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Mark
Goulston is Senior Vice President of Emotional Intelligence at Sherwood
Partners, a Palo Alto, California-based turnaround and growth
consulting firm.
Author of 'Get Out of Your Own Way:
Overcoming Self-Defeating Behavior', Goulston is also a professor at
UCLA. In his work, he helps leaders and teams quickly recognize, accept,
correct, and learn from mistakes.
Integrity is one of the four characteristics of successful leaders. And it's important in every aspect of your business.
With almost all of a difficult year
behind him, a CEO (who asked that his name not be used in this article;
let's call him John) and I sat down for one of our regular Friday
meetings. It was halfway between Thanksgiving and Christmas. John, the
53-year-old grandson of the founder of a third-generation manufacturer
of high-quality socket and ratchet tools looked 10 years older than his
age -- perhaps because the firm had been losing its market share
progressively for those 10 years. As the end of the year drew nigh, John
just wanted to talk. When I asked him where he wanted to be at this
time next year, he said, "Next year, I'd like to feel hopeful and proud
instead of afraid and ashamed, like I feel this year."
We began a heartfelt discussion about how
he might turn his fear into hope and shame into pride. We kept going
back to the same word -- integrity. Our conversation developed an idea
for an integrity-based business, one that had an excellent chance of
getting John out of the sad place he found himself now -- and into the
place he wanted to be.
After meeting with John, I realized that
although baring his neck so completely was unusual, it was not
surprising. The ache to transform fear into hope and shame into pride is
felt by many presidents, CEO's, COO's, and other high-level leaders
whose companies are going through hard times. Our plan for an
integrity-based business has a good chance of working for John, and it
may work well for other leaders facing the same dilemma.
Integrity of Vision Create
the greatest-value service or product. By exceeding customers'
expectations, you will satisfy them -- and instill pride in your
employees. If you do good business, it's good for business. Don't rest
on your organizational laurels and risk losing your commitment to
customers and clients, much less the possibility of being exposed as
mediocre. In John's case, this meant improving the design, quality, and
reliability of the tools his firm manufactured to match what they had
been in the company's heyday 25 years earlier. So prized were its
earlier tools that they had become collectibles, and John envisioned
developing new markets for a younger generation that could become just
as crazy about these tools as their parents had been. Creative pricing
strategies could then be developed by looking at and learning from the
pricing leaders in the tool and other industries that are known to give
customers great value for their money.
Integrity of Mission Make
your business' quality and value the best that it can be regardless of
whether you're contemplating selling your business. Work to increase
your company's value by improving every aspect of it. Cut costs wherever
possible without cutting quality. Avoid cutting corners and
half-hearted efforts, and you won't have to be concerned that your
competition has already passed you by. For John's company, this involved
a long-overdue update of the engineering and design departments to
utilize new technologies -- and encouraging the sales department to
enthusiastically reconnect with current clients while still going after
new markets. The company pursued a rigorous cost-benefit analysis of
expenditures, leading employees to ask a question they'd been avoiding
for years: "Is what we're getting worth what we're paying?"
Integrity of Functions All
functional units need to be the best that they can be. A strong engine
won't make up for a weak transmission. Work together toward mutually
agreed upon goals to correct departments' previous practice of acting
like prima donnas with disregard for other departments, to expose
inadequate departments that try to hide their incompetence, and to
counter leaders' fears that a laissez-faire attitude may already have
caused too much damage. In John's company's purchasing, engineering, and
service departments worked together to develop higher-quality products
and improve customer satisfaction.
Integrity of Team Members Each
person needs to do his or her best in all aspects of their job. People
show strength of character and commitment by giving their best effort to
every responsibility in their job, even when they don't want to. It's
called professionalism. If you don't feel confident in an area, seek
assistance or training. Don't do anything behind anyone's back. Avoid
the counter-productivity of excuses, blame, not meeting commitments or
keeping promises, and counter concerns of inadequacy by directly
addressing deficiencies. Employees who raised criticisms and complaints
at John's company now helped find realistic solutions -- and committed
to taking action. Supervisors and team leaders helped hold everyone
accountable.
Integrity of Financial Compensation Tie
pay to performance. Basic compensation includes salary and benefits.
Bonuses need to be saved for sustained performance above and beyond the
call of duty rather than an assumed part of compensation. Prolonged impaired
performance needs met with disciplinary measures and financial
consequences. Set quarterly goals and develop an objective performance
evaluation method that involves the COO, supervisors, and employees.
Bonuses and raises tied to popularity, political savvy, and squeaky
wheels are less effective than bonuses tied to productivity. If the
health and success of the company is at stake, confront overpaid,
overextended, high-level executives -- perhaps including yourself.
Integrity of Non-Financial Compensation Respect, gratitude, and recognition should also
be tied to performance and attitude. Don't treat employees who stroke
their bosses better than conscientious and loyal workers. If you favor
undeserving workers who flatter their superiors and play politics,
conscientious and responsible workers may become demoralized, which
could result in sloppy work. Supervisors at John's company began to
track the progress of their team members, offering recognition and
praise for good work and positive attitudes.
Integrity of Security Develop
a plan that shores up the stability and security in the face of the
changing needs, abilities, and stamina of devoted, conscientious,
long-term employees. Don't allow executives to claim excessive perks or
treat employees like commodities; if you do, insecure workers could
retaliate by stealing, lying, or doing poor. If you take advantage of
people, how can you expect people not to do the same to you? At John's
company, some highly technical work required skills that some devoted
employees in their mid- to late-50s were having trouble learning. But
those same people fully understood another aspect of the busines -- what
the tools were all about. They were true "tool guys," so leaders
designed a program to develop the managerial skills of these mid-career
employees so they could coordinate the work of younger workers while
imparting their tool wisdom to the more technologically adept but less
seasoned workers.
The higher road of being dedicated to
integrity at all levels of his company appealed to John enormously. Even
though, John, too, would have to change how he worked, he looked
forward to relieving the gnawing feeling in the pit of his stomach.
After we completed our list, he looked it over, turned to me, and said,
"Now that's the kind of company I want to lead, work for, and buy from. I haven't felt this way in years!"
Usable Insight: If you tell the truth, you never have to remember anything. (Mark Twain)
This article formed the third
part of a five part series by Mark Goulston, originally published in
Fast Company earlier in 2004. The other four articles are available to
read within the Value Systems section of the LeaderValues website. |
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