Does Power Corrupt?

 

Dacher Keltner in a 2016 article highlights how “while people usually gain power through traits and actions that advance the interests of others, such as empathy, collaboration, openness, fairness, and sharing; when they start to feel powerful or enjoy a position of privilege, those qualities begin to fade. The powerful are more likely than other people to engage in rude, selfish, and unethical behavior. The 19th-century historian and politician Lord Acton got it right: Power does tend to corrupt,” (p.112).

 

When you think about ‘power’ it’s a strange attribute – very few people strive for ‘power’ on its own, though I accept there are the exceptions that do exactly that. I believe the majority of people don’t look for the power itself, they look for the ‘position’ whatever that might be – captain of a soccer team; leader in business; leader in their community; leader in government; or even an entrepreneur. As people strive for these positions they are rarely aware of the personal ‘power’ this brings, and believe they think more about the ability to shape the future (in a positive way) – it’s only when they are in these positions that the ease and temptation to use power to get things done, above other more positive traits, starts to raise its ugly head – and people start to change. 

 

Keltner highlights how “in an experiment, Paul Piff of UC Irvine and I found that whereas drivers of the least expensive vehicles – Dodge Colts, Plymouth Satellites – always ceded the right-of-way to pedestrians at a crosswalk, people driving luxury cars such as BMW’s and Mercedes yielded only 54% of the time, nearly half the time they ignored the pedestrian and the law. Surveys of employees of 27 countries have revealed that wealthy individuals are more likely to say it’s acceptable to engage in unethical behavior, such as taking bribes or cheating on taxes. And recent research led by Danny Miller at HEC Montreal demonstrated that CEO’s with MBA’s are more likely than those without MBA’s to engage in self-serving behavior that increases their personal compensation but causes their companies’ value to decline,” (p.113).

 

Its interesting research and each of us will have our own experiences, and hence opinions. For me, I totally agree with the research – I have found people in positions of power to behave more arrogantly and selfishly than those that have less. In fact there was an interesting research study done recently on homeless people begging on the streets of America – and it found that in many cases those that could afford to help didn’t, and passed the homeless person quite aggressively; and it was in fact those that had a little and maybe had once been homeless themselves that would stop and help.

 

Obviously this isn’t a one cap fits all scenario and I know there are many wealthy people who support their communities on a regular basis and don’t look for the recognition of their deeds; more often than not these are the wives, girlfriends and daughters of wealthy people who will support different local causes.

 

Keltner mentions that “the consequences can be far reaching. The abuse of power ultimately tarnishes the reputations of executives, undermining their opportunities for influence. It also creates stress and anxiety among their colleagues, diminishing rigor and creativity in the group and dragging down team members’ engagement and performance. In a recent poll of 800 managers and employees in 17 industries, about half the respondents who reported being treated rudely at work said they deliberately decreased their effort or lowered the quality of their work in response,” (p.113).

 

This is an incredible statistic, yet it probably hasn’t made a dent in the poor behavior and the abuse of power. Why? Because these power players are also good at covering their own backs – it’s never their fault when things go wrong and they seem to be masters at blaming others. Yet when things go well, it’s because of them and their leadership – where they play down the involvement of others. What’s incredible is that the senior leadership and corporate boards of organizations around the world seem to be oblivious to this basic kind of corporate bullshit; and blindly accept these peoples explanations of events – possibly because they are ‘content’ with performance. This sadly raises another key issue for organizations which is too many corporate boards are not fit for purpose; and filled with self-driven egotistical males (in too many cases) who also love the ‘power’ that comes with the role and don’t want to challenge the status quo.

 

So the misuse of power will continue in organizations and suboptimal results will be signed off by boards; until there is a complete shake up in how we conduct business and ‘we’ reintroduce genuine corporate values once again – and hold people accountable.

 

So that’s the bad news – but it doesn’t have to be this way. So what can we do about it? Keltner suggests that “you can outsmart the power paradox by practicing the ethics of empathy, gratitude, and generosity. It will bring out the best work and collaborative spirit of those around you. And you, too, will benefit, with a burnished reputation, long-lasting leadership, and the dopamine-rich delights of advancing the interest of others,” (p.115).

 

It simply goes back to basic values and concepts like treating people as you’d like to be treated. You know what it feels like to be led by a ‘power’ driven leader, the impact it had on your motivation, performance etc – so knowing the impact it had on you, you must know the impact it will have on your employees if you adopt the same approach. There’s no excuse to use power other than you have been over-promoted and are out of you depth. In these situations be honest with yourself and seek advice and counselling outside of the work environment; get feedback from your employees and work to be the best leader you can be.

 

Conversely you know the kind of leader who motivated you to perform, to exceed expectations – the kind of leader that made going to work enjoyable – the kind of leader you wanted to follow and were loyal too.

 

It’s not rocket science and it’s time corporate boards and other key stakeholders demanded leadership excellence in their organizations – as they know if they do, that performance will get even better and the company will become stronger and more efficient. Leaders who misuse power should be counselled and given support to change their style; and if they can’t change over a reasonable period of time then they need to be removed from the organization. This is the only way to change the negative impact of power in organizations.

 

As Jack Welch said “before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others.”

 

References:

 

Keltner, D. (2016). Managing Yourself: Don’t Let Power Corrupt You. Harvard Business Review, October, p.112-115.

Do You Believe in Transformational Leadership?

Transformational leaders try to develop their followers’ full potential (e.g., Bass, 1985; Johnson & Dipboye, 2008); therefore, followers tend to feel that their organization is effective and that it can provide future opportunity and development. As such, it is expected that followers will be more likely to stay in the organization because they are satisfying their needs for self-categorization/self-identity, and they have a sense of being unique from other members in society. Organizational identification is therefore likely to be strengthened.

 

Wang and Huang state in a 2009 article, that “in the last few decades, within the field of leadership, transformational leadership behaviour has come to represent the most effective form of close engagement between leaders and followers that motivates the latter to perform beyond their transactional agreements. Robbins (2001) defined transformational leaders as, leaders who provide individualised consideration and intellectual stimulation, and who possess charisma,” (p.381).

It was the late Bernard Bass (founding editor of the leadership quarterly journal) who back in 1990 attributed four behavioural characteristics to a transformational leader: charisma, inspirational motivation, intellectual stimulation and individualised consideration. It was only later, in 2003, when John Antonakis, Bruce Avolio and Nagaraj Sivasubramaniam replaced the characteristic of charisma with, what they termed, idealised influence.

Wang and Huang (2009) remind us that “a leader only possesses idealised influence if his or her followers seek to identify with, and want to emulate, him of her. This type of leader is admired, respected and trusted.” Further, “transformational leaders behave in ways that;

1) Motivate and inspire their followers by providing meaningful challenges;
2) Encourage followers to envision attractive future states, which they can ultimately envision for themselves; and
3) Aim to expand their followers efforts in terms of innovativeness and creativity by questioning assumptions, reframing problems and approaching old problems in new ways;” (p.381).

Research has also linked transformational leadership with levels of emotional intelligence. Where, for example, Wang and Huang mention that “emotional intelligence is an emerging topic within psychological, educational and management research, and that it was Daniel Goldman back in 1995 who suggested that the best predictor of who eventually emerges as a leader is based on emotional intelligence (EI), which includes abilities such as;

Self-Awareness;
Self-Management;
Self-Motivation;
Empathy; and
Social Skills.”

 

John Ryan from the Center of Creative Leadership mentions that "as we explore what's new and meaningful on the frontiers of leadership development, we do know this: the context in which leadership happens is changing every day in every sector. We are living in a VUCA world: one characterized by Volatility, Uncertainty, Complexity and Ambiguity and will be for years to come. In a dizzying swirl of socio-political upheaval, natural disasters and volatile business markets, many of us stay awake at night wondering if our skills and knowledge are enough to see us through tomorrow or the next quarter. Seeing farther than that is even more daunting and yet we have to keep searching."

The findings from Wang and Huang’s study “indicate that leaders exhibit more transformational leadership behaviour when they have the ability to perform self-emotional appraisals; others’ emotional appraisals; regulation of emotions and constructive use of emotions. Their findings support the view that emotional intelligence is an important variable for understanding and predicting transformational behaviour. Their results also contribute further evidence that transformational leadership influences not only individual level consequences, but also group level consequences,” (p.389).

 

Genuine transformational leaders possess great referent and inspirational power (Bass, 1985) which enables them to gain the respect, admiration, and trust of their followers. They are also seen as role models who exert significant and positive influence on followers that creates a sense of meaningfulness (Bass, 1985). Employees who experience a greater sense of meaning from their work are likely to feel more empowered (Spreitzer, 1995) and proud of being a member of the organization, and thereby enhance their identification with the organization (Koberg et al., 1999).

 

In their HBR article from 2012 Boris Groysberg and Michael Slind highlight that “smart leaders today engage with employees in a way that resembles an ordinary person-to-person conversation more than it does a series of commands from on high. Furthermore, they initiate practices and foster cultural norms that instill a conversational sensibility throughout their organizations. Chief among the benefits of this approach is that it allows a large or growing company to function like a small one. By talking with employees, rather than simply issuing orders, leaders can retain or recapture some of the qualities that encourage operational flexibility, high levels of employee engagement, and tight strategic alignment.”

In the last few years transformational leadership has become one of the dominant leadership theories and applications for successful organisational development. Occasionally as a leader, it’s worth stepping back and asking; are you a leader who is admired, respected and trusted by your followers and your peers – do people in your organisation strive to be like you? An honest reflection will help you understand the difference between just being in a leadership position and actually being an effective transformational leader.

References:

Groysberg, B. and Slind, M. (2012). Leadership is a Conversation. Harvard Business Review. July.

 

Ryan, J.R. (2012). What's next for leadership? 5 big ideas. Center for Creative Leadership Annual Report, 2011-2012.

 

Yung-Shui Wang and Tung-Chun Huang. (2009). The Relationship of Transformational Leadership with Group Cohesiveness and Emotional Intelligence. Social Behavior & Personality: An International Journal; Vol. 37, Issue 3, p.379-392.

 

Zhu, W., Sosik, J.J., Riggio, R.E., and Yang, B. (2012). Relationships between Transformational and Active Transactional Leadership and Followers’ Organizational Identification: The Role of Psychological Empowerment. Institute of Behavioral and Applied Management. p.186-212.

Do You Have to Lie to be a Good Negotiator?

In the 21^st Century it seems like not telling the truth has become an acceptable norm. Besides the ‘fake news’; and the fake stories around fake news; we’ve seen a tidal wave of bad business deals, the most catastrophic leading to the financial crisis in 2007-2008.

 

Leslie John in a 2016 article highlights how “robust social psychology research indicates that people lie – and lie often. One prominent study found that people tell, on average, one or two lies every day. Judging from studies done in 1999 and 2005, roughly half of those negotiating deals will lie when they have a motive and the opportunity to do so. Typically they see it as a way to gain the upper hand (although it can actually cause a backlash and prevent the kind of creative problem solving that leads to win-win deals). Deception is thus one of the intangibles that negotiators have to prepare for and take steps to prevent,” (p.114).

 

Social media has also increased the propensity to lie – in many cases just to try and keep up with all the other lies flying around in the social media space. Social media may have a means to bring people together – but it has also caused an environment of significant individual competition, as people try to ‘stand out’ within the social media crowd.

 

John mentions how “one meta-analysis (a study of studies) found that people can correctly identify whether someone is telling a lie only 54% of the time – not much better odds than a coin flip. Even the polygraph – a technology specifically engineered to detect lies in a controlled setting – is riddled with problems and comes to the wrong conclusion about a third of the time. Humans are particularly inept at recognizing lies that are cloaked in flattery: your boss promises that a promotion is coming any day now; the supplier’s assurance that your order is his top priority. We’re wired to readily accept information that conforms to our pre-existing assumptions or hopes,” (p.115).

 

Because lying is prevalent in the 21^st Century the younger generation haven’t had a chance to ‘learn’ how to spot the difference between fact and fiction. Experience comes with time; and as the younger generation get ‘burnt’ again and again, they will eventually learn to look for the tell-tale sign of dishonest behaviour.

 

John highlights how “there are several science-backed strategies that can help you conduct conversations in a way that makes it more difficult for your counterpart to lie. Though these methods aren’t fail safe, they leave you better positioned to create maximum value” in a more honest environment;

 

Encourage Reciprocity

Ask the Right Questions

Watch for Dodging

Don’t Dwell on Confidentiality

Cultivate Leaks

 

 

“Humans have a strong inclination to reciprocate disclosure: When someone shares sensitive information with us, our instinct is to match their transparency. Reciprocity is particularly pronounced in face-to-face interactions. In experiments led separately by Arthur Aron and Constantine Sedikides, randomly paired participants who worked their way through a series of questions designed to elicit mutual self-disclosure were more likely to become friends than were pairs instructed to simply make small talk. Other research by Maurice Schweitzer and Rachel Croson shows that people lie less to those they know and trust than they do to strangers,” (p.115).

 

As humans we build our reputations on our integrity – and though it may take a few years to gain a reputation – once you have it, you’ll have the best competitive advantage you could possibly want – and those who have tried to lie their way to success, will find a sudden rocky road ahead and find doors closing in their faces. Lies, when they work, only give a short term benefit.

 

Negotiation is a true art – and if you’ve met great negotiators in your career, you’ll know what I mean. They don’t lie – to achieve success – but they know how to ‘play poker’ and when to be strong and when to fold.

 

“Most people like to think of themselves as honest. Yet many negotiators guard sensitive information that could undermine their competitive position. In other words they lie by omission, failing to volunteer pertinent facts. The risk of not getting the whole story is why it’s so important to test your negotiating partners with direct questions. Schweitzer and Croson found that 61% of negotiators came clean when asked about information that weakened their bargaining power, compared to 0% of those not asked. Unfortunately, this tactic can backfire. In the same experiment, 39% of negotiators who were questioned about the information ultimately lied. But you can go a long way toward avoiding that outcome by posing your questions carefully.”

 

If you look a politicians these days – they have lost the art of negotiating – and prefer to either misdirect or ignore questions completely. “Savvy counterparts often get around direct questions by answering not what they were asked but what they wished they’d been asked. And, unfortunately, we are not naturally gifted at detecting this sort of evasiveness. As Todd Rogers and Michael Norton have found, listeners usually don’t notice doges, often because they’ve forgotten what they originally asked. In fact, the researchers discovered that people are more impressed by eloquent sidestepping than by answers that are relevant but inarticulate,” (p.116).

 

Trust is something that is earned over time, by being trustworthy in all aspects of your life. “Research shows that when we work to assure the others that we’ll maintain their privacy and confidentiality, we may actually raise their suspicions, causing them to clam up and share less.”

 

“People inadvertently leak information in all kinds of ways, including in their questions. When people leak mindlessly, the information tends to be more accurate. Astute negotiators realize that valuable knowledge can be gained simply by listening to everything their counterpart says, even seemingly extraneous or throwaway comments – in the same way that interrogators look for statements from criminal suspects that include facts not known to the public.”

 

I remember being taught by my parents to ask if I didn’t know and never to lie. Those basic values are just as true today. Ignore the pressures of social media and others around you to lie – just be yourself and garner a reputation of reliability and trustworthiness – and you’ll be surprised with the rewards that this will bring to your career and your personal life too.

 

Finally John states that “lying surrounds us – and can be a real impediment to the creation of value in negotiation. The good news is that deploying science-backed strategies can go a long way toward bringing out the best in negotiations and in the parties involved,” (p.117).

 

References:

 

John, L.K. (2016). Managing Yourself: How to Negotiate with a Liar. Harvard Business Review, July-August, p.114-117.

Does Big Business Learn From Past Mistakes?

Do we learn from past mistakes? In today’s global economy does big business look at past successes and past failures of other organisations to help them plan effectively for the future; or is there a sense of arrogance that comes with the large size of some organizations that makes them feel invincible?

 

On 15th April, 2018, it was 106 years since the Titanic sank and leaders should remember and reflect on the comments of the captain, Edward. J. Smith, before the fateful voyage. When asked how he could best describe his, nearly, 40 years at sea, he replied, “Uneventful. I have never been in an accident and I have seen but one vessel in distress in all my years at sea. I have never seen a wreck and have never been wrecked, nor have I ever been in any predicament that threatened to end in disaster of any sort.”

In the 21st century the biggest and most profitable organisations should be the guiding example for the rest of the business community to follow and learn from. Yet these organisations need to be conscious and aware; and not allow their size to make them complacent to their constantly evolving competitive business environment.

 

I know I’ve learnt so much during my career both from my mistakes and learning from the mistakes of others; and learnt that complacency can be a dangerous trait for both organisations and individuals as we go through our career.

It’s nothing new, “for organisations to deceive themselves is neither rare nor random. Charles Frankel, Assistant Secretary of State in President Johnsons Administration in the US (1965-67) concluded that self-deception was not simply a passing problem, but a permanent condition facing all organisations,” (Landau, M. and Chisholm, D., 1995, p.72).

So what can organisations and leaders learn from history and specifically the tragic story of the Titanic?

The Titanic was warned in advance of the increase in ice and the potential for icebergs, but chose to ignore the warnings; as an example, a steward on the Titanic when asked if it was true that the ship was unsinkable, replied “Madam, God himself could not sink this ship.” Large organisations can enjoy the feelings of power and control – and with it the feeling of invincibility just like the Titanic.

After setting sail the Titanic restated its objectives and decided to attempt to beat the record for crossing the Atlantic to impress its shareholders. There was no immediate reward for beating this record (held by its sister ship) since the Titanic was receiving publicity on both sides of the Atlantic. Power and arrogance led to this decision and contributed to the upcoming disaster. Best practice organisations focus on business principles such as sustainable growth and putting the customer first; on transparency and creating cultures that lead to job satisfaction and retention at all levels – an organisation that will provide a ‘luxurious and safe passage’ for all those who embark on the journey.

Finally, the capacity of the Titanic's lifeboats was only 1,178, while the ship was built to carry 3,000 passengers and crew. There was simply no way any more than half the ship's complement would survive should the unthinkable happen. So when the tragedy occurred, only the few survived - only 705 out of about 2,220 escaped to the safety of these craft. The lessons should be self-evident, plan for all eventualities; accurately analyse, assess and manage your organisations risk.

Critical self-evaluation is a basic requirement of excellence in leadership – it takes courage and self-belief – and that is how we will distinguish between the great leaders of tomorrows great organisations and those organisations who are wondering where the iceberg came from – and who to blame for not seeing it coming!

As Pamela Waymack states in her 2006 article, “management’s overconfidence and failure to see its own vulnerability contributed to the sinking of the Titanic. Neither historic track record nor size and prowess are a match for a market in flux. We cannot assume that our organisations are invincible. A seaworthy captain with a spotless record for 40 years was no match for this field of icebergs,” (p.41).

References

Landau, M. and Chisholm, D. (1995). The Arrogance of Optimism: Notes on Failure-Avoidance Management. Journal of Contingencies & Crisis Management, Vol 3, Issue 2, p.67-80.

Waymack, P. (2006). Managing the ice in the waters ahead: Lessons from the Titanic. HFM (Healthcare Financial Management). Vol 60, Issue 7, p.38-41.

Are You a Company Man?

The pressure of work varies from occupation to occupation – some are more relaxed than others in respect of the hours of intensity that are required. I remember when I moved into the consulting sector in my late 20’s having to work 16 hour days at times, especially when we were analyzing a potential client before the ‘project pitch’. It was exhilarating and exhausting at the same time – yet I have no regrets for the intensity, it was required at that particular time and I learnt so much at the same time.

 

Fortunately it wasn’t ‘constant’ and to some extent there was a work life balance over time – and as you ‘earned your stripes’ in the industry from a ‘grunt’ (as us new consultants were called) climbing the ladder to project manager and above, the intensity shifted from ‘hours’ to ‘strategic output and relationship building’. So there is a time and a place for ‘intensity’ in some industries, within the career life-cycle.

 

Yet in some other industries there seems to be a slight contradiction between the concept of finding that ‘work life balance’ and how some organizations ‘drive’ their employees. Erin Reid and Lakshmi Ramarajan mention in their 2016 article how “tales of time-hungry organizations – from Silicon Valley to Wall Street and from London to Hong Kong – abound. Managers routinely overload their subordinates, contact them outside of business hours, and make last minute requests for additional work. To satisfy those demand, employees arrive early, stay late, pull all-nighters, work weekends, and remain tied to their electronic devices 24/7. And those who are unable – or unwilling – to respond, typically get penalized,” (p.86).

 

This is the ‘new’ world we live in. Since the financial crisis job security has been a key concern for most employees. The financial crisis brought with it a constant stream of job losses, which hurt the life’s of hundreds of thousands of people around the globe, where many have never recovered. The new demands put on employees are based on the simple principle that if you’re not prepared to do it – there are hundreds of people ready to take your place. So fit in or ship out.

 

Reid and Ramarajan suggest that “many people manage the pressure to be fully devoted to work by simply giving in and conforming. Indeed, at one consulting firm among the companies we studied, 43% of those people interviewed fell into this group. In their quest to succeed on the job, ‘accepters’ prioritize their work identities and sacrifice or significantly suppress other meaningful aspects of who they are. People we spoke to across professions told us, somewhat ruefully, of giving up dreams of being civically engaged, running marathons, or getting deeply involved in their family lives,” (p.87).

 

But this group have another secret – they’re not motivated to go beyond the basics. They will do their job – work the crazy hours and sacrifice their personal life – but they won’t be committed to the organization or be innovators and influencers. They look forward to the day they can either find a better job or safe enough to get their life back.

 

Reid and Ramarajan mention “another strategy employed by another group of workers is to devote time to non-work activities – but under the organizations radar. At the consulting firm (mentioned above) 27% of the studies participants fell into this group. These people were ‘passing’ – a term originally used by sociologist Erving Goffman to describe how people try to hide personal characteristics that might stigmatize them and subject them to discrimination. Consultants who were successful at passing as ideal workers received performance ratings that were just as high as those given to peers who genuinely embraced the 24/7 culture, and colleagues perceived them as being ‘always on’,” (p. 87.)

 

What’s sad about this group is that they are living a lie and apparently getting away with it. There’s nothing healthy about this group – to themselves or the organization – though both probably see this as a win-win, it’s actually a lose-lose as integrity and transparency have gone right out of the window. They are passing themselves off as company men or women – yet devoting time to non-work activities without being noticed. They will ‘sell’ this game playing as a survival tactic, but if you sacrifice integrity for survival in business, what have you really accomplished and what type of person have you become.

 

Yet Reid and Ramarajan highlight how “not everyone wants to ‘pass’ – or can play the game of passing – and some who initially revert to ‘passing’ grow frustrated with this strategy over time. These people cope by openly sharing other parts of their lives and by asking for changes to the structure of their work, such as reduced schedules and other formal accommodations. At the consulting firm, 30% of those interviewed pursued this strategy – identified as ‘revealing’. Although it’s often assumed that those who resist the pressure to be ideal workers are primarily women with families, we have not encountered enormous gender differences in our research. Data from the consulting firm showed that fewer than half of the women were ‘revealers,’ while more than a quarter of men were,” (p.88).

 

Employees should be able to be ‘revealers’ at any organization – as the concept of revealing links with the concept of transparency. This is the kind of organization culture leaders used to strive for – but it seems that standards are dropping in this regard. It’s in an organizations interests to offer an environment that supports a fair work-life balance; because if you do the rewards are best for everyone. The employee is motivated, more healthy, focused and energized and the organizations reaps these rewards through increased commitment, innovation, productivity and optimized sustainable growth.

 

Reid and Ramarajan found, for example, that “most organizations leave it to the employees to set boundaries between their work and non-work lives – often with the best intentions. When Netflix offered unlimited time off, for example, managers thought they were treating their people like ‘grown-ups.’ But proving complete freedom can heighten employees’ fears that their choices will signal a lack of commitment. Without clear direction, many employees simply default to the ideal-worker expectation, suppressing the need to live more balanced lives,” (p.90).

 

Sudden change can often be viewed with suspicion by employees. If a tough organization suddenly offers unlimited time off – the employee’s natural reaction is to wonder what the catch is. Are they trying to see who’s not committed to the organization and then the next thing you know they are downsizing and you’re the first one asked to pack your desk and leave. Organizations have to have a genuine trusting and transparent culture before you can start offering unlimited time-off. Change has to be managed, especially when trying to change from a distrusting to a trusting culture – it will take a long time and must be approached small steps at a time.

 

Reid and Ramarajan conclude by highlighting how “the pressure to be an ideal worker is at an all-time high, but so are the costs to both individuals and their employees. Moreover, the experiences of those who are able to pass as ideal workers suggest superhuman dedication may not always be necessary for organizational success. By valuing all aspects of people’s identities, rewarding work output instead of work time, and taking steps to protect employees’ personal lives, leaders can begin to unravel the ideal-worker myth that has become woven into the fabric of their organizations. And that will enhance employees’ resilience, their creativity, and their satisfaction on the job,” (p.90).

 

References:

 

Reid, E. and Ramarajan, L. (2016). Managing the High Intensity Workplace. Harvard Business School, June, p.84-90.

Do You Work in a Trusting Environment?

Trust is one of those words rarely discussed in the work place, yet it has a huge impact on performance, talent retention and sustainable growth, to name just a few elements. All the leaders I’ve respected in my career have been men and women I genuinely trusted, amongst other great attributes; and the high performing teams I’ve been involved with also had trust as a key element in their successful make up.

 

Paul Zak in a 2017 Harvard Business Review article found that “building a culture of trust is what makes a meaningful difference. Employees in high-trust organizations are more productive, have more energy at work, collaborate better with their colleagues, and stay with their employers longer than people working in low-trust companies. They also suffer less chronic stress and are happier with their lives, and these factors fuel stronger performance,” (p.86).

 

Worse still trust is a word customers hardly use anymore where in fact distrust seems to be the rule rather than the exception. I’m still amazed that organizations and leaders feel that trust isn’t an attribute worth focusing on; and don’t care if they and their organizations are distrusted. Yet Zak highlights how “leaders understand the stakes – at least in principle. In its 2016 global CEP survey, PwC reported that 55% of CEO’s think that a lack of trust is a threat to their organization’s growth. But most have done little to increase trust, mainly because they aren’t sure where to start,” (p.86).

 

Trust is actually very healthy in all aspects of the business equation – it’s not just important for the business-customer relationship, but has a huge impact inside the organization too. Zak highlights how “neuroscience shows that recognition has the greatest effect on trust when it occurs immediately after a goal has been met, when it comes from peers, and when it is tangible, unexpected personal, and public. Public recognition not only uses the power of the crowd to celebrate successes, but also inspires others to aim for excellence. And it gives top performers a forum for sharing best practices, so others can learn from them, (p.88).

 

The problem with trust is, as we know, that it takes time and a constant effort to develop a trusting environment, probably even more so in the 21st century, and yet that same trust can be eradicated in a split second. It seems that too many leaders either simply don’t want to put in the effort to build trust in their workplace or feel that ‘trust’ limits their leadership style – where the latter is a very scary but real fact in today’s business world.

 

The thought that some leaders would feel that ‘trust’ limits their ability to lead should be something more academics and subject matter experts are discussing openly. The signs are everywhere, an over-promoted to fearful of showing their weaknesses and too scared to ask for help and development, limp through their leadership role using mostly power, with a pinch of ‘fear’ and find a distrusting environment makes it easier for them to lead; and I’d even suggest in some cases they purposefully create the mistrust.

 

I mentioned in the first paragraph how the high performing teams I’ve worked with in my career have all had ‘trust’ as a key attribute; and looking back it wasn’t even something the team consciously worked at. It was simply a team of skilled and principled people, who wanted the best for the organization and that was our primary focus. We felt great once the objective was achieved and had leaders who recognized our successes. Zak mentions how “when a manager assigns a team a difficult but achievable job, the moderate stress of the task releases neurochemicals, including oxytocin and adrenocorticotropin, that intensify people’s focus and strengthen social connections. When team members need to work together to reach a goal, brain activity coordinates their behavior efficiently. But this works only if challenges are attainable and have a concrete end point; vague or impossible goals cause people to give up before they even start. Leaders should check in frequently to assess progress and adjust goals that are too easy or out of reach,” (p.88).

 

Further Zak highlights how “only 40% of employees report that they are well informed about their company’s goal, strategies, and tactics. This uncertainty about the company’s direction leads to chronic stress, which inhibits the release of oxytocin and undermines teamwork. Openness is the antidote. Organizations that share the ‘flight plans’ with employees reduce the uncertainty about where they are headed and why. A 2015 study of 2.5 million manager-led teams in 195 countries found that workforce engagement improved when supervisors had some form of daily communication with direct reports,” (p.89).

 

It genuinely saddens me that one has to write articles about an attribute like trust – where even without the science, we know ‘trusting’ environments are better than ‘distrusting’ ones. As Zak mentions “the brain network that oxytocin activates is evolutionarily old. This means that trust and sociality that oxytocin enables are deeply embedded in our nature. Yet at work we often get the message that we should focus on completing tasks and not making friends,” (p.89). Why, even when we know something is right, are we prepared to settle for less. We know how long it takes to build a trusting environment – and we know how much harder it is to rebuild trust, if the trust has previously been broken. We also know there comes a point where it’s virtually impossible to rebuild trust without fundamental changes in the makeup of the group.

 

So let’s draw a line in the sand. Shareholders, corporate boards and executive directors make it your mission for 2018 to build a trusting working environment – the benefits both in the short and long term will be well worth it for all of you.

 

Zak highlights how “high-trust workplaces help people develop personally as well as professionally. Numerous studies show that acquiring new work skills isn’t enough; if you’re not growing as a human being, your performance will suffer. High-trust companies adopt a growth mindset when developing talent. Some even find that when managers set clear goals, give employees the autonomy to reach them, and provide consistent feedback, the backward looking annual performance review is no longer necessary. Instead, mangers and direct reports can meet more frequently to focus on professional and personal growth. Assessing personal growth includes discussions about work-life integration, family and time for recreation and reflection. Investing in the whole person has a powerful effect on engagement and retention,” (p.90).

 

Reference:

 

Zak, P.J. (2017). The Neuroscience of Trust. Harvard Business Review. Jan-Feb. p.84-90.

Do Ethics Matter?

It seems that not a week goes by without the reporting of unethical behaviour in business and politics. Yet most organisations usually have a list of corporate values on their hallowed walls somewhere – but does the constant stream of scandals mean that the only place you can find corporate values in the 21st Century is on walls, rather than in the hearts of leaders and employees, where they belong? It definitely seems that organisations are failing to move their values from ‘wall plaques’ to actual living entities within their employees, at all levels, in business (and politics for that matter).

 

As citizens of the world we have to decide the kind of world we want the next generations to inherit and then teach our children accordingly. If greed and unethical behaviour is going to be the rule rather than the exception, as it seems to be – then we might as well take the leap and start develop our children to be excellent liars and cheats; giving them a head start into the business world they will eventually join.

 

But if we genuinely want a world where ethical values are the rule – then we really need to start standing up to the constant stream of unethical events around the globe and start holding people and organizations to account. We, that’s the global ‘we’ of consumers, have the power to make significant change if we really want to. Politicians and the media know the power we have – which is why they are constantly trying to keep us divided – as they know if we come together and use our consumer power, we can make more change in a day than any government or multibillionaire makes in a year (or more) – just simply through our combined buying power.

 

We’ve been brainwashed into believing ‘this is the world we live in’; ‘we can’t change anything’; etc, but we have to stop believing this rhetoric and start ‘fighting’ for the world we want for our children and their children.

 

As an example of the stream of scandals and unethical behaviour I just researched two days, Friday 8th September and Monday 11th September and looked at some of the unethical practices being reported in the media; some of which I’ve shared below.

 

We’ve seen the report of a young British mother who is suspected of running a massive tourist sickness scam that allegedly defrauded the industry of at least 9.2 million British pounds. She is alleged to have controlled touts who enticed hundreds of British holidaymakers in Majorca to make false sickness claims against hotels on the island over the past three years (Graham K Madrid, The Times, Fri 8th Sept, p.5). On the same day the Times reported how two retired footballers are alleged to have invented ‘ghost learners’ to steal 5 million British pounds meant for training apprentices.

 

The environment editor of the Times, Ben Webster, reported how Tesco has been accused of holding on to millions of pounds that should have gone to charity from the proceeds of the compulsory 5 pence charge on disposable plastic bags. The retailer retained 3.4 million British pounds last year to cover the ‘cost of administering donations’ unlike other major supermarket chains, which did not deduct any of the proceeds for that purpose, (p.8, 8th Sept).

 

Mark Bridge, the technology correspondent of the Times, highlighted how ‘virtual assistants’ are at risk from hackers. Where researchers in China have found that cheap off-the-shelf technology could compromise virtual assistants from companies such as Apple and Amazon, potentially enabling criminals to instruct them to carry out tasks for their own illegal ends. Imagine situations where ‘psst, Alexa, unlock the back door. And Siri, transfer $1,000 to bank account number …..’ Where criminals could use ultrasonic sounds to ‘whisper’ commands and take over voice-activated electronic devices such as smartphones, (p.17, 8th Sept).

 

We had David Bond and Emma Dunkley on the 8th September reporting how staff at Bell Pottinger have been told that the scandal-hit PR firm is likely to go into administration as early as next Monday, after attempts to find a buyer failed. Co-founded by Margaret Thatcher’s favourite advertising executive Tim Bell in the late 1980’s, Bell Pottinger has been battling for its future after the PR industry’s UK trade body expelled the agency for at least five years over the Gupta controversy. In a damning report, the Public Relations and communications Association concluded that its messaging for the Guptas targeted wealthy white individuals and corporations in South Africa and was likely to inflame racial tensions, (p.12, FT, 8th Sept).

 

Sarah Harris, Jack Doyle, Daniel Martin and Tom Payne, reported in the Daily Mail on 11th September how demands were growing for the Government to slash the ‘outrageous’ interest rates of up to 6.1 per cent levied on student loans. Chancellor Phillip Hammond is being urged to use his next Budget to help students by at least replacing the outdated inflation measure used to set repayments – the Retail Prices Index (RPI) – with the historically lower Consumer Price Index (CPI). Its adoption could save students as much as 18,000 British pounds over their lifetimes, according to recent estimates. Last month Theresa May’s former joint chief of staff, Nick Timothy, described higher education as an ‘unsustainable and ultimately pointless Ponzi scheme’ that burdens graduates with debts and needs radical reform, (p.10, Daily Mail, 11th Sept).

 

Ilan Ben Zion, from Tel Aviv, reported how the controlling shareholder of one of Israel’s largest supermarket chains was arrested on suspicion of corruption. Rami Levi, chief executive of Rami Levi Chain Stores Hashikma Marketing, as well as a local politician, another businessman and a reporter were detained for questioning for alleged fraud and breach of trust involving the owners of a shopping mall and the local municipality; according to a police statement, (p.14, FT, 11th Sept).

 

Ben McLannahan, from New York, reported in the Financial Times how emerging markets are hit by financial crime curbs. The global regulators’ assault on terrorists, tax dodgers and money launderers is sapping vitality from a host of emerging market economies, according to the private-sector arm of the World Bank, as big banks cut ties that could expose them to sanctions. Over the past few year’s banks such as HSBC, BNP Paribas and JPMorgan Chase have paid billions of dollars in fines for failing to keep tabs on criminal activity, while spending heavily to increase their routine flagging of suspicious transactions, (p14, FT, 8th Sept).

 

At the political level you had Laura Pitel from the Financial Times in Ankara reporting how New York prosecutors have charged a former Turkish economy minister with taking millions of dollars in bribes in order to conceal a scheme that bypassed US sanctions. Where Mehmet Zafer Caglayan is accused of receiving cash and jewellery as part of an international operation to trade billions of dollars of gold with Iran, (p.3, FT, 8th Sept).

 

Joe Leahy and Andres Schipani, from Sao Paulo, report how the Brazilian supreme court ordered the temporary arrest of billionaire Joesley Batista, who in May revealed he had secretly taped a conversation with Brazilian President Michel Temer allegedly discussing bribes, has been ordered to face at least five days in jail alongside close associate, Ricardo Saud. “There are multiple indications …. Showing that they were part of an organisation dedicated to the systematic practice of crimes against the public administration and money laundering” supreme court judge Edson Fachin said in the order, (p.2, FT, 11th Sept).

 

And of course not surprisingly on the same day, 11th Sept, Joseph Cotterill, Southern Africa correspondent for the FT highlighted how Robert Mugabe’s spy agency secretly controls a diamond mine in Zimbabwe’s Marange region that has enriched the president’s allies and funded state repression, according to anti-corruption campaign group. The evidence, gleaned from company records and secret documents linked to CIO, will reignite fears that a hole of up to $31 billion in reported revenue from Marange has enriched the country’s political elite and the ruling Zanu-PF, (p.4, FT, 11th Sept).

 

As I start to wind down my own career and think of retirement, I’m genuinely concerned for the future of business and politics; and the generations to come after me. In my lifetime I’ve seen a dramatic change in business behaviour, mostly for the worse. I do wonder how long it will take us to work together as consumers to make positive change and make a real difference throughout the business world, for the generations to come.

I don’t believe (or don’t want to believe) the reported argument that that the current generation don’t care – I actually believe they do. The problem is we are ‘divided’ and until we come together for the greater good, these greedy, unethical people and businesses will be laughing at how gutless we all are, all the way to their offshore banks.

At the moment I think history will look back very poorly on the current world we live in and how much ‘crap’ citizens are prepared to take – let’s stop being divided and come together to make a difference; and lets starting living our corporate values today.

Is Transparency the Missing Link?

I started my career nearly 40 years ago now and remember my first job as if it was yesterday. What I distinctly remember from that time is the transparent cultures that I worked in. I remember feeling part of the organisation even as a young inexperienced graduate as the organisations leadership made me feel a valued part of the organisation, where my thoughts and inputs were actively sort by my manager on a reasonably regular basis.

 

Obviously there was confidential, high level information that wasn’t so transparent, often until after the fact, but that didn’t bother me, as I genuinely felt that I was a ‘cog in the organisational wheel’ albeit a very small cog and part of both a small departmental team and a much larger organisational team. 

 

When I talk to employees today, however, they often tell me that they feel that they are seen simply as a ‘warm body’ filling a position, to do as they are told and do not feel that they are employed for their thoughts and ideas. It seems, sadly, that transparency is not a business principal that is embraced by many 21^st century leaders. I wonder why?

 

There definitely seems to be a negative trend, back towards command and control leadership which is really sad, as this leadership approach does not build strong organisational cultures. Organisations that encourage or turn a blind eye to this negative style of leadership may feel that their choice is validated because they get the results they want – but they naively don’t appreciate the cost in terms of ‘lost’ employer loyalty, innovation, and performance. Because the allure of the power that comes with the command and control style – these leaders blindly continue on their path, believing that they are solely the ones who have any brains in the organisation – and that employees are there to do as they are told; and not to think or question ideas.

 

These command and control leaders fear transparency as they believe it will show their weaknesses and shortcomings; and as individuals who can’t stand solely on their ‘work record and skills’ need ‘power’ to keep them in their leadership role – and the ‘perceived feelings’ that this brings. Hence they avoid transparency and create a ‘brick wall’ between themselves and the employees they ‘lead’ – allowing them to operate with perceived impunity. In the end command and control might get results but it doesn’t get optimum performance, sustained growth and innovation – business principles that are vital in today’s cut throat world of business.

 

Because command and control leaders are rarely transparent, this just fuels the distrusting culture even more, creating a very negative environment for their employees who simply adopt a ‘survival’ culture until they either find an alternative job or until they retire. Creating, in the end, a lose-lose situation for everyone – if only these modern day leaders had the courage to open their eyes and see it.

 

Transparency is the ‘competitive advantage’ between organisations and leaders you want to work for and those you strive to avoid or escape from. Transparency is one of the key elements of what organisational cultures should be all about. For example some of the benefits of transparency include;

 

It opens up a trusting relationship between leaders and employees;

It allows employees to contribute and innovate towards clear goals and objectives – a win-win for everyone;

Employees feel part of ‘something’ and feel valued – hence this helps with talent retention;

Day-to-day business discussions focus on genuine ‘pro-active’ honesty in all aspects of the work cycle – where, for example, mistakes aren’t hidden but transparently embraced and actively learnt from; and

Transparency makes an organisation a ‘rich’ place to work in, learn and develop your career.

 

It seems in today’s hectic global business environment that too many organisations have let poor leadership become the acceptable norm – often because once in place these leaders surround themselves with incompetent people who will follow them and be the ultimate ‘yes’ men – pushing out the best talent – but sadly still getting good enough results to remain in post.

 

It needs a strong CEO, with a strong board, to constantly challenge and investigate their ‘real’ company culture rather than the one that is portrayed by those in positions of power – as there may be a real difference between perception and reality, which can have a huge impact on an organisations future. A lack of transparency is like a cancer slowly eating away and ‘killing’ the good parts of an organisation.

 

Often by the time organisations find out that their middle management is not that good, it’s way too late to do anything about it – as by now all the really good talent has already left.

 

Leadership comes from the top and hence so does transparency. As a leader you need to ‘get out’ and meet you employees – have genuine and transparent one-on-one chats with them to find out what the real culture is like – and then you can more easily adapt and respond.

 

Just by getting out and having genuine, meaningful, transparent conversations with your employees will go a long way to developing a transparent culture; from there you can build a very special organisation. Why not give it a go today, you won’t regret it…..