Dr. Peter Koestenbaum

What Is Your Business Philosophy?

Looking Beyond the Obvious: An Interview with Dr. Peter Koestebaum, author of the Philosophic consultant and The Heart of Business

By John Milton Fogg

In this age of specialization, Peter Koestenbaum may be the closest thing we have to a Renaissance Man. As a young man, his quest for insight brought him degrees from Stanford (BA in physics and philosophy), Harvard (MA in philosophy), and Boston University (PhD in philosophy); he also attended the University of California (Berkeley) for additional studies in music and philosophy. Peter taught for 34 years in the Philosophy Department of California's San Jose State University, where he received the Statewide Outstanding Professor Award, and founded an accredited institute in California for teachers, nurses, physicians, psychologists, and psychiatrists, teaching the applications of philosophy in education, psychology, psychiatry and psychotherapy. During that time, he spent 25 years working with psychologists and psychiatrists, through seminars, lectures, and books, exploring the relationship between psychiatry and the healing potential of philosophy. Impressive? Yes - but he was just getting started.

Not satisfied with the limits of his work to date, Dr. Koestenbaum set out to apply the insights he'd gained in philosophy and psychiatry to the practical world of business management - strategic thinking, marketing, and especially leadership - a journey that has taken him to over 36 countries in five continents, and into intensive consulting relationships with firms including IBM, Electronic Data Systems, Ford, Ciba-Geigy (now Novartis), Citibank, Volvo, Amoco, Xerox, American Medical International (now Tenet HealthSystem), Warner Cosmetics, Statoil (Norway), Sparbanken Gruppen (Sweden), and others.

His business books include Leadership: The Inner Side of Greatness (also, in Spanish, Swedish, French and Korean), The Heart of Business (also in French) and Freedom and Accountability at Work: Applying Philosophic Insight to the Real World (with Peter Block). Some of his philosophic books are The Vitality of Death, The New Image of the Person, Managing Anxiety, Choosing to Love and Is There an Answer to Death?

Today, at 74, Dr. Koestenbaum is the veritable grand old man of philosophy in business. Despite his apologetic claim, "English is my third language, so writing in English will always be a challenge," Peter is articulate, engaging and thoroughly entertaining.

"My mother sang me songs in German when I was a baby," he elaborates; "by the time I was on my second language, Spanish, she was ill. By the time I was on my third language, she had died. And it shows - I don't have the ear for English that, for example, my wife and children have." Perhaps not...but if we were all a fraction as profound in our first language as Dr. Koestenbaum in his third, the world might be a profoundly better place.

We recently met with Dr. Koestenbaum to discuss his latest books, The Philosophic Consultant and Leadership: The Inner Side of Greatness, and his long career as the businessman's philosopher. - J.M.F.

You have devoted your life to the combination of business with philosophy. Why?

I've been a committed philosopher in every sense of the word all my life. A philosopher is someone who looks at greater degrees of depth and uncommon degrees of clarity; that's the philosopher's job.

"Greater degrees of depth" means to look beyond the obvious, whether it's inward or outward. "Uncommon degrees of clarity" recognizes that many questions are really not clear enough to be answered, and many answers are not clear enough to be really understood. That's a philosophical attitude, and it has always intrigued me.

In the last third of my career, I've become more concerned with philosophy's practical applications. These have traditionally been first and foremost in the area of religion or theology. That's why Plato is extremely important to Christianity. Dante invented the concept of "limbo," and placed Aristotle, Plato and Socrates there, asserting that since they were the founders of the theoretical part of Christianity but were never baptized, there must be a special place for them.

Philosophy in business has to do with the actual business responsibilities of the business. You are in business to do good business. What does it mean to do good business? What can philosophy contribute to the total spectrum of the person in charge of the business?

The next application that captured my imagination was medicine - the whole area of psychiatry, psychology and psychotherapy: how can you improve the practice of medicine by looking at a human being with the depth that philosophy brings? It was fascinating to apply philosophy seriously to a secular sort of priesthood - which is what psychotherapy really is. It became a major part of my life: I wrote five books on the subject, was active for a long time in the American Psychiatric Association, had my own institute, and helped set up graduate schools in psychology.

Then I said to myself, "In our world today, reality occurs in business." This realization was very close to the philanthropic approach of your magazine. In your profession of networking, there is a recognition that business is where the action is, that it's important not to decommercialize business, but to accept commercialism and go beyond.

So, after 34 years of teaching, I left the university. I wanted to be more involved in the real world - which included making serious money myself: with four children and high ambitions for all of them, I'd been working like a mule to support our family.

Was there any sort of "culture shock" for you, moving from theology and psychiatry into business?

The only real difference is that my students today are much more accomplished people. When I taught younger students, I could learn a lot from my students; now that I consult to CEOs of major corporations, I can learn even a great deal more from them!

What's the benefit of bringing philosophy into business?

If you want to deal with the world you don't deal with people who think they have a problem, you deal with people who think they have solutions.

People often think that philosophy in business means, "emphasize the softer side," the emotional aspects. There was a wonderful "60 Minutes" episode about a man who refused to fire people: he believed his job was to take care of his people and make the business successful at the same time.

This is a misconception: that's not philosophy in business. Not that it's wrong - but it is not enough.

The other misconception is that philosophy in business means ethics. With so many ethics-in-business issues in the news right now, people tell me, "Your telephone must be ringing of the hook!" Yes, that's also very important - but philosophy in business is much more than that.

Philosophy in business has to do with the actual business responsibilities of the business. You are in business to do good business. What does it mean to do good business? What can philosophy contribute to the total spectrum of the person in charge of the business? Gabriel Media Group co-founders Chris and Dr. Josephine Gross have their own answer, and philanthropy is part of that.

The answer includes ethics, but it also includes the capacity for much better strategic thinking on a much wider range of issues. It includes an approach to the harsh realities of life: it means dealing more deeply with defeat, destruction, envy, betrayal, indifference, insensitivity, terrorism, sabotage, the realities of the stock market - which is an impersonal thing and doesn't give a hoot about your feelings. And, dealing with the courage required for implementation. It's not just a question of thinking right: you've got to act, to put your life on the line.

You have said, "Too few people make the connection between profits and human values." Can you make that connection for me?

That's the ultimate issue: Can profit and human values be connected? My first business book, The Heart of Business, deals with this whole issue at some length.

We want to be able to say, "Yes - you cannot make profit without adhering to certain values." But we should have no illusions: there is a heck of a lot of evidence that this is not always the case. I think the jury is still out on this question. It is a tragedy that this is so, but it is.

It is therefore very important for networking people to create a society where the answer is, Yes, profit and values do go together - and to make it difficult or impossible for profit and values not to go together. This is our obligation.

In a civilized world, you cannot be allowed to gain profit by cheating people. We have to make that decision. I think our country's more extreme response to what was being practiced every day without hesitation is a way of saying, Yes, we have made that ethical decision.

Cheating violates a Kantian principle: it means that I make a special case of myself. "Everybody better follow the rules - except me." That is the very definition of injustice and unfairness, and there's not a human being in the world who will say they like that - unless they benefit from it themselves. Ultimately, a society where you benefit because you lie, but others do not benefit, is not sustainable.

An ethical society is essential. Business doesn't work in an unethical society. Most people like to be valued and appreciated. An individual in an unscrupulous society has a very hard time. I lived for some years in a country that was rife with corruption. A nation that is corrupt cannot function well.

This is a most difficult issue. If you say, "Ethics is good business," you are not making an ethical statement, but an unethical statement. An ethical statement is, "Ethics is right, regardless of profit; if it leads to poverty, then you're just going to have to be poor." It's only when the consequences would be negative that you know for sure you are motivated by being ethical!

Where do we start that process?

You're doing it all the time. With this magazine, with your business, with your whole life. It is a question of being clear.

Life in general is not black and white; life is ambiguous. Therefore, it's your job to do something about human values; then you make it less ambiguous. That's a matter of courage, honor, and pride - that's what makes people great.

From your vantage point, what is right about business today? What's really working?

I'm a very patriotic American - an American by choice. I came to this country in 1945 and have loved it very much. Notwithstanding its crimes - the way Native Americans were treated, the way African Americans were treated, and so forth - there is a heck of a lot that is right with American business.

The very fact that I can make a living here tells me there's something right with business! That they're willing to risk having a philosopher come in and start messing around with their minds - as Ford and EDS, for example, did in a big way. They don't want to talk to a priest, because the priest already has the answers. They don't want to talk to a psychiatrist, because there's nothing wrong with them in the mind. They want to talk to a philosopher; a philosopher has no axe to grind.

I got a lot of calls from the business community about my latest book even before it came out - when it was still in uncorrected galley proofs! There is a tremendous hunger in this country to do some soul-searching - especially after 9-11.

Dr. Koestenbaum, what can you tell us about your latest book?

I have my whole life invested in this book, The Philosophic Consultant. I have been amazed at the response. I thought I would never get any endorsements - and I've gotten more than ever before. Warren Bennis, the guru of American consultants, was gracious enough to write the foreword, which ends with this sentence:

"Every once in a while, a book comes along that illustrates the darkness of our time. This is the book for our time."

When I read that, I was speechless. It's embarrassing - and I would sue him for saying it, except it's so beautiful you can't! Another endorsement said:

"The complexity and fragility of our life at the beginning of the twenty-first century can only be mastered by a new world ethos. Peter Koestenbaum's new book provides the basic philosophical concepts for meeting this challenge."

This book is what I want to use to spread the word. It's all about deepening the business experience, so that it is rooted not in human greed but in human civilization. The effect will not necessarily be that people go to church more often or donate more to philanthropy. The effect will be a more civilized world through more civilized, more profoundly reasonable business activity.

The Leadership Diamond®

I have spent my life trying to create a model, a simple image that communicates the message of how you can bring business and values together - a model that is teachable at all levels, from CEO to grade school student.

I call this model the Leadership Diamond®.

The Leadership Diamond consists of four values that serve as a prescription or compass for living - four factors to consider if you want to be successful in life, from a philosopher's point of view. The Leadership Diamond is also a picture of your customer and your customer's needs.

The two vertical concepts, Ethics and Courage, are character issues.

For most people, Ethics has emotive value. It's not just a word, it means something. If I tell you, "I think your ethics are questionable," you are quite offended. If I say, "I admire your ethics, that's what attracted me to work for you," that's also a very powerful statement.

Courage, again, is an emotive word. If I say, "You have no courage," that would be very offensive. If I say, "What attracts me to you is your courage," that's also a powerful statement.

The two horizontal concepts, Reality and Vision, are business issues.

Your grasp of Reality (in the West) is your grasp of the data, the facts. This is what 99 percent of what business school is all about. Bloomberg, now the mayor of New York, made billions because he gives you the numbers.

On the East you have Vision, the capacity for grand strategy and historical perspective. If you don't see things from the largest point of view, then you won't see the clouds gathering on the horizon; you will fall into traps, and your business will be short-lived.

There are also two larger needs, which apply to the Diamond as a whole:

1) the need to manage Polarity, which also means managing conflict and ambiguity;
2) the need to manage Greatness; we don't want mediocrity, we want greatness.

Those six terms define your customer and your customer's needs - and therefore, your business. Your business's job is to meet those needs for your customer.

Why "Leadership" Diamond? Because, no matter what your actual product, whether people are attracted to or repelled by your business is determined perhaps 20 percent by the actual technology in your product, and at least 80 percent - often more - by the leadership in your product and in the way you do business.

How you manage leadership will predict the success you have with your business.

I once asked Jean Levy, then chairman of Renault, "What's your business philosophy? What's your mission statement?" He said, "Go to our show rooms: if it's not obvious when you walk in, call me up, and I'll be paying that showroom a visit!"

What do you want people to experience when they enter your "showroom"?

Courage means the ability to do something, even though you experience anxiety about it. Do you offer your customer a sensitivity to their anxiety about certain issues?

Ethics: your client must feel that you have a really trustworthy environment. Trust is crucial. People are into relationships. Ask yourself, "What will my customers perceive as ethical?" Does it have to do with the way they are treated?

The first thing some physicians' offices tell a patient is, "How are you going to pay?" That's not thinking of the patient! That's thinking of you: How am I going to be paid? They're missing the patient's need from the start. The patient wants to be welcomed and asked, "How can we help you?" Name one broker who can talk intelligently about anxiety to his customers. They say, "This statement says that you won't hold me responsible if you lose all your money that I'm about to invest, that it's not my fault - sign here." It's amazing how many professionals are trained in the particulars of their profession - but are untrained in the human dimension.

The Diamond is not a cookbook approach. You can't be too formulaic, or it becomes superficial and mechanical. But it's a fairly straightforward analysis. Within an hour or two, you cover a huge spectrum of issues that people usually completely overlook - issues that actually determine whether people make a choice for or against your business.

This Diamond awareness then transfers to everything: the way you greet your spouse when you come home, how you are with your children, the kind of citizenship you exhibit, and so on. - P.K.

For more on the Leadership Diamond and Peter Koestenbaum's work, see his Web site, "Philosophy in Business," at www.pib.net.