Hi! Welcome. You being here means more than you know. Knowing it lands with someone like you keeps me going. I'm Lavena Xu-Johnson. I write about psychology for founders. Why? Because scaling a business means scaling ourselves first.
Hi founders,
Last week, I started a mini-series on the psychology of betrayal and discussed how invisible agreements and social exchange dynamics between two people can contribute to a stinging stab-in-the-back situation in the workplace. I used a hypothetical founder scenario to break down the motivations behind a hypothetical betrayal, though it was inspired by real-life stories I’m sure are familiar to you as well.
Today, when I was writing the third theory on betrayal, I kept hearing little voices: "Real-life situations are not that simple", "you cannot rationalize a truly emotional betrayal", "this is pure reductionism"…
But science helps us recognize patterns, and sometimes it's important to remember that we share a human experience. No matter how complex the circumstances are, our behaviors overlap more than we think. If one finding helps one reader interpret a past betrayal with a little more clarity, it is worth writing about.
Let’s continue with Explainer 3: fascinating theories from social psychology.
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The story
Two co-founders start a B2B company together. One runs products and operations. The other owns sales and manages client relationships directly. They split equity 60/40, with 60% to the product founder and 40% to the sales founder, and verbally agree that major decisions will be made together and, like most early teams, never write down what "major" means.
Three years in, the company is growing steadily. The sales co-founder has personally built most of the client relationships. Investors are circling and want a cleaner decision-making structure. Over the next fourteen months, the sales co-founder starts taking client meetings alone. A separate company was secretly formed with a vague description. Soon, the product founder received a note: "I need to talk about my future with you."
By the time that message arrives, the product co-founder has already lost his client base without realizing.
Explainer 3: Moral disengagement & self-licensing
In 1999, Canadian-American psychologist Albert Bandura examined how ordinary people participated in atrocities.
The mechanism was moral suspension: people dissociate from their internal moral standards and behave unethically through a cognitive restructuring process that happens largely outside awareness.
Bandura identified eight mechanisms in what he called moral disengagement:
Moral justification reframes harmful behavior as serving a higher purpose.
To the sales co-founder, he thinks: This is better for the company in the long term. The team cannot scale with the current structure.
Euphemistic labeling changes the language to make an unethical behavior easier to ignore.
The sales co-founder is not stealing clients. They are "going independent", "pursuing a new direction", and "restructuring their professional focus".
Advantageous comparison measures the behavior against something worse to make it seem reasonable.
Other people in my position would have done this two years ago, but I stayed this long, plus at least I didn't take the whole team. The behavior stops being evaluated on its own terms and is instead evaluated against a worse version of itself.
Displacement of responsibility locates the cause in external forces rather than personal choice.
The investors pushed me here. The equity structure was always wrong. The board made this outcome inevitable.
Diffusion of responsibility spreads accountability among enough people so that no single person bears the full weight.
The advisors saw this coming. Everyone on the leadership team knew this was unsustainable. When responsibility is distributed, each individual's share becomes small enough to ignore.
Distortion of consequences minimizes the actual damage caused. They will be fine. They have other clients. The company can survive this. It is not as serious as it looks. The harm does not disappear. It just gets reclassified as manageable, temporary, or overstated.
Attribution of blame constructs a version of events in which the other party's behavior made the current behavior necessary. If they had listened eighteen months ago. They left me no other option. The moral code remains intact. The person concludes it simply does not apply in this case.
Dehumanization depersonalization reduces the other person to a category rather than a human with real stakes in the outcome. They were a liability. They were holding the company back. Once a person becomes a category, what happens to them carries less weight.
A systematic review of over two decades of workplace research found that once moral disengagement activates in a professional context, it compounds (Moore et al., 2019). Each rationalized step reconstructs the internal threshold, making the next step easier to take. The review also found that moral disengagement predicted unethical behavior in professional settings more reliably than many stable personality traits.
When being good frees us to be bad: moral self-licensing
This next theory explains the foundation for the moral disengagement process: when people have done something good, they give themselves more room to do something bad afterward. The person does not run this calculation consciously. The good deed creates a psychological credit, or a credential, that they draw on without realizing it.
In 2009, researchers Sachdeva, Iliev, and Medin did an interesting study: asked participants to write short paragraphs about themselves using one of two sets of words. One group received positive trait words: caring, generous, kind, compassionate. The other received neutral or negative ones. Afterward, both groups were asked how much they would be willing to donate to charity.
The group that had written about their own positive traits donated significantly less than the group that had not (Sachdeva et al., 2009). Writing about being a good person reduced the motivation to act like one immediately afterward.
Merritt, Effron, and Monin formalized this pattern in their 2010 review of moral self-licensing: past good deeds liberate people to engage in behavior they would otherwise avoid, because those deeds establish either a credit balance or a credential that protects their self-image. The two mechanisms work differently. Moral credits operate like a bank account: good behavior deposits credit that bad behavior later spends.
In our scenario, the sales co-founder spent three years building the company from nothing. They took personal reputational risk in every client relationship they cultivated. They carried the revenue function through the hardest years. That history was there; it also created a psychological credit balance that, over time, began to operate as a licence.
The internal logic is: I have given enough. I have sacrificed enough. I have earned this.
By month fifteen in our scenario, the sales co-founder had a three-year credit balance and a solidly reframed version of events. From the outside, what happened looked like a decision. From the inside, it was the only logical conclusion to a long sequence of reasonable steps.
Key takeaways
We can’t prevent betrayals, and most of the signals above are only obvious in hindsight. What the research does give us is a more precise set of questions to think through earlier, so we can reflect on our personal experiences with greater knowledge of human nature.
Here are all the aspects of betrayal covered in the past two issues:
Most co-founder and team betrayals begin with a breach of the psychological contract.
Loyalty tracks the available alternatives, not just the quality of the relationship.
The rationalizations that precede betrayal accumulate in steps, and each step makes the next easier to take.
By the time the behavior registers as betrayal, the reclassification has usually already happened.
How's the depth of today's edition?
See you in the next one!
Lavena
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