Issue 24, Wednesday 26 July, 2000
Made in New Zealand - twice winners of the America's Cup
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Award is a free, fortnightly email magazine with the tools, techniques and best-practice models that deliver high performance in the new economy
The values issue
Workplace ethics – doing right, for all the right reasons
Open book management – living in a glasshouse
Ten minute MasterClass – values and your Human Resources focus
Building trust for competitive advantage
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Workplace Ethics
Subscribers to our companion publication on leaders and leadership (fortunate souls that they are - here's a sample copy) have been subject to several articles on workplace ethics, a topic we've given a good dusting because it's part of the big 'values' picture, and 'values' is an increasingly potent differentiator in the 24/7, on-line, high risk, consumer-focused new economy.
Today, 'good' implies much more than just fitness for service. Quality is a given. Choice is everywhere. On what basis do you shop? 'Well, these guys are great corporate citizens, and I like their approach. They make me feel secure and reflect my own values. So I'll buy their product.' Values is the key – theirs and yours – the organising principle. And at the core of any set of values lies – ethical behaviour.
So who's writing good stuff about everyday, workplace ethics? Pop ethicist Jeffery Seglin, that's who - New York Times columnist, advisor for Inc. magazine, author of The Good, the Bad and Your Business: Choosing Right When Ethical Dilemmas Pull You Apart, John Wiley & Sons Inc, New York, $27.95, March 2000 - of Emerson College, Boston, where he teaches in the graduate department of writing, literature and publishing.
Here's a severely abbreviated version of a story and interview by Elaine M Cummings published in the July 15th issue of CIO Magazine
In the of fall 1982 seven people from the US Midwest died from cyanide-laced Tylenol capsules. News of the murders travelled quickly and although manufacturer Johnson & Johnson was certain the tampering had not taken place at its plants, it had to protect its good name and the brand. Things looked bad … "I don't think they can ever sell another product under that name," advertising guru Jerry Della Femina told The New York Times.
In what was only later recognized as a stroke of marketing genius, the company put customer safety first and profit second, stopping all Tylenol advertising and recalling more than 22 million bottles of capsules at a cost of about $100m. In the best interests of the company's stockholders? Johnson & Johnson was praised for its socially responsible actions. Tylenol returned to the market in tamper-proof bottles, and today it's still one of the top-selling over-the-counter drugs in the US.
How would you handle such a predicament?
Seglin – take the time to think about that. And not just for the looming emergencies, but for everyday decision making as well.
Cummings asked (and I'm summarising, folks); you say that when making decisions that involve money (finance, sales ...), people (employees, bosses ...) and the common good (society at large, including the environment and competitors), the challenge is to accommodate the needs of all three. How realistic is it to claim that you can perfect this technique?
You can't, Seglin replied. What's more, your decisions may vary from week to week or even day to day depending on the factors that are in play.
So what's the point of trying? Cummings asked.
Seglin - because the world of business has changed. The old idea, that you checked your personal values when you entered the office door, is being overtaken by the view that values are values, at home and at work, and we should expect to live them wherever we are. Examining the effect decisions might have on people, money and the common good can be a very effective way of making tough choices.
In the digital economy, the rules are still being written. How do you behave in a world with nascent rules?
Seglin - by disclosing as much as possible. If effect, Seglin said, adopt open book management principles.
Why is it that businesspeople have such a hard time conceiving of and discussing the ethical dimensions of their work?
Seglin – because they assume that for something to be ethical, it has to cause pain to the business and its people. Many argue that J & J's decision wasn't ethical, because it benefited the firm – apparently, ethics have to hurt!
But doesn't including the outside world (other players, the greater good …) remove ethics from where it belongs - being true to yourself?
No, said Seglin, because the two are inseparable, and “if your own value system allows you to cause harm to others, then it's inappropriate behavior … you need to weigh how your decisions will affect all constituencies."
In his book, Seglin writes “Who wouldn't want to be able to pull out a code of ethics and work down the list: Did I steal? Check. Did I lie? Check. Did I kill someone in the process of making payroll? Check. But one of the sad by-products of over-reliance on … codes or … regulations is that it frees up people caught in the heat of a decision from having to think through the implications of their actions.
That's where the real work gets done, the hard thinking, the coming to terms with the implications of your actions. When you make choices solely on what the law will and won't allow, you free yourself from taking any moral responsibility for your actions. And what fun is that? It's like spending your life as an automaton waiting to be told how to behave, how to make the tough choices that define you, the way you do business, and the way you live your life.
The full interview from the July 15 issue of CIO magazine is at http://www.cio.com/archive/071500_black.html
CIO Magazine is free to qualified readers - go to http://subscribe.cio.com/
To subscribe to CIO's online newsletter, The Insider, go to http://www.cio.com/CIO/cioinsider.html
Author Jeffrey Seglin can be reached at jseglin@post.harvard.edu.
Leadership Research Center http://www.cio.com/forums/leadership/
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No it's not. Well, it almost is. We'd like to remind you about EDGE FIRST, our companion e-zine dedicated to leaders and leadership - a fortnightly serving of provocative thinking about what it means to be a leader, and the tools, techniques and best-practices that drive leadership improvement. If you haven't seen it, click here for a complimentary issue.
Snapshot - open book management
It's funny how these things happen. We were happily summarising our way through Seglin, stuffing the big ideas into our small (OK, small-ish) package, when the June 13 issue of Business 2.0 dropped (figuratively) into the letter box – with a 'Big Picture' essay on trust – see below. There's more. Ping went the email. Hello, here's an inc.com newsletter (July 25th, 2000) story on open book management!
Someone's trying to tell us something.
Could you live in a fishbowl? Bo Burlingham, editor-at-large for Inc. magazine and co-author of a book on the subject (with Jack Stack, The Great Game of Business) says you should ask yourself that question if you're considering practicing open-book management (OBM).
Which is: 'The practice of sharing financial information with people throughout the company for the purpose of getting everyone to focus on helping the business make money.' The article offers testimony to the power of OBM. For example it's an important marketing tool for Setpoint, which constructs automated industrial machines and roller coasters in Ogden, Utah … all employees (and even some customers) know how profitable the company is week to week. This openness and the up-to-the-minute financial reports have impressed customers, who have in turn recommended the company to others
The downside? 'If you screw up as a CEO,' Knight says, 'everyone knows it.'
Find the full article at http://www.business2.com/content/magazine/ebusiness/2000/06/01/12910
Ten minute MasterClass – values and your Human Resources focus Building trust for competitive advantage
In Business 2.0's June 2000 issue, Arthur Ciancutti and Thomas Steding write ”An organization in which people earn one another's trust, and which commands trust from the public, has a powerful competitive advantage. It can retain the best people, inspire customer loyalty, reach out successfully to new markets, and provide more innovative products and services, [creating] at virtually no additional cost, opportunities to increase growth, profit, productivity, and job satisfaction.”
We're in a rut, they suggest, preoccupied with the notion of organization as machine, dealing with what can be observed, measured, manipulated, structured, and modified. We make improvements – from Taylorism at the start of the twentieth century to Six Sigma at the start of this one – but these essentially mechanistic approaches only provide temporary benefits which vanish as they become established best practice. They don't confer permanent strategic advantage.
“We seem trapped in a mind-set of externals,” they say, “pursuing the management program du jour to try to squeeze a little more blood out of something that looks increasingly like a turnip.”
Step beyond the machine, as these authors suggest, and we're into the realm of this newsletter – values. “As we step into this territory, we begin to deal in meaning, trust, inspiration, paradox, transcendence, and connection — as well as their dark-side counterparts: doubt, fear, conflict, isolation. The search for competitive advantage is shifting from the exterior to the interior, and departing radically from the metaphor of organization-as-machine.”
Trust works, they say, because we all have an innate, passionate desire to contribute. When we don't, it's because we're afraid - of rejection, failure, loss, retribution, or embarrassment. It may not be obvious at first glance, but under the bonnet almost everyone wants to be productive, to make a difference. Fundamentally, motivation is almost never the problem. But. “Our passion to contribute is always delicately balanced against our instinct to protect ourselves — and there is an important emotional consequence, positive or negative, each time we take the risk to contribute and be productive.”
How to tip the balance? Create a culture of trust, where we feel reinforced, validated, and supported, even when our ideas are not accepted. We are far more likely to plunge in, to be creative and generous with our talents. Benefits? A business case? How about:
Sustainable competitive advantage. High levels of trust nurture innovation and unleash the combined intelligence and creativity of teams
Self-regulation. Problems are spotted and resolved faster, without supervision. People become committed to developing habits of reliability, follow-through, and clear communication
Efficiency. Park the politics, the them vs us frustrations, recapture for productive use the energy lost to suspicion, unresolved issues, forgotten commitments, unclear agreements, missed deadlines, and blame, gossip, resentment, and frustration
Inspired performance. Ideas pass through many hands and are improved at each turn, creating superior products and services
Capacity for change. Trust-based organizations have a knack for holding opposite conditions and points of view simultaneously. They may, for example, have tightly structured, disciplined development processes, and yet still be able to react quickly to changing market needs or internal situations such as mergers
Meaning. Making trust a central principle anchors the organization in a set of values that everyone agrees is attractive and meaningful. People become part of something bigger than themselves — and that results in attracting the best people, and keeping them happy and creative.
Fast-tracking trust
It can take years to establish trust between individuals. But organizations often have to hurry – a few financial quarters can be more than enough time to perish in the current economic climate.
People are more willing to trust, more quickly, when principles that promote trust have been explicitly and universally adopted, and when behavior, particularly the behavior of key leaders, is consistent with those principles. Provisional trust, confirmed by experience, then deepens into institutional trust.
How is trust built quickly? Start by deciding where trust should reside — think about subject areas like growth, profitability, closure, commitment, communication, speedy resolution, respect, and accountability. Establish and model a set of trust guidelines – framed by the leaders, but everyone should participate. Building a workable model requires all-in involvement, contribution, and creativity. Drafting them, making sure everyone knows about them, earning acceptance for them, and maintaining and evaluating them are all part of trust-building.
What sort of 'principles' should underpin the guidelines:
Go for 100% closure – agreeing about what will be done, by whom, with a specific date for completion. Don't leave anything dangling. "I'll get you the report" isn't closure – no date. "I'll do what I can" isn't closure – no agreement about what will be done. Lack of closure breeds uncertainty, hesitation, doubt, wasted time and energy, resentment, and lack of trust. Closure is critical to trust.
Eliminate false commitments – there are no hidden ifs, ands, or buts. Maybe you can't absolutely guarantee the result that you promise, but you enter into the commitment with every intention of fulfilling it.
Usually, false commitments are just workplace habits – sometimes called 'nodding commitments' or 'hallway salutes.' But in organizations that wink at or even encourages pretended commitments, people stop believing what others tell them. False commitments bleed energy in many ways. People first have to stop and figure out how to get the work done that was promised but not delivered. Then they have to fix the mess that they are probably in because the work didn't get done with the original commitment. They also have to deal with knowing there is someone in their midst who says one thing and does another. People trust less, and fear more.
An organizational culture in which people consider their commitments carefully, and in which they absolutely intend to do what they say they will do, generates trust. People can relax into their natural enthusiasm, without fear that they'll be let down, and feel part of something bigger. When we encourage people to earn trust, and show them how, everybody's goal becomes the same. That translates into greater commitment, greater creativity, greater satisfaction with work, and better performance.
Eliminate the 'them vs us' – it needn't be inevitable, even though your experience may tell you otherwise. 'Them vs us' arises because people care about the outcome of their work, and the outcome is thwarted due to lack of closure between groups.
Finding new forms of closure, and collaboration, between heretofore warring elements leads to innovation:
But much more than that, Giancutti and Steding's “Fundamental Folk Theorem of Competitive Advantage” says that “The greatest prospective opportunities for competitive advantage arise from the most virulent current instances of 'them vs us' in the organization.” There are an infinite number of ways to gain competitive advantage by re-investing the energy and lost opportunity wasted by 'them vs us.'
“Your next great advantage is lying there in the white spaces in your organization chart, awaiting discovery. An important clue to locating the areas for highest payoff in your organization can be found in your discomfort.”
Try this test:
Arthur Ciancutti (arky@learningcenter.net) has taught teamwork and change at Stanford University's Graduate School of Business. He is founder of the Learning Center.
Thomas Steding (tom@metacode.com) is CEO of Metacode Technologies, which develops technology for publishers and ecommerce companies.
Resources
New for July at the 'New Ideas' Management General Webzine: Drama At Work - lead story about DramaWorks, which performs inside corporations to stir critical discussion.
New ezzays by:
- Joseph DeFeo (Juran Institute): Be A Six-Sigma Leader!
- William and Ellen Ferris (Professor; Actress): Be Dramatic!
- Blaine McCormick (BEN FRANKLIN'S 12 RULES): Ain't Gonna Study War...!
- Marc Tyler Nobleman (Cartoonist): Lights, Camera, Action!
- Paul Stoltz (THE ADVERSITY QUOTIENT): Tap Your Adversity Quotient!
- John Whitney and Tina Packer (POWER PLAYS): Study Shakespeare!
Columns by:
- Henry Alford (Author, VH1 Host): What, Precisely, Is My Motivation?
- Joel Barker (Futurist): Wealth, Innovation, Diversity!
- R. Brayton Bowen (RECOGNIZING AND REWARDING EMPLOYEES): Just The Basics
- New Regular Feature: "Make It Happen" - Applying MG's Theme.
Interested in hiring a coach?
Give us a call. We'd love to talk to you about it! Or any other proposals. Here's Malcolm Macpherson's resume.
Next issue of this eZine 8/9 August. Reader contributions warmly received!
Copyright © 2000, Macpherson Publishing
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