I think it was the UCLA Bruins coach, Red Sanders who, around 1950, is reputed to have said "Winning isn't everything: its the only thing!"
It seems that this has been taken to heart by athletes over the years - of most recent note internationally we have it in the person of Lance Armstrong and, just the other week, in the widely publicised claims by the Australian Crimes Commission relating to a range of sports in Australia. If only "the end" is important than how you get there is irrelevant. Cheating, whether by the use of drugs or any in other form, is always a case of "the end justifies the means".
But its not just in sport that we find illegal and/or immoral behaviour. In Sydney right now the Independent Commission Against Corruption (ICAC) is investigating how a then member of the New South Wales Parliament stood to gain up to $100 million in a matter of months from an investment of around $4million - it is claimed that a then Government Minister manipulated matters to ensure that his colleague benefitted. The hearing is being closely watched across the State with drama being played out every day and the final findings will be eagerly awaited whether or not corruption is held to have occurred.
There are questions in the business realm also. For years Australian consumers have been forced to pay significantly more for identical products when they are purchased in or from Australia rather than in the USA. In fact a recent enquiry showed that, for one product, it was cheaper to pay for a return airfare to the USA and purchase an item on-line there than it was to purchase the same item on-line in Australia. There is now a Federal Government enquiry being conducted into this possible price gouging and Microsoft and Apple (among others) have been summonsed to appear after they refused invitations to voluntarily appear. They are being asked to justify why identical products, both sourced from the same location and requiring no additional expenditure by the supplier, have such a huge price variance other than 'the end (profit) justifies the means'.
There is no doubt that winning is important. Equally there is no doubt that almost always (other than in some non-existent utopia) there are winners and losers in every arena of activity. This is normal and natural. However "how" you win should always be at least as important than the winning itself.
Recently I've been involved with a company that changed its "how" of doing business. Three years ago it was turning over around $55million annually for about $1million profit. Last year, without reducing staff levels, remuneration, or any employee benefits and while remaining a local manufacturing and distribution business they had revenues of around $70million for a profit of around $11million. Three years ago they saw themselves as losers. Today they know they are winners - all because they took a different approach to "how" and concentrated on a new form of leadership.
What happens in your organisation? Where is the emphasis - on the "what", the "how" or both?
Winning is important. But its not the only thing.
What do you think? Please add your comments below.
More information about Doug Long at http://www.dglong.com
Thursday, February 14, 2013
Friday, February 8, 2013
Committed to the job?
Last November Gower publishing commissioned me to write a follow up to "Third Generation Leadership and the Locus of Control". Although Third Generation Leadership had only been released in September 2012, the interest in it was sufficient for them to want a "how to" book that showed Third Generation Leadership in action. For the last few months I've been totally engrossed in the new book because I had an end of January deadline if it was to be released this year. I've now sent it to them!
Third Generation Leadership is all about harnessing the energies of people so that they become engaged with their leaders and committed to helping their organisation achieve desired results. I chose to centre the new work around an Australian manufacturing operation of around 350 people (mixture of full-time, part-time, and casual) that, when I first became involved, had a turnover of around $55 million for earnings before interest and tax (EBIT) of $1 million and was considering moving its operations off shore in order to remain viable. Two years later, while remaining in Australia and without reducing staff levels or impacting negatively on any entitlements, the company had a turnover of around $70 million for an EBIT of around $11 million. The change had come about by harnessing everyone's energies and creating an environment where people wanted to help the company succeed - they had become engaged with their leaders (and each other) and committed to their company.
While I was working on the book it was sad to see a number of well-known Australian companies continuing a different approach - the traditional one of getting rid of staff in order to improve profitability. Most of the companies that I have observed taking this route are companies that have spoken frequently of the need for employee engagement and commitment. There's a bit of a disconnect here! It started me wondering about whether engagement and commitment really exists across organisations and, if it does, where in the organisation is one most likely to find engagement and commitment and, related to this, to what are most people really committed in the workplace. In answering these questions it seems to me that there are several myths that need to be addressed.
Myth 1 - High pay brings engagement and commitment:
There is a simplistic view that providing very high remuneration packages to CEO's and executives will bring about the level of engagement and commitment necessary to achieve high profitability - those receiving this money will demonstrate high productivity and ensure the success of the company. This is supported by a 2011 study from the University of South Carolina which found a positive correlation between executive remuneration and organisational performance as measured by return on equity. (http://astonjournals.com/manuscripts/Vol2011/BEJ-31_Vol2011.pdf ) However another study - done in Australia - considered return on equity, share price change, and change in earnings per share. This study concluded that there was no positive link between high executive pay and company performance - in fact they concluded that ultimately high executive pay levels actually coincides with a lower bottom line. (http://www.parliament.wa.gov.au/intranet/libpages.nsf/WebFiles/Hot+Topics+-+Shields+report+Executive+salaries/$FILE/Buck+stops+here.pdf)
If very high levels of remuneration really do provide high levels of engagement, commitment, productivity and success then why do we find resistance to increasing the remuneration of those at the lower echelons of organisations? If it works for those at the top, why don't the same principles apply for everyone else? After all, without the people at the lower echelons there would be nothing for those at the top - and vice versa - there is a symbiotic relationship between organisational levels. The truth is that high remuneration eventually becomes an end in itself - a status symbol - and that indicates commitment to oneself - not to one's organisation and its long term viability.
Myth 2 - "Strong" leadership will engender commitment:
There was a time when we didn't talk of 'leadership" as such. Until relatively recently we recognised command and control for what it was and accepted that one's place in the hierarchy determined what say one had in how an organisation was run - we called it "command" and/or "management" and it worked very well. Today we seem to speak almost exclusively of "leadership" yet, in many cases, we are not talking about inspiring people to move forward nor to creating an environment in which everyone can be successful - instead we are really still talking about command and control. Those who exercise this are regaled as "strong" leaders despite the fact that such an approach almost always degenerates into power and control games such as we see daily in politics, business, sport, religion, domestic relations, etc.
The truth is that "strong" leadership discourages true engagement and commitment. "Strong" leadership brings about a situation in which people obey or conform primarily out of fear. In such environments creativity and innovation drop because no-one wants to "rock the boat" - and certainly no-one is prepared to tell the boss that he or she is wrong - even when this is patently obvious.
The organisation that moved from $1million to $11million EBIT in 2 years used a different approach. There the Board and executive worked with their people and that transformed everything.
What has been your experience?
More information about Doug Long at http://www.dglong.com.
Third Generation Leadership is all about harnessing the energies of people so that they become engaged with their leaders and committed to helping their organisation achieve desired results. I chose to centre the new work around an Australian manufacturing operation of around 350 people (mixture of full-time, part-time, and casual) that, when I first became involved, had a turnover of around $55 million for earnings before interest and tax (EBIT) of $1 million and was considering moving its operations off shore in order to remain viable. Two years later, while remaining in Australia and without reducing staff levels or impacting negatively on any entitlements, the company had a turnover of around $70 million for an EBIT of around $11 million. The change had come about by harnessing everyone's energies and creating an environment where people wanted to help the company succeed - they had become engaged with their leaders (and each other) and committed to their company.
While I was working on the book it was sad to see a number of well-known Australian companies continuing a different approach - the traditional one of getting rid of staff in order to improve profitability. Most of the companies that I have observed taking this route are companies that have spoken frequently of the need for employee engagement and commitment. There's a bit of a disconnect here! It started me wondering about whether engagement and commitment really exists across organisations and, if it does, where in the organisation is one most likely to find engagement and commitment and, related to this, to what are most people really committed in the workplace. In answering these questions it seems to me that there are several myths that need to be addressed.
Myth 1 - High pay brings engagement and commitment:
There is a simplistic view that providing very high remuneration packages to CEO's and executives will bring about the level of engagement and commitment necessary to achieve high profitability - those receiving this money will demonstrate high productivity and ensure the success of the company. This is supported by a 2011 study from the University of South Carolina which found a positive correlation between executive remuneration and organisational performance as measured by return on equity. (http://astonjournals.com/manuscripts/Vol2011/BEJ-31_Vol2011.pdf ) However another study - done in Australia - considered return on equity, share price change, and change in earnings per share. This study concluded that there was no positive link between high executive pay and company performance - in fact they concluded that ultimately high executive pay levels actually coincides with a lower bottom line. (http://www.parliament.wa.gov.au/intranet/libpages.nsf/WebFiles/Hot+Topics+-+Shields+report+Executive+salaries/$FILE/Buck+stops+here.pdf)
If very high levels of remuneration really do provide high levels of engagement, commitment, productivity and success then why do we find resistance to increasing the remuneration of those at the lower echelons of organisations? If it works for those at the top, why don't the same principles apply for everyone else? After all, without the people at the lower echelons there would be nothing for those at the top - and vice versa - there is a symbiotic relationship between organisational levels. The truth is that high remuneration eventually becomes an end in itself - a status symbol - and that indicates commitment to oneself - not to one's organisation and its long term viability.
Myth 2 - "Strong" leadership will engender commitment:
There was a time when we didn't talk of 'leadership" as such. Until relatively recently we recognised command and control for what it was and accepted that one's place in the hierarchy determined what say one had in how an organisation was run - we called it "command" and/or "management" and it worked very well. Today we seem to speak almost exclusively of "leadership" yet, in many cases, we are not talking about inspiring people to move forward nor to creating an environment in which everyone can be successful - instead we are really still talking about command and control. Those who exercise this are regaled as "strong" leaders despite the fact that such an approach almost always degenerates into power and control games such as we see daily in politics, business, sport, religion, domestic relations, etc.
The truth is that "strong" leadership discourages true engagement and commitment. "Strong" leadership brings about a situation in which people obey or conform primarily out of fear. In such environments creativity and innovation drop because no-one wants to "rock the boat" - and certainly no-one is prepared to tell the boss that he or she is wrong - even when this is patently obvious.
The organisation that moved from $1million to $11million EBIT in 2 years used a different approach. There the Board and executive worked with their people and that transformed everything.
What has been your experience?
More information about Doug Long at http://www.dglong.com.
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