Enron had “integrity” as a core value. FTX had none at all. Both collapsed. Jason Hughey argues the problem isn't whether companies state their values—it's whether those values function as actual decision-making frameworks or just motivational posters on the wall. Episode Summary Most organizations betray trust not through malice but through design. Jason Hughey breaks down the two paradigms shaping every workplace: top-down control systems that optimize for short-term extraction, and emergent systems that treat employees as contributors rather than resources. The dysfunction you've felt—being punished for good ideas, watching customer service decline to hit quarterly targets, seeing values that exist only on walls—isn't random. It's built in. Hughey works with a framework called Principle Based Management, developed by Charles Koch at Koch Industries and first codified in 1990. The core distinction: rules tell people what to do, principles empower them to decide. When you suppress the signals coming from people closest to the work, you get the same coordination failures that collapsed the Soviet economy—just at company scale. The alternative requires hiring for virtue over talent, building genuine challenge cultures, and committing to low time preference even when it's not exciting. If better money requires better principles, better organizations might too. About the Guest Jason Hughey leads business development at Satoshi Pacioli, a Bitcoin-focused accounting firm founded in 2022, where he's also driving the firm's adoption of Principle Based Management—a framework rooted in Austrian economics that treats organizations like markets rather than command structures. With over ten years in customer experience and team building, including time in the fitness industry, Hughey brings a practitioner's lens to management theory. He co-authored Called to Freedom (2016), exploring the intersection of Christianity and libertarianism. LinkedIn: https://www.linkedin.com/in/jasonhughey/ Satoshi Pacioli: https://satoshipacioli.com Substack: https://satoshipacioliaccounting.substack.com Key Quotes "Values or a company's culture becomes the motivational poster on the wall that you walk by and acknowledge and see the word integrity there, and then you forget about it." — Jason Hughey "When you are consistently using your power to shut down those signals that are emerging from people who are on the front lines doing the work, you're going to run into the problem of now we're not getting the knowledge to where it needs to go." — Jason Hughey “The value is the ideal that you live by. The virtue is the day-to-day commitment to doing it.” — Jason Hughey Key Takeaways Stated values mean nothing without lived virtue: Enron had “integrity” on the wall. The distinction between values (ideals you claim) and virtue (daily commitment to act on them) separates companies that build trust from those that betray it. Suppressing internal signals creates Soviet-style coordination failures: When employees are punished for bringing ideas or challenges forward, knowledge stops flowing to where it's needed—the same problem that collapsed centrally planned economies, just at organizational scale. Hire for virtue first, talent second: Talent can be coached; character rarely changes. If you have to choose between someone highly skilled who plays politics and someone less skilled with integrity, take the latter. Principles empower, rules constrain: Rules-based management treats employees as resources to accomplish tasks. Principle-based management gives people a framework and lets them decide—unlocking creativity, ownership, and better customer outcomes. Timestamps [00:48] Why most organizations betray trust—two competing management paradigms [04:41] FTX, Enron, Theranos: the pattern behind corporate values failures [09:16] The fifth dimension of PBM: self-actualization and meaning at work [11:34] Design choices that guarantee dysfunction—challenge culture and cult of personality [16:18] How high time preference management destroys customer service and employee trust [20:35] Information flow in broken organizations—when signals get siloed or shut down [23:49] The socialist calculation problem applied to business management [26:01] Principles vs. rules: empowering employees to decide [29:08] What local knowledge actually requires—integrity, challenge culture, knowledge systems [30:49] Virtue vs. values: the ideal you claim vs. the commitment to live it [36:06] Building scaffolding so you don't fall when times get tough [39:08] Where to start when your team shows cracks—two diagnostic questions [43:24] Hiring for virtue when everyone can perform values in an interview [49:41] What's been harder than expected implementing PBM at Satoshi Pacioli [52:21] What changes if more organizations operated this way—restoring trust [55:41] The infinite game: low time preference as competitive advantage [59:13] Legitimate organizational authority and equal application of rules Mentioned in Episode: TFTC #699: Jason Hughey on Principle Based Management (Jan 17, 2026) — Jason's conversation with Marty Bent Principle Based Management — The framework developed by Charles Koch at Koch Industries, first codified in 1990 Podcast: Subscribe: https://podcast.trustrevolution.co Music: More Ghost Than Man