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Leadership & Management

The Emperor's Tailors

The fraud doesn't end at appointment—it must be maintained. The people best placed to name it are the people whose interests depend on not naming it. Part two of two on who keeps the corporate con moving, and the one question that stops it.

In Gerrit Dou's painting a mountebank on a draped platform hawks remedies to an attentive town-square crowd, while the painter looks on from a window above.
A mountebank holds forth from his platform, the crowd pressed close and credulous. In the window above, the painter watches and says nothing. Dou's point—and the essay's—is that the performance only runs because the audience lets it.
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The Emperors Tailors
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The confidence man of Herman Melville's tale boards the Fidèle on the Mississippi on April Fool's day and proceeds, through a succession of disguises, to talk the passengers out of their money. What unsettles the reader is not the swindler's skill but the passengers' appetite. The con works because they want it to. Each mark supplies, from their own optimism or vanity or wish to appear charitable, the credulity the con requires. Melville's swindler does not force the strongbox. They are handed the key, with thanks.

This is the truth the more famous fable softens. In Hans Christian Andersen's (1805–1875) telling, the emperor's nakedness is exposed by a child—an outsider, untutored in the flattery the court runs on, who simply says what they see. The emperor, unwilling to accept anything untoward has happened, continues with the procession.

The boardroom version follows a similar path—the procession continues, but there is no child to call out the fraud. This is because unlike the fairy tale, in real life the procession is arranged by tailors whose continued employment depends on everyone staying on message, and the crowd along the route consists of people who have either been measured for a similar suit or hope shortly to be. The nakedness is plain to every one of them. None will name it, because none of them would be in the crowd if they were the sort of person who would.

And here is the uncomfortable part, which the first column left implied. You are not the child. You are somewhere in that crowd, or somewhere among the tailors, and you have at some point seen the nakedness and held your tongue. The phenomenon described last week—the executive who pitches transformations they cannot deliver—does not require an emperor of unusual delusion or a court of unusual cowardice. It requires only a stable arrangement in which the people best placed to see the nakedness are the people whose interests depend on not naming it. The harder question is who keeps the procession moving. The answer implicates most of the building, and a fair number of those outside it.

Rashness, Presumption, and the Bystander

The Aristotelian category that fits this best is not cowardice or self-interest but rashness. The rash person acts in apparent disregard of danger because they have failed to perceive it; the defect is not corrupted courage but absent practical wisdom. They are culpable not because they intended harm but because they should have seen it—and the culpability rises with rank, since seniority is precisely the vantage from which the danger ought to be visible. Burke names the same defect in another idiom. Burke's presumptuous reformer has read a few books, concluded that an inherited institution can be redesigned from first principles, and set about demolishing what they have not troubled to understand. Presumption, for Burke, is a moral failing and not merely an intellectual one: the wise know the limits of their knowledge; the presumptuous mistake confidence for competence.

The instructive move is to extend these categories outward, from the executive to the people who installed them. The director who appointed the rash candidate without interrogating the record is rash by proxy. The fellow executive who sat through the appointment discussion and said nothing, though they had every reason to doubt, is presumptuous in Burke's sense—their silence presumed that someone else would name what they had noticed and chosen not to. Why does each of them keep quiet? Not, for the most part, from cowardice, but from the oldest finding in social psychology: the more people who could intervene, the less any one of them feels obliged to. Responsibility diffuses along the appointment chain precisely because the chain is long. The search consultant who shapes the shortlist, the chair who runs the interview, the committee that signs the package, the analyst who upgrades the forecast on the announcement—each performs a task whose local logic is unobjectionable, and each assumes, reasonably enough, that someone better placed will raise the objection they are declining to raise. The aggregate is an appointment no individual on the chain would have warranted alone.