Leading With Meaning: Using Covenantal Leadership to Build a Better Organization
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Leading With Meaning: Using Covenantal Leadership to Build a Better Organization
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Overview
Product Details
| ISBN-13: | 9781466891678 |
|---|---|
| Publisher: | St. Martin's Publishing Group |
| Publication date: | 03/03/2015 |
| Sold by: | Macmillan |
| Format: | eBook |
| Pages: | 192 |
| File size: | 310 KB |
About the Author
Moses Pava is a professor of Business Ethics at Yeshiva University and author of eight books including Jewish Business Ethics. He currently lives in Springfield, Massachusetts.
Read an Excerpt
Leading with Meaning
Using Covenantal Leadership to Build a Better Organization
By Moses L. Pava
Palgrave Macmillan
Copyright © 2003 Moses L. Pava,All rights reserved.
ISBN: 978-1-4668-9167-8
CHAPTER 1
THE MANY PATHS TO COVENANTAL LEADERSHIP
Increasingly, many corporate managers are looking to the covenant model for inspiration, guidance, and most of all, practical business wisdom. This model is both ancient and new. The idea of covenant is deeply rooted in the rich soil of biblical narrative; the term describes not only the climactic events of Sinai and the giving of the Torah to the children of Israel, but echoes through every book of the Bible. Covenant is the central organizing theme of biblical thought. At the same time, it is also a new idea, or at least an old idea with startling new applications.
Though some managers exploit the religiously inspired language of covenant for purely self-interested reasons, other managers and executives — among them Tom Chappell of Tom's of Maine, Max De Pree of Herman Miller, Aaron Feurstein of Malden Mills, and C. William Pollard of ServiceMaster — express an authentic attachment to the idea. These executives have been the most articulate and the most extreme spokesmen for the application of the covenant model for business, and other companies have attempted to benefit from the concept, albeit in less explicitly religious terms. In fact, one might argue that the seemingly ubiquitous idea of "the stakeholder" descends directly from the blending of the covenant model and the more traditional theory of business. Corporate credos such as Johnson & Johnson's, with its emphasis on fairness and responsibilities to all affected parties, often resemble biblical covenants more than modern contracts.
DEFINING COVENANT
It is helpful, for our purposes, to start with a formal definition especially sensitive to the needs of modern business managers and executives:
A covenant is a voluntary agreement among independent but equal agents to create a "shared community." The primary purpose of the agreement is to consciously provide a stable social location for the interpretation of life's meanings in order to help foster human growth, development, and the satisfaction of legitimate human needs.
This definition is designed to highlight the most important characteristics of covenants. It suggests that covenants are: open-ended, long-term in nature, and respectful of human integrity.
1. Open Ended
Covenants emphasize mutual responsibility and respect but are purposely vague. Unlike the modern contract, in which more precision is always better, here ambiguity is not only tolerated but is built in by design and embraced. The hope is that the sparse but inspirational language of covenants will encourage new and deeper responsibilities to emerge over time. Not all companies will reach the level of CMP Media, the family-run, Manhasset, New York–based publisher that recently announced an average bonus of more than $25,000 for every one of its 1,750 employees. Nevertheless, in the context of a true covenant, all participants are expected to search actively and creatively for the best interpretation of the agreement — one that will benefit everyone in the long-run — and not the one that requires the least amount of effort. The Supreme Court's use of the U.S. Constitution sometimes provides a good example of the benefits that can be obtained from the kind of "loose" interpretation advocated by covenants.
2. Long Term in Nature
At the extreme, covenants are agreements that are expected to last forever. As in marriage, there are no pre-set time limits.
3. Respectful of Human Integrity
The agreement is meant to protect the integrity, uniqueness, and personhood of all covenantal parties. At the same time, it is understood that the covenant is a self-chosen mechanism for locking agents into a social entity. This last characteristic of covenants creates a paradox, and to the detractors of the covenant model this paradox is fatal. They argue that one necessarily has to choose: It is either individual freedom or social order, but never both. To the supporters of the covenant model, the paradox, far from being the Achilles' heel, is a source of great strength. Accordingly, it makes sense to say that we are simultaneously free agents and members of a living community. At their best, covenants promise us that we can have our cake and eat it, too. In fact, human freedom requires a background of social order and social order presupposes human freedom. The boxed quote on this page reflects one chief executive officer's way of overcoming the paradox inherent in covenantal thinking.
WHAT MAKES A BUSINESS COVENANT WORK?
As the covenant model increases in popularity, it raises many practical questions and issues. For example, is the explicit use of religious language appropriate for the modern, pluralistic organization? Consider the case of ServiceMaster, a Chicago-based outsourcing services company that employs more than 200,000 people and serves more than 6 million customers in 30 countries across the world. The company earned revenues of more than $4 billion in 1997 and was ranked 373 in the Fortune 500 list. But do the company objectives — "To honor God in all we do; To help people develop; To pursue excellence; and To grow profitably" — cross some implicit but well-accepted line? Ironically, for those who don't take the language seriously, there is little concern about mixing religion and business. On the other hand, for those of us who do, it represents an issue that needs to be addressed carefully. Similarly, other questions about covenants can be raised: To the extent that one purges religious language, does one really have a right to invoke the covenant model at all? Can the covenant model, with its pre-industrial roots, really help in the context of the modern purposive organization? After all, in order for an organization to survive, it must produce tangible results for stakeholders. Can a corporation committed to creating a "stable social location" remain competitive and be expected to fire employees if and when the need arises?
Our research at Yeshiva University's Sy Syms School of Business, the only business school in the United States under Jewish auspices, suggests that although each of the above issues is important in its own right and needs to be addressed, the most fundamental answer to the question of what makes a business covenant work is covenantal leadership. Again and again in our research one thesis emerges: Covenantal organizations require covenantal leadership.
Covenantal leadership is not a single characteristic or virtue; there are many paths to covenantal leadership. This chapter introduces some of these.
The metaphor of many paths is useful as an organizing principle for a variety of reasons. First, the imagery of paths implies that the characteristics identified here are aspirations rather than resting places. To put this thought in a slightly different way, one is never a covenantal leader — at best, one is on a path to becoming a covenantal leader.
Second, "many paths" is meant to imply a multileader paradigm. In theory, at least, every covenanter is a covenantal leader. Though this is obviously an unrealistic ideal in today's business environment, it is a direction that covenantal organizations try to take.
Third, the picture of many paths leading to a single location is desirable because it emphasizes the pluralistic nature of modern organizations. This aspect of covenantal leadership is important and needs to be made explicit for everyone involved in organizations, but is particularly important for those advocating more religion in business. In the absence of pluralism, religion in business is a potential nightmare.
Finally, the paths of covenantal leadership are many but not lonely. The paths intersect one another at various points. It is possible to get from here to there by changing paths at crucial points. Unlike the poet Robert Frost who noted with elegance, wit, and melancholy his choice of taking the road "less traveled by, and that has made all the difference," covenantal leaders are not imprisoned by previous decisions. Each of the paths discussed below supports and reinforces the other.
THE PATH OF HUMANITY
To some, it may seem like an unconventional place to start a discussion about an idea whose origins are obviously religious, but to the authentically religious minded, covenantal leadership begins first with a proper focus on people and not God. Covenantal leaders, like the biblical hero Noah, are always building arks big enough to ensure the survival of the human race.
When the bible turns its attention to covenants, a key word that appears over and over again is hesed, which is usually translated as loving-kindness. The best way to think of hesed is as active caring in the context of community. In Jewish thought, hesed is considered so important that it is listed as one of the three pillars upon which the world stands.
Covenantal organizations require leaders who walk the path of humanity. To do so, leaders need to be engaged in active caring. Covenantal leaders ask employees about their family lives not because it is the polite thing to do, but because they are really interested in the answers. A covenantal leader will keep idle employees on the payroll even while a burned-down factory is being rebuilt, as Malden Mills' Aaron Feurstein recently did. It's not just doing the right thing, but it's doing the right thing for the right reasons. Hesed is the glue that holds covenants together.
In the business context, many experts are beginning to emphasize the importance of trust and reputation. Fortune's widely cited and studied annual survey provides a useful and robust measure of corporate reputations for top U.S. companies. Trust is important and is becoming more so. Many executives and consultants talk as if trust is something that one can buy and sell in the marketplace. One hears talk of investing in trust. For covenantal organizations, however, trust is not something that can be easily manipulated. Rather, trust is an outcome of a stable pattern of active caring. In fact, it may be the case that genuine trust needs to be earned in the context of an overarching covenant. Covenants are not a panacea, but in the absence of an explicit covenant — an agreement among equal agents — why trust the trust promoters?
THE PATH OF NO ILLUSIONS
The path of humanity is the first that leads to covenantal leadership. Supporting and extending this first path is the second, the path of no illusions. Active caring is necessary for covenantal leadership but not sufficient. An undisciplined caring may be more dangerous than no caring. In fact, the case of Malden Mills, which is now facing the possibility of bankruptcy, raises some pointed questions about Aaron Feurstein's decision to keep idle employees on the payroll. The path of no illusions is an attempt to eliminate all kinds of magical thinking. The emphasis is on pragmatism. An authentic monotheism implies that only God is God, that everything else is humanly created. The prophet Micah, among others, talks of a future age when there will be no more "enchantments and witchcrafts." The best covenantal leaders recognize that Micah's vision has yet to be realized but is worthy of our attention.
An overriding implication of this second path is the realization that while we may have invented new and more sophisticated secular enchantments, we must still recognize them for what they are. The well-known sociologist Peter Berger continually reminds us that all institutions are humanly created. This is obviously a tautology, but a tautology often forgotten. Those business leaders on the path of no illusions recognize (among other things) that there is no such thing as the "bottom line." In fact, the maximization of profits to the exclusion of everything else has often turned into a kind of fetish. Profit maximization fails the no illusions test because it chooses to ignore the obvious fact that the very concept of profit is a human construction. This thought is apparently just as difficult for some top-level corporate executives to grasp as it is for some of my beginning accounting students.
One of the great myths of business is that God gave GAAP (generally accepted accounting principles). The truth is, of course, corporate performance has many dimensions and cannot be captured through a single number no matter what we call that number. Performance is an array that includes short- and long-run financial considerations (including risk factors), environmental impacts, product quality and safety, employee satisfaction, managerial compensation, and community and global responsibility. Executives and others who continue to conceptualize corporate performance as a single number are uncertain about what is being asked of them. They are under the illusion that the bottom line is the only thing that counts. Covenantal leadership is committed to an alternative path, the path of no illusions.
THE PATH OF INTEGRATION
Covenantal leadership requires integration. The dictionary defines integration as the process of "making into a whole by bringing all parts together." Integrity is part of integration, but not the whole of it. According to the above definition of covenants, value is created as an output of integration. Although it is an oversimplification, it makes sense to state that to covenant is to integrate.
In organizational life, my own university provides a paradigmatic example of how value can be created through integration. The guiding vision of Yeshiva University is the belief that "the best of the heritage of contemporary civilization — the liberal arts and sciences — is compatible with the ancient traditions of Jewish law and life." This integrationist philosophy is embodied at the undergraduate level in the dual curriculum under which students pursue a full program of Jewish studies while taking college programs in the liberal arts and sciences and business. On the graduate level, the mission of the university is put into practice through the emphasis "of the moral dimensions of the search for knowledge and ethical principles that govern professional practitioners." The motto of the institution is "Torah Umadda," which, roughly translated, means religious learning and secular knowledge. For those looking for a postmodern philosophy that steers away from the easy nihilism and pessimism of some of the more popular versions of postmodernism, this integrationist philosophy deserves study and emulation.
In business, integration has many faces. Using old technology for new purposes, creating alternative relationships among purchasers and suppliers, and creatively linking the for-profit and the not-for-profit sectors all illustrate the path of integration in business.
A classic example is Sears, Roebuck's introduction of the role of the farm agent in the early part of the twentieth century. Julius Rosenwald knew that in order for his new mail-order business to succeed, his company needed a robust farm economy. Rosenwald understood that the real problem for the American farmer was a lack of understanding and acquaintance with the new and emerging farm technologies. For ten years, Rosenwald financed the farm agent until the U.S. government took over. In creating value, Rosenwald was able to integrate his knowledge of the mail-order business with his knowledge of agricultural technology. He combined a sense of social responsibility with the goal of earning a fair profit for the company. His mind-set was not either-or, but both-and.
THE PATH OF MORAL IMAGINATION
Integration and, more generally, covenantal leadership, require honesty, fairness, and justice. The path of moral imagination starts with these bedrock concepts but goes beyond them. Moral imagination recognizes that no predetermined set of rules can encompass all moral decision making. It can be formally defined as the ability to see various imaginative alternatives for acting within a given circumstance. It allows the agent to foresee the potential benefits and harms that are likely to result from a hypothetical decision. According to the business ethicist Patricia Werhane, what is really interesting about moral imagination is that it allows one "to step back from one's situation and view it from another point of view. In taking such a perspective a person tries to disengage herself from the exigencies of the situation to look at the world or herself from a more dispassionate point of view or from the point of view of another dispassionate reasonable person."
If integration is what covenantal leaders do, then moral imagination describes how they do it. Although the formal definition provided above is important, the real key to moral imagination is the following insight: At its best, moral imagination lets us continue to be who we always were — only better. In the Jewish tradition, moral imagination has been enhanced and promoted through the use of storytelling, interpretation, and the brilliant application of the distinction between the written and oral law. Covenantal organizations require moral imagination. In many ways, the path of moral imagination helps such organizations overcome their inherent conservative tendency. In some instances, even in the context of covenant, moral imagination can be revolutionary.
(Continues...)
Excerpted from Leading with Meaning by Moses L. Pava. Copyright © 2003 Moses L. Pava,. Excerpted by permission of Palgrave Macmillan.
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Table of Contents
The Many Paths of Covenantal Leadership * The Path of Humanity * The Path of No Illusions * The Path of Integration * The Path of Moral Imagination * The Path of the Role Model * The Path of Moral Growth * Integration and the New Responsibilities * Conclusion: Covenantal Leadership as Teaching