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Plausible deniability and the insulation of upper management

Michael K. Shaub, September 14th, 2016

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Photo credit: James Ulvog

Two scandals running in parallel have made me think more deeply about whether certain ethical trends are fixable in our society, and what role the auditors have in addressing them. I am following both the Wells Fargo and Volkswagen scandals with great interest, because each in their own way reflects the business environment that dominates developed countries. Both tell stories that outrage the average person, reflecting total disdain for honesty or for the impact of company policy on others. They involve huge penalties and fines. And their revelation will, in my opinion, do absolutely nothing to stanch the devolution of business behavior into unimpeded self-interest.

Volkswagen has more than 600,000 employees producing roughly 10 million vehicles a year for the world’s largest car company. Wells Fargo has about 265,000 employees; roughly 2 percent of them were fired for their participation in the scandal. Wells Fargo also has a 37-page ethics “vision & values” brochure. This allows for the plausible deniability we see in these situations by CEOs like Wells Fargo’s John Stumpf; how can we expect upper management to be aware of what’s happening at the branches? Mr. Stumpf said in his interview with The Wall Street Journal, “There was no incentive to do bad things.”

But of course there was, and the rampant cross-selling behavior across branches of the bank evidences this incentive. Actually, a better word is pressure. If you can put enough layers between yourself and the employee, you can pretend that it is not true. But that teller or “personal banker” has quotas for selling new accounts and new services from a supervisor, who has quotas from a branch manager, who has quotas from a regional manager, ad infinitum. And if there was no incentive, why is Wells Fargo announcing that they will no longer promote these practices?

There is nothing wrong with cross-selling products or services that add value to the customer. But the temptation is to take advantage of the leverage you have with an existing customer and use it to generate fees that provide little or no benefit to the customer. Wells Fargo is not the only bank doing this; in fact, my sense is that it is common practice. Wells Fargo went even farther by opening accounts and credit cards without the customers’ consent in order to meet quotas, subjecting the customers to fees they should have avoided. And the incentive to stop is small; the $185 million settlement for Wells Fargo is chump change. A recent story indicated that the bank’s three largest competitors have paid over $100 billion in fines in the last eight years for a variety of questionable practices. And the executive in charge of the Wells Fargo unit where the unauthorized accounts were opened, Carrie Tolstedt, retired in July with a pay package reported to be in excess of $124 million. Mr. Stumpf referred to her as “a standard-bearer of our culture.” Apparently, this was true.

Volkswagen’s leadership has tried to put similar distance between itself and the engineers who developed the technology that allowed them to detect when emissions testing was being done. But the conspiracy to cover up the fact that “clean diesel” engines could not be both clean and meet fuel efficiency targets extended almost nine years, according to the Justice Department. When upper management claims that it knew nothing of situations like these over such a protracted period, fines are not enough. The only effective way to find out is to prosecute from below and move up the executive food chain. That process began last week with the guilty plea of Volkswagen engineer James Liang.

So what can be done to detect this behavior other than to push for more prosecution? Auditors need to better understand these risks in their clients. I know that most of my audit partner friends will say “Not my job!” But the truth is that auditors of public companies have almost unlimited access to data, and the big data tools and analytical skills to evaluate it. That is one reason consulting services are such a growth area for accounting firms. What auditors need to do is bring those skills to bear in nontraditional audit applications if they want to have real insight into their clients. We used to call this “understanding the entity and its environment” in the auditing standards.

Auditors protect the public interest. Auditors who bring professional skepticism and data analytics skills to bear in the audit can serve as an early warning system for some of these scandals, instead of relying on customers to reveal them. For example, data analytics might well have signaled to the auditors that there was disparate growth in Wells Fargo’s new accounts in California, causing them to question the reliability of the bank’s revenue numbers.

Wells Fargo is a classic example of customers being used for profitability rather than served. If auditors really want to have value, they can stop focusing solely on cross-selling analytics services, and use them to detect fraudulent behavior in the audit. And they can remember that in the case of a large corporation, management will never say they knew what was going on.

OLYMPUS DIGITAL CAMERA

Photo credit: James Ulvog

Two scandals running in parallel have made me think more deeply about whether certain ethical trends are fixable in our society, and what role the auditors have in addressing them. I am following both the Wells Fargo and Volkswagen scandals with great interest, because each in their own way reflects the business environment that dominates developed countries. Both tell stories that outrage the average person, reflecting total disdain for honesty or for the impact of company policy on others. They involve huge penalties and fines. And their revelation will, in my opinion, do absolutely nothing to stanch the devolution of business behavior into unimpeded self-interest.

Volkswagen has more than 600,000 employees producing roughly 10 million vehicles a year for the world’s largest car company. Wells Fargo has about 265,000 employees; roughly 2 percent of them were fired for their participation in the scandal. Wells Fargo also has a 37-page ethics “vision & values” brochure. This allows for the plausible deniability we see in these situations by CEOs like Wells Fargo’s John Stumpf; how can we expect upper management to be aware of what’s happening at the branches? Mr. Stumpf said in his interview with The Wall Street Journal, “There was no incentive to do bad things.”

But of course there was, and the rampant cross-selling behavior across branches of the bank evidences this incentive. Actually, a better word is pressure. If you can put enough layers between yourself and the employee, you can pretend that it is not true. But that teller or “personal banker” has quotas for selling new accounts and new services from a supervisor, who has quotas from a branch manager, who has quotas from a regional manager, ad infinitum. And if there was no incentive, why is Wells Fargo announcing that they will no longer promote these practices?

There is nothing wrong with cross-selling products or services that add value to the customer. But the temptation is to take advantage of the leverage you have with an existing customer and use it to generate fees that provide little or no benefit to the customer. Wells Fargo is not the only bank doing this; in fact, my sense is that it is common practice. Wells Fargo went even farther by opening accounts and credit cards without the customers’ consent in order to meet quotas, subjecting the customers to fees they should have avoided. And the incentive to stop is small; the $185 million settlement for Wells Fargo is chump change. A recent story indicated that the bank’s three largest competitors have paid over $100 billion in fines in the last eight years for a variety of questionable practices. And the executive in charge of the Wells Fargo unit where the unauthorized accounts were opened, Carrie Tolstedt, retired in July with a pay package reported to be in excess of $124 million. Mr. Stumpf referred to her as “a standard-bearer of our culture.” Apparently, this was true.

Volkswagen’s leadership has tried to put similar distance between itself and the engineers who developed the technology that allowed them to detect when emissions testing was being done. But the conspiracy to cover up the fact that “clean diesel” engines could not be both clean and meet fuel efficiency targets extended almost nine years, according to the Justice Department. When upper management claims that it knew nothing of situations like these over such a protracted period, fines are not enough. The only effective way to find out is to prosecute from below and move up the executive food chain. That process began last week with the guilty plea of Volkswagen engineer James Liang.

So what can be done to detect this behavior other than to push for more prosecution? Auditors need to better understand these risks in their clients. I know that most of my audit partner friends will say “Not my job!” But the truth is that auditors of public companies have almost unlimited access to data, and the big data tools and analytical skills to evaluate it. That is one reason consulting services are such a growth area for accounting firms. What auditors need to do is bring those skills to bear in nontraditional audit applications if they want to have real insight into their clients. We used to call this “understanding the entity and its environment” in the auditing standards.

Auditors protect the public interest. Auditors who bring professional skepticism and data analytics skills to bear in the audit can serve as an early warning system for some of these scandals, instead of relying on customers to reveal them. For example, data analytics might well have signaled to the auditors that there was disparate growth in Wells Fargo’s new accounts in California, causing them to question the reliability of the bank’s revenue numbers.

Wells Fargo is a classic example of customers being used for profitability rather than served. If auditors really want to have value, they can stop focusing solely on cross-selling analytics services, and use them to detect fraudulent behavior in the audit. And they can remember that in the case of a large corporation, management will never say they knew what was going on.

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DenhamDenham Springs, Louisiana is a sleepy bedroom community of broad lawns and big grills east of Baton Rouge. It is the kind of place you build a home and raise a family and wear purple and gold a lot.

It is, on an average Saturday, not all that friendly to maroon. But the week before last was not an average Saturday. And a sleepy bedroom community becomes something else entirely when a river runs through it.

To be specific, a 3-foot-deep river ran through the house of one of the most dedicated husbands and fathers I know. I had seen him earlier that week at a conference in New York, and we laughed about the things that normally preoccupy us—our research project, our families and our students. He is a gentle giant, personally unassuming and always others-centered.

I found that to be true in the worst of circumstances during a short visit last week to Louisiana. I arrived to lawns littered with the wet remains of lifetimes, gone for good in a matter of hours. I heard stories of narrow escapes, of rescuing his aging father first before the remaining family members went through a harrowing hours-long ordeal, including wading out in chest-deep water with dogs on their shoulders. Of homes and vehicles uniformly destroyed without warning in areas that never flood, like my friend’s house. And all he could think about was how I could be most comfortable.

I watched his children do the work that children should never do, tearing down and destroying all that the family had built up through the years in an effort to rescue what was salvageable. They cut drywall out 3½ feet high throughout the house, and mercilessly ripped out door molding and the doors themselves, swollen by the onslaught. Out came wet insulation, and soggy slippers, and anything that was not on a high shelf or counter. The floor was smeared, van Gogh-like, with the tracked remains of the crumbled sheetrock. His daughter peeled apart letters from her grandmother, page by page, draping them on ruined stools in hopes that a convection oven drying would be sufficient to sustain them for posterity. Her older brother, mindful of their significance, moved them gently aside to a shelf when it became necessary to use the stools. A portrait of the children hung above the fireplace, a reminder that everything important still remained.

Tiger values, I found, aren’t that different from Aggie values. Loyalty and selfless service manifested themselves everywhere. Every meal was provided by the neighborhood of relatives who were less affected by the deluge. I watched various family members assume leadership for the different jobs that had to get done. Any request from a neighbor was fulfilled instantaneously. As with many disasters, this one served to unify disparate people, and to remind those who were already close why they loved each other so much.

My brief trip to Baton Rouge also provided a portrait for me of what I have seen in the lives of those who have made serious ethical missteps. I have had the privilege of knowing those who have reconstructed their lives after disastrous decisions. I have also known those who have crashed and burned. What allows people to walk through the biggest mistakes of their lives and still find something worth rebuilding?

First, it takes a willingness to embrace a certain amount of pain, a ruthlessness that will recognize truth and not live in denial. You cannot fix a floor by pretending that there is no seepage underneath; it must be ripped out for the room to be restored. A restored life requires facing the truth, recognizing the damage that has been done and taking responsibility.

The second requirement of rebuilding is perseverance. If you have never been through a disaster, it is common to think that the toughest day is the next day, when life has been turned upside down. But it turns out that day six, and 12, and 20 can be tougher, when it seems like the fixing will never get done. A rebuilt life requires moving forward even through rejection and constant reminders of past failures. It also requires living with the knowledge that it may never actually be the same again.

But perhaps the most important need for those rebuilding is friends. When we make the big mistake, we need those who will come alongside us to help us tear down and rebuild. We need those who will feed us and make sure we stay hydrated, physically and emotionally. We need those who are in it for the long haul—not because of what we have done, or what we have built, but because of who we are.

My friend has all three of these, in his character and in his surroundings, and I am confident that he will be OK. But I know those who don’t, who are one big rain or one bad decision from watching it all come crashing down. And, as another school year begins, I am about to meet some more.

That’s why I’m here.

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Facing backwards while riding the up escalator, she squinted across the terminal to catch a final glimpse of the mixed emotions in her parents’ faces. On seeing us, her face lit up and we received one last enthusiastic wave before she disappeared behind the overhang. The unseen pivot at the top was her entrance into her dream.

Katie Departing for New York

That dream involves places with names like Queens, and Astoria, and Hell’s Kitchen, and Times Square. It is the adventure of doing what you were trained to do, as well as what you have been called to do, in the place where you most want to do it. It is, in fact, what she has been preparing to do for the last 24 years.

Her grandmother preceded her in this great New York escapade by 66 years, a young pianist fresh out of Peabody pursuing a master’s at Columbia. I can only imagine how excited Mom was as a gifted musician to embrace the arts present there, since as an accountant I tend to associate Manhattan with Wall Street. After finishing her Ivy League degree, she took a train to Dallas, met my father-in-law, and the rest is history.

When we think of our children, we tell stories of the homecomings. We celebrate the times we gather as a whole family at the beach, or at a farmhouse at Christmas. We rejoice, as we should, at being together, at the chance to express love in meaningful conversations.

But there is an important part of love that involves choosing to be apart. I have found for each of my children that their destinies and, in fact, the richness in their lives as adults, have come from their intentional choices to leave. Four of the five went away to college, two have had impactful overseas experiences, and two have served extensively at summer camps. One daughter went to college, married and settled in Tennessee.

Because I am a professor, I regularly encounter parents who are on the other side of these choices, bringing to Texas A&M their most valued investment, young people who have chosen to leave them. There is a mixture of pride and dismay in Mom’s and Dad’s faces as they contemplate their child beginning this adventure. And no matter how many times they claim they can’t wait to get them off the payroll, there is a hint in the air of melancholy, of the permanent surrender of how things once were. I can tell you, as a parent, it is hard to get past that.

But I have found also that it is that letting go that provides the fuel that launches our children out of the safe orbit of home. For a season, that is where they belong—but not for a lifetime. There is too much they were meant to do, and to become. There are those lives out there who need them, and what their parents and their faith have built into them.

And in some sense we at Texas A&M are the halfway house to the fruitful lives they will live. They will build their friendships, find meaning in work and service, and establish their priorities, while they develop the discipline that goes with earning their degree. Because of this, I am privileged to have, week after week, meaningful conversations with these remarkable people in formation.

But today, I am a daddy, less than six hours removed from that airline terminal where my curly-haired girl disappeared out of sight. She has already landed, and moved on. Me, not so much.

Sixty-six years later, her grandmother is deeply loved and well cared for. But in this latter season of sameness she endures with such grace, she also longs in her heart for the day when she went away, by choice.

So sleep well, little girl, on your first night in your new, and awful, and wonderful place. You were meant for this.

And I was meant to let you go.

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values
Last Friday night I had the opportunity to speak to SUMMIT, a Mays conference designed to help students understand who they are and who they want to become. The faculty and staff in Mays who have designed this conference are very intentional. Me, not so much. I went out to Carolina Creek camp to do my session, but I would be lying if I said I did a great job of tying it into the rest of the conference. But it turned out that I was the one who was going to be learning a lesson this weekend.

What I explained to the students at SUMMIT is that we all make decisions about what is valuable, what is worth the most. The goal is to develop principles to guide your life that align with those values. (I understand that people can value worthless things, but that is a topic for another blog.) Finally, we hope to make choices consistent with those principles we have defined.

If you find yourself making choices that are inconsistent with those principles, most people feel guilty or troubled. If your choices are often different from your values, then you are lying to yourself. You really have different values.

I spent the rest of the weekend watching the person I know who is most consistent in living her values, known to my students simply as The World’s Most Beautiful Woman. What she values is people; specifically, for her, people are more important than things. And her choices almost always mirror that value.

Saturday she orchestrated an event, along with others, meant to honor someone else. She set up a chapel for an engagement party with the help of a delightfully industrious young woman, following the preferred design of the groom-to-be to the letter. She made sure that the food she contributed to the party was the favorite of those involved, making arrangements ahead of time to be sure there was plenty. She bought the flowers and gathered the candles and
Shaubsgarnered the help to move the furniture in the chapel, and she made sure she understood the preferred layout. Then she left, and went to make sure that her part of the contribution to the celebration was in order. It even
occurred to her that she might be seen, and so she tried to avoid any chance of
that happening on the way from one venue to another. I, on the other hand, drove the car. After the engagement deal had been sealed, she returned to the chapel with that industrious young woman to clean things up and put things back the way they were.

On Sunday evening, we had students over for dinner. Since she was making meat loaf, and her homemade macaroni and cheese, and green beans, and apple crisp, I suggested that perhaps it would be more efficient to buy canned biscuits instead of making them herself. She quietly ignored my suggestion. And when the students arrived, she engaged each one in conversation, both before and during the meal. She drew out from them their stories and their connections with one another, and she recognized when someone wasn’t really getting a chance to contribute to the conversation. I, on the other hand, told stories.

Monday evening, after attending a Mays Business School discussion on race, I sat on the same side of the booth at Chick-fil-A, sharing a sandwich, soup and a shake with this same pretty girl. For half an hour I was all she cared about, and I was the one she wanted to draw out and know better. I made my half a sandwich last as long as I possibly could.

If you aren’t aware of it, your values ooze out of you. Most people can reach conclusions about what you value within the first 30 minutes of a conversation. I make a living studying how people live out those values, and helping my students think intentionally about the lives they want to live. It is a rare privilege to do what I do.

But it cannot compare with the privilege of living side-by-side with a person so aligned with her values, day after day. It is true that her values have shaped our children, and thus our grandchildren, as well. But, more than anything, she has changed me by living her values so consistently.

I really can’t describe how much I value her. But that’s why she goes by a title, and not a name.

 

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I have been thinking lately about how to better use my time. The truth is, I am always thinking about that rather than actually doing it. But I have been trying to give serious thought to the things I should say no to, and the things I should embrace and do with all my heart. Part of my preoccupation with this derives from my having read Greg McKeown’s Essentialism, and part from trying to figure out what really matters in life.

Most of my values are reasonably well formed, though I may not live up to them consistently. I don’t struggle so much with what is important or valuable, but with what is priority, what comes first. I often fail in my priority because I give a little bit of attention to a lot of issues, and my job is such that I can do that and feel, in the moment, that I am making a contribution. But I am lying to myself.now later

One of the hardest decisions for me is whether to accept speaking engagements. Who doesn’t want to hear himself speak, or want to be asked? But the truth is that the things I talk about are things that any number of people are perfectly capable of addressing and, in most cases, more eloquently. What I need to decide is which situations warrant the investment of preparing for that speech.

I think the answer for where I should focus my efforts is where I am less replaceable. At some level, accounting professors are all replaceable. If you are looking for an accounting professor, there are any number of people who fit the bill. People might like certain characteristics of one more than the other, but there are a lot of people who can fill the role. I am less replaceable in certain teaching contexts than others, so it makes sense that those warrant more of my attention.

But many times we are disappointed to find out that we are replaceable. I used to teach at a small liberal arts school, and in my last year there, I was named professor of the year. Since I was still relatively early in my career, I was under the impression that my leaving the college would have a significant impact on the students and the accounting program. I went back the next May to attend the graduation of those juniors whom I had taught. And though I was welcome, and they greeted me warmly, it was clear that life had moved on just fine without me.

Our replaceability in most contexts may seem depressing, but it is actually quite freeing if you are the type of person who has difficulty saying no. I control my choice to make the highest contribution I can to others’ lives, to my family, to my workplace, and to my continued growth and development. Greg McKeown makes the point in Essentialism that if we do not choose for ourselves, someone will choose for us.

With national signing day for football this week, numerous high school students will be given the impression, through conversations with coaches and reading about themselves on message boards, that they are irreplaceable. That may be true for a few, but only for a limited period of time. And believing that it is true can lead to all kinds of dysfunctional behavior.

Replaceability has the potential to produce the kind of humility that frees us to maximize our contribution while living a priority-driven life. Ironically, failure and burnout can accomplish the same thing, as I have learned on more than one occasion.

But my hope, in this stage of my career, is to let this realization that there is a finite end to my productivity light a fire in me to maximize my contribution today. I can prepare students for my profession and encourage them to adopt the values that will sustain it. I can engage in one-on-one conversations aimed at helping them do that, and in helping them understand their own values. I can invest in the one woman I will ever love and, to the extent I am given entry into their lives, in my children and grandchildren. And I can continue my research in the two or three areas where I make my maximum contribution.

And I can write.

But I will only do these things if I am humble enough to know that I am not necessary for everything and that it is okay to say no to things that others can readily do. My goal for this year is to make real progress in that endeavor.

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She is up befoMeredith Oliverre dark for a two-hour workout, and she knows that a workout at least as long waits for her in the afternoon. And yet, for the last 15 weeks, Meredith Oliver has faithfully attended and engaged in my Auditing class while her body recovered from one workout and braced itself for the next. She never asked for special treatment or made excuses. Perhaps some days were more of a grind than others in the classroom. But if grinding is what is necessary, Meredith Oliver is ready to do it, because she is not just an accounting student. She is also a swimmer.

Twitter started blowing up yesterday with speculation about a second quarterback leaving our football program at Texas A&M, leading to the inevitable statements of despair, loathing, and frothing at the mouth over coaches, game plans, and loyalty. Meanwhile, I was sitting quietly in my office discussing upcoming internships with two scholarship athletes who have distinguished themselves in their time here, and who have excelled in my classroom at Mays Business School this fall.

One of those, Conner McQueen, is a quarterback as well. He is also the holder for placekicker Taylor BertolConner McQueenet, who was recently named second team All-SEC, and I am confident that Bertolet knows that his success is in no small part due to the consistency of his holder’s performance. But you are not going to hear that out of Conner McQueen. He is self-deprecating in the best sense of the word. The grandson of one of the greatest Texas high school football coaches, he is more concerned about being prepared to succeed in his accounting firm than he is with winning awards. You can tell by watching him on the field how much he loves his teammates, the experience of playing college football, and wearing maroon and white. He was recently named to the SEC Football Community Service team and was nominated this fall for college football’s Wuerffel Trophy for community service.

The other student-athlete sitting in my office was volleyball player Shelby Sullivan, captain of this year’s SEC champions. Watching her on the court with her animated support of teammates is inspiring. I sat at a match where a Shelby Sullivanteammate was removed unexpectedly, much to her chagrin, and her disappointment led to an animated, whispered conversation with another player while waiting to re-enter. I am not a volleyball aficionado, so I watched to see if that behavior was typical. In fact, I watched Shelby, because she was rotated out regularly, even though she was the team MVP last year and was an all-SEC player this year. She left each time with a smile and a high five for her replacement, already intent on how she was going to get those on the bench more excited in their support of the team. It is no surprise that in addition to being last year’s SEC Scholar Athlete of the Year, she was one of 10 national finalists for college volleyball’s Senior CLASS Award this year, given for excellence in community service, classroom performance, character and competition.

All three of these students are top-flight academically, even while they are running a second parallel life in the athletic arena at a big-time sports school. I have the privilege of preparing them for a role in the accounting profession, though any of the three could be successful in a variety of ventures, from coaching to entrepreneurship. Their paths to success are largely the result of incredible work ethics attached to their inherent giftedness, and the habits they have developed will almost certainly lead to significant achievements. All of them are also very grounded; none of them seems driven by the need for adulation or the attention of others.

I am a season ticket holder for A&M football games, and I have only witnessed one 10-win season in my 10 years here. I ask myself the same questions that every other fan does about where we are as a football program and where we are headed.

But I don’t ask that question about Texas A&M as a university, because I have an advantage that very few Aggies have. I get to spend my life investing in students who work long hours at jobs to support themselves, who serve extensively in our community, who lead organizations, who quietly enrich the lives of others without asking for anything in return. I get to talk to them about the auditing profession, and life, and where they come from, and their hopes and dreams.

As I finish another semester as a professor, I am reminded that it is a gift to be here, to be alive in this place, to teach. I have been given a sacred trust, the hearts and minds of young people anxious to learn, to be better, to build a life worth living. Students like Meredith, Conner and Shelby will leave this place and make their communities, their families, and their workplace different, and richer.

So, just in case you were worried about us here, please don’t. All is well in Aggieland.

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Mike ShermanMike Sherman left College Station four years ago after a 6-6 season. He was, the legend goes, standing in the driveway of Matt Davis’s house when he was notified of his firing, attempting to persuade the highly coveted quarterback to come to A&M. After the call, he is said to have encouraged Davis to come to A&M anyway, because Sherman was convinced he would be a big success here.

Yesterday I read an article about Sherman’s current football team. After leaving Aggieland, he became the offensive coordinator of the Miami Dolphins, famous mostly in that stint for drafting his own Aggie quarterback, Ryan Tannehill, in the first round. When he was fired by the Dolphins, he decided to return to New England to be near family. After a career coaching at the highest levels in both the NFL and college football, he was not in need of money. But the athletic director at a local high school persuaded him this year to become their head coach for the princely sum of $6,000.

I knew he was coaching high school, but what I didn’t know is that his team has yet to win a football game. I can see how someone who had coached Brett Favre would be tempted to walk out mid-season, as Steve Spurrier did at South Carolina last month. But the article describes the same guy I wrote about four years ago when he left, a man whose investment is in people, not in his own personal branding or success. What Mike Sherman enjoys is watching those people succeed.

Ironically, I watched Matt Davis play last night, and he is enjoying some of that success that Mike Sherman predicted for him four years ago – only he is now the starting quarterback for SMU, and his performance put a scare into nationally ranked Temple. Davis initially enrolled at Texas A&M, but a logjam of quarterbacks and the emergence of Johnny Manziel led to his decision to transfer. It has been a difficult year for Chad Morris’s Mustangs, but Davis’s competitiveness and athletic ability have given SMU fans hope.

In the article I read, Sherman described the millennials this way: “They are multitaskers and can handle a lot of things at once. But they don’t handle adversity real well.” As I wrote four years ago, I watched Mike Sherman handle adversity here, culminating in a painful last-second loss to Texas in his final game as A&M’s coach. He handled it with class and dignity, and he walked through it optimistically to that last moment in Matt Davis’s driveway. Those Nauset Regional High School students, many of whom face very trying circumstances, could not ask for a better person to teach them that lesson. I think NBC Sports recognized that, because they have produced a reality show that has followed the team this fall. I am no fan of reality TV, but each minute I watched online today has spoken about the humility and impact of teachers, parents, and a coach who didn’t have to take on this assignment.

The changes that have happened here the last four years are astounding. There is a new perception of A&M since our entry into the SEC, and we have renovated a stadium and built facilities that are the envy of all who see them. Fan interest and monetary support are at an all-time high, and the result has been unprecedented success in recruiting. We are also a place where nine wins is no longer enough, and where challenging for SEC and national championships will be expected. If you are the quarterback and play badly for two or three games, social media will keep you fully informed of your worth.

I am writing this on Saturday afternoon before the Auburn game, and Twitter is abuzz because Johnny Manziel is home, and the former Heisman Trophy winner is likely to be at tonight’s game. But I hope, in the near future, we will welcome home someone who, though he may have had a .500 record in his four years here, solidified the integrity and stability of a program badly in need of it, and recruited a bunch of NFL players to boot.

I can guarantee you he is not spending any time worrying about whether we do or not. He is too busy doing what he was put on earth to do—coaching football and preparing young men to lead fruitful lives. But we have rarely had a public representative of this university who better embodied Texas A&M’s core values.

Let’s bring Mike Sherman home and tell him thanks.

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I have been involved in some interesting discussions since my last blog, “I Miss the Hiss.” I certainly did not expect the level of back and forth that arose from writing it, but I can appreciate both sides of the argument. I know the yell leaders have put forth their view in The Battalion. I thought it was worth one more blog to address some of the concerns of those who dismiss the view that “hissing is a good thing.”

I see the horse laugh as part of passing on culture more than anything, and this process needs to be intentional in most cases. Though I don’t wear an Aggie ring, I do have some experience at passing on culture. Linda and I have raised five kids together, beginning when Jimmy Carter was president, and our youngest is in college. We have spent the last 37 years passing on a particular culture. As a result, if you meet my children, you are likely to be addressed in certain ways and afforded a measure of respect, even before you have “earned it” in the relationship. Many of the criticisms of my position on the hiss remind me of criticisms I received of my parenting skills. (Of course, both may be well founded.)

12th Man #4

The first objection to the hiss is that it is hypocritical. You mean the same thing as a boo, so you are just being hypocritical to hiss, and it is actually more irritating than a boo is. This view makes some sense to me. But there are also a lot of ways to express anger in a marriage, and the way you do so says something about your character. My wife does not appreciate a snarky laugh when I disagree with her on something, but it is way preferable to shouting at her and calling her an idiot. I am trying to do better than a snarky laugh. But there are orders of magnitude to how we disagree that say a lot more about us as individuals than they do about the person on the other side of the relationship who is “wrong.” The hiss is not perfect self-control, but it has humor injected into the disagreement rather than pure anger.

The second objection is, “You’re wasting your time, Mike. You need to let go.” (This is usually accompanied by “smh.”) People said the same thing to us repeatedly when we were raising our kids, and I’m glad we decided not to listen to them. If you are going against the flow of culture, you do have to swim upstream to be unique. But that doesn’t mean the waters are not swimmable. And if that is true, how did the hiss last until 2015? Couldn’t you have made the same argument in 1985? Because it is going to end some day is not a strong argument that it ought to end today. “Some day” we’re all dead.

The third argument is that booing is my choice. You can’t tell me what to do. True. And I love that we are still a free country. Besides, I’m a professor. I’m used to people not listening to my suggestions.

Fourth, the team prefers the boo to the hiss. I saw one player’s Twitter post to that effect. I think that is one of the most legitimate arguments against my position. But if my kids were mistreated by classmates or a teacher, I didn’t go yell at that person, even though I might have felt that was the most effective thing I could have done. With teachers in particular, I generally gave them the benefit of the doubt that they were trying to get it right. I would express my disagreement whenever necessary. But my goal was to do it with respect. Were my kids happy? Not always. Did they feel supported? You would probably have to ask them. But I am confident that my yelling would not have made them more successful.

Finally, booing helps the team get calls later in the game. Officials can be intimidated. Again, that may be correct. It’s an empirical question, and I’ve never seen anything more than anecdotal evidence regarding officials’ behavior after a controversial call against the home team. So why not boo loudly after every innocuous encroachment or offside penalty (which they do in some stadiums)? Is that the culture we want?

I actually think the self-control demonstrated by the horse laugh helps restrain us from being that kind of culture. In all the discussions since my earlier blog post, I have not heard anyone argue, “I wish we were more like Tech fans.” (Of course, I admit that I did not view all of the memes of my position on fan sites.)

What is truly unique about our culture in Kyle Field is honor and respect. It is what bonds the Class of ’56 with the Class of ’86 and the Class of ’16. All throughout the game, we honor people – and we stand. We stand for an invocation, for the national anthem, for “Texas, Our Texas.” We stand for Bugle Call out of respect for someone who has had a significant life. And, if you are a student, you always stand as the 12th Man. The way we treat the other team, including inflammatory players and coaches, the way we treat their fans, and the way we treat the officials is simply an overflow of our love and respect for one another.

Linda and I don’t become different people when someone comes into our home, just because they don’t share our view of life. This is true even if they mock us for being Aggies or loving A&M. Without changing who we are, they get the benefit, while they are in our home, of the love that flows within our family. That includes respect and restraint on my part, even when they are disagreeable, or downright irritating.

Kyle Field is our home, and I will be rooting hard at every home game for the Aggies to clearly establish their position in the SEC West. I really want us to win. But, on Sunday morning, visiting fans will go home to their home state and I will wake up in Aggieland. Here’s hoping that the place I wake up in is always unique, a group of people who love one another and are unafraid to live by our core values.

Because those values are what brought me to A&M. What has happened to me as a result is what I hope will happen to many of our visitors. In fact, we sing it at every game: “Then they will come and join the best.” It will happen, not because we are the same, but because we do things differently.

Don’t dismiss the hiss.

Categories: Uncategorized

One of the funniest traditions I encountered when I came to Texas A&M was the tradition of the “horse laugh.” As an alternative to booing, especially the officials at a sporting event, Aggies have traditionally yelled, “Riffety, Riffety, Riff-Raff! Chiffity, Chiffity, Chiff-Chaff! Riff-Raff! Chiff-Chaff! Let’s give ’em the horse laugh!” followed by hissing from the crowd. It actually makes me laugh and takes the edge off a bad call by the officials.

During the second quarter of Saturday night’s game, A&M wide receiver Ricky Seals-Jones was ejected for targeting after a crushing block on an unsuspecting Mississippi State defensive back. It was, to say the least, a controversial call, and the 12th Man was incensed. Boos rained down on the field as the penalty was assessed and Seals-Jones was ejected.

Kyle Field is viewed during an NCAA college football game between Ball State and Texas A&M, Saturday, Sept. 12, 2015, in College Station, Texas. Texas A&M won 56-23. (AP Photo/Bob Levey)

Kyle Field is viewed during an NCAA college football game between Ball State and Texas A&M, Saturday, Sept. 12, 2015, in College Station. Texas A&M won 56-23. (AP Photo/Bob Levey)

We had a string of disappointing losses in Mike Sherman’s last year, but the crowd never devolved into what I saw Saturday night, including after the phantom penalty on the last drive of the final Texas game. But the same chorus of boos happened after a controversial call in the LSU game last year, and I remember feeling regret over it. Perhaps I shouldn’t feel that way, since the same thing would happen in virtually any stadium in America, pro or college. Still, one of the things I admired about A&M even before I got here was the ability to express disagreement and anger, even disdain, in creative ways. The War Hymn makes clear how Aggies feel about Texas every time it is sung, but the locked legs sawing Varsity’s horns off are as much about school unity as they are about vanquishing a foe.

Saturday night you could hear a little hissing in the crowd, but it was overwhelmed by the boos and the invective, at least in my section of the stadium. Certainly it was a reaction in the moment by a large subset of the 104,000 in attendance, and I am not recommending an unemotional response. And I am probably not the right person to point it out, since this is only my 10th year as a season ticket holder. But it feels to me like we are losing something around here that is important.

This year we have put up a statue of our core values on the west side of the stadium, the same core values that are over the entries to the MSC across the street. Saturday night I saw five of the six celebrated throughout the game, and most of them demonstrated in significant ways: Excellence, Integrity, Leadership, Loyalty and Selfless Service. We paused numerous times during the game to recognize those who demonstrate these qualities—former players, generous donors, Bugle Call, outstanding alumni. The Big Event was celebrated as a national example of student service.

And, to be honest, there were many demonstrations of respect including, I think, the way Mississippi State fans were treated. But Kyle Field Saturday night was not the Kyle Field I have known and respected both as an outsider and as a part of the faculty. And I know that part of that is loyalty—to the team and to Seals-Jones—and part is a perceived lack of integrity in people’s minds from the officials. Part of it is also the desire to create the kind of intimidating atmosphere we encounter at Alabama or LSU, stadiums that are the proving ground for excellence. There is a lot at stake—money and image and recruits, and all the ancillary benefits those things bring to the university.

But in the midst of becoming the mega-university we are quickly becoming, I hope the yell leaders will provide direction to all of us admission-paying adults, and to the student body, on how to be an Aggie when things are the worst for us. It won’t be long before the next “worst call I have ever seen,” and it will be much more critical than the one Saturday night. How will we react then?

I am not foolish enough to believe that my words will move the needle on something like this. But I have a sense that this is one part of Aggie culture that can be quickly lost and, once it is lost, difficult to ever retrieve. And though I don’t wear the ring, I love this place, and all that it stands for.

I miss the hiss.

Categories: Uncategorized

VWI was watching TV when a Volkswagen commercial came on. I found myself thinking, “Why on earth would I go in and test drive one of those?” You probably think this is irrational, because they are quality cars. But who trusts Volkswagen after this past week?

Volkswagen has admitted to installing software rigged to defeat emissions testing, apparently in 11 million vehicles. The software to blame for the scandal was intentionally designed. Unlike most automotive industry scandals, this was not a design flaw. In past controversies, whether it be Ford Pinto gas tanks or GM ignition switches or Toyota gas pedals, the car makers did not deliberately design systems intended to cause harm to customers. What has always been in question is what the companies did once they found out that they had a problem. And though the clarity of who is to blame has varied across cases, people have recoiled at evidence that car makers knew there was a problem, but decided not to act, because of a calculation that it would be less expensive to do nothing and to address lawsuits that might arise than it would be to recall cars or replace parts.

Volkswagen’s dishonesty may not directly threaten lives in the short run, but the software was intentionally designed to mislead not just the regulators, but the public. Volkswagen has built a very successful advertising campaign around clean diesel vehicles that will get over 800 miles per tank of gas. What they did not reveal is that the truth is that you can have EITHER a clean diesel vehicle OR get over 800 miles per tank of gas. Playing on their deep knowledge of the regulatory environments in Europe and the United States, they rightly calculated that their deception would not be detected. In fact, it was only because private testers were able to evaluate several vehicles that the issue was discovered at all. The intent of the American testers was to find clean vehicles with results that would allow them to put pressure on European regulators to adopt tighter standards. The testers were reportedly the most surprised people of all at their results.

When regulators and those involved in the testing tried to confront Volkswagen about it, executives repeatedly denied that there were any issues and questioned the competence of the testers. The company’s persistence in resisting the questions of the testers, and their refusal to conduct their own investigation to support their claims, give the impression in hindsight that Volkswagen executives were being deliberately misleading. This is why CEO Martin Winterkorn’s expression of shock about the systematic dishonesty in the company rings hollow. It was only when the EPA threatened not to allow the company to sell Volkswagen and Audi diesel models in the U.S. that they admitted to the problem. The German transport minister says that 2.8 million vehicles sold in Germany are affected.

Former Volkswagen CEO Martin Winterkorn

Acting VW Chairman Berthold Huber stated, “I want to be very clear, the manipulation of tests for diesel engines is a moral and political disaster.” That is exactly the right term, but it is more than that. It is an indictment of the very culture that has driven Volkswagen to become the number one automaker worldwide, having surpassed Toyota only a few months ago. According to a New York Times article, it wasn’t until September 3 that “a group of senior engineers” admitted the truth. The truth is that a large number of people within Volkswagen knew exactly what was going on; this was not some rogue employee. It was a result of the culture.

And this is almost always true in major corporate scandals. The fact that so many are involved gives each individual an excuse that “this is not me” doing this, but management, or the market pressure, or the strategy. It is why the second half of the Aggie Honor Code so often ignored by students—“or tolerate those who do”—is critical to living out ethics in the business world or in the public square. We actually have immense tolerance for those who do when they are close to us, part of the same company or the same institution with the same goals we have. But we ought not to.

The results of this tolerance are inevitable, and oft repeated, crash and burn events. Instead of catching things early, we only find out when the results are devastating. Instead of being able to adjust and let the air out of the balloon slowly, we get an explosion.

The results include Volkswagen taking a $7.3 billion charge to earnings in the third quarter, and EPA fines that could (but likely will not) reach $18 billion. There will be shareholder lawsuits after a two-day drop of 35 percent in the company’s share price, and plaintiffs’ lawyers are lining up for their share of class action suits from car owners.

And, inevitably, we get more regulation. This is sure to come after the Volkswagen affair. Of course, there are good by products of that regulation—in this case, perhaps, more truth-telling and cleaner air. But the entire market will bear the cost of that regulation; unjustly, that includes those who tell the truth and compete honestly and, ultimately, the consumer.

I may get emotional about this type of deception, but the market is perfectly rational in its response. That 35 percent share price drop is simply a shift in predictions about two things—significant decreases in future cash flows and more risk in the stock. What is unclear at this point is the long-term effect on diesel car sales, which represent about half of VW’s market in Europe, and on the costs and rigor of future testing.

But you can be confident of this: Volkswagen created a culture of dishonesty at the highest levels. We can argue about who knew what, when. But there is no transparency there. In fact, apparently the American arm of the company was kept in the dark about what was going on until right before the EPA announcement. This is what a high competence, low integrity environment looks like.

And if you trust Volkswagen, you do so at your own peril.

Categories: Uncategorized

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