Hundreds of thousands of small to medium-sized businesses that form the foundation of our economy were founded and managed by honest, hard-working entrepreneurs. For many of these stalwarts in business, ethical behavior isn't something they learned in a seminar — it's natural. It's who they are. Jack Burke explains that good leaders don't manage numbers; they have the tools for a deeper understanding of business as it relates to society.
Warren Bennis has been the proverbial leader when it comes to leadership, having written more than 25 books on the subject during the past 40 years. In Old Dogs, New Tricks, Bennis wrote:
“Today's leader has to take into account all of the stakeholders and not just the shareholders. The individual has to create a balance among these groups, despite the fact that, collectively, they might have conflicting objectives. Leaders must pay attention to the goals and purposes of the corporation and ask the question, ‘To whom is the business responsible?' Many executives might say the shareholders — and no one else … but that overlooks other stakeholders, including employees, customers, and the community.”
Those powerful words, written in 1999, perhaps have even greater meaning today. Leaders of major corporations have destroyed the confidence of the greater community through unbridled self-interest and unethical manipulation of numbers to benefit share value.
Is our society that amoral and unethical? I believe not. But I do believe that many of the “Baby Boomer/MBA” generation of leadership lack the essential building blocks of character.
Back in the 60s, colleges were overflowing with students for any number of reasons — including rising parental wealth and the Vietnam War. The students who were driven to success focused totally on their career niche. Specialty schools within the colleges flourished like trade schools in a blue-collar town. Liberal arts curricula, according to the more focused students, were populated by the great unwashed — those evading the draft or undecided about their life goals.
Upon graduation, business majors — like premeds — immediately went on to gain their MBAs at the most prestigious schools possible. Two years later, corporations competed for these highly trained young MBAs. Organizations such as RCA created “Fast Track” programs to quickly acclimate them to their corporate entities and move them into executive offices. Today, many of these “fast-trackers” are corporate CEOs.
Unfortunately we have a generation of highly skilled business technicians who are lacking in the people skills of leadership. They manage numbers (or mismanage them, as the case might be), but don't have the tools for a deeper understanding of business as it relates to society.
In the past, business leaders often grew in wisdom through the experience of building their business. Their people and leadership skills often surpassed their financial acumen, which they shored up by hiring the necessary professionals. Companies were valued for their products, their managerial expertise, and their profitability. Stock value generally reacted to those factors. An efficiently managed company with a good product and reasonable profits could be expected to have a fair stock value.
Now that doesn't mean that the past wasn't rampant with “cooked books” and financial scams. Corporate skullduggery has been a fact of life from the Railroad Barons to the S&L debacle, and the days of Milken. After all, power and greed are hungry bedfellows.
This brings us back full circle to today. Recent events such as the Enron scandal somehow seem more sinister. Seldom have corporate bandits pillaged every aspect of the business culture — employees, clients, investors, and the community. There seems to be a blatant disregard of everyone and everything. Employees lose not only their jobs, but their future financial security. Clients are not only overcharged, they're raped. Investors are merely available pockets to empty, and the community is left holding the bag.
Several years ago, I had the privilege of hosting Warren Bennis at my office for a day. Our conversation naturally veered to the state of business leadership. Warren said that if he had to do it all over again, he'd do it differently. He had come to realize that a liberal arts education opens the mind to the wonders of art, history, and literature: Wonders that help to form the basic character of an individual providing an education that first teaches one to “think,” and then later to “do.”
Warren felt, and I agree, that MBA candidates should be required to first obtain a liberal arts education followed by at least four years experience in the workplace. Then the MBA program should be four years on an alternating work/study basis (six months of school, followed by six months of application experience at work). The net result: Potential leaders with a broad-based education supporting their technical skills, and all of it wrapped in experience. Obviously, this would only be a first step in addressing the problems of today, but it could be a significant step toward building a better future.
We need leaders with character. We need leaders who are devoted to the business of their business. We need leaders who understand, appreciate, and nurture the symbiotic relationship between company, employees, clients, and community. We need leaders who understand that stock value should only be one benchmark of their business, rather than thinking that their business is the manipulation of the stock value. We need leaders who are not only intellectually aware of ethics, but are personally committed to ethical behavior. We need leaders who walk the walk while they talk the talk.
Is this pursuit of good leadership a pipe dream? I think not. Just look around at the hundreds of thousands of small to medium-sized businesses that form the foundation of our economy. The vast majority were founded and managed by honest, hard-working entrepreneurs. For many of these stalwarts in business, ethical behavior isn't something they learned in a seminar — it's natural. It's who they are.
I've also seen a groundswell of spirituality beginning to surface in the business arena —not religion, but spirituality. Although religion might provide the underpinnings, I'm talking about the essence of human behavior. This behavior supports the positive facets of an individual, puts the greater good ahead of individual gain, empowers one person to benefit another, and penalizes (rather than rewards) avarice and greed.
We've all been victims of an egomaniac at one time or another. Their self-inflated ego limits their educability. Their only concern is self-interest. I think of “ego” as an acronym for “Edging Goodness Out.” Self-serving ego doesn't drive great leaders. They acknowledge a vested interest in all five components of business: Company, employees, clients, investors, and community. They consider themselves to be benevolent servants of the business: A worker among workers.
In 1994, I finally got to know neighbors whom I had lived amongst for years. It wasn't any outpouring of community spirit on my part; it was the Northridge CA earthquake. We came together in adversity to help each other, putting the interests of the community ahead of our own petty frustrations. On 9/11, we again witnessed the world coming together in a common spirit when facing horrendous terror. As one neighbor asked in 1994, “Why didn't we come together before there was a tragedy?” These are the events of history from which we need to learn. We should seek out the joy in events and people that cross our paths. We should look for commonality in spirit and set aside the negative temptations that surround us. Leaders should set examples for us to emulate as they guide us toward the greater vision.
It's been said that the true worth of a person is measured by friendships, not money, power, and prestige. Because friends help one another in good times and in bad, it's time to concentrate on building the wealth of friendship through caring consideration. If we wait until we need a friend, it might be too late to make one.
Although greedy and dishonest behavior will always be with us, these can become rare — if we all commit ourselves to working for the greater good. There's more to leadership than first meets the eye.