My last blog post urged you, treasured reader, to focus on the positive aspects of business ethics, to look beyond what is permissible to what is possible. I continue to write and talk about what I called the “ethics of opportunity.” I still believe everything I said.  

 

Before continuing down that path toward genius and light, I need to share with you two instances of idiocy and darkness. I share them not merely because I found myself dazzled by each instance, but also because each example is so perfectly at odds with the themes that the Hill Center has been developing. On that basis, they have considerable illustrative power.

 

Corporate social responsibility at its best involves wise investing in relationships with the people who touch your business. You do the right things, in the right ways, at the right times, and they pay off for your business. Our stories for today, by contrast, illustrate obvious disregard for those relationships, with predictable results.

 

The first case is trivial, and began last winter, when I bought my kids an ant habitat.  (I later learned that “Ant Farm” is a registered trademark of Uncle Milton Toys, which did not produce my unit, as we shall soon see.) The written instructions warned against capturing just any old ants for the habitat. The box included a coupon for a free vial of Harvester Ants, ideally suited to a (relatively) long and (presumably) happy life within the spatially limited but nutrient-rich confines of the Plexiglas enclosure. 

 

I lost the coupon.

 

Turning first to the Internet and then to the telephone, I found Uncle Milton Toys, a supplier of Ant Farms® and their intended denizens since 1946 (their Website makes no reference to Milton Berle).  In March I called Uncle Milton, and was told that they would not ship ants to my ZIP code until the weather was more conducive to their survival. 

 

Last week I returned to the project. The Uncle Milton’s online order site was down, so I called customer service.  After a brief introduction, the operator asked what company made my ant farm. I told her that I didn’t know, and she informed me that she couldn’t sell me ants if I hadn’t bought a genuine Uncle Milton Ant Farm®. She asked about the color of the food gel in my product, I told her it was blue, and she informed me that the company policy prohibited her from selling ants to purchasers of competitive products. “It don’t build business unless you buy our Farm,” she explained. 

 

I confirmed that if I had reported the Uncle Milton color, she would have sold me the ants. I then politely ended the call.

 

I had to try again. I did not intend to deceive Uncle Milton – indeed, I won’t give them an order they don’t want.  Before sharing this story with you, I felt some responsibility to determine whether I had encountered an instance of individual foolishness, or institutional foolishness. I was more than slightly amused when the second operator confirmed, “we only sell ants to owners of an Uncle Milton Ant Farm®. You can get them at Target.”

I already had a perfectly suitable habitat. I quickly found a much more flexible supplier of Harvester Ants, Carolina Biological Supply (www.carolina.com).  Their website was clear, and their telephone staff (I wanted a fair comparison) was friendly and helpful. The ants are en route to their new home.

 

Especially where educational toys are concerned, I am enjoying my kids’ childhood at least as much as they are.  While cruising the Carolina Website, I saw gifts and projects that will take us well past the (children’s) age of majority.   I am now a loyal customer and a vocal fan of Carolina Biological Supply. 

 

I’m dazzled that Uncle Milton’s policy makers either didn’t foresee, or do not value, that relationship. Uncle Milton sells only through retailers. Even so, they have a mechanism for connecting with end users, and they are squandering an opportunity to introduce their brand products directly to competitors’ customers.

 

I would have paid to ensure a profitable transaction for Uncle Milton. Charge $30 to anyone, and offer a $20 discount to customers who can demonstrate ownership of an Uncle Milton Ant Farm®.   Create a club (a “Farm Team,” if you will), or launch co-op advertising programs with retailers targeting a growing base of loyal customers.

 

Uncle Milton’s policy isn’t unethical – just foolish – but it reveals how easy it might be for a wiser firm to do better. By cheerfully selling supplies to all comers, even at a premium price, they could build customer relationships and grow market share, building immediate and ongoing revenue at no cost.

 

 

This week’s second example of foolishness in action is more serious and, I fear, more pervasive. A close friend was recently laid off, his position eliminated due to a change in strategy and a general enterprise contraction.  He was notified by his supervisor, accompanied by a human resources manager. They presented him with an agreement that was to be signed before he could receive a very modest severance, and then had him escorted off the premises. He was not allowed to return to his office, but was assured that his personal belongings would be sent to him within two weeks.

 

Years ago, as a junior manager, I was directed to participate in a nearly identical exercise. We were gutting and reorienting my team, consistent with a change in organizational strategy. HR led the termination process, which was rigid and swift, designed to minimize the risks of litigation or retaliation.  The only humane adjustment I could negotiate was permission for me to return with the laid-off employees – my team members – to help them pack their belongings.  I carried some boxes to their cars, and expressed my personal regret at what had transpired, both broadly and specifically.

 

Just writing about that event makes me nauseated, not because of the terminations, but because of the way they were executed.  Our actions as managers demonstrated clearly that we didn’t trust our employees to behave honorably.  We revealed a lack of compassion and, more disturbing, a contemptuous mistrust of people who, hours before, were responsible for critical client relationships, operating decisions, and organizational strategy. We trusted them to run our business with us, until we didn’t need them anymore.

 

When my friend shared with me his own termination story, his anger was palpable but his response was reasoned. He sought the advice of counsel, and negotiated with his former company, turning first to securing the speedier return of his personal belongings. He offered to brief managers on his work in progress, an offer which was rejected. He chose to act in ways that reflected his values and commitments, rather than to respond to an essentially hostile act in kind.

 

I understand that this approach to termination is fairly prevalent, and that it is not intended to be hostile. It is intended to eliminate risks of employee retaliation, while limiting legal liability. The unintended consequences, however, include the creation of an avoidable adversary, and the demonstration to current employees that they, too, are potential adversaries based on events beyond their control.   That’s foolish.

 

In fairness, I do not know the likelihood, frequency, or even the full nature of detrimental acts committed by terminated employees. I do not know the degree to which those acts could have been prevented – or exacerbated - by an essentially rude and adversarial termination process.  I just know that treating employees, current or former, in rude and adversarial ways can’t be all good, and it can be quite bad. 

 

I have also seen specific instances where reasonable and respectful transitions led to considerable commercial gains. By trusting employees to act in ways consistent with their character, and with the attributes we appreciated during their tenure, we achieved the best possible outcomes under difficult circumstances. We made sales that we otherwise would have lost, and maintained critical client services through personnel transitions. We sought and earned our clients’ trust that a new team could continue to deliver, based on the invaluable contributions of the departing team members.  None of these outcomes could have been achieved had the employees involved been escorted to the door by security guards.

 

I am not prepared to call all instances of abrupt termination foolish or stupid – just some of them.   We can learn from those examples and consider the full spectrum of outcomes when we determine how to act at this critical juncture in the relationship between a firm and its employees.

 

This isn’t rocket science (though I did see a very cool rocket science kit, ages 10-12).

Last Thursday I stopped for dinner at Duke’s Bowl, a bar and bowling alley in the shadow of the Wisco Feed Elevator, the tallest structure in Abbotsford, Wisconsin. Duke’s is a simple and authentic place, adorned with Packers memorabilia from both regional and national breweries.  Floor space in the bar is dominated by coin-operated amusements.  The staff is welcoming in only the gruffest sense: when a new customer asked for the “non-smoking section,” the senior bartender raised an eyebrow, snuffed out his smoke, rounded the bar, and sauntered to a table in the corner. Removing two dirty ashtrays, he smirked. “Here.” I didn’t bother to leave behind any Hill Center brochures. 

 

Duke’s menu features a sandwich that transcends its surroundings, simply and aptly named, “Hot Beef.” Wisconsin’s answer to barbacoa on a fresh, sturdy Kaiser roll, served with grated horseradish and basic barbeque sauce, the Hot Beef is a singularly satisfying gustatory experience. If Duke’s were the sort of place where a guy could comfortably set up a laptop, I might still be sitting there, a pile of discarded plates growing beside me. It isn’t. Nevertheless, I rarely miss an opportunity to stop there, in part because I am convinced that the Hot Beef can spring forth only from these surroundings, like a slightly greasy lotus flower. When I asked my server what cut of beef was used, she responded, “I dunno. It’s a huge chunk, and they make us cut the fat off. It’s gross.” Hot Beefs sell themselves. Good thing, too.

 

I found myself in Abbotsford returning from two days of meetings with a client team. We had worked remotely for several weeks, using teleconferences and videoconferences, and it was high time we got together, face to face. In general, we business people are often tempted to avoid travel, to save time, money, or the environment.  It is easy to neglect the value of actual human contact, of sitting around a table with a team of people, working together to solve problems, generate ideas, or chat in between meetings and topics. In truth, the value of these experiences is hard to calculate, but nearly impossible to overestimate.

At our best, we human beings communicate with all of our senses, consciously and unconsciously. I have written about the importance of trust as the universal lubricant of effective commerce. Nothing builds trust like face-to-face contact, like real handshakes, shared laughter, and especially common frustration, resolved through persistent discussion. I was driving across Wisconsin last Thursday because this client team and I needed to communicate more clearly and fully than we could have through an electronic intermediary.

 

Electronic communication is a powerful business tool. Another Hill Center client, Sensory Environment Design (www.sedexperience.com), creates truly amazing electronic environments, and I am dazzled by the ever-improving quality of a/v technology. It is impossible not to respect and value the efficiency of a conference call or a Webinar presentation. However, the level and nature of communication that take place through these media are no match for the real thing. These tools are most effective among people who already know (and presumably trust) one another, or for sharing information that does not require a deeper level of communication.  Such is very often the case, and thus a teleconference or videoconference is very often a great option.

 

By any means, communication is precious. I have long been guilty of paying too little attention on conference calls, of attending to other tasks rather than engaging fully in conversations.  (This habit may reinforce my reluctance to rely on conference calls for difficult communications.) Increasingly, I try to engage in these discussions fully, or excuse myself entirely. If a discussion is worth having, it is worthy of my attention. 

 

As the cost of travel rises, we can increase its value by making the most of our time together. We can listen with all of our senses, and ask the kinds of questions that benefit from eye contact. We can share ourselves as people as well as potential transaction partners or collaborators, and appreciate it when others do the same.  The inevitable outcome of this enriched engagement is enhanced trust – or the awareness that trust is not warranted. Either way, we are wiser and better off for having paid close attention.

 

And, when it’s time for lunch, you could do worse than a Hot Beef. On, Wisconsin!

 

Our work lives are, by definition, a big part of our lives. How, then, can we accept a notion of having one set of moral values for “work” and another for “the rest of our lives?”  Clearly, we can’t.

 

I recently had dinner with an old family friend, who naturally asked about the Hill Center.  As I told him about our mission of helping align business performance with ethics and social responsibility, he shook his head.  He made the standard jokes, that “business ethics is an oxymoron,” and that books on the subject are works of fiction. Chuckle, chuckle. Then the conversation turned serious and, upon reflection, moderately disturbing. 

 

My friend began by likening my work to that of the clergy – essentially positing that only the truly faithful (presumably, of any number of faith traditions), would really care about doing the right thing in business. “Business,” he said with conviction, “is morally neutral. It’s not about right and wrong, it’s about profit-making.” In the interest of decorum, I uttered something about the deeply ethical business leaders I’ve met, and changed the subject.

 

Decorum is overrated. I am still annoyed, days later.

 

The notion that business and morality are separable isn’t new; the noted business ethicist R. Edward Freeman dubbed it “The Separation Thesis” in 1993, and the most recent edition of Business Ethics Quarterly has yet another article about what it really means and why it matters. In general, it means that business decisions are, essentially, amoral. Theorists have been arguing against that view, quite persuasively, for years. I’m with them. 

 

We spend much time at work. If we have different moral values at work, or simply  suppress our sense of right and wrong there, what does that say about the totality of our lives?  Moral values constitute an important component of our identity. An essential element of our humanity.  If we are forced – or, worse yet, choose – to suppress who we really are in our work lives, how can we function effectively? How can we feel good about our lives?

 

It is certainly true that settings and circumstances appropriately influence how we conduct ourselves.  A couple of years ago, my young son began playing rec-league soccer. A few minutes into his first game, he left the field in tears. Thinking he was hurt, the coach sent him over to me on the sideline. Thankfully, he wasn’t hurt at all – he was pissed! He had been taught not to push and shove, and that was exactly what the other kids were doing. We had a quick, sideline talk about being aggressive on the field, complete with my pantomime of an attitude of aggression. We also talked about the rules, and about going after the ball and not the other players. He returned to the game with a clearer sense of expectations, and was jubilant at half time, not for the goal he had scored, but because, “when other kids shoved, I just shoved them back.” He remains a gentle kid, except on the soccer field.

 

We are right to act differently in different situations. Our relationships with family members and close friends are different from our relationships with co-workers. Even within the business context, we are right to make distinctions based on our respective relationships (e.g., with colleagues, vendors, customers, or competitors), and to act accordingly.  At the same time, a coherent sense of right and wrong ought to govern our conduct throughout. If we truly believe that business decisions are amoral, and act accordingly, we would do well to remove the mirrors from our washrooms, rather than face our own reflections at work.

 

That process of adaptation, of acting in ways which are appropriate to circumstances, is perfectly consistent with maintaining a coherent sense of right and wrong, which transcends those circumstances.   It also speaks to the richness and complexity of a meaningful moral viewpoint. We can be deeply ethical, and still be flexible, within limits, about how we engage the world. If doing my job leaves me with a sense of moral discomfort, it is right for me to examine both my morals and my circumstances. Perhaps I am being a prig, or I am confusing ethics with etiquette. More likely, my pangs of conscience are indicating that I change my actions or lead a change in my environment, in accordance with a considered sense of right and wrong. This may entail a transformation within a company, or a departure from one.

 

Like youth soccer, ethical leadership is a team sport. (Also like youth soccer, it can get messy at times.) Members of effective leadership teams trust one another:, to act from motives of organizational success, for example, and to speak with candor about what an organization ought to do and why.   If these leaders do not each have coherent moral perspectives, then the processes of reflection, and the resulting organizational improvement, are nearly impossible to achieve.

 

Great business leaders do not check their morals at the door. They seek opportunities to act in accordance with their moral values, and remain open to learning and growing through experience and engagement with others. Businesses grow stronger by embracing diverse points of view. They also grow stronger by cultivating a coherent set of ethical boundaries and shared values that promote excellence in action.   It’s only human.

 

It is currently my pleasure to teach a unit for graduating business majors at Concordia University, here in Saint Paul. The unit is intended to help the students grasp and apply concepts of business ethics and strategy.   Starting next week, we’ll be discussing corporate social responsibility. Students will use the einsight e-quiz, an online introduction to the concepts of the SAIP, to evaluate some model companies, and we’ll discuss the findings.     

 

Thankfully, the students have been clear in asking for what they need. Before we talk about enterprise-wide strategies for social responsibility, they wanted to consider business ethics from a more personal perspective. We talked about bringing personal values and ethical perspectives to the workplace. We also discussed, in very practical and specific terms, how to talk about ethical issues with superiors, peers, and subordinates. The discussion left me with a renewed appreciation of the power of candor in our business lives.

 

Candid communicators speak their minds. Effective ones do so tactfully, to a degree appropriate to the situation.  Honesty is necessary but not sufficient for true candor: an honest speaker may share all or part of what he believes to be true, while a candid speaker shares what she is thinking, what she believes to be true, and why.  That’s a high bar, requiring both self-awareness and a keen sense of the situation. It also requires courage, at times, to truly and accurately express thoughts and beliefs. The payoff can be equally high, though. Meetings achieve the best possible outcomes when knowledgeable people share openly. Trust is established because – well, it’s obvious, isn’t it? We tend to trust people who are richly and fully honest with us.

 

Moreover, a lack of candor can be costly. Years ago, I found myself splitting a week between clients in San Diego and Stamford, CT. Monday and Tuesday, we worked in San Diego, hearing nothing but vaguely positive feedback from that client. We then flew east, and spent the rest of the week being criticized, pointedly and at times profanely, by the second client, who was concerned about the emerging direction of our work.   By Friday, my longing for Southern California went well beyond the weather. 

 

The San Diego client terminated our work shortly after our sunny sessions, without ever explaining why. An expensive project was shelved at its midpoint. They never returned my calls. Nobody won. In Connecticut, we changed direction based on the client’s input, and successfully completed the project. Last I heard, the products of our work were still in use years later.

 

Communicating candidly and clearly can be difficult. Often, we’re afraid to say what is on our minds, for fear of exposing ourselves to criticism or ridicule. We may pull our punches to avoid embarrassing or offending our friends, or obscure our true beliefs to avoid arming our adversaries. Sometimes discretion is in order; determining the appropriate level of candor can a delicate process in and of itself. Even when it is appropriate, candid communication requires courage and skill.

 

The manner of communication be appropriate to the audience. Anthropologist Edward T. Hall and others have described a distinction between high-context and low-context cultures. The distinction is rich and interesting, but for our purposes I will summarize as follows. Low-context cultures rely primarily on the words that are spoken, and high-context cultures require that speakers and listeners understand a great deal more about the way in which those words are used, by whom, and under what circumstances.  

 

The standard examples of high-context cultures include China, where often what is said in a meeting is less important than who says it, or even where people are seated at the table. I would argue that we need not travel so far to find high-context communication in action. Even in, say, South Dakota, the word “yes,” spoken with a particular, sharp intake of breath, can mean, (for us low-context folks) “over my dead body.” I’m told it’s the same in Japan.

 

Overcoming challenges to clear communication is everyone’s responsibility. Speakers must be courageous about sharing what is truly on their minds, and both sensitive and knowledgeable enough to do so in ways which are well-understood by everyone involved and appropriate to the situation. Listeners likewise must engage all their senses, and interpret what they hear and see based on an enlightened understanding of context. How many times have you misconstrued an email because you couldn’t see a twinkling eye or hear a playful tone of voice?

 

I learned the hard way in San Diego. In retrospect, it seems likely that I was the only one in the room who was anticipating our next meeting. Whether that miscommunication was a pure lack of candor, or whether they were candid but I missed the cues, will never be known (at least not without some long-overdue returned phone calls). Considerable time and money were wasted as a result.

 

Establishing and maintaining an environment where people can communicate candidly and respectfully isn’t always easy, but it is worth the effort. Much of the value of a truly diverse working team can be lost if participants cannot openly share ideas and perspectives. The effectiveness of communication across teams or companies can make or break deals. In every business context, the critical element of trust depends upon communication that is richly truthful and mutually clear.

 

That’s what I really think.

 

Would you know a stakeholder if you saw one?

 

A few weeks ago now,  I had a remarkable conversation with Jamie Forman. Jamie is an attorney by profession, a philosopher by disposition, and a committed contributor to the community by substantiated reputation. You might ask what he’s doing talking to the likes of me.   I’ve learned to accept good fortune when it presents itself. 

 

Our conversation was wide-ranging, but included the core concepts, mission, and offerings of the Hill Center. When we turned to our consulting services, Jamie posed a most interesting question, which I want to expand upon and explore here. 

 

(One of these days, someone will comment on a posting – I’m poised and ready for that great moment – but in the meantime, I’ll keep writing, the digital equivalent of talking aloud to myself in a public place.)

 

I digress.

 

Today’s question concerns my use of the term “stakeholder.” When I use the term, I mean to refer to the groups with which an organization meaningfully engages. Typically, these include shareholders or owners, employees, customers, vendors, partners, and the communities in which the businesses exist. We might also competitors and the environment, though the latter is different in kind from the other candidates for stakeholder status. 

 

Forman raised the question of whether “stakeholder” should denote only those who have an acknowledged financial stake in the business. These include investors, creditors, employees, and just maybe customers or vendors. Forman suggested that we consider using “influence” as the framing concept and term – “influencers” and those who “are to be influenced” – in describing the broader set of constituencies.

 

There is a broader context for this discussion. In using the term stakeholder in this broader sense, I’m following a tradition first established by R. Edward Freeman in his book, Strategic Management, a Stakeholder Approach (1984), and expanded upon by other writers. Freeman’s approach has been criticized, in part, based on the argument that obligations to stakeholders cannot readily, and perhaps should not, be negotiated in the even-handed way that stakeholder advocates seem to suggest. Fiduciary responsibilities to shareholders, for example, are fundamentally different from contractual obligations to vendors or creditors, and are different still from moral obligations to serve community members or to protect the environment.

 

As semantic discussions go, the stakes (as it were) are fairly high.  In the Hill Center’s consulting work, we use the Self Assessment and Improvement Process (SAIP) as our primary analytical tool for assessing an organization’s degree of social responsibility. That tool is organized in terms of stakeholders per se. If the “stakeholder” term were to be confusing or unclear, I could certainly propose to the SAIP Institute, the developers and stewards of that tool, that we change the terminology, but I’m not sure that there is a better term. I have proposed crazier things to Dean Maines, President of the Institute, and he’s always been receptive to new ideas.   He even buys lunch, most of the time. I’m just not at all convinced that this is something that we ought to change.

 

Any suggestions out there? Should we use “stakeholder” to describe constituencies that are truly external to the firm, such as customers, vendors, or the community?

 

Beyond the semantic question on the table, I also want to clarify that I’m not suggesting that an organization has the same set of obligations to all of its stakeholders, or that there is uniformity among stakeholder relationships. Quite the contrary! The key to aligning business performance with social responsibility is to understand the nature of each relationship, and to implement ways to improve those relationships in ways that deliver measurable gains for the organization. Every relationship is distinctive and every situation, unique.

 

So, what do you think of when you hear “stakeholder?”

 

I had a fascinating meeting with Dean Maines, Harry Halloran, and Tony Carr this week. Dean is of course the President of the SAIP Institute at the University of St. Thomas. Harry is the visionary and philanthropist who, through his foundation, has supported the creation of the Hill Center, as well as the SAIP Institute and a number of other efforts related to ethics and social responsibility. Harry fundamentally believes in the power of business to make a positive difference in the world, and in the essential good nature of people. Tony shares these beliefs, as evidenced by his work as the executive director of the Halloran Foundation.  I was honored to be in the company of these three – I wish we had had more time.

 

Mostly, we discussed our common project, the SAIP (the Self Assessment and Improvement Process). They brought me up to speed on one implementation that is underway. Soon enough, we were talking about the essential nature of the SAIP. It is an outstanding process for rigorously, objectively evaluating an organization’s relationships with stakeholders. I see it primarily as a strategic assessment tool, the findings of which constitute a powerful lens for studying an organization and for setting strategy.

 

As we talked, another perspective emerged. We know that SAIP isn’t for everyone. What is the common thread among those who are likely to adopt it? Leadership. SAIP provides a leader committed to serving stakeholders with a rich, detailed picture of the current status of an organization and a meaningful path forward. Moving the organization down that path also focuses on leadership.

 

I chose the name “Hill Center for Ethical Business Leadership” for a reason: leadership is arguably the critical success factor for socially responsible business.   Evaluation requires analytical skills. Setting strategy based on that evaluation is largely an act of creativity and problem-solving, seeking the intersection points between business performance and social responsibility. We are trying to serve stakeholders in ways that deliver measurable business results, after all. Delivering on that promise requires leadership that integrates head and heart and spine.

 

 

Nope. Not there yet.  But, my heart’s in the right place.

On Friday I had the pleasure of introducing Bill George, the former CEO of Medtronic, as he addressed the Club WOW symposium.   I like his books very much.  Authentic Leadership is a very good reflection on practical aspects of leadership, and True North builds upon his account, sharing learning from 120+ interviews with a wide range of leaders. As he pointed out, the latter emerged from research that was atypical for a professor at the Harvard Business School, but the qualitative learning was impressive, even to (at least some of) his colleagues there. Both books are well-written, without a ghostwriter, and both integrate personal experience into thoughtful frameworks that actually add value. I recommend them highly.

 

 

George’s talk was also excellent. Among his themes was a great discussion of what he calls “21^st Century Leadership,” which he contrasted briefly with more conventional views. I think he rightly described the conventional wisdom that leadership focuses on the ability to attract and direct followers. The most-outdated views, I think, equate leadership with charisma and leading with persuading and directing. Even more contemporary views, though, connect leadership with skills (rather than some natural gift) related to managing and directing. (There’s more that I’d like to say about the evolution of leadership development, in future posts.) George argues persuasively that authentic leadership has very little to do with “followers.”

 

Instead of focusing on persuading or directing, George argues that effective leaders today will succeed by achieving three intermediate ends:

These are easy words to type, and harder goals to achieve. Doing so begins, George points out, with the leader understanding him- or herself deeply, and being able to connect with others on a very personal level.   In fact, he really focused on the very personal dimensions of being aware of one’s self and exhibiting a deep commitment to some ennobling purpose.

 

With his third aspect of leadership, George very directly reinforced one of the fundamental premises of the Hill Center’s mission: that companies can prosper through a strategic commitment to ethics and social responsibility. He acknowledged the responsibility of a corporation to serve its shareholders.  Then he made the critical connection: that shareholders are best served by organizations that focus primarily on serving customers! I would add a company is best able to serve customers if it also meets the needs – and earns the loyalty - of employees, vendors, and other key stakeholders. 

 

One size does not fit all: every situation is unique, and an organization must serve stakeholders in ways that truly strengthen the firm’s ability to capture and deliver value. Effective leadership, though, is leadership that focuses on serving others in meaningful ways.   It was especially heartening to hear this message from someone of Bill George’s stature and experience, and to watch an audience of emerging entrepreneurs listen intently to it.

 

 

I don’t mean to sound surprised that Bill George’s books are good, or that his talk was insightful. He’s truly an outstanding person, who exemplifies all that he recommends. However, I’ve read a fair number of books on leadership, encompassing the good, the bad, and the ugly. Not to mention the trite, the obvious, and the self-serving. These books are worth reading. As time goes on, I expect to share more about the broader literature, perhaps making some interesting connections between the various sub-genres of the leadership literature. At least, that’s my intention…

 

 

The J.J. Hill Blog space is still in beta, so we are not yet promoting this blog, but there are SOME readers. If you’re one of them (yes, that’s a joke), let me hear from you! Send me a comment through the blog or email me at cweinstein@jjhill.org.

 

Greetings! It is good to be back.

I spent last week away from the office, getting married.  Cathy and I went to Estes Park, Colorado, and stayed at an Inn in the shadow of the Continental Divide.  I am committed to keeping the focus of this blog on business, but it’s also a personal reflection on a range of topics, and this was, well, personally significant.  This personal note also affords me an honest introduction the topic of today’s entry.

 

I was talking with the photographer, Steve Cathcart (proprietor of Cathcart Photography), the afternoon before the ceremony.  His reputation preceded him, as a photographer, as a colorful character, and as a really good guy. He asked me what I do for a living, and so I told him (briefly, in deference to my fiancee’s rolling eyes).

 

I talked about the business benefits of doing the right thing, about creating an organization that brings out the best in employees, creates win-win partnerships with vendors, and engenders loyalty and enthusiasm in customers. Steve listened intently, and then looked a little puzzled.  He asked for some examples, and I told him a few stories. He understood what we’re up to, but the connection between doing the right thing and growing his business seemed obvious to him. Maybe, he thought, the work of the Center is more relevant for big firms. Then he told a story of his own.

 

Years earlier, Steve read about a “wedding photographer” in nearby Denver who bilked six couples, taking deposits and standing them up on their wedding nights. Cathcart worked with local merchants in Estes Park to give the couples a remarkable gift: a weekend away, tuxedos, flowers, and a judge to renew their vows.   All photographed, of course, free of charge. Innkeepers, florists, merchants, and even Kodak contributed. “Photos are important,” Cathcart observed. “When people leave a burning house, what do they take? Photo albums.”  

 

I asked him about the business benefits of his actions, and he smiled. “I did it because it was the right thing to do. But, we also got national media attention, including articles in two photography journals.” His Website also cites stories on Inside Edition and Montel Williams. (Not to mention notice on this humble Blog almost a decade later.)   The project also cemented relationships with vendors and partners, including the innkeepers who hired him as part of our wedding package.

 

Cathcart is also committed to delivering a valuable service and to meeting customer needs. He and his son do all of the photography, and both invest in considerable ongoing training and education. In fact, he teaches classes and seminars for other photographers. Cathcart charges an hourly rate for his services and cedes all copyrights to his customers, because his customers prefer doing business that way. 

 

Steve was right to wonder about how a very small business like his could benefit from thinking systematically and strategically about social responsibility.  His employee base consists of his two sons; as a digital photographer, he doesn’t even need traditional vendor relationships like a lab and photo supplies.  His work produces almost no waste.   As he talked about his business, we both recognized the crucial importance of relationships with customers and with those who make referrals. Those relationships, in turn, are based on quality and reputation, both factors over which he personally has extensive control.  What else does he need?

 

The challenges emerge as a business grows.  This small enterprise has been built on certain commitments to doing business the right way.   While it may not always be easy to do the right thing, it is relatively straightforward to honor those commitments. The owner makes the calls, and earns the trust of customers and referral partners. However, if a business like this is to grow, decisions will eventually have to be made, and actions taken, that are beyond the immediate control of the business owner.   Customers and partners will need to trust the firm in the same way that they currently trust the owner. That’s when a clearly articulated mission and values, well-documented processes, and excellent hiring and employee development practices become critical success factors. Those things, like the trust they promote and support, do not happen by accident. Even an outstanding photographer (or merchant, or mortgage broker, or restaurateur…) can benefit from experience and best practices in building their business.  As a business grows, trust can become harder to maintain and easier to lose.

 

Cathy later made an excellent point, as well. Estes Park is a small town.   Reputation is everything there, and actions speak volumes. Businesspeople succeed there by knowing this and by acting accordingly. That might have been why Steve seemed a bit bemused by the concept of consulting to help businesses to become more trustworthy, and to translate that trustworthiness into business gains. It is simply what he does.

 

Cathy grew up in Vermillion, South Dakota. It isn’t a tiny town, and the presence of the University extends the community beyond its borders, but everyone seems to know everyone else, and word travels fast.   I accompanied her father to the supermarket, and it seemed that everyone under a certain age greeted him with a cheerful “hello, Mr. Huber,” and his contemporaries slapped him on the back with a “Hey, Bill,” or a basic guy-joke about putting on weight or “being up to no good.”   When I returned to the same store unaccompanied, it was a much different place, not unfriendly, but not unlike any supermarket I have entered. It’s impossible to succeed in business in that kind of intimate social environment without earning and maintaining trust.

 

In an increasingly connected world, businesses compete less in anonymous, mass markets and more in a web of intersecting, small towns and communities of interest. In considering a purchase, we send out an email or post a question. In the absence of direct referrals for products and services, we turn to online reviews. We can spot phonies and shills a mile away. Many books have been written on how to communicate in this new world. One of the best is Gonzo Marketing, by Chris Locke (my hero among bloggers) and David Weinberger (a brilliant guy as well). 

 

Beyond communications, beyond marketing, this world calls us to act in ways that build trust. The stakes are higher than ever – the rewards for being trustworthy are greater than ever.   Being trustworthy is harder for organizations than it is for individuals, but it isn’t impossible.   In fact, that is what the Hill Center is all about.

 

See?  This posting was about business after all. And about life, well-lived.  Ethics, in short.