I think it is time for a new executive officer on every leadership team. The name of this position should be CEO – Chief Ethics Officer. (Though I doubt that these initials are available).
“First, do no harm…”
We’ve got a serious problem, and it is going to take some serious solutions.
Now, there is quite a range. There are some folks who are just downright evil; lying, defrauding… (Last night, on one of the local TV stations, a web discount site was exposed as that kind of company).
But most “evil” isn’t quite “evil,” but falls under the category of “mistakes.” And even if they are acknowledged as “egregious mistakes,” they are still costly mistakes that hurt actual people, and can destroy a company’s reputation as a to-be-trusted, ethically upright company.
Let’s start with a verse from the Christian Scriptures:
“Do not be deceived. Evil companions corrupt good morals.” (1 Corinthians 15:33. Click here to read a lot of variations, from multiple different translations. I especially thought this one was gripping: “Don’t let anyone deceive you. Associating with bad people will ruin decent people..”).
The principle behind this verse is important. Good and decent people do not intend to do harm. They do not intend to made bad decisions, to make mistakes, and they certainly do not intend to harm anyone. But, bad judgment; ignorance; not “thinking through;” being “seduced” by compelling salesmanship or persuasion… before you know it, a good and decent person can do a not-so-good and decent thing.
Now, how many examples do I need to offer?
Let’s assume that not every NFL player started out intending to do harm, but the allure and the persuasion of a coach and fellow players will lead someone to say, “okay, I will try to take this player out in this game.” A bounty beckons a decent person to do a not-so-decent thing.
Let’ s assume that Jamie Dimon is the smartest, best banker of the bunch. But under his watch, J. P. Morgan Chase made an “egregious mistake,” with $2 Billion lost, and real people hurt, from actual losses, and then stock value loss.
Days after disclosing a $2 billion trading loss at JPMorgan Chase, the bank’s chief executive, Jamie Dimon, admitted that “we made a terrible egregious mistake” in an interview Sunday on NBC’s “Meet the Press.”
Or, consider the plight of Mark Zuckerberg. Farhad Manjoo has a terrific piece up this morning about the Facebook IPO — Ads, Ads, and More Ads: How Going Public Will Change Facebook for the Worse. Here’s the opening paragraph of Manjoo’s article:
When Facebook filed for its initial public offering in February, Mark Zuckerberg wrote a frank letter to potential investors in the firm. “Facebook was not originally created to be a company,” he began. “It was built to accomplish a social mission—to make the world more open and connected.” The founder went on to say that while making money was important to Facebook, raking in cash was not its primary goal. “Simply put: we don’t build services to make money; we make money to build better services.”
He also quotes a line from Google’s early days, adding his own warning:
His letter bears a resemblance to the note that Google founders Larry Page and Sergey Brin wrote to investors in 2004. In that note, Google warned Wall Street that though the search company’s shares were for sale, its mission was not. “Google is not a conventional company,” the pair warned. “We do not intend to become one.”
Don’t buy what any of these guys are selling. Eight years after its IPO, Google is still quirky, still sometimes surprising, and still wildly successful, but it is not at all unconventional. Just like any other company, Google has been swayed by pressure from investors to do things that once seemed unlikely…
In other words, going public and adding stockholders can lead to different decisions over the long haul – decisions that may betray the original mission of the company.
Now, I do not know how to fix this. But I’ve got a few observations/recommendations.
1) Run away from the evil folks… The outright liars, defrauders, bad folks should not be trusted. Don’t hire them; don’t do business with them; don’t ever trust them.
2) Assume that every good and decent person can make an occasional mistake. Sometimes, a whopper of a mistake (an “egregious mistake”). So, even if you trust the person, remember Ronald Reagan’s advice: “Trust, but verify.”
3) Get serious about ethics. Is it ethical to let the mission of the company be undone by some new set of stockholders? Is it ethical to abandon a core mission? Is it ethical to try some fancy new investment instrument when you can’t quite know the ultimate consequences? Somebody, with genuine clout in the room, needs to be asking these questions.
4) Quit bellyaching about too many regulations. Regulations are created because we can’t trust some people, and we can’t guarantee a good outcome from the rest of the good and decent people. The Volcker Rule, and other rules, are simply at times needed to save us from our own stupidity. The regulations really can be for our own good.
5) And, maybe it’s time to put a CEO in the decision making meetings. A Chief Ethics Officer, who has only one job: to ask, until he or she is almost hated for it, “is this the right, the wise, the ‘good’ thing to do?” And, maybe, give that person the authority to overrule us in the midst of our own unwise stupidity.
Years ago, Jon Katzenbach told me that the greatest challenge that change agents face is changing their ideas about change. The Japanese term for continuous improvement is kaizen (改善) and was probably introduced when Edgar McVoy convinced Lowell Mellen to join him in Japan to properly install the Training Within Industry (TWI) programs in 1951. It is most widely associated with the Toyota Production System (TPS), a major precursor of the more generic “lean manufacturing.” Taiichi Ohno, Shigeo Shingo and Eiji Toyoda developed the system between 1948 and 1975.
Here is an excerpt from an article written by Ron Ashkenas for the Harvard Business Review blog. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.
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Six Sigma, Kaizen, Lean, and other variations on continuous improvement can be hazardous to your organization’s health. While it may be heresy to say this, recent evidence from Japan and elsewhere suggests that it’s time to question these methods.
Admittedly, continuous improvement once powered Japan’s economy. Japanese manufacturers in the 1950s had a reputation for poor quality, but through a culture of analytical and systematic change Japan was able to go from worst to first. Starting in the 1970s, the country’s ability to create low-cost, quality products helped them dominate key industries, such as automobiles, telecommunications, and consumer electronics. To compete with this miraculous turnaround, Western companies, starting with Motorola, began to adopt Japanese methods. Now, almost every large Western company, and many smaller ones, advocate for continuous improvement.
But what’s happened in Japan? In the past year Japan’s major electronics firms have lost an aggregated $21 billion and have been routinely displaced by competitors from China, South Korea, and elsewhere. As Fujio Ando, senior managing director at Chibagin Asset Management suggests, “Japan’s consumer electronics industry is facing defeat. “Similarly, Japan’s automobile industry has been plagued by a series of embarrassing quality problems and recalls, and has lost market share to companies from South Korea and even (gasp!) the United States.
Looking beyond Japan, iconic six sigma companies in the United States, such as Motorola and GE, have struggled in recent years to be innovation leaders. 3M, which invested heavily in continuous improvement, had to loosen its sigma methodology in order to increase the flow of innovation. As innovation thinker Vijay Govindarajan says, “The more you hardwire a company on total quality management, [the more] it is going to hurt breakthrough innovation. The mindset that is needed, the capabilities that are needed, the metrics that are needed, the whole culture that is needed for discontinuous innovation, are fundamentally different.”
So should we abandon continuous improvement? Absolutely not! It has created tremendous value and still drives competitive advantage in many companies and industries. But perhaps it’s time to nuance our approach in the following ways:
[Here is the first of three suggested modifications. To read the complete article, please click here.]
Customize how and where continuous improvement is applied. One size of continuous improvement doesn’t fit all parts of the organization. The kind of rigor required in a manufacturing environment may be unnecessary, or even destructive, in a research or design shop. Sure it’s important to inject discipline into product and service development, but not so much that it discourages creativity.
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Here is an article written by Michael Hess for CBS MoneyWatch, the CBS Interactive Business Network. To check out an abundance of valuable resources and obtain a free subscription to one or more of the website’s newsletters, please click here.
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(MoneyWatch) COMMENTARY Money and its material manifestations are the most typical measures of a person’s professional success, but they’re not always telling or even accurate: We all know it’s possible to buy nice things without being financially successful (debt is an unfortunately common substitute for net worth). So I rarely make assumptions about a person’s business or other financial accomplishments based on clothes, cars, boats or houses.
Knowing and dealing with many highly successful people, I’ve found that there are behaviors and characteristics that are much less superficial and more telling than just acquiring status symbols. In my observation of ultra-high achievers, the more professionally successful they are:
• The less stuff they carry: The most successful people I know never carry laptops, briefcases or much of anything else, other than (usually two) phones.
• The fewer calls they answer or return: Even with those two phones, top dogs rarely return calls that aren’t critical to their own business or personal needs.
• The harder they are to reach by anyone or any means.
[These are the first three of ten defining characteristics of the "hyper-successful."
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But there is an important central theme that’s valuable to all of us, regardless of where we are on the ladder, whether we admire these behaviors or are put off by them, or whether the list accurately reflects our own style or aspirations. No matter what combination of these characteristics the Masters of the Universe might possess, the bottom line is the same: Without exception, the people at the very top of the business ladder don’t waste time.
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To read the complete article, please click here.
Michael Hess is founder and CEO of Skooba Design, and also serves as an advisor to other entrepreneurs. He is “obsessed to the point of insanity” with customer service. Read the philosophies that make Michael and Skooba Design tick by clicking here.
To read all of his articles, please click here.
Be•Know•Do: Leadership the Army Way: Adapted from the Official Army Leadership Manual
United States Army (Author); Frances Hesselbein and Eric K. Shinseki (Introduction), and Richard E. Cavanagh (Foreword)
Jossey-Bass/Leader to Leader Institute; 1st edition (2004)
How to develop leaders who have character, competence, knowledge, and results-driven initiative
I recently re-read this book, curious to know to what extent its content remains relevant. My conclusion? It is even more relevant today than it was when first published in 2004. In Richard E. Cavanagh’s Foreword, he recalls a discussion during dinner with Peter Drucker and Jack Welch who shared the same opinion that the United States military services do the best job developing leaders. What we have in this volume is an adaptation by Frances Hesselbein and General Eric K. Shinseki (USA Ret.) of Field Manual 22-100, Army Leadership, with assistance from Alan Shrader. Hesselbein and Shinseki also wrote the Introduction. The material is carefully organized within seven chapters, followed by a Conclusion that reviews the most important points, correctly noting the unique and compelling role that the U.S. Army has played since June 14, 1775, when the Continental Congress authorized enlistment of riflemen to serve the United Colonies for one year.
With regard to the book’s title, “Army leadership begins with what the leader must Be, the values and attributes that shape a leader’s character…People want leaders who are honest, competent, forward-looking, and inspiring…People willingly follow only those who know what they are doing. One of the quickest ways for a leader to lose trust and commitment of followers is to demonstrate incompetence…Character and competence, the Be and the Know, underlie everything a leader does. But character and knowledge – while absolutely necessary – are not enough. Leaders act; they Do…They solve problems, overcome obstacles, strengthen teamwork, and achieve objectives. They use leadership to produce results.”
I realize that these concepts seem simple. In one sense they are. However, in this context, I am reminded of what Oliver Wendell Holmes once said: “I would not give a fig for the simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity.” The challenge to any organization when developing leaders is to guide those involved to the other side of complexity.” The composite of excerpts from Be•Know•Do identifies core concepts, to be sure, but it also describes the character, competence, knowledge, and results-driven initiative that the U.S. Army seeks to develop within every one of its soldiers, regardless of rank. “No one is only a leader; each person in an organization is also a follower and part of a team. In fact, the old distinction between leaders and followers has blurred; complex twenty-first-century organizations require individuals to move seamlessly from one role to another in an organization, from leadership to `followership,’ and back again.”
Hesselbein and Shinseki are to be commended for their skillful adaptation of Field Manual 22-100, Army Leadership, but also for the inclusion within the narrative of relevant material from sources outside the U.S. Army organization. For example, they quote prominent business thinkers throughout the narrative: James Kouzes and Barry Posner on leadership by example (page 24), John Gardner on the importance of a shared vision (page 30), Patrick Lencioni on teamwork (page 86), and John Kotter on a leader’s “quest for learning” (page 132). Readers will also appreciate the provision of various “Exhibits” such as 5.1 that provides a brilliant illustration of Team-Building Stages.
Those who share my high regard for this volume are urged to check out Frances Hesselbein’s other works and the wealth of resources available at the Leader to Leader Institute, a non-profit and tax exempt organization. Also, Warfighting: The U.S. Marine Corps Book of Strategy (Tactics for Managing Confrontation) published in 2004.