Monday, March 29, 2010

Political "Reality"

This is the paper I mentioned - social constructionism and politics. Obviously, I had to try to present the argument in a neutral manner, which was tough in light of Conservapedia.

The political atmosphere today makes it easy to seem as if Republicans and Democrats are living in entirely different worlds, with entirely different realities. Rational debate is difficult, as each side believes its value set is accurate and morally correct. The dichotomy between the two viewpoints is hard to understand - how can two groups of people, looking at the same facts, have such wildly varying conclusions?

In 1966, Peter Berger introduced the concept of the “social construction of reality” in his book of the same name, positing that the social world is the ongoing creation of humans and the language we use. Reality is modified, reified, and institutionalized over time, leading to the creation of what we consider “fact”. Individuals seek to associate with the reality that most closely resembles his or her internal beliefs, thereby reducing cognitive dissonance. Organizations serve to reinforce this reality and associated beliefs. By examining the political debate in this light, we can better understand the existing polarity.

“Things are that as which they are named” (Berger and Pullberg, 1965, p. 203). While we tend to look at word definitions as concrete facts, Berger would argue that language and meaning are part of the social process. We assign meaning to words based on our construct of reality and our associated values. One of the most fascinating aspects of the political conversation is that that certain words seem to have different (and loaded) meanings to different parties. If we look at the word “liberal” across three websites -, Wikipedia, and Conservapedia - we can see the wide variance in definition. offers no political commentary, simply definitions pulled from Merriam-Webster dictionary and assorted anthologies. The site defines the word “liberal” as “favorable to progress or reform, as in political or religious affairs; favorable to or in accord with concepts of maximum individual freedom possible, esp. protection of civil liberties; favoring or permitting freedom of action, esp. with respect to matters of personal belief”. To me, a self-proclaimed liberal, this seems to be a reasonable and unbiased definition. Wikipedia uses a similar definition on its user-generated encyclopedia, describing “modern liberalism” as a combination of “social liberalism and social progressivism with support for a welfare state and a mixed economy”, and lists causes such as voting rights, freedom of choice for women, and “government entitlements such as education and health care” as examples of liberal policies. Again, to me, this definition seems neutral and unbiased, as Wikipedia is theoretically a neutral aggregation of facts.

However, to many conservatives, Wikipedia demonstrates a strong liberal bias and distorts the facts accordingly. Conservapedia states that its purpose is to “convey knowledge free of liberal bias”. It does not embrace a conservative bias (anymore than Wikipedia claims a liberal bias); instead, it attempts to present just the facts. According to the site, a liberal is “someone who rejects logical and biblical standards, often for self-centered reasons. There are no coherent liberal standards; often a liberal is merely someone who craves attention, and who uses many words to say nothing”. Obviously, this is a very different definition than the two previous sites, with a much more pejorative slant. As a liberal, I find this definition offensive, but many conservatives see this as the unvarnished truth - this is their reality.

It would be easy to claim that one site is “real” and the other “fake” (according to the reader’s personal views), but a social constructionist viewpoint rejects that option. Individuals and organizations create meaning based on their reality and interpretation of events, even if that constructed reality is repugnant to others. If we accept that reality is fluid, must we then accept all versions as valid? Perhaps or perhaps not. However, as a society, we should be aware of the power of groupthink and the danger of institutionalized views based on factually incorrect information.

Tuesday, March 16, 2010

Grad School

So it's been a while since I've published anything. I've been in school and volunteering at the Humane Society, which is fabulous.

School is interesting. I LOVE the reading. I really, really do. And I adore the professors. I'm conflicted about writing anything else. I tend to be very academically focused, which is a luxury - I don't have to work right now. It's hard to judge anyone else for getting their masters for fiscal reasons only. Also, I'm freaky anti-social - I'd be happy doing all independent studies and never going to class.

So how to reconcile varying points of view? I don't know. I love theory and am delighted to geek out with abstract discussion. However, this isn't realistic for the majority of students.

Should I move to a PhD program? Should I accept the fact that my borderline Asperger's tendencies just need to be managed and that I have to behave?

Again, let me restate that I LOVE the professors and the reading. I love being in class and I love learning. I'm just trying to find the correct program for me.

Banking Analysis

Looking back on my time in the banking industry, I can identify multiple cases of retroactive sensemaking, cognitive dissonance and the subsequent attempts to reduce equivocality, and systems theory gone awry. The industry is currently in serious flux, and I believe that much of the current instability is due to poor sensemaking and blame. I looked at three examples in the brokerage business: the compensation structure, management efforts to create structure, and the dilemma of bank brokers. These failed examples demonstrate the power of sensemaking, and the damage it can create if used poorly.

Cognitive Dissonance

The complex nature of banking pay rewards short-term productivity, rather than long-term corporate success. In order to justify their high pay, the bankers must feel as if they are contributing to the success of the company - even if their bonuses require pumping up short-term (and sometimes artificial profits). This gap creates cognitive dissonance, in which they render the outcome sensible by creating a good story to explain it. In the brokerage business, the distinction between annuitized, fee-based compensation and short-term commissions creates a sense of disconnect between the brokers and the clients.

Brokers are encouraged to develop long-term relationships with clients, always working in the client’s best interest and not making recommendations based on potential fees. Transactional business is strongly discouraged in this client model. In this type of relationship, it can take years before a broker is actually paid for his or her work. Meanwhile, managers demand monthly targets. It is entirely impossible for a broker to meet these monthly targets without doing some transactional (read: high commission) work. These dueling messages - make money each month, don’t make decisions based on money - create an enormous amount of cognitive dissonance in brokers. In order to resolve this, many convince themselves that transactional business is in the client’s best interest. And if it magically happens to be in the client’s best interest on the last day of the month, well, then that’s just coincidence. They create a reasonable (albeit often false) story to reduce this tension between their choices.

Systems vs. Chaos Theory

Brokers are an odd bunch, highly independent and authority-averse. Many entered the business because of its slightly chaotic, minimal management structure. They liked the idea of not having a boss and operating on a strictly commission basis. However, as the industry matured, brokerage firms began to create more structure in the form of meetings and layers of managers. I initially worked in an office that was very loosely coupled, with a hands-off manager and very little requirements. People did their work on their time with no interference, demonstrating Margaret Wheatley’s theory that order is a naturally occurring phenomenon. As she stated in 1994, “if people have access to one another and to information, they create the order they need to get the work done.” Unfortunately, as banking and brokerage merged, Wachovia decided to impose a more classic structure, which led to an enormous drop in morale. The firm brought in two managers with military backgrounds, who immediately demanded daily meeting attendance and strict work hours. They looked at the flexibility in the current system and saw nothing but chaos and a lack of control.

Unsurprisingly, the new artificial order lowered productivity. The new managers were too focused on planning, rather than letting the brokers organize themselves. This classical management style was entirely at odds with the employees sensibility, leading to rebellion. Their strict adherence to their plans was at odds with the essential equifinality of the situation. The new managers’ alterations to the work structure could be considered second order changes; however, in this case, the deviation-amplifying feedback created a negative effect on the office.

Retroactive Sensemaking

One of the biggest issues facing the combined bank/brokerage was the existence of bank brokers, located in individual branches. These brokers had similar, but less extensive licensing, plus the ability to gain new clients simply by asking a teller for a referral. In the brokerage offices, we were unable to see any account balances on the banking side. This was a huge disadvantage, as we could not identify clients with large cash balances or CDs about to come due. The Chinese Wall was alive and well on the brokerage side - in fact, we couldn’t even see which Wachovia Securities client was also a Wachovia bank client. The bank brokers had an entirely different situation. Not only could they see bank balances, but they could also see the brokerage balances of bank customers. While they weren’t supposed to discuss brokerage business with Wachovia Securities clients, the reality was that they used this knowledge to solicit our clients.

Clearly, this was an issue. Bank brokers were poaching our clients at an alarming rate, with absolutely no consequences. Clients were confused, brokers were angry, and the press was salivating over the disorganization. Yet Wachovia continued to insist that it was an excellent situation - despite all evidence to the contrary. Why? The bank had made a decision to merge the two sides of the business without much thought to the working details. Admitting that it was a failure would be unthinkable. Instead, they used retroactive sensemaking to create a story explaining the issue. The firm convinced itself that this split between the bank brokers and ‘regular’ brokers was intentional and a positive outcome, stating they wanted clients to have options. Accordingly, they looked at any disputes as individual problems, refusing to see the pattern because it went against their story.


We all know what has happened to the banking industry on a nation-wide level, but I think it’s important to note the changes that happened on a local level. Managers who talked out of both sides of their mouths, firms that refused to acknowledge the reality of the situation, and the convergence of banking management with brokerage management all contributed on a micro-level. Personally, it led me to leave Wachovia for Merrill Lynch, and then to leave the industry as a whole. Sensemaking is a powerful tool that can be used in a very harmful way to reduce dissonance, even when that dissonance should be a warning.