Society for Organizational Learning

When I speak of an ecology I am describing the fundamental inter-relationship of humans and their environment. An enabled ecology means that people, organizational goals, and espoused values are aligned, that the emotional and psychological ecology of the institution is congruent with the basic, deeper and higher attributes of human nature. In the following pages, I will describe a philosophy and set of principles for tending to this ecology. These ideas are not new. Some, indeed, are very long old. If they sound "soft" to you, know that in actuality, they are hard work, because they run against the grain of conventional practice; but, as we shall also demonstrate, they pay dividends, for they release the potential stored in bound human energy.

Principled-Centered Governance Operating matters tend to consume daily agendas. There' s meetings to attend, reports to prepare, people to see and deadlines to meet. Often pushed aside are the principles by which we choose to live our lives and guide our organizations, those central principles of human affairs, which make for a deeper, more meaningful life.

Whenever there is an ocean of information about a subject without central principles around which to organize that information, we find ourselves confused and frustrated. That is why in business we organize financial information around the income statement and balance sheet, and why we make decisions about manufacturing physical materials based on engineering principles derived from the scientific method. Through training and practice, Western management has become quite adept at resolving both financial and reductionistic issues, but as a whole it has been less successful when it comes to the management of human beings.

Since it is people who make the decisions and perform the actions that determine a company' s results, human beings are (arguably) the most important influence on a corporation' s performance in the competitive market place and consequently of its long term financial achievements. Thus, there should be better understood principles for their governance and development as there are for deciding financial and physical matters. Ought not these central principles for human affairs promote moral excellence in corporations in the same manner we strive for engineering or marketing excellence?

Today' s growing interest in principle-centered or value- based leadership naturally involves individuals. But it is not enough to just view these issues as ones of individual development. These are matters of corporate and institutional governance. There is a synergistic inter-action that takes place when a corporation begins the journey to move from command and control governance to value- based governance and when individual managers choose to carefully attend to their own moral formation and particularly it' s application to their business decisions and relationships. Put differently, from my experience as a CEO leading cultural change, I found it necessary to constantly stimulate progress in both improving the moral climate and individual moral maturity. When one lagged behind the other, the community began to dysfunction. For example, when the value of merit, which stated all decisions should be made on the basis of what works best instead of pleasing a boss, was widely internalized in a unit and a manager was observed playing politics, there were feelings of betrayal and accusations of hypocrisy which worked against our business imperatives. On the other hand, when the institutional climate is morally underdeveloped it generally overwhelms all but the most valiant efforts of individuals to practice principle based leadership. So, I found myself constantly ratcheting up both sides of the equation to keep the ecology in balance while continuing the "never-arriving" march toward greater and greater congruence between values and behavior. A nine in individual moral effort with a two in corporate moral climate was significantly less effective than a five in each. Incidentally, we never invented the thermometer to precisely measure our culture or an individual' s living up to our corporate moral aspirations. I use the one to ten scale as a figure of speech based on experienced judgment. Nevertheless, the high leverage in transforming an institution, is in cultivating a high quality moral ecology.

The questions are:

1. Is it possible to move organizations to a higher plane where there is less of a gap between what institutions say and what they do;

2. Is it possible to move the soul of our organizations toward liberating the individual, pursuing truth, being just, acting with courage. acquiring wisdom, practicing virtue -- and earning a profit?

I believe the answer is "yes" to each question. If it is set in a climate of moral excellence, and, as we shall show in this paper, it can provide an enduring source of inspiration. An underlying assumption is that it will also drive service to customers. If you take care of the relationships in your ecology and nourish them, provide a structure for honest communication and feedback, design processes and rules that serve these purposes, then the business imperatives of profit, market share growth and competitive advantage will be readily achieved.

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A PHILOSOPHY OF HUMAN NATURE, WORK AND HAPPINESS

The Greeks had a deep and abiding suspicion of work. Workers could not be citizens and therefore could not vote. Somewhere deep inside, we still harbor antipathy that work is a "necessary evil." Yet in the modern era, work has become one of the two principle vehicles through which most people pursue activities that engender inner feelings of satisfaction. The other, of course, is family. In fact, for most people, work and family are the principle stages on which they express their talents, personality and intentions in the pursuit of becoming all they are capable of being, and therefore, presumably, of achieving happiness.

Happiness

There are numerous definitions of happiness ranging from the superficial (often seen on TV commercials or advertisements) to the profound. My personal description of happiness goes something like this: it is an inner feeling of satisfaction about my life "as a whole." The good feeling comes from using my talents to make a contribution to something larger than myself - be it family, a corporation, a nation--which must, in return, treat me fairly and appreciate my contribution. This definition distinguishes happiness from pleasure and recreation but opposes neither. In fact, pleasure and recreation enable us to relax and refuel, re-energizing us to make contributions to further happiness.

Work and Happiness: Mutually Reinforcing

It comes down to two simple ideas, that work is an important vehicle for achieving happiness and that happiness has its roots in devoting our talents to something larger than ourselves. It follows that creating an effective environment for work is more than getting "people to do jobs" efficiently in exchange for pay. Instead, designing work at any level is a near sacred responsibility that has a powerful, direct impact on the quality of life of all individuals who work. Peter Drucker has written recently that while organizations routinely say that people are their greatest asset, "most still believe, though perhaps not consciously, what nineteenth century employers believed: people need us more than we need them;" but in truth organizations need more than ever to "attract people, hold people, recognize and reward people, motivate people, and serve and satisfy people." Why is this so? Because in the transition into the knowledge age, it is the new source of capital formation--the knowledge workers themselves--who control the principle means of production and constitute competitive advantage. Quality of work life is not just a moral imperative but a business imperative.

Let me be clear, converting work from it's widely perceived role as a "necessary evil" to a pathway toward deeper levels of inner satisfaction is not about lowering standards of performance or diminished financial expectations--nor is it about Pollyanna thinking. In fact, in the current era of continuous improvement and high competitiveness, the reverse is true. Work must fill the rising expectation of people for fulfillment, and be economically effective as well. In fact, economic effectiveness will increasingly depend upon enriching the human quality of the workplace.

Human Capital Drives Financial Capital

Most seasoned entrepreneurs or managers I've met (do hold firm convictions) that over a long period of time it is human capital that creates financial capital; not vice versa. Yet rarely, as we pointed out, do corporations devote the same care to absorbing the time tested principles for human development as they do to applying financial and scientific principles to their tangible affairs. ln fact, many organizations depreciate their human capital by unconsciously using financial and scientific mental models in making their human relations calculations. Financial and scientific concepts do not engender creativity, ingenuity, trust, perseverance and other human qualities that directly impact business performance and personal happiness. These human characteristics can only be nourished by adopting human values that are lived up to in going about ordinary commercial activities.

Contrast the emphasis on financial and scientific mental models with a - notably different and more balanced approach to human relations in organizations. It comes from Konosuke Matsushita, the founder of Matsushita Electric. He said (he was addressing an English speaking audience): "Poor you, management is the art of smoothly transferring the executive ideas to the workers hands. For us, management is the entire workforce' s intellectual commitment to the service of the company...without self imposed functional or class barriers. Only the intellects of all employees can permit a company to live with the ups and downs and the requirements of its own new environment. "

The Top-Down Command and Control Organization

Why haven't more companies caught on to the connection between human nature and financial performance? To answer this question. one must understand the current intellectual and emotional ecology of most American institutions. Despite the trend toward flatter organizations, most large enterprises still in fact support outmoded bureaucracies with a top down, command and control structure where people learn to play it safe and not take risks. This structure, which served its purpose well in another era, is afflicted with numerous problems that bias the interpretation of information, distort decisions, and, over time, stunt the personality and character of managers and workers. The corporate environment in most American institutions, as a result, is drenched in personal politics that puts individual interest and cronyism ahead of the enterprise's common good, where "who" is stressed rather than "what;" in bureaucracy that is used to escape personal responsibility, where compliance with rules and procedure is more important than accomplishing the intended purpose; in hoarding power to keep one person up at the expense of holding others down, where aligning yourself with the right person is more important than the rightness of the mission and the pecking order still reigns; in manipulating information through selective secrecy and spin control, and in enormous waste of human and tangible assets .

This is not an indictment of individuals but of a system where material considerations overpower enlightened governing ideas for human relations. In essence, it's a system of governance in which conforming is prized over individual commitment and involvement. It seldom works well even when good order is established. Naturally it gets the trains running on time but it always has a high cost. It creates a climate rife with office politics, toadying, bureaucracy, and verbal gamesmanship, where human contribution is devalued.

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PRINCIPLED-CENTERED GOVERNANCE:

The Value-Guided, Vision-Driven Organization

Where would I start to right this mess?

The antidote to overcoming the dispiriting impact of the authoritarian institution is to cultivate deep respect for each individual worker, recognizing that all work has dignity and understanding that humility is an important virtue for managers to achieve long term success. To do this requires a shift of mind.

I am skeptical when someone suggests a shift of mind to me. Their are too many people peddling all purpose snake oil cures for organizational illness. So let me be precise about what I mean by a shift of mind.

Transformational cultural achievements, in my experience, are rooted in two processes:

1.) substituting a higher value to replace an inferior value such as merit decision making replacing political decisions, individual responsibility out weighing bureaucracy and openness replacing unjustified secrecy or

2.) a superior mental model replacing a less effective one.

Mental Models

A mental model is a set of ideas that form a concept that functions as a filter or computer program in our mind. All information that our senses bring to us go through this filter or program which, in turn, determines the opinion or conclusions we form. Obviously, the opinions and conclusions we form govern our actions. Paradigm is another word for mental model. For instance, an accountant takes in information and views it through a lens that measures its impact on the income statement and balance sheet. Meanwhile, the sales manager takes the same information and views it through a lens that measures customer reaction and competitive advantage. Converting a logjam between these two functions requires developing an integrative mental model to replace the compartmentalized ones.

Narrow, compartmentalized mental models in the heads of employees result in fragmented behavior in a company. Integrated mental models, combined with appropriate values such as Merit and Openness, drive cooperative behavior and produce competitive advantage. Lack of either appetite or skill to examine or develop mental models results in organizational rigidity. Capacity to insightfully analyze and refine mental models by workers results in agility, quality and improved performance.

At the core of a learning organization is the willingness to constantly test their current operating mental models in seeking to develop more accurate and better nuanced models and sharing the findings throughout the organization . The transforming leader' s principal task is not to possess all the answers, but to espouse and practice higher human values and promote the search for better sets of concepts for deciding strategic and tactical issues. Within that context, managers and workers will find the appropriate answers to their issues.

What is the difference between a value and a mental model? A value is an eternal truth about human nature that an individual believes is important and right. We live up to a value because we believe it is right to do so. We expect values to be constant. What changes is the degree to which we practice them in our daily activities. A mental model is a set of assumptions each person develops about how the world or other complex systems work so they can process information quickly and make effective decisions. We use our mental models to decide large strategies or small tactics. The test of a mental models effectiveness is how it works. When the outcome of a decision does not satisfy us, we should reexamine our assumptions and decide if our mental model was appropriate for the issue. An important dimension of life time learning is a relentless pursuit of better concepts through which to process information. Enduring competitive edge is driven by mastering the process of constantly improving mental models not getting the right one.

Transformation Begins at the Front Line

The key to marrying work and happiness, humanistic values and financial performance is to make it happen at the front line. Managers must examine their long-standing and habitual practices, which are derived from their own internalized values and mental models, towards the individuals who work for them--regardless of their position in the pecking order--and be willing to do something about them. If the attitude, "I'm your boss, do what I want" were supplanted with, "Let' s combine our perspectives and see what we can learn together," a whole new type of institution would emerge.

The idea that a manager can serve his employees as well as lead is an old one. An early proponent was the sage Lao Tse, who promulgated the concept of the servant leader in Ancient China, before he disappeared into the mist of time. Robert K. Greenleaf, in his excellent book Servant Leadership, develops the subject in a modern context. He said, "We are not wanting for knowledge of how to do things better, or for material resources to work with. But we are sorely in need of strong ethical leaders to go out ahead to show the way so that moral standards and the perceptions of many will be raised, and so that they will serve better with what they have and what they know." It is an idea whose time has returned. The environment I am about to describe presupposes a different approach to human behavior. It respects the need for good orderly direction but combines that with a respect for individual capacities. It understands the dictum that organizations need to serve and satisfy all members of their work family. By carefully selecting and nurturing people who espouse and practice these ideas, the ecology shifts. To paraphrase Gandhi, transformation takes place when you become the change that you wish to see in the world. Before taking any action to change a corporation, a senior leader needs to look into his own soul and determine what he wants to do with his life... then what he wants his company to do.

If we start from the perspective of companies, what central organizing principles might provide the underpinnings of such a transformation? With the above as background, I propose four values on which to center human relations in organizations. They are Localness, Merit, Openness and Leanness.

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LOCALNESS

We are living in a time when people believe they can have less and less influence on events. Disillusionment with large institutions- government, business, education--has caused many people to lower their aspirations. Though no one likes mediocrity, there is a tendency to tolerate it. In nearly all companies, people have come to learn to accept the world this way, a kind of "play it as it lays" fatalism pervades--"I have no say in how things run."

What if the idea were the other way around? What if people believed they could change their part of the world, that they do matter, that their decisions are valued, that, they can have an effect on their environment? What would this environment look like? What values would it espouse?

If asked, most managers will tell you that the best decisions are usually made as close to the scene as possible. Nearly everyone accepts the idea that high motivation results from local people thinking and working together to determine their actions and, therefore, their results. This is the essence of the idea of localness, making decisions as close to the scene of action, as practical, so that those who do the deciding have the flavor as well as the facts and are sensitive to unintended consequences as well as to the intended purpose. This does not mean that localness is a geographic distinction. More significant, it is not a management approach like decentralization that places operating functions and applicable authority outside headquarters (a bias we favor, incidentally).

Liberating and Economically Productive

Localness, instead, is a philosophy that guides people who are at different levels of an organization in relating to one another. Localness is about liberating workers at all levels from the oppressive features of the command and control structure, so that each individual may use the job to personally develop and to truly serve the organization's mission. It is a package of attitudes, ideas and principles which lead to better decisions, guide relationships between levels, and maintain a balance between order and freedom. Localness embraces the tension between order and freedom, rather than just capitulating to order. That is why it is harder to do. It is, in fact, much more complicated to be free than to be enslaved.

Localness is crucial to the concept that work can serve as a primary vehicle through which people achieve satisfaction and happiness, that it can engage the whole person. So how do we go about designing jobs that are both liberating and economically productive? First, it entails a frame of mind in which managers engage themselves in helping the members of their staff develop their full potential. Conversely, employees ought to be encouraged to approach work as an opportunity for self-development---and for its contribution to corporate performance.

Second, we must overcome the traditional pattern of focusing job training on technique alone. To fully engage a person, work must be understood in its context--how it fits into the larger function of the company or competitive universe--and in its aspirational dimension, that is, what plateaus of quality would we like to achieve in the future.

Most people entering an organization that promotes localness have received their professional training in command and control companies. A few might think that since there is less of the apparatus and baggage they were accustomed to in their command and control days, they now can do anything they want to do. That, of course, is absurd. It is important that they understand that discipline is valued and needed. The difference is that in this environment the source of discipline is common values and shared aspiration. Discipline is self-discipline, not imposed discipline. Under all circumstances great organizations have discipline. A great organization cannot exist without it. Members need to learn and internalize accountability which is eventually a joy, but initially a tough transition for many because they have not been encouraged to develop personal responsibility or to express their creative selves.

The Principle of Subsidiarity

As an important principle of organizational life, Localness is not a modern fad. Its roots are found in the Principle of Subsidiarity, which is a concept that emerged in Western Europe during the Middle Ages to free the majority of mankind from the oppression of feudal society. The Principle of Subsidiarity states that it is a usurpation of good order for a higher level to intervene at a lower level in a group of humans, if the people at the lower level are competent to resolve the issues themselves. Its application is as appropriate to the twentieth century business enterprise, as it was to twelfth century feudal fiefdoms. The principle, whether we call it subsidiarity or localness--applies across the full spectrum of human relations in organized settings. It does not matter whether it involves the headquarters of a multi-national corporation and a remote field office or a cook and a dishwasher in a small eatery. The purpose of the principle is to provide conditions under which each individual has the liberty to use his or her occupation (menial or otherwise) to grow their talents, express their personality, and advance their maturity.

Localness does not alter the source of authority in an institution. Power flows, in all public corporations, from shareholders to an elected Board of Directors, to the CEO on through echelons of management just as it does under the conventional hierarchical arrangement. What changes under the philosophy of Localness is how management chooses to use and distribute power. I believe that organizations who widely distribute power to competent people will generally out perform those with equally competent people who tend to hoard power at each echelon. Over time distributing power to capable people increases organizational adaptability and self reliance at points close to where the product is built or a service is delivered to the customer. Conversely, hoarding power at each echelon increases rigidity and decreases individual responsibility at the critical points where the rubber meets the road.

Furthermore, power is one of those rare commodities that, if you do it carefully, the more you give away the more influence you can retain. Think about that for a moment. When you disperse power, you do not give up responsibility or influence. If you do, that is abdication. Instead, localness entails giving workers or subordinate levels of managers more authority to make decisions, deeper understanding of the context surrounding issues they are likely to face and more familiarity with the holistic aspirations of their enterprise. It has been my experience that managers who do this effectively produce better economic performance which, over time, results in their being asked to take on more responsibility and possessing more power and influence.

Power Disciplined by Values

A fundamental question in designing an organization is, "What is the best way to use and distribute power?" rather than, "Who has the power?"

The best way to distribute power is to disperse authority and accountability in tandem while living up to the values of Merit and Openness (which we cover more fully in the following sections). Briefly, Merit is a value that commits us to make all decisions on the basis of what gets the best result and is consistent with other organizational values. It insists that the company' s common interest transcends departmental or individual self interest. What will work is more important than who it pleases. Openness is a value and set of skills that enables us to determine what constitutes a decision based on merit. It centers on making proposals testable through examining both implicit and explicit assumptions. Localness is a bias toward making each decision as close as practical to the scene of implementation .

Dispersing power as I have just described the process grows self discipline in an organization. Generally, a company with high self discipline has a competitive advantage over one that relies heavily on enforced discipline. Why? Self discipline engenders flexibility and spirit. "Let's figure out what to do and the best way to do it" is a more productive mind set than, "Tell me what you want boss and I'll do it". The latter question increases worker dependency on supervision and keeps managers functioning like volunteer fireman i.e., always responding to emergencies. The former question increases workers' self reliance, and in time, frees managers to spend more time on the larger issues of strategy and nurturing a productive culture. The most compelling reason to weave a corporation's culture around widely dispersed power and high personal responsibility is the human consequence of providing an army of workers with an environment that stretches them to mature into more complete individuals. There is also a ripple effect. They become better citizens, spouses and parents.

Furthermore, giving people at the front line the space to reach their full potential does not obviate the need for the center. The center, in fact, has a distinct role--helping people grow through mentoring, coaching, evaluating, inspiring, deciding principles of the common issues, stating overall or overriding values and the basic mission of the organization. From their unique perch at the center of the organization, senior executive have serious responsibilities for setting the enterprises long term direction.

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MERIT

If localness is about liberating the individual, then a merit environment is about creating a different context or set of operational principles for an organization.

A merit environment is one in which the entire effort of the organization is focused on the attainment of the organization's purpose and vision in a way that is consistent with its values, that is, what it stands for. A merit environment, in contrast to a bureaucratic or political environment, supports individual initiative, open discussion, and the search for the common good. The idea is startlingly simple and logical--and sensible. Why, then, do we often find it overwhelmed by the politics of self-interest or bureaucracy where procedures are used to avoid personal responsibility? The reason is that creating a merit environment requires most of us to change the way we think and express our thinking. The practice of merit requires a strong sense of responsibility, a willingness to speak out--not to follow orders for order's sake--but to focus on ways to achieve the organization's purpose and vision consistent with its values. The challenge of merit is to practice it so that behavior is consistent with what we say and what we intend.

How do we get there? How do we create and sustain the dedication required for a merit environment? First, people must feel free to question rules and procedures. They must feel free to speak out whenever something stands in the way of achieving the organization's purpose. Creating a merit environment means encouraging individuals to express their thoughts about what they're doing or should be doing. For this to work, people need to understand the company's purpose and goals, and the reasoning behind them. This means that senior management must become much better at explaining the business context and challenges. Managers must maintain an ongoing strategic dialogue throughout the organization. For Merit to work, the people must take the responsibility of thinking about the merits of their ideas rather than raising questions or making suggestions just because they want something changed. Questions like, "Will the idea help us to accomplish our purpose more effectively? What are the facts? What decisions seem best after we openly discuss the facts and relate them to improving effectiveness?"--are to be encouraged. The Merit environment is characterized by careful evaluation of the merits of any idea. This is not an environment characterized by "who's in charge here,"not "it's right because the boss says it's right." It is an environment where people can say, "we carefully gathered the facts, discussed them freely, and now believe we can set the most appropriate course." Eventually, out of this continual testing and challenging of individual actions, new insights will emerge that cause actual strategies and goals to evolve. In this sense, the organizations' strategy and goals evolve with input that is not just top down and bottom up, but also "bounced around." Such decisions are not only better informed but also more widely "owned."

Heightened Role for Management

When people believe that what they are doing is worth doing, when they know they can change the way their department or the company operates, then organizations will get better ideas and better results. People will have more fun at work and feel a greater degree of satisfaction because their whole person is utilized--body, mind, and spirit. The role of management changes too. It is characterized by the phrase "leadership by example." While management has the same authority and responsibility as in comparable organizations, the difference is that managers need to exercise their power consistent with the merit environment. For a merit environment to work, managers must be able to teach what the mission is all about-- purpose, vision, and values--and apply this framework to local needs. Further, their needs to be sufficient institutional frameworks and support systems to teach the managers and to continually enable them. A company's governing ideas and strategic mental models need to pervade its organization and be constantly supported in thousands of little ways.

The value of a merit environment should be obvious by now. Ensuring that a merit environment can be created and sustained is the role of openness.

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OPENNESS

We live in a society which places a great deal of emphasis on understanding ourselves and others. We are encouraged to be open with our feelings, thoughts and beliefs, to communicate. Yet many organizations have environments that seem expressly designed to discourage this openness. Have you ever attended a meeting where you disagreed with what was being said, but you did not feel free to voice your own ideas? Did you ever then leave the meeting at break to become involved in a discussion where people felt they could say what they really thought? If your answer is yes, you're not alone. Many people sit through such events thinking, "I don't believe that's the right thing to do." Or I'd like to say what I think, but I know my boss doesn't agree." Or "I'd better keep quiet about my ideas, they're just too different." Then, they vent in the corridors or the lavatories.

An open environment attempts to resolve this tension. It seeks to create a climate in which people are allowed to share their ideas without worrying about whether others will be pleased or offended, without considering who is for or against an idea, without keeping track of winners and losers. Practicing openness, like the other three principles, is easier said than done. It is one thing to say you want to be open, another thing to practice it. Why?

All of us were born with unlimited potential for openness. Yet as adults, we often have to struggle for the spontaneity that came to us as very young children. One reason is the conditioning we receive during our formative years. By the time we become adults, we've likely experienced more win-lose than win-win situations, more "shall nots" than "can dos," more distrust than trust, more competition than cooperation. This starts when we are small and is institutionalized in society in many ways. In such a scenario there's every reason to play our cards close to our vest--and very little incentive to be open. First and foremost, openness requires trust. Through trust we accept the risks which come with honest, forthright communication. Without trust, people feel isolated. Just ask the denizens of a command and control hierarchy. Openness is like lubricant, it encourages the free flow of information and the meaningful discussion essential to sound decisions. When practiced, it lets us know what is happening, why it is happening, and the thinking behind it. It results in decisions which incorporate multiple viewpoints and experiences. We build open environments, supported by trust by being honest with each other, sharing our thoughts and opinions, developing mutual understanding of purpose, vision, and values, sharing information, respecting ourselves and others, helping each other succeed, and walking our talk--that is, closing the gap between our words and our behavior.

The Three Dimensions of Openness:

How do we recognize openness? First, openness has three dimensions and each is connected to the other, as we usually find when we explore values in the context of forming philosophy. The first dimension is conversation skill, the second is information flow, the third is credibility.

Conversation Skill

Individuals have a strong drive to accomplish their own agendas. They strive to exert control over tasks. They maximize winning and minimize losing. This behavior creates an environment in which people have little freedom of choice, take few risks, and often make only token commitments to the goals of the company. It fosters a low quality of conversation often characterized as verbal gamesmanship.

Open and skilled conversationalists design situations in which all participants can use their personal initiative and take responsibility for their actions. Ideas are structured for testing, not for sale. Sharing information is deemed essential to the capacity of both individuals and the organization to grow. The capacity of an individual to inquire about the beliefs and ideas of the other person is as important as the ability to advocate. Winning is arriving at the best answer, not dominating. Openness is about clarity and using dialogue and negotiation and other conversational skills to build shared understanding. Openness also requires skills in reflecting on one' s own thinking.

Information Flow

In order to fully engage the whole person in work--spirit, mind, hands, body--everyone has to know the rules of the game, how the company is performing, the critical issues the company faces. There should be no hoarding information, no pockets of secrecy, and no undiscussable subjects. Their are a few exceptions to full dissemination of information such as data entailing individual privacy (the content of a performance review) or insider information. However, in general everyone has access to all fifty-two cards in the deck--and in the case of meetings, preferably several days before the date set for discussion.

Credibility

American corporate managers have become so accustomed to putting a spin on information that many are no longer conscious of doing it. Bad financial news is obscured by relegating it to a footnote on page 32 of the annual report. New words like "rightsizing" are coined to describe layoffs that result from unwise past decisions. You often get the feeling of drowning in molasses when companies report news in their house organs, and much business conversation is plagued with defensiveness, euphemism, and signs of insecurity.

In an open environment, the standard for all corporate communication is forthrightness. Each constituency gets the same facts and interpretation. The message is the same no matter whether it goes up or down.

Openness builds greater competitive advantage than closedness because it nurtures cooperation and stimulates the thinking and creativity of the people closest to the problems and the solutions. Equally important, through practicing openness, individuals learn, grow and mature. Through openness, they become active participants in the work, and the life, of their organizations. Knowledge is power, so to be open is to share power. To share power, managers must confront the fear of loss of control and status while the organization must reward not power but, empowering.

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LEANNESS

Individuals have an appetite for ever increasing comfort That is normal. Likewise, corporations have an appetite for growth and expansion. That also is normal. Where trouble occurs is when these appetites are excessive or ill-timed in terms of the individual's financial capacity or the corporation's point in the economic cycle. Then, as we all know, much pain and suffering accompanies the process of bringing ourselves or our company in compliance with the economic law that stipulates income must exceed outgo.

How does an organization avoid getting fat or overextending on the false assumption that good times will go on forever? Leanness is a value that moderates unhealthy appetites for lavish displays of corporate wealth or personal propensities toward excess materialism.

Thrift

Leanness is a derivative of thrift which, throughout the history of civilized mankind, has been an established virtue while its opposite, waste and extravagance, are vices that weaken both cultures and individual character. When practiced to excess, materialism breeds moral and psychological corruption. Lavish expenditures at the top of many companies distorts peoples sense of values and distances them from their sense of obligation to workers and customers. It engenders deep resentment on behalf of employees and lowers their buy in to the organization' s mission. Unfortunately, displays of opulence, and the conversation attendant to them, by senior executives get imitated and passed down through the managerial echelons. More damaging is the fact that excess materialism degrades moral authority and the sense of proportion with which decisions are made. What more is leanness? Let's begin by considering what it is not. Leanness is not cheapness. It is not paying low salaries. It is not accepting shoddy work or thinking. What then is leanness? It is demanding that every dollar we spend earn a high return for our company. It is being mindful that many business and financial mistakes arise from waste, overspending, unsound expansion and other bad business practices which eventually become bad habits. Though the poor practices occur in good times, the penalty most often strikes in bad times. Many business historians tell us that the biggest mistakes take place during prosperity. Thomas J. Watson, founder of IBM, called prosperity "more dangerous for a business than depression." The recent history of American business is full of examples of companies, which, intoxicated with profits, allowed euphoria to overcome common sense, experience, and rationality.

For Good Times and Bad Times Leanness is an attitude. It is a frame of mind that helps a person or an organization grow and prosper in good times and bounce back from bad times. It is a way of life in which we base our sense of satisfaction on what we achieve, not on what we spend. A lean organization avoids spending for show because it knows that results and performance speak for themselves. It feels no compulsion to impress. Furthermore, leanness must always be married to improving quality. It's easy to be lean and do things late and poorly, but it's not very satisfying. It's no great feat to deliver timely and excellent service if unlimited amounts of money are available, but it's not very realistic for the long haul.

Leanness is a future-oriented value. It prepares organizations in good times for the inevitable bad times, creating a mindset for an environment of moral excellence, and countering the pull toward ordinariness.

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SUMMARY

The central organizing principles for an organization's decisions and actions involving people, its values, and aspirations cannot be reduced to a formula. Nor do I believe there ever will be a package of rules such as their is in accounting and science to be plugged in and applied to human relations. It is unwise and unworkable in this age of Western democracy and capitalism to try and run an organization on principles that are forced on people. A value to be a value, by definition, can only be voluntarily embraced.

Nevertheless, there are certain principles for guiding human behavior, that, if followed to a reasonable degree, will transform the moral ecology of modern corporations to a new plateau and at the same time improve productivity and financial performance. That is what this paper has been about so far.

Let there be no misunderstanding. Shifting the mindset of organizations will require changing how we think about work and the role organizations play in ow lives. The work that must be done will involve many dimensions. Transforming the climate from one of mediocrity to one that supports moral excellence will take time and effort and commitment - a profound re-orientation. That is the subject of our next essay, The Moral Formation of Managers.

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MORAL FORMATION FOR MANAGERS

Closing The Gap Between Intention and Practice
One of a series of essays about Character and The Corporation
WILLIAM J. O' BRIEN

MORAL FORMATION FOR MANAGERS Closing The Gap Between Intention &;Practice

"We judge others by what they do, we judge ourselves by our intentions." "What you do thunders so loud, I can't hear what you say." These two quotations, one from an anonymous author and the other from Henry David Thoreau are a succinct summary of the difficulties of changing an organization from one that is considered ordinary by present standards to one that strives to practice moral excellence. By the practice of moral excellence I mean more than avoiding what is illegal or simply conforming with contemporary commercial ethical principles. Instead, I mean absorbing age old moral truths that have been identified, developed, written about and experienced over centuries of western civilization and pursuing their practice with the same vigor and commitment with which we go about achieving technological, marketing or financial excellence.

Human Capital Drives Financial Capital Why make such an investment in moral excellence? Because human energy in the form of initiative, creativity, discipline, conscientiousness, fortitude and stamina drives product and service excellence which, in turn, drives financial performance. Human energy, in turn, is inspired by either fear, greed, ideology, or the pursuit of moral excellence. Of the choices, the pursuit of moral excellence in my estimation is the most effective, enduring, and elevating path to energizing organizations because it taps into man' s noblest and enduring appetites for truth, learning, honesty, purposefulness and to love. As a by-product, it engenders a social ecology that fosters individual growth, maturation, and happiness.

Are such aspirations too idealistic? I don't believe so. Perfection in moral behavior is never achievable. The energy we seek to release--and the inner happiness we desire--are derived from pursuing moral excellence in a community with shared ideals and through achieving a level of practice that compares favorably with both our past and our competitors. Put differently. performance improvements are earned by getting better. not perfect.

Moral Formation: A Difficult Journey If pursuing moral excellence is a superior method for driving business performance, why do we find it at the core of so few companies? Moral excellence requires commitments that run counter to the many habits and mores in Western society; namely, instant gratification rather than life-time satisfaction, technological solutions rather than developing qualities associated with the human spirit, and feeling good rather than being good. Though many recognize and lament the character imperfections that infect the ranks of large authoritarian hierarchies, they seem paralyzed to do anything about them. One reason is the systems principle of delay between cause and effect. In other words, when the lag time between an act and the visible penalty is long, we do not clearly associate the two. If those who smoked on Monday discovered they incurred cancer on Tuesday, few would smoke. Thus, rather than root out the infection of low moral behavior people adapt to it by becoming political, bureaucratic and adept at corporate lingo that is always accurate but seldom purposeful. Most employees want to be moral. They prefer to spend their working lives in moral environments. Most companies, including the members of their Board of Directors and CEO, want their organizations to be moral. Then why is living up to high moral practices so difficult? There are three reasons.

First, after decades of being treated as a herd of hired hands (often compassionately and fairly), employees are highly skeptical of new schemes of governance. They say to themselves and close colleagues, "I hear what management says, but do they mean it, will they personally practice what they advocate (such as tighten their own belts in a program to lower overhead)?" Second, corporations have not undertaken major efforts to develop philosophical and moral underpinnings for governing their people. What most have is a hodge podge of notions that come from Roman army ideas about control, from technological innovations to maximize the efficiency of mass production, from scientific principles about measurements, and lately some accommodations to Douglas McGregor's Theory Y. Yet few corporations have made a systematic effort to design their methods of governance in congruence with how human nature has evolved and is evolving.

Third, managers have received minimal instruction about the moral dimension of exercising their responsibilities, although moral excellence requires more than instruction. It must be undergirded by a network of managers, who have paid attention to their own formation as human beings, a subject seldom found on the curriculum of our corporate management education programs or the business schools. My observations persuade me that the most influential forces on managerial moral practices are parenting, mentoring, high school education and the example of senior executives.

Although the difficulties are daunting, think for a moment of what might be achieved. The competitive advantage for those organizations would be breathtaking. The potential in releasing bottled-up human energy is twofold: a high percentage increase in more productivity, and an unimagined improvement in relationships with external consdtuencies, who will respond positively to the quality of the experiences they have with such an organization.

Building A Culture To Foster Moral Excellence How does one begin the arduous task of retrofitting a corporation culture to put the pursuit of moral excellence at its core? For me, it would begin by facing the character disorders that affect human relations in routine business activities in a manager's area of responsibility. How are decisions influenced by political connivance? To what degree do actions, intended to maximize self- interest, interfere with achieving the company's overall interest? Does bureaucracy overwhelm individual responsibility? Do rules and procedures always take precedence over human judgment, even when everybody knows the application of the rule to a particular situation is counterproductive or unjust?

The responses to these questions, to have meaning, require a "compared to what" measurement. Do you compare your answers to a "typical company," to an objective standard of morality that has not been sharply tilted by late twentieth century (perhaps beginning in the sixties) slippage in moral practices, or to the vast amount of human potential that would be realized and channeled into corporate endeavors by improving the moral ecology. My preference is the latter.

Viewing Responsibility On A Moral Step Ladder In my experience as a CEO, the essence of transforming an organization's character begins with raising the level of managerial moral behavior in routine matters that are usually invisible to anyone outside a small number of people in a given manager's immediate work environs. It helps me to grasp the abstract notion of "raising the level of moral behavior" by envisioning a step ladder for ranking a manager's response to an ordinary day-to-day business situation.

For instance, an employee suggests to his manager that a certain standard procedure is wasteful and might be performed more economically by a proposed change, but the manager believes such a change would be unpopular with the head of another department who, in turn, would lobby against it with his boss. So he decides to ignore the suggestion, because he believes it is better for his own interest. In other words, he puts self-interest ahead of common interest and avoids risk, ahead of his personal responsibility. The consequences of this innocuous-appearing decision is to weaken the fiber of his own character and stifle the appetite of employees to commit their initiative and spirit to the corporation. Thus, it stunts growth.

The scenario I have described represents behavior on a low rung of our moral step ladder. If it were investigated, it no doubt would be excused as something that fell between the cracks. In fact, incidents similar to it are common everyday events in many companies and government departments.

Nothing that happened is a headline grabbing moral transgression. Nothing done was illegal, nor can anyone point with evidence to a lie. Probably no company procedure was violated, but acts like this repeated over and over again sap the vitality out of worker teams, stunt the growth of the individual's aspirations, and tarnish the souls of corporations. And, it damages financial performance as well because it is impossible for dispirited people to fully thrust themselves into productive action for the benefit of an organization of which they are - whether they admit it to themselves or not - ashamed. We label this rung of our moral step ladder, "Legal But Repugnant".

Let's move on to the next higher rung of our moral step ladder. Our manager evaluates the employee's suggestion on the basis of how it will effect quality and cost, is not influenced by self interest or politics, and recommends that it be introduced into operations. He may be surprised: his idea may be adopted, but more likely, his original fears were accurate and the suggestion is vetoed for political reasons. He advises the employee who originally made the suggestion and expresses appreciation for his thought and effort. We label this rung, "A Moral Effort Overwhelmed By The System."

Obviously, the next higher rung on our ladder belongs to the manager, whose sense of personal responsibility is becoming stronger. He attempts to change "the system." i.e., from one that is political to one based on merit. How might he go about this? He could commit himself to adopting the highest rung on the ladder as his personal standard for his area of responsibility. Then he could set expectations for his staff that all departmental decisions be executed at the higher step of the ladder. After an example is set in his own department, which no doubt others will notice, he can credibly advocate for change in the larger entity. We might call this step on our moral step ladder, "Marching To My Full Moral Potential (without becoming a fanatic or martyr)."

This simple and fictitious story offers a scale for comparing the relative character of moral action, from a low level approach to an admirable effort. Thinking of moral action in terms of a progression i.e., using a step ladder, gets people in an organization out of the either or trap, of, "It's not immoral. so it's OK."

lt is evident to me that transforming a corporation's character lies in advancing the moral formation of its managers. This statement is not intended to imply that the majority or even many managers are immoral. That has not been my experience in more than thirty five years in corporate life. In fact the opposite is true. The vast majority of my colleagues (and adversaries) have been moral people. It is simply that the traditional command and control corporate structure has become a system that depersonalizes work and, in many instances, has substituted material principles for moral values without understanding the human or financial consequences.

Morality is either facilitated or hindered by the environment. People who may be moral at home are often less moral at work because only the most courageous of us can step out of roles and expectations when everyone else sells out. The corporation should make it easier to act morally on its behalf by telling its people explicitly to do the "right thing". Again, we see the journey toward moral excellence entails ongoing ratcheting up of personal moral formation in tandem with creating culture that supports and expects such practices.

No Need To Invent New Moral Theories Advancing the moral formation of managers sounds like a formidable task. It takes us back to identifying central organizing principles for human behavior to augment the organizing principles we have for science and accounting. Fortunately, we need not invent or discover new principles and then wait a decade to see if they work. There is much wisdom that has been collected and tested over the centuries and can be tailored for the twentieth century corporate and civil setting. The teachers who have helped me most are Plato, Moses, Jesus, Adam Smith, Teilhard, Douglas McGregor, E.F. Schumacher and Scott Peck. No doubt each of you have your own list of people who shaped your character. The challenge is not to come up with a master list of moralists and their theories, but rather take what we already know and rigorously apply it to day to day managerial conduct.

Transforming the moral ecology of a corporation, thus, entails two broad gauge strategies: 1,) promulgating moral principles around which human relations are centered in much the same way that financial information is centered on accounting principles and 2,)- encouraging managers to pursue their personal moral formation with the same vitality with which they develop professional skills. In the previous section of this paper we discussed Localness, Merit, Openness and Leanness as values that engender human happiness and the financial performance of business. Now, let's look at what values arc key to the formation of personal managerial character. Personal moral formation begins with shaping one's interior attitudes toward virtue and vice. Shaping interior attitudes begins a process of examining critical ideas and internalizing beliefs that should be taken seriously for they have a profound effect on one's life. These critical attitudes ought not just be inherited or accidentally adopted for they are at the root of the "meaning of life". To qualify for leading people at any level in a first rate company, a manager should be required to have paid serious attention to his/her moral formation and consequently to the construct of his interior attitudes.

One of my implicit assumptions is that each of us possesses a will that is free to choose moral attitudes. Put differently, moral attitudes are not the same as being born left handed. Though influenced by our environment, we each have a free will for making moral choices, which is developed through reason and discipline The essence of our character is the moral dimension of all the acts and decisions that constitute our life to date.

Choosing The High Road Imagine a recent college graduate setting out on a journey to reach lifetime happiness. He heads west on Route 90 and soon comes to a junction in the road that presents a choice. The sign for the road to the left says, "To Life Time Happiness via Wealth and Power." The sign for the road to the right says, "To Life Time Happiness via Virtue and Wisdom." The heavy traffic steers toward the wealth and power road. Its rewards are apparent, visible, appealing and achievable over the short term. So many of the people who run our institutions today seem to have come down this road. Besides, most of our friends head in this direction.

What about this road that goes by way of virtue and wisdom. The dictionary defines virtue(n) 1. Moral excellence; right living; goodness. Virtue comes from the Latin word virtus, which means manliness, or virility. Yet, in modern management circles, virtue is often associated with notions of softness and weakness. Let there be no doubt, transforming typical corporate rat races into morally uplifting cultures that earn superior financial returns requires an inner toughness of its leaders, a willingness to stand against the crowd, an ability to question well-rationalized assumptions and a faith in the power of the human spirit. Wisdom, in turn, is more than intelligence. It suggests a special quality of judgment in human affairs based on knowledge of moral principles, human nature, human needs, and human values. Wisdom is more than what people know, it is who they have become; and who they have become is determined by how congruent their behavior is with their knowledge. Put differently, knowledge of moral principles, human nature, human needs, and human values are not enough. To have credibility as leaders, and consequently earn followership, they must live up to their knowledge.

So our young graduates are faced with a critical decision about their personal formation i.e.; which route is the best way to happiness. It, no doubt, will be a private decision, drawn out over a period of time, and largely invisible to all but a few close confidantes.

If one aspires to be a leader, the choice between the two roads is not easy. Within all of us, there is a pressure to go down the popular road. There is the tension between what we want to do and what we feel we should do. If, however, we assess the choice at the junction from the perspective of, "what kind of leader would we prefer to lead the company with whom we are committing our career," the answer is easy. Obviously, as followers in an organization we'd prefer to have our environment designed and governed under the guidance of a leader whose driving influence is virtue and wisdom as opposed to power and wealth.

In the everyday world of commerce seldom would we find anyone who traveled exclusively down one road or the other. We are mostly lead by managers whose interior choices travel both roads. Theirs is a balancing act of sorts. Is this also true of leaders? Which set of interior attitudes is the driving force in their moral development? That is the key to determining who they become. Often individuals, who strive for happiness through developing virtue and wisdom, and act in accordance with these beliefs, acquire a great deal of power and wealth as a by- product. On other occasions, the opposite occurs. It is a conservative generalization to say that the highest quality of happiness is derived from centering one's life on virtue and wisdom, and if it brings financial comfort and influence, that is a nice bonus.

For some reason, the pursuit of the practice of corporate virtue, as I have described it, is seen as a tradeoff against profitability. Nothing could be further from reality. Lowering acceptable standards of performance for technical business activities does not advance virtue, wisdom or happiness. In fact, it does exactly the opposite. The path to happiness via virtue and wisdom is a demanding one. It stretches people. It raises energy levels. It strengthens commitments. But, it ought never be confused with paternalism. Every adult should be treated as an adult both in terms of responsibilities and expectations.

At this point the reader's reaction to my emphasis on moral formation might be, "all that you say seems sensible to me, but it doesn't fit into the world I live in." This poses an interesting question: has traditional moral teaching (over twenty-five hundred years) become obsolete in the latter third of this century? Did western society take a wrong turn three decades ago, when moral relativism began to gain ground? Once again, I do not want to be misunderstood. The issue is not that too many managers have bad morality. Instead, it is that we are part of a system where morality is underdeveloped in relation to professional skills in technology, finance, communications, etc. Put differently, it has been my experience that many. managers underachieve, not because they don't have any core beliefs, but because their core philosophies of life are underdeveloped. They simply have not devoted enough time to reading and reflecting on the application of the wisdom of the ages to their professional responsibilities. Is this not to be expected in a society where public education is expected to be value neutral, organized religion has lost influence, family structure has been weakened, and the principal influence on young people's character is often television and motion pictures? On the other hand, when the human species gets off track, it invariably makes the necessary (and usually painful) adjustments to behave in a way congruent with its evolving nature.

Perhaps, as corporations learn to understand the importance of human spirit in achieving superior economic performance, enlightened corporate governance will also have a significant role to play in getting ow western civilization back on a track of moral development in the twenty-first century. Ought not this generation of corporate managers play a leading role in an inevitable societal transformation through reintroducing the moral dimension to everyday commerce? If so, it's time for managers to begin to prepare themselves by learning how to shape their interior dispositions.

So let us move to the hard part of managerial formation, i.e., applying age old moral wisdom and practice to issues that often infect the culture of modern enterprises. Some that quickly come to mind are depersonalizing workers ("I feel like a number around here."); institutional rigidity ("We can't change fast enough to keep up with innovation in our market."); or ineffective implementation of grand strategy ("It sounded like a winning strategy but in the complexities of execution we made some incredibly poor judgments.) At the root of each of these infections is a virus called "hoarding power." Each level of management practices "trickle down dispersal of authority." In my experience, it is worse at lower echelons than at higher ones. Not only is authority rationed but so is information. Information on job techniques is readily available, but knowledge about context which is necessary to handle the unanticipated is scarce. By not sharing context, bosses keep workers dependent.

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LOCALNESS, LOVE AND THE MORAL STEP LADDER

Earlier we talked about the role of values and their ability to remedy the ailments we have just discussed. Consider for a moment, the problem of how managers relate to the people in their organizations. What stance do they take vis-a-vis a senior manager, and what stance do they take vis a vis someone who works for them? We can apply the concept of localness to this problem. Localness, as you'll recall, is a philosophy that guides the conduct of relations between different levels in an organization. Localness is about liberating workers from the oppressive features of the command and control structure so that each individual may use their job to fully develop themselves and improve the organization's productivity .

Now, let's use the concept of localness to reflect on its implications for personal managerial moral formation. How ought a manager at the fourth echelon from the CEO treat a direct reporter who happens to be at the fifth echelon?

A quick and easy answer might be, "Like he treats everybody else including his boss at the third echelon." That is a great answer, but few, in my estimation, live up to it. In fact, one of the best ways to read a person's character is to compare their upward behavior with how they treat those who report to them. Quite revealing. Yes, two-facedness is a moral (though not mortal) deficiency. When you think about it, the people who work for a manager have more impact on what he or she accomplishes than do those to whom that manager reports. Then why are people so often toadying to those above them and indifferent to those who are below? It has a lot to do with the way the system treats power and much to do with our moral development.

The Moral Step Ladder Once again, we can use our moral step ladder to illustrate the range of postures between what is morally permissible and what constitutes moral excellence in this most ordinary relationships of business, i.e.; how a manager conducts his responsibilities with someone who reports to him.

The Business Servant On the bottom step we find the rung called "The Business Servant." This manager's attitude goes something like this: "She works for me, therefore her job is to do what I tell her, to please me and make me look good. I expect compliance with my directions, and for that I pay the market's wage for a day's work. I parcel out information on a "need to know" basis, for workers, after all, are merely hired hands." While it is never expressed in such blunt terms, a worker is viewed solely as an instrument of production. People working on construction crews can find themselves in this position. So can managers at all echelons in the hierarchy, but usually white collar managers get a sugar-coated version of the treatment. The boss's behavior is not illegal; nor does it constitute a specific immoral action. The sum total of the relationship, however, prevents the worker from developing the capacities to take on more responsibility, from experiencing meaning in his work, or in using his work as a path to happiness. From the employer's standpoint, it also only engages his body, part of his mind, and practically none of his spirit. It is normal and legal but dispiriting, and most unfortunately, wasteful of human potential.

The Late 20th Century Enlightened H.R. Practitioner The middle rung on our moral ladder belongs to the person whom we shall call "The Late Twentieth Century Enlightened Human Resource Practitioner." This managers says, "I let competent people have wide latitude in performing their responsibilities, keep them informed about the big picture. and reward them through pay and bonuses for results that are better than average." These practices are based on the assumption that good financial performance and customer satisfaction that produces growth are enhanced by attracting and retaining good people. As we look around the corporate universe, we see many of our leading companies on this step of the moral ladder. What startles us, however, is the degree of disenchantment we see in workers and managers in these, some of our most enlightened companies. Yes, much of their concerns center on security or fear of downsizing, but there is also high frustration because their work lacks meaning to them. They note that the command and control organization requires that they play political games, and they often lack respect for their senior executives. In fact, I am surprised by the number of operating heads of stellar divisions or subsidiaries of respected corporations who see their own senior executives as their major obstacle to better long term market and financial performance.

In the previous section, I proposed that value-based governance centered on Merit, Openness, Localness, and Leanness would produce better financial performance and enrich individual employee growth moro effectively than the traditional authoritarian hierarchy. I said that transforming the moral culture entails two broad-gauge strategies: 1 ) promulgating moral principles around which human relations are centered in much the same way financial information is centered on accounting principles (through the values of Merit, Openness, Localness, and Leanness), and 2) encouraging managers to pursue their personal moral formation with the same vitality with which they develop professional skills. This second element of the broad strategy brings us to the third step on our moral ladder and is applied to the mundane details of boss/subordinate relationships. If we are to have a value- based environment in our commercial endeavors, we must have value- based relationships, particularly between individuals at different echelons. Those who have highest operating responsibility in an organization should have an equal responsibility for their own moral formation. I know there is a school of thought that believes work is work, personal life is one's own business, and a thick wall divides the two. While I believe strongly there are aspects of family and private life in which the corporation has no right to intrude, I also believe that when a company engages a manager in a leadership position his character, his moral formation is as important a consideration as is his professional competency.

So I, hesitatingly, suggest that the third step on our ladder of increasingly higher moral aspirations be based on a practical understanding of love. Why am I hesitant? Because in our Western world the word "love" has deep connotations one does not normally associate with business. On the one hand, there is its romantic or sensuous connotation and on the other hand, is its familial connotation, where it describes that special feeling among family members or especially close friends. These are not the kind of relationships I believe could or should be created in the work place between boss and subordinate--but I do believe that love, at its most universal meaning, is a predisposition towards helping another person to become complete. I believe this is a manager's primary responsibility to everyone within his purview of responsibility.

If we believe ow businesses will benefit financially if our people will enlist their spirit, creativity and ingenuity to their occupations, ought not their leaders have an intense interest in their deeper happiness? I don't mean by passing out stars or other superficial kinds of recognition that have a temporary effect on one's spirit. Instead, I mean by helping them develop to their full potentials.

What changes in the formation of managers are needed to take the value of love as a concept and put it into practice?

Love, aside from its romantic dimension, is not something that suddenly strikes us from the inside or outside. Instead, it is a predisposition toward our employees, customers, vendors, owners or other constituents. It is an interior predisposition, an attitude within us that we can cultivate and direct by our will just as we do with other personality characteristics. As I suggested earlier. the central question to ask oneself in putting the value of love into practice in the work place is, "what can I do to help Joe or Mary (or ten thousand employees) complete themselves more fully as human beings?"

Quite often to render that help requires inflicting short term hurt, i.e., telling someone what they would rather not hear. Have no illusions, delivering or receiving this kind of messages is not fun. But, when it is done for the purpose of growth and not to hurt, it is a loving act. When it is genuine, it is more often appreciated than not, even when it hurts.

Practicing the value of love in business is not a soft undertaking, nor is it without tension. The loving manager is always faced with the pressure of achieving the business imperative, deciding in the . interests of the common good of the organization and of what helps the individual involved. There are no formulaic answers, but a working knowledge of the age old values of truth (openness) and justice (merit) are good navigation points to guide the practice of love in business. I believe if a loving manager is quick and tough in addressing issues when they originally surface, most damaging organizational issues can be kept at a minimal level.

Rationality has its base in the human mind; particularly one centered on scientific principles of measurements. Love has its roots centered in the human heart; particularly one centered on a relationship with a higher power. Scott Peck effectively makes this point practical in his book, "A World Waiting To Be Born" on page 254 where he says, "Top managers are not paid to make easy decisions; they are paid to make difficult ones, those that put their job on the line every day. The higher you rise in the power structure, the more double binds you are asking for. There are two ways to play these agonizing situations. They cannot be played successfully with the intellect. All the intellect will see is the the double bind, and paralysis--not leadership--will be the result. They need to be played according to the heart. By the time a person reaches a position of top management, her heart will either belong to her personal ambition or to a Higher Power. If to ambition, then her primary consideration will be to the politics of the situation, her popularity, and what is most likely to make her look good so as to preserve or enhance her position and its power. If her primary allegiance is to a Higher Power, it will be to what is right. This does not mean she will give no consideration to politics or what is right will be clear; it is a matter of the primary orientation of her instincts."

Leaders who intend to build corporations that tap into the full inner resources of their people must pay as much attention to their own moral formation and that of their key managers as they do to mental and technical proficiency. In fact, I believe, as an individual assumes more responsibility and rises up the ladder, moral formation becomes more important. The pure technical decisions usually all get resolved several echelons down in the organization. But, leadership goes beyond rational decision making. The depth of commitment that an employee makes to his employer's well being is directly related to his perception of the moral formation of his boss and his boss's bosses. The same can be said to a lesser degree about a customer's loyalty to a supplier.

Often when a leader loses his position of power because his followers reject him, as happened to Richard Nixon, or in the case of corporations, the Board of Directors removes a CEO because the company doesn't respond to his direction, those who have known the deposed individual over a long period of time frequently say, "success didn't change him, it unmasked him." Behind that comment is the assumption that all along the road to high responsibility the individual had some chinks in is character that people close to him knew about but he nevertheless was able perform those responsibilities in a way that enabled him to move to even higher office. Put differently, what are minor cracks in moral formation in upper middle management positions can be fatal flaws in senior management responsibilities. This is a critical point that is often underestimated by those with the responsibility for anointing senior executives or CEOS and by those preparing themselves for higher responsibility.

For me, the moral step ladder is to transforming institutional culture what the hammer and saw is to building a house.

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GETTING FROM HERE TO THERE

If I were reading this article and found myself inclined to endorse its major themes, my question would be, "How does one get from here to there?"

There Is No Short Cut Regardless of where the perch you occupy in a corporation is situated, leading a change in culture from command and control to governance that is driven by living up to values, by nourishing healthy aspirations and by becoming a learning community is a formidable undertaking. This is true whether you are the CEO of a complex corporation with a hundred thousand employees or the manager of a relatively small self standing division within a large corporation with a couple hundred people on the staff. It is an ongoing lifetime's world, for with each step forward, there are new obstacles to overcome and risks to be taken. And as your organization approaches each new plateau a new mountain will emerge before you have an opportunity to relax and enjoy the setting you just reached.

How long is a lifetime's work? It took Jack Adam, my predecessor as CEO at Hanover, and myself six years to see the linkage between changes in governance and improved economic performance and twelve years to build a mature value based, vision driven culture. By mature culture. I mean what began as an experiment in theories about corporate governance reached a point where it produced consistently superior financial results and widely recognizable individual growth through a process that we knew how to replicate. The substance and flavor of the culture existed in practically every corner of the company.

Why does it take so long? Because your management has to change some of its long held mental models (paradigms) and replace long standing habits. People quickly grasp the intellectual dimension of these ideas and the overwhelming majority, in my experience, conceptually agree with them. But internalizing the ideas by moving them from the mind to the heart and stomach where they are translated into practice takes quite a bit longer. It requires more than a lesson. Their needs to be debate and discussion followed by application of the concepts to authentic situations. Embedding philosophy in an organization is built on achieving small successes, followed by bigger successes, while management lives up to the philosophy in times of crisis as well as in good times. In other words, people must see it work better than the culture being phased out and sec their manager walk the talk. While this progress is taking place, there will be periods of skepticism and times of enthusiasm, periods of doubt and times of confidence. All this takes time.

Knowing what we know today and considering current widespread managerial interest in improving culture, I estimate the above estimated time periods to transform an organization could be halved. However, in 1981 when I roughly calculate we reached maturity in value based management we were confronted with a new mountain to climb; becoming a learning organization - another decade plus journey. That is a subject for another article at another time.

Take A Look Inside The best place to begin the quest for organizational transformation is by examining what you want to do with the rest of you professional life. For me, when I was in my late thirties, the question I posed to myself was, "Do I want to spend the rest of my life adapting to office politics and all the other ecological pollution that infests the typical command and control company or do I want to devote it to building the kind of company where 1 would want to start out, if I were beginning my career over again." Why is this question important? Because there is a lot of perceived personal economic risk entailed in pushing- for the transformation of cultures. Perceived risk is based on fear of a negative event in our lives. I use the phrase perceived risk because I believe the estimated risk is much greater than the actual risk.

Fear of risk causes tentativeness which, when excessive, diminishes our effectiveness as leaders. Cowage is not the absence of fear. Only mindless people are free of fear. Courage is overcoming fear. How do you overcome fear? By internalizing convictions that the goals you are accomplishing are worth risking the penalties you face. Sacrifice is made sensible. Put differently, the perseverance, courage, stamina and determination necessary to overcome the inertia, skepticism and systemic resistance to cultural transformation is rooted in the leaders beliefs and depth of conviction. The self discipline to live up to the values and ideas you espouse are likewise anchored in your depth of conviction. It comes back to Ghandi's observation that transformation takes place when you become the change that you wish to sec in the world.

Root Yourself In Guiding Principles So you have decided what you want to do with the remainder of your Professional life and where you are headed. What's next? As you already know, there are no formulas. You start the journey, usually in the circumstance in which you find yourself. Don't let yourself get bogged down in minutiae or be deluded that you need to know all the answers before you start. Your responsibility is to know moral principles, human nature, human needs, human values and how best to apply this knowledge to ordinary business tasks. You do not need to micro manage each person or situation. Be confident that over time high quality principles will drive out low quality principles when they are advocated by leaders with integrity. Leadership integrity, to me, means the leader personally lives by the values he or she espouses.

An organization's culture, without regard to its size, can be transformed around fewer than a dozen ideas. Out of my experiences as a business practitioner and consistent with the material covered in this article, I suggest eight ideas: four are values and- four are mental models. First, here are the four values:

LOCALNESS is more than decentralization. It is a path of discovery on which people stretch their talents to become what they are capable of becoming. Localness disperses power to competent people in an orderly, disciplined way. Over the long term, wisely distributed power produces better economic results than docs centralized power.

MERIT is more than an abstract concept. It is directing every decision and action toward the organizations goals and aspirations while being consistent with the company other values. Its practice cures the office politics and bureaucracy that demeans the dignity of people engaged in work.

OPENNESS, since nobody has all the answers, is the world's best navigational instrument for an institution or individual to take stock and to chart a course.

LEANNESS tempers the human inclination for excess comfort and expansion so that an organization or individual maintains its health in both good and poor economic times. It embeds in the soul of the corporation the ancient virtue of thrift.

The four mental models are:

WORK is a platform on which people mature, develop and achieve happiness through growing their competencies as well as contributing to the Gross World Product. Therefore, as an employee, a person is first a human being and second an instrument of production. When workers sense this order in a company, they devote quality energy to achieve stretching business goals.

CORPORATE ECOLOGIES based on values and visions (aspirations) will, in the twenty first century, generally out perform command and control corporations characterized by trickle down disbursement of power, office politics and bureaucracy.

LEARNING exclusively through the mechanical, reductionistic model has served business well up to now. But it must be augmented by systemic understanding that unfolds the enormous connectedness that makes up this decades reality.

LEADERSHIP defies precise definition. However, being a leader in a vision- driven, value- guided organization has a high component of service, learning and love. In the final analysis, leadership is building character and advancing learning. That is why the moral formation of our managers is of critical importance.

It has been my experience that when people are free to choose between high quality and inferior ideas, they inevitably choose the former. They deserve a chance to have this choice in our places of commerce.

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ASPIRATIONS AND VISION

The Chemistry of Leadership
One of a series of essays about Character and The Corporation
William J. O' Brien

ASPIRATIONS and VISION The Chemistry of Leadership

Global Financial (GF) has named its vision "Top Quality". The vision is a service improvement program, an introduction of redesigned work processes and a delivery strategy to reach more and better customers. Its objective is to make the company the first choice of its constituents; customers, employees and investors. Around this vision the bank's senior executives expect to transform their culture in a way that more fully engages the mind and spirit of their employees to enhance the company' s financial performance and market share.

Certainly, what the vision hopes to achieve is desirable. Yet this vision is not likely to inspire the majority of employees who do the ordinary work upon which the bank's performance depends. Let's look at why.

Stanton Ivory is the Executive Vice President boldly spearheading the vision movement. He is quoted in a recent internal publication as saying, "There's going to be only one kind of person in this company- committed, on-board people who are part of the team and who buy into the vision wholeheartedly....I'm going to see this through. I started the GF Vision and I will ensure that it comes to fruition." (He sees the vision as a mechanical tool to be used as an instrument to get done what he wants done. He expresses impatience at the pace with which his vision is accepted by managers in the ranks.)

GF's Top Quality Vision is likely to fizzle out. It is a package of programs and slogans that is being implemented as a project to be merchandised to employees in the same way one might sell soap for better personal hygiene to people aspiring to the next level of social class. Just in case some employees find the sales pitch resistible, there is a dose of economic coercion. Insightful, street smart employees will soon conclude that the purpose of the vision is to get them to work harder, smarter and cooperatively so the company has better financial performance and the senior executives look better in the eyes of their Board. The Vision is intended to convince employees to do what Stanton wants them to do because Stanton knows what is best for them.

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THREE SIMPLE TRUTHS

Why is the Top Quality Vision likely to fail? A corporate vision that genuinely energizes its employees is not some magical picture of the future that is conceived by the boss and then injected into each person through meetings, discussions, slogans and alternately dispensing carrots or threatening sticks. Visions that energize the individual must be predicated upon three simple truths: ( 1 ) they must be aspirational, (2) they must be intensely personal and (3) they must be internalized.

Aspirations

Just as people need oxygen to breathe and thus support their physical life, they need aspirations to enjoy emotional health. Highly energized, forward looking companies are distinguished by an environment where each person can pursue vocational and organizational aspirations more than by a carefully worded corporate vision articulated by the CEO. Individual aspirations will be related to one's career but the major aspirational force ought to be the kind of organization the larger entity becomes. The larger entity need not be the whole corporation but the universe to which the employee directly belongs, such as a division, region or local branch. The objective is not to inoculate each level in sequence with the vision of the top level of executives. The challenge is to awaken and nourish the natural appetite of employees for vocational aspirations toward improving the organization to which they devote two thirds of their waking life. It is to stimulate those in ordinary jobs to apply their spirit, creativity, ingenuity and thinking toward making their company the best it can be in a way in which they can express their personality and develop their talents so they themselves become more than who they are today.

Personalization

The second truth that is overlooked is that the kind of vision which energizes a person's vocational life is intensely personal. My vision, for me in my job at my company, gets me out of bed each morning with anticipation to go to work to build what I want to achieve. It doesn't do anything for anyone else's level of energy or inspiration. Naturally, if I succeed in building what I want to achieve, for example, a higher quality of customer service- and it enriches the company I then expect a fair reward.

Internalization

The third truth we must consider when we shape culture around visions and values is that visions that inspire people must be made their own and internalized. This takes time. An executive attempting to force a fixed vision on an organization in a short period of time enters perilous waters. The vision needs testing by the people for its appropriateness for the organization. The executive who pushes too hard, runs the risk of demanding cult-like support which engenders unhealthy organizational consequences, such as resistance, passivity, and lack of individual initiative.

Any leader who sets out to transform an organization's culture ought to begin with a healthy dose of humility. It is not unlike matching the right sized nut to a bolt. If you mismatch the sizes and try to force them together, you strip the threads and ruin both the nut and bolt.

The task of the senior executive in large corporations where decisions and activities are widely dispersed is not to define The Vision and then try to force fit it through the echelons of the organization through either salesmanship or coercion. Instead, it begins with cultivating a personal vision for one's self and one's company. This task is a reflective and lonely job that takes time insight into one's self, one's corporation, its industry and society. Rather than building a program around one's own conclusions, the executive should explain his or her ideas and beliefs about what the organization should stand for and its central strategic direction to a variety of respected people who have a stake in the organization so they may test the executive's ideas. Out of this Process, the executive sharpens his or her own aspirations for the company and begins tho dialogue about visions and aspirations. The task at hand is to create an environment where aspirations flow through every sector of the company and all employees breathe in a climate that nourishes their appetite for aspirations. The CEO leads the visionary process by demonstrating his or her own vision and inspiring others to conceive and live up to their own vision for their area of responsibility.

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PROCESS

How does one go about conceiving one's vision for a particular area of responsibility? There is no single formula for doing so. However, here are three questions that have helped me over the years.

Question 1: What Are Our Organizational Roots? On many occasions I have seen troubled companies, or departments within a company, recruit an outside manager from a highly successful competitor. The new manager immediately tries to replicate the culture and strategies of his former company. Frequently, she recruits a number of her former colleagues to her new employer. I have never seen a great corporation emerge from efforts to copy another company. Why? Because the leader usually fails to ground his or her visions by connecting them to the roots of the corporation he or she is leading. Each generation of management stands on the shoulders of every previous generation of workers and managers. Through indifference to the past, the new leader condemns as worthless the life' s work of those he is charged with inspiring. That is not an auspicious beginning for earning voluntary followership. Further, the imported executive is abdicating one of a leaders most important responsibilities i.e., to provide context so that members of the organization can decide for themselves if the new direction is sound. Otherwise the people are likely to adopt a "wait and see" attitude suspecting the vision might be just a passing fad.

Organizational transformations do not occur simply because the boss wants them and thinks he has the power to coerce others to commit to the same course of action. Transformations occur because those in ordinary jobs grasp the intellectual reasons for change and then internalize a commitment to pursue those changes. Commitments are born out of convictions which, in turn, are always derived from voluntary choice and not from a direct order. And amplifying context around the organizations roots is one of a leader's tools for building the internalized convictions and commitments that underlie transformation .

Question 2: What Is The Current Reality Of Our Organization?

I approach this question from two directions i.e.; looking at the corporation from first the inside and then from the outside. It is important to do both, and probably at the same time. If you skip over looking at the inside, you might erect your externally focused vision on a foundation unable to support it. If you skip over looking outside, the culture will tend toward narcissism, chauvinism, and insularity and will fail to adequately test reality.

When examining the organization from the inside look for what functions well and what does not. Describe the organization's ecology for decision making and action. What are the influences? Which are tacit, which are explicit? The power of your vision will be directly related to the insightfulness of your assessment of current reality as it is where the rubber meets the road i.e.; as seen by the worker assembling the product on the factory floor, by the customer at the point of trying to get a problem resolved or by a front line supervisor trying to sell the boss on making a change to improve departmental effectiveness. You know your view of current reality is hitting the proverbial nail on the head when an experienced employee on the front line has an "aha" reaction and responds with vigorous agreement.

Obtaining an insightful external appraisal of your organization is relatively uncomplicated. Ask several customers, distributors and vendors to describe and rank your organization against selected competitors. The vendors may need extra reassurance that you want their criticism and that they will not lose favor for being candid. Ask your financial people to compare your organization's performance with the top ten companies in your industry. Also, I suggest you get a comparison with industry as a whole, since your entire industry may have developed arteriosclerotic myths that blind it to industry forces.

The objective in addressing these two questions is to get an inside and outside description of unvarnished reality for your area of responsibility. The summation should be free from exaggeration or biases. Resist temptation to use spin. We want people to judge the substance of the assessment and make their own conclusions.

Question 3: What Ought To Be? I again suggest two avenues for approaching this question about your vision quest. The first entails creating work relationships through which each person has the opportunity to use their job to become all they are capable of becoming. Work should be a vehicle for growing innate capacities. for maturing, for enjoying friendship, for exercising a sense of purpose and earning a livelihood. But, if that is all work did, it would be an incomplete and narcissistic endeavor. Work is also how we make our contribution to the community and the world. One description of an honest person is one who puts more into life than he takes out. Therefore, any realistic vision must have aspirations for a societal contribution, preferably ones that can be measured. In societies built around free markets those entities that are for profit, can best measure their external performance by how well they combine creating wealth and increasing market share over a long period of time. Profits measure how efficiently the organization uses capital; growth tells how effectively the organization is satisfying customers (in this respect I am referring to internal growth and not acquisitions). The words "over a long period of time" are important, for in short periods of time luck, cycles, fads and the use of accounting tricks often distort business results.

Executives, whether they run a global conglomerate, a division or a modest sized selfstanding business unit, have a responsibility to think through and articulate the "What Ought To Be" dimension of their vision for their area of responsibility. It should wed together inspirational conditions that enhances human development of their constituents with goals for business performance that are constructively stretching but also realistic. And, of course, I believe the best foundation from which to progress with this exercise is a deep understanding and appreciation of the entity' s roots and an insightful reading of current reality.

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ENLISTING SUPPORT

When I had occasion to go through this process at Hanover Insurance, I was careful not to anoint my vision the corporate vision. Instead, when I spoke to employees about my vision for the company I encouraged them to think about it, test it and if they had concerns or ideas to tell me and when they did, I listened and let them know they were heard. What I did tell them was that it was not my vision that was important. As I said previously, my vision motivates me, it doesn't do much for anyone else. What is important is their vision for themselves, their people and their areas of responsibility. The day that an individual gets out of bed to build what he wants to achieve, instead of because he has to be at work by eight o'clock, is a transformational day in the life of that person. Furthermore, I believe that, if in my company only ten per cent of the people cross that transformational line and our competitor only has five percent, then our company has a significant competitive advantage that will be reflected in better business performance. When we have thirty per cent of our people crossing that line we will have built an overwhelming advantage. Again, what is important in corporate cultural transformation is not the exact content of visions but rather the process of getting individual aspirations flowering in every corner of the organization.

People internalize aspirations and visions through combining reflection and experience. That is why, I believe, staff meetings intended to discuss and draft a corporate or departmental vision invariably fail to come up with inspiring ideas that go beyond agreeable platitudes. The moment we cast visioning as something "for the organization" as opposed to being "mine" the passion, which is the source of inspiration and aspiration, dissipates. A visionary company is an organization where lots of people have aspirations and future focused mental models, not a company with a carefully crafted vision statement. I counsel leaders who want to have vision at the center of their culture to begin by composing their own vision for their enterprise, and then invite their employees to test their ideas and better yet, weave their vision into their ordinary business conversation.

Leaders must be careful to never cross the line from inspiration to manipulation in using visions or values to foster cultural transformation. I am not talking about being good at masking manipulative intentions with a veneer of sincerity. Instead, I mean extinguishing every bit of manipulative inclination from both your character and style. The antidote to manipulation is an unwavering commitment to truth, forthrightness and asking people to do only that which is purposeful toward achieving the highest common interest of the enterprise.

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THE HMD FACTOR

When I was a private in the U.S Army Infantry in the 1950's, I was puzzled why one company commander inspired remarkable loyalty from his troops and high commitment to our unit's mission, while under his successor, morale and performance plummeted to the bottom of regimental rankings in less than six months. The army is an extraordinary laboratory for studying the impact of character on the effectiveness of leaders because so many of the other factors that influence organizational performance are standardized. For example, all privates in the same line of work get identical training, follow the same standardized operating procedures and get the same pay. Why did performance differ so markedly between my two Company Commanders, both of whom graduated from the U. S. Military Academy at West Point.

Captain Driesenstock, the Captain who inspired loyalty and high performance, was soft spoken, short in stature and highly respected by his men. He always leveled with us. He told us when our performance was good and when it was poor. He protected us from the chicken excrement that regularly comes down from regimental staff. We knew he was committed to us and our unit's mission. He treated us with respect and fairness.

His successor was six feet two inches tall, possessed a deep resonant voice and was a casting director's dream of what an army commander ought to look like. Unfortunately, his men didn't feel that way. It took only a few exercises over a period of a couple of months for the lowest private (me) and everyone else to figure out that we were being used to advance his career. Decisions were being made to impress the regimental staff, not the accomplishment of sensible military imperatives. Chicken excrement from the regimental staff usually hit us full blast. How did the troops discern so quickly between authentic leadership and the pseudo version? I have mulled over this question many times throughout my business career because the situation repeats itself so often in corporate life. The answer to the question is that I don't know how the troops spot the fakers so fast while it takes years for the General to catch on to the problem in his organization. However, I do believe it is easier to spot a leader's serious character weakness from the bottom than it is from the top because aspiring pseudo leaders put a lot of energy into impressing higher echelons and less into putting integrity into their relationships with the people for whom they are responsible.

While I do not have an answer to this question, I have developed a theory from my experience as an army private that has served me well over my business career. The theory goes like this. The vast majority of people, regardless of their level of education, have within them a built-in horse manure detector just as they have a mind, a soul and spirit-- none of which can be identified on an anatomy chart. The horse manure detector (HMD) serves as a signal for individuals in ordinary jobs to sort out whether they are receiving an explanation or exhortation that is forthrightly stated (without duplicit intentions) from communications intended to manipulate their behavior. As we know, spin control takes different forms. Sometimes exaggeration is used to slant a subject a certain way, sometimes anxiety or fear is used to push concurrence in a certain direction; at other times information is withheld to influence a certain direction. Many people are often not able to articulate how their HMD works within them but they intuitively decide not to commit to propositions which trigger the alarm. Thus the manipulative boss gets pseudo followership in response to pseudo leadership. That is why executive moral formation should be grounded in a passionate commitment to truth, forthrightness and respect for tho capacity in ordinary people to discern between high and low quality propositions.

It is possible for a manager over a brief span of time to temporarily achieve his goals by manipulating people. He might then conclude manipulation works. It doesn't. The highest price in a manipulated relationship is paid by the person who does the manipulating for he dilutes his future capacity to recognize truth and sincerity. It is human nature to see the rest of the world through who we are. If we are manipulators, we lose the capacity to know when someone else is being honest and forthright. And, of course, the manipulator often wins a few events but tarnishes his reputation and any chance his troops will look up to him. Conversely, transformational leaders are highly sensitive to the vibrations from their own HMD and respect its presence in everyone else.

Employees who are the manipulated can pay a painful price. Those who do not consciously recognize the horse manure often join in the pursuit of empty illusions and it results in eventual depression, bitterness and a host of other symptoms that often get attributed to "personality" when, in fact, they are often the indirect result of diseased cultures and flawed supervision. Burnout is not caused by hard work as much as it is by working in dysfunctional cultures.

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SUMMARY

Attending to the task of nurturing a corporation' s vision and aspirations is not a mysterious undertaking that can only be mastered by an enlightened few who have prophetic capacities. The first step is to know yourself and seek greater alignment between who you are, what you believe about humans and what you do in practice. The second step of the journey is to understand and connect with your entity' s roots, whether a department or the entire corporation. Then assess current reality as if you were a detached observer. Do it from both an inside and outside perch and concentrate on where your product or service is made, performed or sold. Finally, think through what you believe "ought to be" by drawing on your knowledge and experience about human nature, human values, human needs, societal aspirations and industry competitive conditions to compose "your what ought to be". I suggest two dimensions to your vision; one inspirational and the other, measurable business performance. A wise man once said that man does not live by bread alone.

Don't try to sell your vision, don't try to inoculate anyone with it. Just talk about it, let your natural enthusiasm flow, ask others to test it, and honestly and nonjudgementally hear them out. It will get better as you go along.

After you have set the example, ask others to think seriously about their aspirations for their sections of responsibility. There will be no moment of exuberant breakthrough when an inspiring vision appears. However, over time, you will begin to recognize a visionary dimension to discussions about ordinary business activities. People will begin to say that your folks know where they are headed and what they stand for.

Global Financial is espousing and trying to adopt a theory of governance where visions and values are expected to exert more influence in guiding decisions and actions than individual executive inclinations to command and control. That is, I believe, the appropriate direction for guiding an enterprise into the twenty first century. The problem is ensuring that the implementation methods are congruent with the theories of governance.

Stanton Ivory, before he can change his corporation, must change himself. He must actually compose his own vision and it must be of sufficient quality and depth to attract voluntary followership. It will be connected to his values. He must understand that a Vision is not a mechanical tool to get people to do what he wants. Instead, the task he faces is to unleash the pent up energies within the company's employees by nourishing their aspirations for vocational fulfillment in a way that enhances Global Financial's business imperatives of profit, growth and customer satisfaction.

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Character and the Corporation

William J. O'Brien

Table of Contents

THE SOUL OF CORPORATE GOVERNANCE

Moral Principles For Excellence One of a series of essays about Character and The Corporation WILLIAM J. O'BRIEN

THE SOUL OF GOVERNANCE

Moral Principles For Excellence

The Value-Guided, Vision-Driven Organization

MORAL FORMATION FOR MANAGERS

Closing The Gap Between Intention and Practice One of a series of essays about Character and The Corporation WILLIAM J. O' BRIEN

ASPIRATIONS AND VISION

The Chemistry of Leadership One of a series of essays about Character and The Corporation William J. O' Brien

Moral Principles For Excellence
One of a series of essays about Character and The Corporation
WILLIAM J. O'BRIEN

Closing The Gap Between Intention and Practice
One of a series of essays about Character and The Corporation
WILLIAM J. O' BRIEN

The Chemistry of Leadership
One of a series of essays about Character and The Corporation
William J. O' Brien