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BIG HEART, BIG PROFITS
Liberating the Soul of Business
By Tom McDonald
Balboa PressCopyright © 2013 Tom McDonald, Ph.D.
All rights reserved.
Truths Of The Heart
"Leaders who win the respect of others are the ones who deliver more than they promise, not the ones who promise more than they can deliver." – Mark A. Clement
Considerate businesspeople are masters of both their internal world and their business environment. They get the work of their business done not by doing it themselves, but by doing it through other people. They know that trust and respect are central to business success. When these qualities are present, employees always work harder and smarter and get the job done faster and better. And they become friends in the process. According to Jack Mitchell, CEO of the clothing stores Mitchells/Richards/ Marshs, all of his people genuinely like and root for each other, creating a niceness culture that permeates the whole business. Conventional leaders don't seem to know this. Or if they do, they think it's too difficult to put into practice. To reverse this, we need leaders who are considerate toward other people and know how to create a caring environment at work. For them, it is not the COO, VP/MIS or the CFO who are the most important leaders in a company today, but the VP of Human Resources. You always beat the competition by fielding the best team. You need to know: Companies like Google and Timberland consciously put people first in their business paradigm and outperform the S&P 500 by significant margins, returning to investors 1,026 percent compared to 122 percent % – more than an 8:1 ratio!
Memo 1: Trouble In Paradise
The growing realization that soul-filled strategies, skills and tools are good for business couldn't come at a better time. Simply put, the world economy has been battered. With the loss of trillions of dollars in companies' value and the arrival of a global recession, one can only say that yes, there is serious trouble in paradise. Add stricter accountability standards and regulations because of unsettling ethical lapses, threats of terrorism and really ugly unemployment numbers, and it can be said honestly that the soul of business has been bruised mightily. For any healing to take place we need leaders and workers who have a different perspective on how business should work and a different set of strategies, skills and tools to make it happen. At root, this new approach is based on the centrality and nobility of people at work. A Dutch poster, reported by Jurriaan Kamp of Ode Magazine says it fully: "Human beings weren't created to keep the economy going. They want and deserve so much more out of work."
Unfortunately all this has become necessary at a time when trust and mutual respect in business are at their lowest point ever and are continuing to drop. At U.S. companies, 76 percent of employees say they have less trust in senior management than they had the year before; at non-U.S. companies, 51 percent say their trust has eroded. Workers under 25 express the highest level of dissatisfaction (roughly 64 percent say they are unhappy in their jobs). Layoffs, cutbacks, diminishing benefits, disappearing bonuses and negligible, if any, salary increases have set the stage for disgruntled employees to begin to head for the exit. To put it succinctly, people want more trusting relationships at work or they will begin to walk out that door. If you need proof, a startling 42 percent of managers report that their people are planning to move on once the economic recovery firms up.
Now executives, managers and supervisors have to produce significant results and they have to do it in a very different way. Before, CEOs needed a high degree of organizational skills, great attention to detail, persistence, efficiency, analytic thoroughness and the ability to work long hours, for their businesses to be successful. Today, they operate in organizations that are f lat, as Pulitzer Prize winner Thomas Friedman describes them, more like networks than pyramids. Decision-making has shifted from a vertical to a horizontal plane. Leaders can't simply give orders any more, expecting lockstep compliance. Now they have to negotiate with others and influence them in new and different ways. This involves relating to them as whole persons.
This is also true in the relationships between a company's service personnel and its customers. That interaction is changing too. AMEX's customer service czar, Jim Bush, now sees every interaction with customers as an investment in building better relationships. His department is able to show that increased satisfaction increases engagement with AMEX's products, and that drives shareholder value. They get that a big heart in business leads to big profits, the concept that this book espouses.
This attention to human capital management is the common thread among the Most Admired Companies in America, chosen by Fortune. Recent studies conducted by the Hay Group, have identified the business practices that make these companies both highly regarded and highly successful. These organizations involve employees at all levels in promoting efficiency and innovation; they train their managers in the art and science of coaching their people; they recognize the importance of work/life balance; they keep current the skills of their people and they systematically hook rewards to performance. What does this accomplish? Strong and sustained performance levels well beyond those of their peers.
These soul-filled leaders are rallying around a new set of caring qualities that make them considerate, empathic, thoughtful, altruistic, inspiring, concerned, earnest, stimulating, devoted, benevolent, respectful, generous and yes, even loving. No one possesses all these qualities completely, nor are they expected to undergo a massive personality change to develop them. But caring leaders strive to possess a critical mass of these attributes, enough to separate them out from all others.
A full 40 percent of executives, including Bill Gates, Warren Buffett, Charles Schwab and Doug Conant, until recently CEO of Campbell Soup, describe themselves as introverts, quietly skilled at dealing effectively with this deeper internal world in business. Other studies find them to be humble, self-effacing, diligent and resolute. From all these qualities, you can get a feel for the kinds of people who will lead us out of the business malaise we're in.
No longer can we afford to have our leaders be soulless individuals either, with personal qualities that make them inconsiderate, narcissistic, thoughtless, egotistic, demoralizing, unconcerned, insincere, discouraging, cold, selfish, disrespectful, greedy and especially, unloving. Again, no one has all these qualities but you get a feel for the kind of person who will not lead us out of the turmoil we're in. The problem is that, according to management guru Ken Blanchard, only 16 percent of leaders say their companies have a comprehensive plan for developing new leaders, while 26 percent say that their company offers very little in the way of training for new managers. There is some hopeful news, however. A recent survey of nearly 11,000 leaders found that more than 50 percent of them chose "interpersonal skills" as their top area for improvement!
Employees are feeling the pressure too, and are quite restive. They want to be treated better on the job. According to some studies, on average 76 percent of all workers across all organizations generally enjoy the work they do. But even with this, they still want greater recognition and support. According to other studies, the majority of today's workers (50 to 75 percent, depending on the survey you look at) are seriously unhappy with their jobs. Yet if they felt more included in the business, the vast majority say they could and would increase both the quantity and quality of their output. But this is not easily done when only 10 percent of leaders are deemed to be effective. Yes, paradise has its troubles. But there is hope, too. What's required to get beyond this point is a mental shift on everyone's part that moves from caring only about people's performance to caring about their minds and hearts, the soul that leads to that performance.
Memo 2: Capturing The Souls Of People
Both leaders and workers are under unrelenting pressure and their relationship has begun to suffer. Just 9 percent of employees say their relationship with management is extremely positive, while nearly half call it lukewarm or negative. Bosses often think employees are malingerers, while too many employees have lost confidence in the very people who are supposed to lead them. Frankly speaking, our workplace is coming up short in this soul work, as author Matthew Fox calls it. Nobody is happy with this increasingly pernicious environment. Nor is it good for business. If there ever was a time when we needed to reanimate the workplace and figure out new ways of putting people first, the time is now. Studies show that the extent to which companies care about their people and the degree to which employees trust their leaders are at least twice as important as pay and three times as important as benefits to those involved. Not everyone is so impressed with these findings. While they admit there is widespread dissatisfaction with work, they ask rather cynically, so what? Yes, people find a lack of satisfaction at work, and yes their work/life balance is out of whack, and yes their work is often robot-like, but, not to sound repetitious, so what?
These tough-minded observers say that on-the-job dissatisfaction goes with the territory of work. It's not that things aren't bad; it's that they've been this way for a long time and will most likely continue to be so. They think that too many people have been taught to expect too much from their jobs. Because we've romanticized work (so they say), this search for workplace nirvana always comes up short. No place can fulfill the fantasy.
I strenuously disagree with this view. Work is not something we should merely have to tolerate; it is something we should want to embrace. I have never met anyone who jumps out of bed in the morning and says, "I can't wait to get to work so I can be as unhappy as I can be." It's just not natural. On the contrary, we all seem to want to do work that is meaningful. And do it in a place where people are pleasant and bosses are appreciative. It is our soul's uniquely human search for meaning that drives this desire. And if history has taught us anything, it's that over time, this positive viewpoint always wins out.
Organizations are slowly beginning to realize how important it is to have a soul-filled platform that guides them. Fortune's annual list of the 100 Best Companies to Work For is one such rating organization. It separates the best from the rest. So does The Gallup Organization's Great Workplace award, which designated Campbell's a Great Workplace four times since 2007.
In a myriad of ways, caring leaders literally take care of their people. Campbell's, for example, has successfully run for the last decade a commitment program called "Campbell's Valuing People, People Valuing Campbell's." Strategies like this get business results – a 2007-2008 study by consulting firm Towers Perrin (now Towers Watson) found that companies with high employee engagement posted 19 percent higher operating income and 28 percent higher earnings per share than average companies. Likewise, a 2009 study by Gallup found that companies in the top 10 percent for employee engagement boosted earnings per share at nearly four times the rate of companies with lower scores. Another study confirms the numbers: About $350 billion per year is lost because of employee disengagement! But according to the Forum for People Performance Management and Measurement (now simply the Forum), we should take a step further, going beyond this idea of "engagement" in favor of a more expansive concept of "enrichment." In this approach, people are the priority, period. Take care of them first and then you can figure out how to make profits. Whether you choose to develop an engaged or enriched environment, you are choosing to make the human soul your platform at work, with strategies, skills and tools that will make the minds and hearts of your people ever more successful. And as we will see later from another Forum research project, there is a direct link between engaged and enriched employees and more positive organizational performance financially!
Memo 3: The Intangibles
Liberating the human soul at work means conducting business in ways that can largely be described as people-focused. Carlos Slim Helú, the richest person in the world, has 250,000 people working for him throughout his global holdings, based in Mexico. The key to his success? He believes that you can't do anything without your human capital. Employees are seen first and foremost as human beings and are therefore treated as whole persons, not as cogs in a business machine. Other caring leaders think the same: They engage fully in human capital management, seeing their people as assets to be grown, not costs to be cut to improve profits. They call what they do high-involvement, high-performance or high-commitment leadership behaviors. They cite something like emotional or social intelligence, even spiritual intelligence, as their guiding source. Whatever you call it, these cutting-edge leaders are using unique strategies, skills and tools to liberate the minds and hearts of their people, the soul of their business. Call them Human Capital Professionals.
In fact, there is a nascent movement underway, known as Spiritual or Compassionate Capitalism or a Leadership of Kindness, that is doing just that. Its supporters believe that taking care of business really means taking care of people. Proponents see it not only as a way of doing good but a way of doing good business too. According to Whole Foods Market head John Mackey, what he calls Conscious Capitalism will become the dominant paradigm of business in the 21st century! Contrarian economist Noreena Hertz would agree. Markets need to serve the interests of people as much as they serve the demands of business. She aptly calls it Ethical Capitalism.
The new rules of the game are taking shape, as you will see. But we have to be specific. What, in fact, do caring leaders do to guarantee excited employees and superior financial results? What business strategies, leadership skills and management tools go into nurturing this liberation platform, in both good and hard times? Based on what successful leaders report, what the metrics show and what personal experience confirms, here's my take on what should be included:
# 1. Create an environment of respect
# 2. Make work interesting
# 3. Recognize and reward consistently
# 4. Focus on work/life balance
# 5. Communicate honestly
# 6. Turn on brainpower
# 7. Leverage the power of teams
# 8. Create opportunities for professional growth
# 9. Convene people effectively
# 10. Make training pay off.
Each of these strategies, together with the skills and tools that go with it, addresses a specific human need of people in business and can therefore be dealt with somewhat independently from the others. Each one will help you reach your potential in slightly different ways. You can, for example, focus on the need people have to be treated with respect at work. Or emphasize keeping life and work in balance. Maybe crafting interesting work becomes your priority. Or developing a culture of recognition and reward at work. Each is valid in its own right and worthy of your considerable attention. You will see, however, that while these strategies, skills and tools are necessary to get good, documented results in distinct areas, something greater is required to face today's hyper-challenging business world. Something more is needed to pull them all together. That something extra, that sustained boost of power, emerges when you take all these strategies, skills and tools and put them together as a platform of principles for all your business endeavors. Therefore the final, surprising strategy that ties all the others together into a working ecosystem that propels you and your organization to a whole new level is strategy:
#11. Use love as your business driver.
This is how you finally and fully liberate the soul of your people so that their big hearts can lead to big profits.
Excerpted from BIG HEART, BIG PROFITS by Tom McDonald. Copyright © 2013 Tom McDonald, Ph.D.. Excerpted by permission of Balboa Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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