Morals have failed to curb business malfeasance. Maybe it’s time to try real ethics.
 

Moses with the Ten Commandments
Painting by Rembrandt

There have been many—probably far too many—articles in the media complaining about the corruption, greed and dishonesty apparent at every level of business in recent years. Solutions abound, usually linked to the idea of better moral and ethical teaching. The trouble is, morality has been around since the earliest periods of recorded history, and it has yet to prevent people from behaving in ways that break just about every moral rule.

If something doesn’t work, the only sensible course of action is to try another approach. It is also sensible, before doing that, to wonder why people go on behaving badly and defying society’s norms. Answers based on the supposedly debased nature of mankind, like the claim of original sin, don’t do it for me. They avoid the question by claiming mankind is inherently immoral. Even if that were true, it would explain nothing.

What I want instead is a way of understanding why conventional approaches to moral rules—based, as they all are, on a combination of stick-and-carrot and pleasing the powerful—are never make mankind any less inconsiderate and selfish than we are today.

I think I may have found one, based on understanding the fundamental difference between morals and ethics: morals are external, imposed rules; ethics are principles derived from individual thinking.

Thought is the basis of ethics

What started me on this track was an article on the HBR Editor’s Blog and the link there to a book by a fifth-grade teacher called Rafe Esquith, who for decades has been teaching groups of the children of Latin American and Korean immigrants at Los Angeles’ Hobart Boulevard Elementary School. Esquith has written a book about what he has learned from this, called “Teach Like Your Hair’s on Fire: The Methods and Madness Inside Room 56.Æ

What Esquith uses to teach his students ethical behavior is a structure for thinking; a ‘template’ to help them grasp the basis of ethical behavior and why it depends on them, based on psychologist Lawrence Kohlberg’s Six Levels of Moral Development.

I have adapted my own version, which helps me understand why people approve of ethical behavior when asked, yet consistently fail to put it into practice in their lives. I call it ‘The Six Stages of Ethical Understanding’.

Many people, even highly educated ones, are stuck in Stages One and Two. Many more never go beyond Stages Three and Four. None of these stages require ethical thought, since they consist in doing what others want to gain reward or approval and avoid punishment. Only in Stages Five and Six, the least common, do you encounter a need for thought, reflection and personal choice.

Forget the stick and the carrot; ignore pleasing others

No stick-and-carrot, reward-based system of ethics ever works for long, since rewards lose their value and people find ways to avoid the punishments, either by concealing what they are doing or weaseling out of the consequences. One of the reasons why greed and dishonesty have been so rampant in business in recent years—and probably always were—is that the basic business attitude encourages nothing more that this ‘don’t be found out’ approach.

Being ethical only to please those in authority, like the boss, has similar drawbacks. Rules, it’s said, are made to be broken—or, at least, evaded with the help of cunning lawyers. Information rarely makes it to the boss if a subordinate is sufficiently determined that it shall not. It also encourages others to inform on wrong-doers as a way of advancing themselves.

True ethics arises when people take the time to think and question what values count for most, what standards are needed for a civilized society and why ethics are needed in the first place. By discovering their own needs and standards, they establish principles they are far less likely to break or evade than those imposed on them by others.

It’s easy to confuse ethics and morals, but they are quite different. Morals are sets of rules, imposed from outside, like the Ten Commandments. Ethics is a process of personal exploration and thought, with the aim of discovering what ways of behaving are necessary to have the type of life you want in the the kind of society you are happy to live within. Morals are authoritarian, derived from society at large and usually restrictive (“Thou shalt not . . . ”); ethics are democratic, individual and derived from living freely (“This is what I understand to be right for me . . .”). Morals come from control by someone of greater power than you; ethics come from within.

Give me ethics every time.

Technorati Tags: corporate ethics, business ethics, morality, honesty, integrity

(This is a guest article by Jonathan Littman, Co-Author of I Hate People!: Kick Loose from the Overbearing and Underhanded Jerks at Work and Get What You Want Out of Your Job)

When historians finally get their hands around the lost decade that wiped out our 401k’s, looted our nation’s treasury and battered our economy, they will likely arrive at a simple conclusion: Playing nice was bad for business.

The last administration sold itself as the “let’s be nice to business” school of thought. It was a philosophy that spread throughout entire industries and our greater economy.

Nice was a forced smile, a phony front for those who wanted to put one over on everyone else. Most of the seemingly nice results generated by all this nice turned out to be frauds. Those generous mortgages peddled to new home-buyers blew up into balloon payments that rendered thousands bankrupt and homeless. Wall Street was nice to investors for most of the decade, delivering fabulous returns on investments nobody understood—until the bill for the bad mortgages came due.

Bad investments had been stacked upon bad investments in this nice new financial instrument called the derivative that nobody understood until it helped to wreck our economy. The nice, regular returns offered by ‘Mr. Nice’ himself, Bernie Madoff, was a gigantic Ponzi scheme that cost investors $60 billion.

“Don’t trust the smile of the crocodile . . .”

During the orgy of niceness, those entrusted with policing the purveyors of phony nice were way too nice. The SEC and FBI were incredibly nice to thousands of scam artists who went on a financial crime spree. Accounting firms were nice to lots of companies that didn’t really earn money, or ship as many products as they said, which ended up costing lots of jobs.

It was a genuinely nice age to steal billions from everyday Americans and corporate employees.

At the pinnacle of our nationwide nice delusion, two advertising agents wrote a sugary 119-page treatise called: “The Power of Nice: How to Conquer the Business World With Kindness” It was what everyone wanted to hear. Donald Trump (a client) loved it. The book became a Wall Street Journal and New York Times bestseller. It was in short, a very nice time for business.

How quickly the herd changes direction

Nice is now a four-letter word. Companies have been falling over themselves in trying to prove that that they are no longer suckers and anything but nice.

Top corporations that have had strong fiscal quarters, or even increases in earnings, have coolly laid off thousands of workers. Smaller firms have even boasted of record earnings—while announcing massive layoffs. Those banks handed the free lunch of our billions of tax dollars have not been very nice to individuals and businesses desperately in need of loans. Congress is on the verge of making it nearly impossible for anyone under 21—young workers and college students struggling under debt—to get a credit card.

The New Nice is Mean.

Today, thousands of corporations are marching in lockstep to prove how nice they are to their company bank account, which has the trickle down effect of being mean to the people who do the work. Firms are paying employees for four days a week but demanding that they work five. They’re slashing benefits and perks. They’re laying off men and women by the thousands.

They’re being nice about it.

Consider Microsoft, which recently put out an official e-mail from CEO Steve Balmer, announcing the firm was “Eliminating additional positions across several areas of the company. While job eliminations are always difficult, we are taking these necessary actions in response to the global economic downturn.”
See how nicely they did it! They’re only eliminating positions. No talk about firing people.

Mean is the New Nice, and just as the age of Phony Nice ruled America for nearly a decade, we are now headed for some Serious Mean.

Don’t worry. They’ll be nice about it.

Jonathan Littman is co-author, with Marc Hershon, of I Hate People!: Kick Loose from the Overbearing and Underhanded Jerks at Work and Get What You Want Out of Your Job and the business blog, IHatePeople.biz. A contributing editor at Playboy, he co-authored The Ten Faces of Innovation and The Art of Innovation. For more information please visit www.IHatePeople.biz

Technorati Tags: corporate attitudes, macho management, making money, mean bosses

“What distinguishes our age from any other is not the world-flattening impact of communication; not the economic ascendance of China and India, not the degradation of our climate and not the resurgence of ancient religious animosities. Rather, it is a frantically accelerating pace of change.” (Gary Hamel, The Future of Management.)
 

(This is a guest article from reader Bay Jordan)

Even our recessions come faster and threaten to hit harder than anything we have seen to date!

Hamel’s statement, made before the current recession, is fundamental to his case for a new management approach. He argues the historical management model is outdated and wonders why the views of senior executives are granted a “higher co-efficient of credibility” than the convictions of mid- and lower-level employees. It’s a fair question. Why should organizations give so much weight to the views of those furthest away from the customer, with “most of their emotional equity invested in the past?”

The pace and severity of this recession seems to reinforce the view that large companies have borrowed their change model from “poorly governed third-world dictatorships,” as Hamel claims. Certainly, the scale of layoffs and the reluctance of executives to give up their high salaries and perks, highlights feudal ideas still embedded in modern management practice.

Is productivity so important?

Hamel’s solution is more proactive management systems. He believes employees need more thinking time. “Too much of what gets done in most companies is a response to some already pressing issue,” he writes. “There’s no slack, no space for improvisation and no way to defend projects that are not already useful.”

This is entirely logical, but it presents a massive challenge to conventional organizations. It runs entirely counter to their traditional focus on improved productivity and presents massive logistic challenges.

If you consider the pattern of the typical working year. there are never 365 days available for work.

• We take two days off per week (Saturdays and Sundays) for 52 weeks per year (104 days), which leaves only 261 days.
• Paid holidays entitle us to a further 20 days off , which leaves 241.
• There are 9 public holidays a year, which leaves 232 days for work.
• In most organizations in the UK, you can take three days or less sick without a doctor’s note, although not more than three times a year. Factoring this in removes a further six days, leaving you with 226 days a year for work.
• Assuming a work day is eight 8 hours, actual time spent working accounts for the equivalent of 75 days (226/3).
• Now subtract 30 minutes for lunch each day, and another half an hour for tea/coffee and nature breaks, and you lose a further nine days (226 hours/24)—which means you have only 1,584 hours (the equivalent of 66 days) available for actual work in a year.

This is the UK figure and may vary slightly from country to country. However, it does not include time spent in meetings, or training, or even—perhaps even more significant—answering emails. My estimate is that that the average person is likely to spend considerably less than 1,500 hours actually working in any given year.
Reckoning like this makes me how much time there actually is for any proactive work of the type Hamel is recommending. Nevertheless, he gives good examples of companies that have successfully adopted such practices.

We now know how little time in hours the average person has for productive work. given this, you have to wonder how companies laying off people due to the economic climate can hope to compete effectively. Are they saving themselves, or are they sabotaging their own efforts? In a workforce of 100 people, around 150,000 man/hours of working time is available each year. Lay off 10 people, and you cut away 15,000 man/hours—not just 10% of the headcount, but the equivalent of 62.5 working days.

So are are such organizations effectively committing suicide? One thing is for sure—if they wish to thrive they need to rethink their strategies.

Saying good-bye to command-and-control

For me, this starts with changing the attitudes to people. Traditional, command-and-control’ management is built on the premise that people are costs, and that the organization is paying for their time.

This accounting convention (for that is all it is) ensures that, despite the ubiquitous cliché that, “Our people are our greatest asset,” few organizations see their staff that way. As soon as business falls off, they begin throwing their supposedly most important asset, ignoring the long-term damage this causes to their business, to the people made redundant and to the wider economy as a whole. They don’t just discard many potential hours of available work, they discard unknown quantities of know-how and experience. It makes no sense.

Valuing people and putting their value on the balance sheet is the only way to overcome this traditional mindset—one that still shapes most organizational behavior, no matter how good people’s intentions, or how often they make pious statements about the worth of employees.

Finding salvation

We cannot persist with ‘business as usual’ and avoid sabotaging our future and risking corporate suicide. Only getting away from the old-fashioned, accountants’ attitude to people as costs can offer salvation. Here’s what we should be doing instead:

• Recognizing an organization is the sum of its parts and empowering the people who are closest to the customer.
• Using greater engagement to stimulate a more productive and happy work environment and improve the customer experience.
• Reducing the supervisory burden that comes with command-and-control working and the time and effort it consumes.
• Making it easier to create shared values and embed a culture of continuous improvement.
• Lessening the effort expended on improving productivity by artificial means, and focusing instead on using all the time and people available in the most useful ways we can think up.

What do you need to run a successful organization? People, time and money. If you throw people and time away, as many organizations are doing right now, how long will you have even the money, since it is the other two elements that produce it. All that will be left is borrowing—and we all know where that has taken us.

Bay Jordan is the founder of of Zealise Limited, a company helping businesses develop human capital management strategies, based on the ideas contained in his book “Lean Organisations Need FAT People.”

This followed his recognition, after nearly 30 years in financial management and consulting, that, no matter what the investment in systems and technology, business is ultimately all about people. He has just published his second book, “A Feeling of Worth—a manifesto for mending our broken world.”

Technorati Tags: change, corporate culture, command-and-control, accounting conventions, business attitudes

Who are you when no one is watching?
 

Your character is your internal guideline: a moral compass that operates 24/7. If you leave it alone, it always points to true north. A flawed character has been tinkered with, like fooling with the odometer of an automobile, while retaining the appearance of authenticity. The direction in which it points has been shifted to something more acceptable and less likely to provoke an uncomfortable conscience.

Along the main road where I run in the morning, there is a side street through a winding residential neighborhood. If you turn right onto that side street, you can take a useful short-cut. But there is a sign just before this side street that reads, “No right-hand turn between 7:00 and 9:00 am.” You can’t miss it.
 
From time to time, I stop at this intersection to watch what happens. Recently, in one 15-minute period (7:40-7:55 am), eleven cars came by—and seven made an illegal right turn.
 
What piques my curiosity is what these people are thinking—assuming they are—as they make that right turn. What are their rationalizations and justifications for breaking the law?

 
One definition of character is who you are at 4:00 am in the dark when no one is watching. Ralph Waldo Emerson said, “People seem not to see that their opinion of the world is also a confession of their character.“ How we act in the world—even while driving—reflects character, or lack of it.
 

What twists character out of true?

Mostly pride, an inordinate sense of self-esteem, which morphs into hubris, an exaggerated sense of self-confidence. When this happens, people lose respect for others, for rules of right conduct and doing what they should, especially if it is inconvenient.

“. . . the thought manifests as the word; the word manifests as the deed; the deed develops into habit; and habit hardens into character. So watch the thought and its ways with care, and let it spring from love born out of all concern for all beings . . . as the shadow follows the body, what we think, so we become. (The Buddha)”

With pride and ego in charge, thinking becomes progressively warped and self-centered. Your character—your moral compass—gets twisted out of line. Gradually you become more self-serving, more self-centered, egocentric and uncaring about others. From this place, it’s easy to circumvent rules and fall into inappropriate, even illegal, behaviors. The justification becomes it’s OK as long as you don’t get caught.  It’s all about you and what you want. 

Making the illegal turn at 7:45 am

 You can imagine the excuses:
“I’m late for work.”
“I didn’t see the sign.”
“I had a spat with my spouse and was distracted.”
“A friend said it would be OK.”
“I have an important meeting to get to.”

Does it matter? I think it does.

Integrity and courage are the foundations of character. Once you start taking ethical short-cuts, even when no one is watching, you twist your character out of true. The toothpaste is out of the tube. If you compromise your values like this, it is well-nigh impossible to regain your integrity. Besides, in the long term, moral short-cuts and cutting ethical corners—‘turning right at 7:45 am’—find a way to catch up with you.

Blaming and deflecting responsibility

Blaming and deflecting responsibility are now art forms in our culture. Our obsession with blaming others, while excusing ourselves, is an indication of how much we’ve become a nation of narcissists, victims and adult-age children, using the adult form of “my dog ate my homework.”

It won’t wash. Emotionally mature adults make conscious choices and accept responsibility for them. As Helen Douglas said, “Character isn’t inherited. One builds it daily by the way one thinks and acts, thought by thought, action by action.” 
 
We all face ethical challenges every day. Our character is tested when we make split-second choices about what to do and what not do. The next time you come upon the sign that says, “No right turn between 7:00 and 9:00 am,” and it’s 7:45 am with no one in sight, where will your character be? 

“Character is the foundation stone upon which one must build to win respect. Just as no worthy building can be erected on a weak foundation, so no lasting reputation worthy of respect can be built on a weak character.” (R. C. Samsel)

 
Here are some questions for self-reflection:

• What blocks you from acting with integrity?
• Do you believe you have character? What would others say?
• Have you lied, cheated or stolen recently? How about running a red light, a stop sign or a sign that says “No right turn?” What was your rationalization or justification?
• Do you use a different measuring stick to judge your behavior compared with how you judge what others do?
• Who are you at 4:00 am in the dark when no one can see you?

Technorati Tags: ethics, business ethics, character, values, integrity, authenticity

A book by Charles Jacobs (“Management Rewired: Why Feedback Doesn’t Work and Other Surprising Lessons from the Latest Brain Science”)says it is—or most of it. Jacobs writes, “The managers who produce the best results are the ones who do the least managing. The biggest challenge is for managers to stop doing most of what they’re doing now.”

I haven’t yet read the book, only a review by Stefan Stern of The Financial Times. It seems that Mr. Jacobs, arguing from the findings of neuroscience and animal studies, claims we need to move on from standard management practices. They are, he says, ill-suited to human beings.

Who let the top dogs out?

I would be the last to defend ‘standard management practices’, which are indeed ill-suited to human beings (or any other species that doesn’t enjoy being lorded over, pushed around and manipulated for the benefit of the ‘top dogs’). I also agree that common practices like performance reviews and management appraisals often come very close to the definition of ‘inhuman and degrading treatment’ the courts use to outlaw torture.

Yet this argument misses a fundamental point: our management practices today, however flawed and backward-looking, were invented by human beings. Indeed, they do exactly what they were designed to do: hold those at the top where they are and keep all the rest under tight control to prevent them disobeying or questioning the aforementioned ruling elite.

Know your place

Practices like appraisals are as much about reminding underlings of their place in the scheme of things (at the bottom, subject to constant judgment by the bosses) as they are about supposedly producing better results. They are also based firmly on the mind-set that pervades the whole edifice: that people are lazy, work-shy and disinterested in anything except their own short-term pleasure.

To get them to work, you have either to bribe them with rewards or threaten them with punishment. If you aren’t watching them, even for a moment, they’ll stop work and go back to lying around, gossiping and wasting your time. You are the master and they are your servants, so you set the rules and ensure they are followed, since, like all servants, they will probably steal the silverware if you don’t. It’s a totally 19th-century set of attitudes, little changed since the Industrial Revolution and invented by the owners of the grand houses of Regency and early-Victorian England.

All too human?

Chimpanzees, our nearest biological relatives, are violent, often blood-thristy animals who live in troops governed by an alpha male and subject to a strict hierarchy, partly based on ‘breeding’ (offspring of the alpha family start near the top of the heap, while the rest have to claw their way up).

Doesn’t that sound like many organizations today?

If so, it may be that our standard management practices are all too human—far too close to our unrefined animal nature and a long way from the rational choices we ought to be making about how to live our working lives.

Probably the best representation of standard management came in the original TV ‘Star Trek’. It wasn’t the rational, logical, objective Mr. Spock who ran the starship ‘Enterprise’, but the over-emotional and rash James Kirk. Mr. Spock’s role was usually to dig the captain out of whatever mess he’d landed them all in by his impulsive choices and egotistical urge to play the hero—the perfect image of the modern CEO.

Technorati Tags: management, management practics, leadership

When does eagerness to contribute turn into verbal nonsense?

(This is a guest article by Karen Senteio)

I love a good Dilbert cartoon. Many times, they make me laugh out loud. Every once in a while there is one that not only makes coffee squirt out of my nose, but causes an internal dialog and some good-natured observations about myself or others.

A couple of days ago, I saw a comic strip where Dogbert asked a possible CEO replacement if he possessed the skill of blathering, as it was required for the position.

The CEO wannabe began to spew out nonsensical corporate speak.

Not only was it hysterical, I understood it! That was the funniest part. I was laughing at the article and at the same time realizing that somehow blathering had a place in organizations. In some instances, it is definitely considered a skill.

Is blathering a good thing?

Are you guilty of blathering for the sake of fitting into a conversation? Is blathering so ingrained into the day-to-day conversation of your organization that it is no longer blathering, but a new language? Are you not even sure if you are communicating or blathering? If your blathering is understood, isn’t that still communication?

One thing I know for sure, I am guilty of an occasional bought of blathering. I am not going to beat myself up about it. I am going to embrace it and have a little fun with it.

The question is how far you go. Where is the line between harmless chattering and spewing total nonsense? At what point do you have to say, “oh, please” and stop yourself from tipping over into the zone of, “What the heck are you talking about?”

There is a sure fire way to test for blathering. It is the ‘quick eye’.

Here is the scenario: You are at a meeting, you decide to comment, and you are in the mood for a little blathering. The blathering begins and you are going at it at a pretty good clip. There are confirming nods and that encourages you to blather more.

Then you notice ‘quick eye’.

‘Quick eye’ is when someone doesn’t understand what you are saying. Their confusion causes rapid eye movement as they quickly look around to see if anyone else is as confused as they are. That is the sure-fire sign that you have gone too far and should just stop. There is no graceful way to back out of blather, so smile, fold your hands and stop talking. It was fun while it lasted.

Thinking about this Dilbert cartoon offers an opportunity to chuckle at something we too often believe we can pass off as making valid points. We know we are blathering, but somehow we think no one else can tell. Don’t you believe it!

Sometimes, our need to add value to a conversation turns into something far less useful and, apparently, pretty funny. I leave you with this final thought. If you blather in the woods and there is no one around to hear it, is it still blathering?

Karen Senteio is a business and life coach and president of VERVE. She has over 20 years experience in developing and coaching individuals and groups to achieve personal success and work-life balance. You can visit her web site at Verve and contact her at Karen@vimandverve.net

Technorati Tags: buzzwords, management jargon, talking for the sake of it, communication, making sense

Change is all around us. We are facing a critical point in how we conduct business. Has anyone noticed?
 

Our dependence on technology-driven growth, our obsession with efficiency and with mechanistic organizational designs are dysfunctional in a business environment characterized by instability, limited resources and economic uncertainty. Yet the need for change seems to be falling on deaf ears. The people in charge prefer the status quo and reinforcing the very things that aren’t working. They can’t wait to get back to ‘business as usual’. The only change they want is to go into reverse.

The challenge for organizations today is to carry out a redesign of their business models that allows more people to contribute. That sees business less as a mechanistic entity of processes, procedures and outcomes, and more like an ecosystem: part engineering, part quantum physics, part psychology, part biology, and part neuroscience.

Adaptive strain and adaptive change

In engineering, ‘adaptive strain’ occurs when tension within a structure produces conflicts that cause destabilization that can only be resolved through a process of ‘adaptive change’—moving from the present equilibrium to another stable state in a dynamic way.

In the world today, we are witnessing this initial destabilization. Yet the move to adaptive change is anything but natural and fluid. Though we need it to survive, those in charge are unable—or unwilling—to create a new steady state. The result, if this continues, can only be breakdown.

When destabilization occurs in business, which is where we are now, fear and resistance take over, all but blocking change. There is no automatic, natural adaptation that allows resilience until a new equilibrium can be found. People are too afraid of the unknown future. They dig in their heels and cling to the status quo. In place of a natural shift to a new state, we are stuck in disorientation and ambiguity, trapped by our fear of loss.

Into the belly of the beast

Perhaps this type of radical change and transformation can only happen when you ‘hit bottom’, in business as in the rest of life. A painful journey through the ‘belly of the beast’ brings you finally to a place where intuition, creativity, ‘right knowing’, ‘right understanding’ and thus ‘right action’ arise.

This journey is neither quick nor easy. You must remain in the ‘belly’ long enough to absorb and metabolize the chaos that exists there. There is no quick fix. Only there, in the turbulence, will you discover the insights and strategies that lead to the kind of fundamental re-design necessary to re-establish connectedness between the procedures and structures of organizations and the psychological and personal needs of the people who inhabit them.

No transformation can happen until leaders recognize their dysfunctional ways of leading and managing—not just in their business models and processes, but in their personal style and character too. Sadly, it seems many businesses are continuing to choose ‘business as usual’, not seeing that it must lead back to the same uncertainly, apathy, turbulence and cynicism as before.

In this time of change, we are all called upon to recognize, and own, our dysfunctional behaviors—our avoidance of risk, the refusal to trust that makes us untrustworthy, our fear of change and ambiguity, our obsessive needing to be ‘in control’. It is these behaviors that sabotage teams and organizations; that add stress to already stressful situations; that undermine performance and sap productivity. Until we enter a conscious process of self-reflection—a journey into the belly of the beast—we will be unable to move away from the status quo and establish the dynamics that produce successful change. We cannot leave it to our leaders. All organizational members have to experience this journey, if they are to contribute what is needed to the carry the change process to completion.

Making a start

It’s a big belly down there. There’s room for everyone. If we stay caught up in resistance and denial, change cannot happen. Only when we choose to take on the journey, seeking out how our dysfunctional behaviors prevent change, can we engage in the change process. Once this happens, the organization will move from being just a mechanistic entity to being a living organism.

The road to adaptive change begins in small, incremental ways: changing your assumptions, altering your world view, making a different decision, creating a fresh strategy. It’s here that we must willingly choose to look inside and explore what threatens our self-esteem and confidence. Here we must face our fears of change head-on. It’s here that we can eliminate self-destructive and self-sabotaging patterns and engage in new behaviors that offer better support for ourselves and the organization.

If we refuse to take this inner personal journey, and stay focused on getting back to business as usual, we will be unable to adapt. Instead, we will choose failure. Preferring the devil we know to the devil we don’t, we will find only a false sense of security. In bolstering what is preventing change, we will assure the breakdown we fear so much.

Here are some questions for self-reflection to start the change process:

• How do you deal with an uncertain future? Do you hang on to your beliefs, world views and assumptions at all costs? What would happen if you let go?
• Are you and your organization facing up to the strain of adapting to turbulent times? How are you doing? What more is needed?
• Are you focusing only on the transactional (mechanistic) aspects of your business? What about the human, transformational aspects?
• Are you and your organization using outmoded models and tools to adapt to change? What is needed instead?
• Have you, personally, experienced the journey through ‘the belly of the beast?’ What was that like for you? What did you discover about yourself as a result? What changed?
• How do you, personally, deal with change? Honestly?

Technorati Tags: change, transformation, coping with uncertainty, facing up to turbulent times

According to research reported by Stefan Stern, writing for the Financial Times management blog (“Soar above the skyful of lies”), today’s managers are addicted to communication. Many never turn their phones off at all and around 25% spend three or more hours a day on their e-mails and sending text messages. “We crave flexibility, connectivity, and speed,” he writes. “But we risk turning ourselves into busy fools, bamboozled by too much noise and information.”

Stern is worried about managing information, and he has a point. Yet it seems to me we should be at least as worried—perhaps more so—about attention. If managers are spending so much time dealing with e-mails, IMs and phone calls, when are they getting any work done?

We all have only so much attention and energy available each day. While the people we depend on to run organizations are busy using up to half of each day’s energy and time quota ‘staying in touch’, they can’t also be focused on doing what they are paid to do.

Have you noticed how the web seems to be full of articles offering advice on how to deal with procrastination? Constant communication for the sake of it, or— worse—for the sake of gossip, is a wonderful way of appearing busy without doing anything. Rather than worry about procrastination, why not turn off the phone, shut down the IM and the e-mail software and try using the computer for actual work?

If people find their ‘real’ jobs so boring, perhaps they should consider doing something else. That would free up cash to save others from being laid off. If any organization truly wants to cut out unnecessary costs, I suggest beginning with letting go all the ‘busy fools’ in management and leadership positions. If this research is anywhere near correct, you could lose maybe 30% – 40% of them without any effect on the amount of useful work being done.

Technorati Tags: time management, prioitization, procrastination, use of time, cutting costs, focus

The story of one business’s philosophy and its effects
 

Words are just words. If you say you are going to do one thing and do another, of what value are the words you spoke? If you want to be considered an honest, authentic leader, you must maintain congruence between what words and actions. If you must do something that differs from your words, at least offer an explanation and demonstrate your awareness of the discrepancy. The importance of this cannot be overstated for leaders who wish to be held in high regard and worthy of being considered a leader.

A recent series of articles from Canada’s The Globe and Mail newspaper featured Isadore Sharp’s book, “Four Seasons: The Story of a Business Philosophy”.One thing that struck me when reading this was the point that too many leaders don’t match words and deeds as often as they should: “We are only what we do, not what we say we are.”

The Gift of the Gab isn’t enough.

Too many leaders, along with their communications staff, spend too much time thinking about how to say whatever it is they need to say. And, for sure, I commend those with the gift of gab for whom communicating clearly and with well-chosen words comes easy. The ability to communicate clearly is, without a doubt, one of the most critical skills anyone in business can possess. Yet as important as such communications are, the benefits from them will be eroded when actions don’t support words. How often have people in our lives, be it in professional or personal circumstances, said one thing and done another? What are we to believe when such things occur?

One way that Isadore Sharp has integrated communications and actions is in the creation of the “Glitch Report.” Every department at a Four Seasons hotel creates a diary of the previous day’s mistakes and uses this to inform teams of issues and ensure that, wherever possible, those mistakes are not replicated. Here’s how she explains this approach in this interview with National Geographic’s Intelligent Travel blog:

“By keeping close tabs on what’s happening at the hotel every day, the management team has the ability to work closely with staff to continually teach, reinforce and empower them to make great customer service decisions.”

There are times when your actions can’t match your words.

You may can have the greatest intentions to follow up your words with the appropriate actions, then realize later that you cannot do as you have said. If that happens, express the changing circumstances aloud and let others know you are fully aware that your prior words cannot be supported by current actions. By doing this, you can show you understand your earlier words and present actions won’t match, then modify the words, provide explanation, and get words and actions re-aligned to one another. People may not like the change, but they cannot disregard your effort to communicate and keep intact the congruence of words and actions required for a trusted relationship.

This follows along my philosophy of telling it like it is. I know that this approach won’t please all of the people all of the time, but it will allow all of the people to know where I stand all of the time. Given the choice of pleasing everyone all of the time (as if this could even happen) or being authentic and having all of the people know that what I say is so, I will always choose being regarded as authentic and honest. My belief about leaders is this: “It is better to be respected and not liked than to be liked and not respected.”

Isadore Sharp understands that actions tell others who we are and what kind of person we are. He spent years evangelizing his focus on service and living up to the expression, “We are only what we do, not what we say we are”—words are easy to say but challenging to live up to.

It required shifting mindsets, delegating responsibilities, giving up control when necessary, firing people who did not live up to the credo—despite them being competent in various other areas—and other actions that demonstrated the seriousness with which his company was going to follow this path. Those who have stay at a Four Seasons hotel will be aware how far the service ethic has been instilled at every level within the company. From the bellmen who greet arriving cars, to chamber maids, wait staff and desk personnel, the Four Seasons chain of hotels demonstrates the possibilities of a corporate-wide focus on doing the right thing, not just saying the right words.

Today, Four Seasons Hotels and Resorts, “are considered among the finest luxury hotels worldwide,” according to Travel + Leisure magazine and Zagat Survey. If we can only get business leaders in all sorts of companies, industries and countries to follow the Four Seasons approach, we might see a radical change in this economy.

Technorati Tags: authenticity, business ethics, business focus, keeping promises

From business hero to criminal swindler. It has all happened before—if you take the trouble to look.
 

George Hudson ‘The Railway King’ (1800–1871)

Sometimes writers really do seem to foresee the future—though I suspect it’s more a case of stating what is clearly true, but people have temporarily forgotten. One of the attributes of chance events is that what goes around, comes around. Only recently, I was reading about an entrepreneur in Britain who got in on the huge boom in building railways in the 1840s. His name was George Hudson and people at the time called him ‘The Railway King’—until his ‘empire’ collapsed into bankruptcy, taking their savings along with it.

What was especially striking was the way in which his actions, nearly 170 years ago, mirrored everything from Enron to Bernard Madoff. Hudson bought up existing railways, promoted more and shamelessly used his position as a Member of Parliament to push his own interests and thwart those of his rivals. He published vaguely worded and heavily doctored accounts (sometimes no accounts at all). Like Madoff (and long before Ponzi), he paid huge ‘dividends’ to shareholders using the money paid in by new investors to buy more shares. He also creamed off vast sums into his own pockets to fund a lavish lifestyle and pay out ‘sweeteners’ on all sides.

When the bubble burst, he was charged with bribery, corruption and stealing the enormous amount of 600,000 pounds (probably close to Madoff’s billions of dollars in today’s money), fled to France and died in poverty. He wasn’t the first and he won’t be the last to act like this. It’s all there in the history books. I guess no one ever reads them or thinks about what they might teach us.

What happens when trust collapses?

Coming much closer to our present times, Charles Handy wrote this in a December 2002 article for Harvard Business Review (“What’s a Business For?” ):

“The markets will empty and share prices will collapse, as ordinary people find other places to put their money—into their houses, maybe, or under their beds. The great virtue of capitalism, that it provides a way for the savings of society to be used for the creation of wealth—will have been eroded. So we will be left to rely increasingly on governments for the creation of our wealth, something that they have always been conspicuously bad at doing . . . Trust is fragile. Like a piece of china, once cracked it is never quite the same. And people’s trust in business, and those who lead it, is today cracking.”

Macho management places suspicion and lack of trust at its center. Company executives not only distrust their own employees, suppliers, customers and society as a whole, they don’t even trust each other. Once their selfish actions come to light, of course, they also forfeit everyone else’s trust in them. Witness the way people all around the world have heaped abuse and derision, not just on those directly involved in the risks that broke the banks, but just about everyone else employed in financial companies.

Can we ignore the social impact of commercial actions? I think not. Business and trade used to be seen as the preeminent force for peace and civilization, replacing feudal bickering over land and titles with the solid co-operation essential to successful trading. Promoting wealth through trade, rather than stealing it by war and conquest, requires people to be honest, to respect contracts and collaborate readily with strangers. Over time, warlike kings became poorer and merchants richer, proving the point that the pen (and the ledger) is mightier than the sword.

Somehow we seem to have lost that. The cult of macho management denies any links between business practice and morality, citing pure self-interest as not just acceptable, but required for markets to operate properly.

But thinking this way inevitably leads to a loss of trust and legitimacy. History proves that again and again. Business today has become more merciless and warlike, even as warfare has become ever more dependent on society’s skills in technology and manufacturing, rather than the individual prowess of warriors on the battlefield.

Do you get it yet?

Even today, there are some who still encourage the kind of macho management that’s based on maximizing short-term profits and executive pay, while ignoring the wider public good. In a forthcoming book, “Think Like a Champion: An Informal Education In Business and Life” Donald Trump (hardly an exemplar either for trust in commerce or successful enterprise) says:

“Business is about making money. It’s about the bottom line. The sooner you realize that, the sooner you’ll get a grasp about what business is. I’m very often surprised by people who think business is something else. They come in with lofty ideas and philanthropic purposes that have absolutely no place in a business meeting. It’s a waste of everyone’s time.”

With an attitude like this, it’s hardly surprising that many organizations still see themselves as somehow outside society—neither bound by its rules and norms, nor concerned with its stability or prosperity. How they expect that same society to have the money to buy their goods and services is beyond me.

Trust is crucial to a civilized way of life, but it is also very easy to abuse. As the present crisis graphically shows, too much is as bad as too little—though the laissez-faire approach of the past decade or so could better be described as apathy than trust. Badly burned by all that has happened, banks and businesses went overnight from trusting almost anybody to trusting virtually nobody.

How can we get back our trust in business? I would be very interested in your thoughts and ideas.

Technorati Tags: business ethics, honesty, trust, the purpose of business, business and society, corporate culture