How to prevent corporate corruption with Eric Ries

**Eric Ries** (0:00)
People think the worst thing that can happen to you is your business fails. Oh no, it could be so much worse than that. We're actually awash in corruption all around us, and I think it's important that we see a pathway out of that trap.

**Adam Grant** (0:16)
Hey everyone, it's Adam Grant. Welcome back to ReThinking, my podcast with Ted on the science of what makes us tick. I'm an organizational psychologist and I'm taking you inside the minds of fascinating people to explore new thoughts and new ways of thinking.
Eric Ries is an entrepreneur and author. He's best known for his best selling book, The Lean Startup, about how founders learn rapidly and innovate continuously. He's dedicated his career to helping businesses succeed and do the right thing. Following that line of thinking, Eric made headlines for creating the long-term stock exchange in 2015
Just like the New York Stock Exchange, you can trade cash, shares and equities. But the long-term stock exchange was designed to help companies resist short-term market pressures and focus on their future growth and impact instead.

**Eric Ries** (1:05)
So one of my questions was, why are all the stock exchanges that we're going to compete against, why do they all have the same listing standards for all intents and purposes? This is America. It's a competitive system. You think one of them would be trying to out-compete the other by being more long-term or something. Why are they exactly the same? So I was like, well, let's go find out.

**Adam Grant** (1:20)
His experience on that project and working with many high-profile companies over the years led to his new book, Incorruptible, which focuses on how to help organizations avoid straying from their ideals. The corruption Eric tackles head-on is one of the biggest problems of our time. A lot of people believe it may be unsolvable. But Eric has some strong ideas on how to move forward, starting with a little bit of tough love and a little bit of hope too.
So I think I have to start by saying probably most of our listeners know you for your seminal work on Lean Startup and helping millions of founders come up with minimum viable products and kind of pressure test their ideas and iterate and get half-baked possibilities out into the world that then turn into really, really great product services companies. And yet, lately, you are in the business of doing something a little different, which is you are making founders and leaders cry. You're making them cry.

**Eric Ries** (2:20)
No one ever cried reading the Lean Startup. It's very surreal, actually, to me. The more I've been talking to people about it and the more often it happens, I feel like it's connecting with something that is really like wounding a lot of people that they feel tremendous pain and loss about. And I guess it shouldn't be taking me so much by surprise because of course that's why I wrote the book. I felt that sense that like in our economy there is something like that has gone wrong. And I've just been around too many companies that lost that special spark that made them worth grading in the first place. And I know a lot of people who have wound up incredibly rich and totally miserable.
Never mind the people who are affected by this boardroom drama, all the thousands and millions of customers who've had a favorite brand get ruined, companies that have become malignant or worse, the addictive algorithms and the negative externalities. And we're actually awash in this corruption all around us.
So much so, I think we often don't even know what to call it or even recognize it as a set of choices that we've made as a society about how our economy should be structured. And so, yeah, I want to bring both a dark message about something that's gone terribly wrong, but then the hope and the blueprint for how we get out of this mess.

**Adam Grant** (3:32)
And that's the part I think that's making them cry. You're telling them something they thought was impossible is actually possible.

**Eric Ries** (3:40)
Yeah, it is really interesting to me how many people tell me that the way things are is inevitable.
And sometimes they say it out of a sense of despair, like, well, can you do? It's inevitable. But even boosters of the status quo often are like great pains to make sure I know that my attempt to reform is going to fail. And at a certain point, I started to realize that the story of inevitability is a tell.
Because if it was really inevitable, if they really believed it was inevitable, they would not bother feeling the need to try to convince me that it was inevitable. You just watch it die. It's like, oh, you foolhardy person, I'm going to sit back and watch you crash and burn. But the fact that they're taking so many active steps to create this aura, this story of inevitability, that is what clued me into the possibility that maybe they're actually a little bit worried, that people might attempt things that are verboten, according to today's modern best practices. And if they attempt some things, maybe they'll find out some things that would puncture this feeling of inevitability, this feeling that this is the best way for some good reason. In the book I write that your optimism, the optimism that you feel about the possibility of a better future is a fuel that has to be burned to drive this engine that creates all these catastrophic results. So a huge part of the book is of course, it's about founders and companies and leaders and organizational structure. Of course, that's there. But for me, far more important is the way in which the book intersects with all of our lives as customers, as employees, as future potential employees, what I call builders and future builders. All of us are creating, we're actively creating these conditions that we hate. Not through manifestos, not by like, okay, after the revolution then, using all practical techniques that are available absolutely 100 percent today, do not require anybody's permission to use, have really strong evidence in favor of them being not just better ethically or morally or socially, but better value creating engines. And also, of course, with case studies where we can learn from real people who have actually taken that plunge.