Are You a Good Leader?

/0 Comments/in /by

You will be if you draw on key ethical principles. Here’s how to do it, whether you’re a CEO, a banker, an entrepreneur, or anyone else in business

“Never underestimate the other guy’s greed.” This isn’t just a classic line from the 1983 Brian De Palma film, Scarface (written by Oliver Stone). It also reflects the attitude that has caused the economic disaster we’re now clawing ourselves out of.

Isn’t it time for a new way of thinking?

I propose the following leadership guidelines for C-level executives, investment bankers, entrepreneurs, and everyone else whose decisions can affect the financial well being of other people.

1. WHAT’S GOOD FOR THE GANDER IS GOOD FOR THE GOOSE.

At a time when companies are slashing their labor forces and freezing salary increases, and when some employees are being asked to take lower-paying positions, it is deeply unethical for leaders to retain their sky-high compensation and to expect enormous bonuses. They should follow the example of Michael Kneeland, CEO of United Rentals, who recently asked for, and was given, a 20% pay cut. Let’s hear more reports like this one.

[wcm_restrict]2. KNOW YOUR PRODUCT.

According to a recent three-part story in The Wall Street Journal, the willingness of investors to buy and sell financial products whose complexity they didn’t fully understand was one of the primary catalysts of the bust. From our current sober perspective, it seems unbelievable that self-identified experts could be involved in transactions with so much at stake and at the same time be ignorant about exactly what it is they were buying or selling, but this is what happened, and on a grand scale, no less.

Because money was being made in these deals, no one thought to question what was going on or had the strength of character to speak up about any suspicions. However, knowing your product isn’t a nicety of doing business. It is an ethical obligation – to your company, your clients, and yourself.

3. WINNING (AT ALL COSTS) IS FOR LOSERS.

Most of us were taught that we should treat people the way we’d like to be treated ourselves. However, too many business leaders have failed to take this seriously. Instead, the guideline seems to be, “Get all you can by any means necessary.” Look at credit-card companies that charge exorbitant interest rates, changing customers’ fees without telling them why. These companies defend such practices on the grounds that they will lose their competitive edge if they don’t play hardball.

This kind of leadership is shortsighted, unfair, and ultimately bad for business, since the consequences will be more federal regulation and oversight. Good leaders know that if they don’t regulate their businesses themselves, someone else will.

4. TELL THE TRUTH.

A leader has an ethical obligation to be honest with stakeholders about issues that directly concern them. One of these issues is the leader’s own health. Consider the recent 10% drop in Apple stock after CEO Steve Jobs announced that he was taking a five-month medical leave of absence. Because Jobs battled pancreatic cancer several years ago, there was speculation that his cancer had returned, even though Jobs had announced earlier that he was merely suffering from a “hormone imbalance.” While stockholders may have punished Jobs for his announcement, he did the right thing in saying he was taking a leave for medical reasons. There is no shame in being ill, and true leadership involves being forthcoming about one’s illness—and anything else that can affect the flourishing of the organization.

5. PREVENT HARM.

When you can reasonably foresee that a decision is likely to hurt people and you make that decision anyway, you’re being both irresponsible and stupid. For example, subprime mortgage lenders and brokers who lend money to people likely to default are enriching themselves at the expense of the rest of us, since the federal government may be called upon for financial rescue.

What such predators don’t realize is that in the long run, their practices will come back to haunt them in the form of bankruptcy filings, bad PR, and perhaps even prison time for the worst offenders. The good leader recognizes that preventing harm to clients and company alike is both an ethical responsibility and a wise business policy.

6. DON’T EXPLOIT.

It is easy to take advantage of a situation for financial gain, but doing so isn’t consistent with good leadership. After Hurricane Ike hit last year, the wholesale price of gasoline shot up, which was nothing more than price gouging.

In the short run, companies that exploited a natural tragedy may have profited financially, but the long-term negative consequences are real and significant: In New York State, for example, more than a dozen companies were fined more than $60,000 for unfair business practices following Hurricane Katrina. Of course, the reason to do the right thing is simply because it is the right thing to do. But it is also true that taking the low road can be harmful professionally and personally.

7. DON’T MAKE PROMISES YOU CAN’T KEEP.…..

…and keep the promises you make. There are rare circumstances in which we not only have a right but an ethical obligation to break a promise, but generally speaking, we have a strong duty to be true to our word. This is, after all, one of the primary ways that we show our respect to people. Recall that last March, Dr Pepper said it would give out free cans of soda to “everyone in America” if Chinese Democracy, the long-overdue album from Guns ‘n’ Roses, came out by the end of the year. When Axl Rose surprised the music world by releasing the album in November, the beverage company was unable to deliver a soft drinksto everyone who wanted one (Whether it’s ethical for a band that has only one of its original members to call itself “Guns ‘n’ Roses” is another matter.) Good leaders are careful to make only those promises they are likely to keep and keep the promises they do make. When they are unable to keep those promises, they own up to it, which brings us to the next rule of good leadership:

8. TAKE RESPONSIBILITY FOR YOUR MISTAKES.

Transparency and accountability should be the new buzzwords. This means, in part, that business leaders who make mistakes should apologize to those they have let down and do whatever is necessary to make amends. In the wake of the toy industry’s lead-paint scare in 2007, Mattel CEO Robert Eckert took the high road and told a Senate subcommittee that the company failed “by not closely overseeing subcontractors in China whose toys didn’t meet U.S. safety standards,” and that Mattel was working with the Consumer Product Safety Commission to ensure that these products would be safer. It must have been extraordinarily difficult for Eckert to apologize publicly, but by finding the courage to do so, he demonstrated ethical leadership.

9. PEOPLE, NOT PROFITS.

We often recite—incorrectly—President Calvin Coolidge’s statement, “The business of America is business.” (What he actually said was, “The chief business of the American people is business.”) But far more important is what followed that statement: “Of course the accumulation of wealth cannot be justified as the chief end of existence.” Coolidge’s policies are often blamed for bringing about the Great Depression, but if enough people had heeded the latter statement, perhaps our history would have been different. Money has no intrinsic value; it is good only for what it can get us. For the good leader, this means that the ultimate goal in business—and life—is not hoarding riches but making things better for all, especially the neediest.

10. BE KIND, NOT KING.

The relentless quest to be No.1 can blind us to what’s really valuable in life: being a decent human being. Yes, good leaders are enthusiastically devoted to accomplishing their mission, but this pursuit cannot be at the expense of the well being of others. For example, leaders with the unenviable task of letting people go will avoid taking the easy way out . No one likes being the bearer of bad news, but the good leader does so with the dignity that leadership of the highest order demands.

BONUS RULE: YOU ARE NOT YOUR CAREER.

It’s admirable to be passionate about your job, but passion can easily become obsession, and that’s where the danger starts. When your life’s work becomes your life, it is time to take a step back and reevaluate your priorities. I’ve already shown why you ought to take vacations and stay home when you’re sick. More critical than either of these is recognizing what’s really important in life—and it’s not your career, no matter how satisfying that may be. Good leaders not only make room for family, friends, and spirituality; they know these are the things that truly make life worth living.

It should be obvious by now that the above rules apply not just to those in the financial sector but to everyone else, too. They are, after all, based on the five fundamental principles of ethics: Do No Harm, Make Things Better, Respect Others, Be Fair , and Be Loving. As Peter Drucker pointed out, it is not enough to do things right; we must also do the right things. The good leader today is concerned not only with getting from A to B, but with deciding whether B is worth getting to in the first place.[/wcm_restrict][wcm_nonmember]

Hi there! This article is available for free. Login or register as a StrategyDriven Personal Business Advisor Self-Guided Client by:

[reveal_quick_checkout id=”25489″ checkout_text=”Subscribing to the Self Guided Program – It’s Free!”]
 
[/wcm_nonmember]

About the Author

Dr. Bruce Weinstein is the public speaker and corporate consultant known as The Ethics Guy. His new book, Is It Still Cheating If I Don’t Get Caught?, (Macmillan/Roaring Brook Press) shows teens how to solve the ethical dilemmas they face. For more information, visit TheEthicsGuy.com. To read Bruce’s complete biography, click here.

StrategyDriven Podcast Special Edition 27 – An Interview with Chris Edgar, author of Inner Productivity

/0 Comments/in , /by

StrategyDriven Podcasts focus on the tools and techniques executives and managers can use to improve their organization’s alignment and accountability to ultimately achieve superior results. These podcasts elaborate on the best practice and warning flag articles on the StrategyDriven website.

Special Edition 27 – An Interview with Chris Edgar, author of Inner Productivity explores how to eliminate the mind’s distractions that diminish work productivity, heighten stress, and limit personal happiness. During our discussion, Chris Edgar, author of Inner Productivity: A Mindful Path to Efficiency and Enjoyment in Your Work, shares with us his insights and illustrative examples regarding:

  • the principle of mindful efficiency
  • how mental distractions cause individuals to unknowingly multitask; reducing their work productivity
  • practical activities to eliminate one’s internal distractions thereby increasing focus on the task at hand
  • steps an individual can take to overcome a creative blankness such as writer’s block

Additional Information

In addition to the outstanding insights Chris shares in Inner Productivity and this special edition podcast are the additional resources accessible from his website at www.InnerProductivity.com. Chris’s book, Inner Productivity, can be purchased by clicking here.

Chris also offers an insightful six part video series on eliminating the inner distractions that limit personal productivity. These include:

About the Author

Chris Edgar, author of Inner Productivity, is a renowned author, speaker, and personal coach who focuses on helping people follow their true career callings and find more enjoyment and efficiency in what they do. His articles have been published in Balance, Balanced Living, EdgeLife, Mystic Pop, New Age Journal, New Renaissance, Self-Improvement, WellBeing, and Wisdom. To read Chris’s full biography, click here.
[powerpress]

Putting “You” in the Denominator: The Renaissance of Self

/0 Comments/in /by

The Oracle of Delphi told Socrates that he was the wisest man in all of Athens. After many years of reflection, Socrates had the answer. He was the wisest, because he knew he wasn’t the wisest. Pretty cool, huh? Leaders know the road of self-knowledge and self-discovery are never ending. This yellow brick road leads to many rewards, but not pot of gold. The rewards found here are contained within the journey, not the destination. You see, there is no destination for leaders. Knowing yourself means separating who you are and who you want to be from what the world thinks you are and wants you to be. Most of us, including myself, lived up to other people’s expectations for years before discovering the power of the space between stimulus and response, and the freedom and responsibility of choice.

There are four lessons of personal renaissance:

[wcm_restrict]First lesson: You are your own best teacher. No one knows how best you learn than you. Even if you’re not consciously aware of your learning style, you likely gravitate to it anyway. Learning is experienced through personal transformation, a literal transformation of brain architecture. Your brain actually alters its connections when you learn something new. The new chemistry, the new expression of the learning process is what allows self-understanding, and ultimately leads to your ability to express your new self. This is how reinvention really takes place on a cellular level. Any personal renaissance for a leader is almost always motivated internally – meaning that leaders have an intrinsic motivation to teach themselves, what I call intrinsic insatiation. And that motivation is always influenced by a leader’s sense of role in any situation – because no matter the situation, as a leader, you always have some role to play in every situation (this role is usually defined as a perceived gap in where you think you should be and where you think others think you should be). That internal drive and the perception of role drive leaders to never stop learning.

Second lesson: Take ownership. A personal renaissance takes place when people assume ownership. All of the sudden the stakes are higher – the pain of failure is more palpable. And yet for an authentic leader, failure is not an option, so the responsibility then of ownership… breeds success. And for great leaders, they create their own success – they take the building blocks of life and experience education in their very own self-designed university – the school of life.

Third Lesson: Learn from everything. I learned in executive coaching school that we can learn from everything – it’s absolutely true if we allow the perspective to saturate our understanding of how the world works. If we can develop a tolerance for every conceivable experience, then we have set the appropriate table, the right platform that allows you to learn from everything and gain perspective from everyone. For leaders, learning is seeing the world simultaneously as it is and as it can be. This is where the term we use here at WealthBridge comes into play – intervision – the ability to see the future and the past at the same time. It’s not about being present (that’s one dimension). It’s about being in two places at one time. Taking an honest stock of the present situation while understanding how those implications influence our vision, and how they were impacted by our past. Leaders understand what they see, and take appropriate action on that understanding. The holy grail of learning from everything is making connections. Leaders connect disparate ideas from many different industries and make the application work in their own business. This is the synthetic mind that Howard Gardner tells us will be so vital in the next 25 years. Learn how to connect. Practice taking ideas from other disciplines and apply them in your business. Mental gymnastics are very important.

Fourth Lesson: Reflection on experience leads to understanding. Reflecting on experience is a means of having a Socratic dialogue with yourself, asking the right questions at the right time, in order to discover the truth of yourself and your life. What really happened? Why did it happen? What did it do to me? What did it mean to me? Reflection is asking the questions that promote self-awareness and true understanding of an experience, so that it can inform the future. So then the importance of reflecting on experience, the idea that reflecting leads to understanding is a main component of a leader’s mind. Learning and understanding unlock the ability of a leader to move forward à to be self-directed – to be proactive. To look forward with acuity means we must have reflected, or looked back, with brutal honesty. Leaders learn from others, but true Authentic leadership is not emulation. – leaders don’t simply copy another person’s creed and actions. They take the distinguishing characteristics from others that allow them to differentiate, and then synthesize the other with self, and in the process of reinvention, the leader with a distinctive voice all their own emerges from the experiment.

We began this article with Socrates; we end with Socrates…He said, “The unexamined life is not worth living.” Leaders use their experiences, and the examination of those experiences, instead of being used by them. They remain in control and at choice. When you consider the prevailing equation that most people subscribe to: Family + Friends + Workplace + Society = You. But to undergo a personal renaissance of self, stick yourself in the denominator [Family + Friends + Workplace + Society / You]. The denominator is all powerful…rather than being designed by your experience, you become your own designer. You become cause and effect rather than a mere product of your environment. The process begins with Self-awareness = once you accept yourself and your uniqueness, it fosters self-knowledge = knowledge always leads to confidence and ownership = what you own, you can control = what you control, you can express à awareness that ultimately results in Self-expression. You make your own life by assuming ownership of the space between stimulus, what happens to you, and your response to it. What lies in the space is the freedom to choose your response. Choose to know yourself better than anyone, and learn to lead the most important revolution in your life – the personal renaissance of the leader in you.[/wcm_restrict][wcm_nonmember]

Hi there! This article is available for free. Login or register as a StrategyDriven Personal Business Advisor Self-Guided Client by:

[reveal_quick_checkout id=”25489″ checkout_text=”Subscribing to the Self Guided Program – It’s Free!”]
 
[/wcm_nonmember]

About the Author

Dr. Greg Gillum is the Chief Learning Officer of WealthBridge Connect (www.WealthBridgeConnect.com). As CLO, his primary role is writing leadership and management curriculum for the international faculty of WealthBridge Connect that helps members drive their business to new heights. In addition, his role at WealthBridge Connect includes lead executive coach and trainer, specializing in leadership development applications, business performance coaching, emotional intelligence, and guiding transformational change in individuals and organizations. Dr. Gillum has also served as the CEO of the humanfusion group of companies (www.humanfusion.com) since 2004. He is a frequent keynote speaker in the areas of human performance and potential. Dr. Gillum spent six years on the faculty of the Medical College of Virginia, and eight years in marketing and senior management with GlaxoSmithKline. To read Dr. Gillum’s complete biography, click here.

Customer Satisfaction: A Flawed Measure

/0 Comments/in /by

Your customers want more than “satisfying” transactions – they want engaging relationships

To master the new discipline of the emotional economy, business leaders need a new way to think about “customer requirements” and a new set of tools to help structure their businesses around them. But exactly how should they construct a new definition of customer requirements?

Traditionally, the customer’s perspective has been evaluated by assessing “conformance to requirements,” often (though not always) by using a generic measure of customer satisfaction. Early practitioners of the quality movement postulated that customers would be satisfied with and would continue to purchase a product or service if it met their functional specifications and fulfilled their requirements.

[wcm_restrict]The origins of how “customer satisfaction” emerged as the preferred measure are a bit murky, but, for better or for worse, it seems to have been selected primarily based on its intuitive appeal. In other words, customer satisfaction seems so plausible that surely it must be the correct thing to measure. As a result, the issue of whether customer satisfaction actually measures anything of value appears to have been overlooked.

Because the bulk of the work that laid the foundation for this perspective originated in manufacturing and process-intensive businesses, customer requirements have generally been specified in functional terms: Did the product have any defects? Did it conform to specified manufacturing tolerances and parameters? Was it delivered on time? And so on.

But as our knowledge of psychology, behavioral economics, and neuroscience has matured, we now recognize that this rational-functional view of human decision making is flawed and incomplete. To date, only advertisers have paid much attention to the essential non-rational and emotional dimensions that define what it means to be human — and a customer. As a result, it’s not surprising that executives and managers continue to struggle to understand why customers who appear to be satisfied defect to competitors — and why authentic, organic growth remains elusive.

Customer satisfaction is not enough

Business leaders, researchers, academics, and management consultants alike have expressed concern that though customer satisfaction may be a necessary foundation for building strong customer relationships, by itself, it’s a relatively poor indicator of future customer behavior. Our data support this concern.

Empirical results from a large and growing number of case studies suggest that customers who are extremely satisfied – those who provide the highest rating of overall satisfaction with a company’s products or services – can be classified into two distinct groups: those who are emotionally satisfied and those who are rationally satisfied.

  • Emotionally satisfied customers are extremely satisfied with the products and services the company provides and have a strong emotional attachment to the company.
  • Rationally satisfied customers, in contrast, are also extremely satisfied with the company but lack the strong emotional connection of customers who are emotionally satisfied.

When we examine the indicators of customer behavior within these two customer groups, such as customer attrition, frequency of use, share of requirements/share of wallet, and total revenue and spending, among others, a clear and striking pattern emerges. Emotionally satisfied customers deliver enhanced value to a company, for example, by buying more products, spending more for those products, or returning more often to or staying longer with the business. Rationally satisfied customers, on the other hand, behave no differently than customers who are dissatisfied.

Consider the following case study from a large U.S. retail bank. When we assessed this bank’s customers using an 11-item metric of customer engagement… we found that over a six-month period, emotionally satisfied customers ended their relationships with the bank by completely closing their accounts at rates that were 37% lower than rationally satisfied customers’ rates. Dissatisfied customers, on the other hand, scarcely differed from rationally satisfied customers in their attrition levels.

Similar results emerged for an international credit card provider. Over a six-month period, emotionally satisfied cardholders spent on average $251 per month and used their cards an average of 3.1 times per month. Rationally satisfied cardholders, in contrast, spent on average just over half this amount ($136 per month) and used their cards less often (an average of 2.5 times per month) during the same period. Again, dissatisfied customers were virtually indistinguishable from rationally satisfied customers in their actual purchase behavior: Dissatisfied customers also spent on average $136 per month and used their cards an average of 2.2 times per month during the same period. And, emotionally satisfied cardholders increased their spending by 67% over a 12-month period, compared to an increase of just 8% among rationally satisfied customers. Once again, dissatisfied customers were virtually indistinguishable from rationally satisfied customers in terms of spending increases.

This general pattern is consistent across every industry we have examined, leading us to this powerful conclusion: Customer satisfaction is not enough. Merely satisfying customers by delivering on their rational requirements represents a minimum point of entry for today’s businesses; managing to satisfy customers will not drive the enhanced financial performance today’s business leaders seek.

To build the strong customer connections that produce enhanced financial benefits, a more complete view of customer requirements is needed, which incorporates an understanding of the emotional dimensions of customer commitment. Customers want more than transactions – they want relationships.

Excerpted from Human Sigma: Managing the Employee-Customer Encounter (Gallup Press, November 2007)[/wcm_restrict][wcm_nonmember]

Hi there! This article is available for free. Login or register as a StrategyDriven Personal Business Advisor Self-Guided Client by:

[reveal_quick_checkout id=”25489″ checkout_text=”Subscribing to the Self Guided Program – It’s Free!”]
 
[/wcm_nonmember]

About the Authors

John H. Fleming, Ph.D., is Principal and Chief Scientist – Customer Engagement and HumanSigma for Gallup and coauthor of Human Sigma: Managing the Employee-Customer Encounter. He coauthored an article on Gallup’s HumanSigma model in the Harvard Business Review (July/August, 2005) and has published more than 20 research articles and book chapters in such prestigious refereed journals as the Journal of Personality and Social Psychology, Social Cognition, the Journal of Experimental Social Psychology, and Personality and Social Psychology Bulletin. John received his doctorate in social psychology and master’s degree in psychology from Princeton University and his bachelor’s degree from the College of William and Mary in Williamsburg, Virginia. To read John’s complete biography, click here.

Jim Asplund is Chief Scientist, Strengths-Based Development and Principal, Performance Impact Consulting with Gallup and coauthor of Human Sigma: Managing the Employee-Customer Encounter. As a founder and director of Gallup’s Performance Impact Consulting practice, Jim pioneered research to develop Gallup’s HumanSigma approach, which improves organizational performance by managing the employee-customer encounter. He was the primary architect of the HumanSigma measurement system and is the principal consultant for many of Gallup’s best-documented longitudinal case studies of the financial benefits of HumanSigma. To read Jim’s complete biography, click here.