Book review: Managing in the Gray by Joseph Badaracco

How to get to grips with difficult decisions in business and life
National hero: Aaron Feuerstein was praised for looking after his staff in a crisis — but ultimately lost his company © Getty

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In 1996, an American businessman became a national hero. Later, his company went into administration and he became a business school case study, in decision-making.

The man was Aaron Feuerstein, the president and chief executive of Malden Mills, a Massachusetts textile company. In late 1995, his factory burnt down and he used the insurance money not only to rebuild it but also pay the wages of the underemployed workers in the meantime. In doing so, he garnered press attention and praise from Americans, including Bill Clinton, then president.

Ultimately the decision cost him his business: in the process of rebuilding the factory, the company racked up overwhelming debt from which it failed to recover. So what was the so-called “Mensch of Malden Mills” meant to have done? This is a question that Managing in the Gray: 5 Timeless Questions for Resolving Your Toughest Problems at Work, seeks to answer. Author, Joseph Badaracco, professor of business ethics at Harvard Business School, is a sensitive guide.

Rather than draw on behavioural economics and psychological theory, as so many contemporary books seem to do, Badaracco turns to philosophers: Aristotle, Nietzsche and Confucius.

There is something refreshingly old-fashioned about this book. This is not a criticism. Rather, the book is a ray of sunshine amid a deluge of management and business books focused on technology’s transformation of work. These books either say the human race is doomed, to be replaced by robots, or that people need to excel in their field in order to complement the work that computers can rip through in nanoseconds.

Yet Managing in the Gray reminds us that many aspects of work will be unchanged and that human problems will persist. “Algorithms can’t solve the hard human problems of life and work,” writes the author. “Resolving gray [sic] area problems as a human being means asking yourself the right questions and working hard to develop your own answers.”

In doing so, he presents a five-question framework to help managers balance an analytical approach with a human one. These are: what are the net consequences? What are my core obligations? What will work in the world as it is? What do we really stand for? What are my best judgment and best self?

His response to the Malden Mills case is to set out a simple decision tree, by first listing all the options for dealing with the problem; second, flesh out the possible outcomes of each of these options. Feuerstein, Badaracco contends, made the mistake of believing he had just one branch to his decision tree: rebuild this factory. “This branch, he seemed to believe, would lead to a single outcome, a successful recovery and a thriving company,” he writes.

With the benefit of hindsight, we can see that there were other, more devastating, outcomes. Badaracco, insists that it would have been wiser for Feuerstein to analyse the textile industry in the US, to explore other options, such as outsourcing some products, and to invest in research and development. These perhaps could have restored the business.

Not only does he underline the importance of exploring various outcomes but also to consult with others. “It is hard to awaken your moral imagination on your own . . . It is particularly valuable for managers and teams working on grey area problems to find ways to escape their organisational bubble and hear directly from people whose livelihoods and lives will be affected by their decision or from people who can represent their experience in direct, concrete, forceful ways.”

There are no easy answers to grey area problems. That is what makes this book so compelling but ultimately what also frustrates. However, it provides a thoughtful and sensitive framework to tackle some of the persistently human difficulties of work.

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