senior ranks and may proactively seek to be posted under
them. Like within cults, if the message is that the subordinate is valued and very much
wanted- it increases the person’s tendency to affiliate and conform and engage in yet
further behaviours pleasing to the leader. “Always try and serve under someone you
know” was the advice given publicly by a serving Lt. General to a Colonel during the
latter’s farewell function at the Staff College some years ago. This not only revealed how
the General might have risen in his career but also reflected some of the current values in
the organizational culture of the Army.

A sub-culture of submissiveness, servility and appeasement combined with rigid controls

ensuring conformity may result in a lack of genuine upward communication. The absence
of debate and insulation of the top leadership by a selected coterie of staff officers can
generate a feeling of omnipotence and omniscience in the leader. Such a mistaken
assumption on the part of a leader prepares the ground for incorrect decisions and
unethical practices.

When careerism is held as the highest value, there is increased willingness to acquiesce in
policies and orders that are detrimental to the good of the service. Officers then may then
have to make a choice between pleasing one’s superior and staying ‘loyal’ or staying
loyal to oneself and one’s values. The individual then assesses whether to object or obey
purely in terms of his ascending career interests.

Subordination of self interest to organizational interest is essential for the excellence of

Armed Forces. A proven example of selflessness is that of the German military, which
was one of the most efficient military of the twentieth century. To become a member of
the German General Staff, what was required was the absence of the quality of ambition.
If an officer of the General Staff was regarded as a climber, they had no further use of
him. In our case, it is possible that senior commanders may fail to stand up to the
establishment in matters of conscience if the bait of ambassadorship, governorship or
some cushy job after retirement looms large.
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Even though the Defence Service Regulations make it incumbent upon subordinates to
report any type of irregularity in which their superiors are involved, this provision of
whistle blowing is rarely invoked or at best may be used by the officer in retaliation to an
injustice done to him.

The Rank and Yank Appraisal Policy of Enron

Enron had a punitive internal culture in which all that has been so painstakingly gained in
a career could be withdrawn at the whim of senior managers. Enron’s appraisal system
was known as “rank and yank”. An Internal Performance Review Committee rated
employees twice a year. They were graded on a scale of 1 to 5 on 10 separate criteria, and
then categorized into three groups. Group A were to be challenged and given large
rewards; ‘B’s were to be encouraged and affirmed and ‘C’s were told to shape up or ship
out. Those in ‘C’ category were given time to improve until their next review. Whatever
they did, 15% of all employees would find themselves in the bottom category twice a
year. So sufficient improvement was almost impossible and they tended to leave quickly.
The A and B categories were also at risk to be downgraded every six months. A cutthroat
culture was created which pitted employees against each other. It was clearly in every
individual’s interest that someone other than themselves received a poor rating.

Through this appraisal system, Enron created an environment where employees were
afraid to express their opinions or to question unethical and potentially illegal business
practices. Because the rank and yank system was both arbitrary and subjective, it was
easily used by managers to reward blind loyalty and invalidate brewing dissent.

The Army’s Appraisal System

Officers in the Army are graded each year on about a score of parameters on a scale of 0-
9. A Niner is considered outstanding and gradings of 7 and 8 are both considered above
average. The 20 parameters are graded by two levels up in the hierarchy and reviewed at
the third level. The hierarchical pyramid is steep, getting very narrow at the top. Till
recently, so drastic was the differentiation with the civil services that while in 18 years of
service, one could rise to the level of a Joint Secretary; a similar status of Major General
could only be attained after 30 years of service or more. Promotions are vacancy based
and relative merit with an exaggerated emphasis on quantitative assessment plays a major
role in selection procedures. So, no matter how good the overall standards of a batch of
officers, a certain percentage has to be yanked. So intense is the competition that a single
grade of 7 in any of the 20 qualities over the entire length of the career could become the
cause of elimination from the promotion process.

While getting superseded is an inevitable reality due to lower performance than peers and
must be accepted with stoic indifference, it is also an accepted fact that human judgments
across the board are not equitable and much can depend on the nature of superiors that
one is placed under. A superior’s frame of reference is much influenced by his own
ethical standards and his own model of success. Quite often, a careerist superior would
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expect attitudes and behavior of his subordinates to conform to ways and means he
adopted to achieve success. If such values extend across the organization on a wide scale,
only individuals deemed appropriate by the dominant group will rise in their career.

Moreover, the system of appraisal is partially transparent. Only the portion of

demonstrated performance rated by immediate superior is shown and not the assessment
of the officer’s potential. Officially, these can be contrasting. The designing of the
partially closed system has its merits but it allows revengeful assessing officers to
commend subordinates in their visible reports and yet administer a “poison pill” in form
of a grade of seven in abstract qualities of potential, without his knowledge. The
assessee is not apprised of his potential and even if he knew he cannot protest much as 7
is considered above average and yet turns out to be a career stopper.

The structural defect in design of the appraisal system can give rise to an ethos of
appeasement particularly when value systems of the appraiser and assessee differ. If an
assessee fails to act upon instructions that are clearly unethical and/or illegal, the errant
superior may nurse a grudge against him and while being unable to wrongly assess him in
the open portion of the appraisal because of his visible competence and which could lead
to a justified protest, he may damage his promotion prospects by under rating him in the
hidden portion of the appraisal report.

Cases of good officers being treated shabbily may arise because of their disagreeing with
the proposed unethical action rather than their lack of objectivity or competence. The
appraisal system thus reinforces the demand for conformist behavior and is a disincentive
to the articulation of voices even when things are going wrong.

The appraisal system is misused as a form of unobtrusive control and as an instrument of

coercion by cultish organizations. By making their subordinates helpless and fearful,
through a mix of approval and abuse, they suppress voices of dissent. Subordinates too,
tend to find security in doing what they are told to do rather than think and make
decisions for themselves.

Conclusion

The picture of certain sections of the Army practicing the ethics of the marketplace does
not suggest a particularly inspired work performance. The optimistic view is that such
sections are minimal and do not reflect on the integrity of the Army as a whole. But
unless this malignant tumor is contained and excised, it poses the danger of weakening
the body and finally overtaking it.

The following measures could help reduce the possibilities of ethical deviations without
compromising on discipline:

A. The unintended birth of some sub cultures that work counter to the primary goals
and identity of organizations need to be identified and kept in check by a continuous
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tracking of practices and the nature of sense-making by the members of the organization.
This is only possible if feedback loops within the organization are effective and leaders at
all levels have a propensity to listen, understand and act. Often times, an eerie bonhomie
among top rungs of leadership, based on ‘quid pro quo’ relationships, prevent the curbing
of the rise of destructive sub cultures within an organization. A formal system of ethical
audits for both individuals and organizations needs to be instituted. At the individual
level, a 360 degree evaluative process, at least on the critical qualities of leaders should
be taken as another input for promotions. Such a process would reinforce values and
measures aimed at ensuring correct conduct. At the organizational level, a stricter process
of external audits with focus on ethically vulnerable points in the system needs to be put
in place.

B. Military structures should have functional doctrines of protest that encourage the
use of the instrument of moral protest through personal courage and a sense of morality.
An officer must not betray his personal integrity or his position and such a doctrine
would help individuals balance moral and career considerations. Valid whistle-blowing
must be encouraged and rewarded.

C. Improve career management by reducing proportionate emphasis on a quantitative

based selection system and increase value judgment on qualitative criteria. Reduce
possibilities of senior officers choosing their subordinates and carrying them in service.
The appraisal system needs to be made more transparent by disclosing judgments of
potential and turning it into a developmental tool.

For any lasting change, efforts have to be both bottom - up and top - down. Systemic
changes to encourage the growth of the right culture need to permeate from the top.
For those below, the advice is that you don’t have to go along to get along. Loyalty to
one’s superior ought to be seen as a conditional relationship based upon the condition that
the superior is acting honorably in his position of command. On issues that seem
important to them, officers need to stand up and be counted at any cost or else, in any
case, they will stay down for good and dent the image of the Armed Forces.

The preceding generations have brought into being our mighty Army with its strong
traditions, values and a unique culture despite some imperfections. It is incumbent upon
the present and future generations to endeavor to remove the imperfections, and build a
greater Army that the Nation can continue to be unquestionably proud of.

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Brief Bio of Author

Dr. (Col.) Rajeev Kumar, ABC is a specialist in the discipline of organizational

communication management. He was awarded his PhD in Organizational
Communication by the Tata Institute of Social Sciences (TISS), Mumbai. He was a
Fulbright Doctoral Research Fellow at Texas A&M University, USA, in 2006-07. Until
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2006, he was in the Indian Army as a Colonel. He was a Professor in OB and HR at

Goa Institute f Management and later Head of Learning and Development at Larsen
and Toubro as well as General Manager, Learning and Development at the Tata Group
Corporate Communication. He is an internationally (IABC) accredited business
communicator. He can be contacted at rajeevcol@gmail.com

The views expressed in the article are personal and do not represent the
views of any of the organizations where he was employed.