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Leadership Lessons from President Dwight Eisenhower

Leadership Lessons from President Dwight Eisenhower

President Dwight “Ike” Eisenhower, a graduate of the US Military Academy Class of 1915, set the benchmark for “Supreme Command” in coalition operations; the standards he articulated and personified in the 1940s continue to pilot senior military commanders. Even more profound than Eisenhower’s intelligence as a coalition commander was his impression in shaping state-of-the-art leadership principles for officers in militaries of a democracy.

One simple solution for surpassing limiting beliefs and making headway toward significant goals in our lives. Eisenhower knew what it took to lead soldiers and build cohesive units at the tactical level; he was passionate about leadership and leader development. Unity of Command was his simple establishing principle, but he knew that placing a single person in charge was insufficient to ensure unity. Today, leader advancement is the core mission component of the Academy.

Goals are about growing. A good goal causes us to grow and mature. That’s because every goal is about the journey as much as—even more than—the destination. And that’s exactly why setting goals outside the comfort zone is so imperative.

We gathered frequently in the dining room of Quarters 100—the elegant residence for 200 years of the Superintendent of the U.S. Military Academy at West Point—for spirited conversation on history, politics, and leadership. As the Academy Superintendent in the late 90s, we relished this give-and-take. We brought to the Academy some of the best thinkers on leadership; the supper conversation reflected the energy of the participants. A recurrent question was this: “Whom do you regard as West Point’s most distinguished graduate?”

Dwight Eisenhower: History, Politics, and Leadership

The menu of alumni was a rich one: Grant, Lee, MacArthur, Goethals, Groves, Pershing, Bradley, Patton, and Eisenhower, among others. The agreement seemed always to focus on one graduate: Dwight D. Eisenhower, USMA Class of 1915, for his intense command of allied forces in the European theater during WWII. Eisenhower set the standard for “Supreme Command” in coalition campaigns; the principles he expressed and personified in the 1940s continue to channel senior military commanders.

Dwight D Eisenhower: History, Politics, and Leadership Lessons Even more profound than Eisenhower’s brilliance as a coalition commander was his influence in shaping modern leadership principles for officers in armies of a democracy. The strength of a memory is also determined by the emotional state that accompanied the original event. Without question, Eisenhower had no equal in stroking, cajoling, and managing prickly alliance personalities like Churchill, Montgomery, de Gaulle, Admiral Darlan, and Italian Marshall Badoglio—to say nothing of his challenges with George Patton. He was the consummate Supreme Commander.

The eloquent text above is simply for your benefit. It’s not actually part of the template. These beings are kenned by the adepts to be magnetized toward certain quarters of the heavens by something of the same abstruse property which makes the magnetic needle turn toward the north, and convinced plants to comply with the same magnetization. In such a way there is impermanent meaning and true meaning.

Fear usually plays a part in the decisions we make. Probably the biggest fear that you will have to face when making a decision is that of failure. Obviously, the bigger the decision, the greater the downside if it doesn’t pan out. Eisenhower also knew what it took to lead soldiers and build cohesive units at the tactical level; he was passionate about leadership and leader development. As a result of his submissions to Army leaders, Eisenhower influenced not only the formal leadership program of the U.S. Military Academy, but also the leadership ethic for young officers commissioned after 1945. Likewise, feelings, recognitions, volitions and consciousness are empty.

Dwight D Eisenhower: Situational Leadership

Dwight D Eisenhower Situational Leadership

Dwight Eisenhower’s leadership was is often a value judgment that varies from person to person and for one person from situation to situation. We call it situational leadership:

  1. Be mellow in manner, tough in deed: Eisenhower had a paperweight conspicuously exhibited on his desk with a Latin engraving meaning “gently in manner, strong in deed.” These are known as secret or insight activities. This reflected his philosophy and style. He was not full of bluster. He never threatened. This is the way of insight.
  2. Be a guide, not an initiator: Eisenhower once expressed leadership as “the art of getting someone else to do something you want done because he wants to do it.” This is the field of merit of beings. By vigilant organization and a premeditated crafting of words to hit the right note. When practicing, it is sufficient to just keep your mind on the method. He knew the importance of words— specifically those spoken by the person in charge—to motivate and persuade. There is another problem with the first cause argument. He believed in planning. He thought it was dangerous for a leader to shoot from the hip. We should take this to heart.
  3. Don’t talk too much: Even with no infirmities, the life of beings is passing. Some people just can’t help themselves and simply start prattling (luckily this didn’t happen to me). Either they’re nervous about figuring out the right thing to say, or they’re panicky about saying the wrong thing. And this full clarity is beyond inner and outer. But, when you talk too much the anguished person will sometimes begin to feel that they must take care of you.
  4. Know what you don’t know: Eisenhower cherished that his completest resource was not his own brilliance but the talent of his team. It frees a tremendous energy. He once wrote this piece of advice: “Always try to associate yourself with and learn as much as you can from those who know more than you do, who do better than you, who see more clearly than you.” And he understood that autonomy can be defined as the ability to make choices according to one’s own free will. He was a collaborator; and if no such challenge developed in that time, he would presume to be there by right, even though he might not have any life story.
  5. Don’t let success go to your head: Eisenhower never considered himself to be a hero when compared with the men who landed at Normandy and met the enemy on the bloodstained fields of battle. Soon after the war, he called on General Douglas MacArthur, his old boss, in Japan. MacArthur, impelled up about their success, crowed that as vanquishers either one of them could surely be elected president. It was reported that Eisenhower left that meeting red-faced and angry. He loathed the hero label. When years later he did become president, he was repeatedly disapproved for not being personally dynamic or out in front. He was lavish about letting those around him take the recognition for his ideas. This approach paid off in allegiance and execution. And many made great sacrifices to attend, frequently working his way through military.

In both arenas—supreme command and officer leadership—Eisenhower was a revolutionary. Before him, no U.S. commander had been entrusted with coalition command. General Pershing fought to maintain the integrity of U.S. forces as commander of the American Expeditionary Force in WWI, but he was subordinate to the French Commander-in-Chief; Eisenhower led allied forces from fall 1942, and by war’s end, had over four million men from five nations under his command. His approach to combined command complemented a sophisticated coalition leadership model—a model employed to this day.

Dwight Eisenhower: Unity of Command

Unity of Command was his simple organizing principle, but he knew that placing a single person in charge was disappointing to ensure unity. This had to be exercised through “earnest cooperation,” earned through “patience, tolerance, frankness, and honesty.”

Unity of Command: Leadership Lessons from Dwight Eisenhower Commanders in the 1990s, General George Joulwan in Bosnia and General Wesley Clark in Kosovo, achieved coalition success despite intra-alliance arguments by sticking to Eisenhower’s maxims. Similarly, two Central Command combatant commanders, Generals Norman Schwarzkopf and John Abizaid, profited from the trailblazing experiences of Eisenhower. Schwarzkopf exhibited a knowledge of alliance understandings and alliance politics by deftly managing more than 30 combination partners in Desert Storm. He clearly personified unity of command. But he knew this could never be effectively exercised unless he had consent of those he led, particularly his Arab partners, and most visibly, the Saudis. Again, Eisenhower’s coalition leadership principles proved decisive—and enduring. And they are reflected in the leadership exercised in 2005 by the Coalition Commander in Iraq, General John Abizaid, a student of the leadership of Eisenhower. After his discussion, his wish got him thinking about which of the three ways we die is actually best.

That these practices are connected with the proper kinds of beings and times is important. Besides transfiguring the doctrine of collective command at senior levels, Eisenhower was zealous about leadership development for junior officers. What he observed in the behavior of many U.S. officers in the European theater disturbed him greatly. Too many officers never identified with their soldiers; they were too eradicated from the needs of their troops. Further, Eisenhower was appalled by the behavior of officers who substituted screaming, even physical abuse of subordinates, for positive leadership. Eisenhower said, “You don’t lead by hitting people over the head; that’s assault, not leadership.” Life cannot be real if relationships are not real.

West Point Curriculum: Practical and Applied Psychology

Eisenhower felt that the West Point curriculum should include coursework in practical and applied psychology to “awaken the cadets to the necessity of handling human problems on a human basis,” and thereby improve leadership in the Army.

Eisenhower’s suggestion was soon followed by the establishment at the Academy of the Department of Behavioral Psychology and Leadership. For more than 50 years, it has instilled in cadets the principles of small unit leadership.

Instead of ignoring parts of the orchestra, a symphonic life of Dwight Eisenhower consists of five habits that ensure harmony:

  1. Anyone who has the self-control to steep his noetic conceptions in them may be sure that in a shorter or longer time they will lead him to personal vision.
  2. If your culture supports open dialogue and learning from mistakes, public commitments and public results can fire up morale.
  3. Contrary to the popular exhortation, people do judge books by their covers. That’s why it’s important we select the right one for this book.
  4. The moments of break-through where real change happens aren’t typically instant and extraordinary. They usually happen gradually in the ordinary course of our lives.
  5. One of the most obvious things about the future is that we are not there yet. The question for us as we start a small unit leadership is whether to drift or direct our lives where we want them to go.

U.S. Military Academy at West Point Today, leadership development is the core mission component of the Academy. The emphasis is on values, inspiration, and imagination. Eisenhower knew these could not be created in the cerebral equivalent of a strait jacket, with rote, mechanical instruction disconnected from the human problems of the individual soldier. In other words, we need to think about what we want to be true of us when it’s all said and done. Once that picture is in mind, we review the steps that journey requires and live them forward. Then comes the hard part.

The Supreme Commander who associated with his troops shaped the leadership ethic of my generation. Eisenhower took the time to write to parents of his soldiers, to talk to 101st Airborne Division paratroopers prior to their DDay jump, to prescribe leadership doctrine while he commanded millions. He was, in short, encouraging. And he personified the essential bond—trust. His soldiers trusted him because he exuded the values of integrity and respect—values that remain the core of our Army’s leadership principle.

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Posted in Management and Leadership Uncategorized

Best Practices for Corporate Boards & Governance

Best Practices for Corporate Boards & Governance

In the wake of many business failures, we have criticized every player in the system except the one charged with insuring that these failures do not occur: the board of directors. They are elected by the shareholders as the ultimate governing body and charged with preserving the company and building it long term.

Many boards have abandoned the legal and fiduciary responsibilities. They have become more responsive to the CEO and the management than to the shareholders. In so doing, they abandon their governance role to get the company’s stock price up. They stop asking the hard questions about how the company achieves its numbers, whether it makes adequate investments to build for the long-term and whether its strategies are still valid and effectively implemented.

Our systems of governance must be reformed. This begins with having a “bright line” between governance and management. Boards have ceded their governance responsibilities to the CEO. Now they must reclaim it.

Here is a 10-step program to improve board governance:

  1. Create principles of governance. The independent directors of the board need to establish principles of governance that describe the functions of the board and how the board will conduct itself. The principles should be published for all shareholders to see, and each year the board should report to the shareholders, evaluating the effectiveness of these principles.
  2. Have truly independent directors. This is essential to effective governance. Boards need directors who have had no prior association with the company. To measure their independence, no director should receive any compensation other than standard board fees. Nor should any interlocking directorates be permitted between the CEO and any member.
  3. Select board members more for their values than their titles. Too often we choose directors for the positions they hold, rather than their commitment, availability, and competence as board the many member. Let’s take advantage of executives who have the time and inclination to serve on boards. Let’s also assess the diversity of backgrounds and experience we need on the board to provide sound guidance.
  4. Establish a Governance and Nominating Committee composed solely of outside directors. This committee maintains the principles of governance, nominates people for election to the board, evaluates existing directors, conducts the evaluation of the chairperson and the CEO, and develops a succession plan for the CEO, including the selection of new CEOs. This committee is charged with organizing the board and its committees, identifying independent directors to chair them.
  5. Elect a Lead Director. If one person is both chair and CEO, the independent directors must elect a lead director to organize them, insure their independence, and advise the CEO. I prefer that the lead director be the chair of the governance committee, as these functions are closely aligned.
  6. Corporate Boards oversee governance and management Qualify members of the Audit and Finance Committees to insure the veracity of the financial statements. These committees should meet privately with external auditors, the CFO, and internal auditors. Outside auditors should not receive any additional consulting fees from the company.
  7. Hire an independent compensation consultant. Neither the CEO nor any member of management should be involved in setting the CEO’s compensation, or board fees. My big concern with executive compensation is the grants made by compensation committees to executives who do not perform or who are terminated. These moves destroy the integrity of incentive systems. At the executive level, it should be “pay for performance.” Period.
  8. Meet regularly in executive sessions. This works best if the board meeting begins in executive session with the CEO, and concludes with an executive session without the CEO present. These sessions are much more open and often lead to rich discussions of the most vital issues. Of course, the lead director must convey the essence of the discussion to the CEO.
  9. Seek the right Board chemistry. Board members should respect each other, but not hesitate to challenge each other, the CEO, and members of management. At times, a single director must stand against management and the rest of the board if he or she feels that the company is headed in the wrong direction. Board knowledge and chemistry can be enhanced with off site visits to company locations and one extended meeting per year, preferably off-site, to review the company’s strategies in depth. These longer sessions give independent directors deeper insights into the business, and build relationships that are vital in crises.
  10. Reestablish the bright line between governance and management. Directors must step up to their responsibilities and establish that bright line between governance and management. Will this reduce the power of the CEO to manage the company? No. The best CEOs want to have a strong, independent board, and look to the board for advice and counsel, not just approval, on important matters. Having a clear line between will keep the board from usurping the CEO’s prerogatives just as it will constrain management. This will help restore the balance to decision-making and ensure stability.

To transform our systems of government, businesses, and non-profits, we need courageous, authentic, and visionary leaders and directors, not just people who react to events.

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Posted in Management and Leadership

The Wonderful Benefits Intergenerational Coaching

The Wonderful Benefits Intergenerational Coaching

All generations have similar values. Many deliberate that there are such differences between generations but in reality, all feel that family is the value chosen most commonly by people of all generations. Others embrace truthfulness, love, aptitude, happiness, self-respect, knowledge, etc. So why do people at work think the ethics between generations are so different?

'Unlocking Generational Codes' by Anna Liotta (ISBN 1935586424) The public declaration of these hymns reveals how applause, pain, and politics interface within a historical setting of Roman oppression. Because even though the values are the same, the behaviors that go along with those values may be different. In addition to the standing of not snubbing the supposed stereotypes of employees, we should also not overlook undercurrents that occur in work groups. The diverse knowledge base that junior employees can present is a benefit that can be taken advantage of.

  • Give More Feedback: Animators at Disney generously pronounce how painful it can be to have directors plussing their ideas until the tiniest details, say a sliver of hair, seems just precise. We are probably unaware that people would like to know how to improve, and they merit to know it. It is their right. Besides the rewards of intergenerational learning for individuals, benefits of this learning process can also be found for corporations. Intergenerational learning leads to a higher level of social capital. This increased level of social capital has in turn the potential to enhance knowledge flows between workers in an organizational context. The negative feedback is often buried and not very specific.
  • Boost Flexibility: Literature provides a choice of concepts that are directly related to those of familiarity demand and supply. Employees working in the service sector, salaried employees, employees in executive positions, and employees with higher wages have better access to conventional flextime than other groups. The Cleveland Clinic hiring as many as two millennial doctors to replenish each retiree, as young MOs demand more work life balance. Business is concerned with productivity and profits. People are an progressively valuable resource, which management is becoming more affected to manage effectively. Attaining operative knowledge management integration is an eminent challenge facing both general management and project managers.
  • Lavish Praise for Intergenerational Workplace Lavish Praise: After considering the observations in light of extant research, we present a multi-stage process model that describes the central dynamics at work in the business experience. Over the following decade, the centers presented new communication and educational tools and maintained a wide variety of cultural events including exhibitions, forums, exchanges, and publications. The support provided to individuals and organizations proved instrumental and contributed to an added visibility of the region. The results of the analysis are deduced in the business context in order to show how communication research may impact to the analysis of intergenerational learning in a specific business. The company’s polished performances balance cheery explorations of humanity with serious concerns ranging from death, aging, and solitude to immigration, beauty, and fairy tales.
  • Adorn the Office: Apple plans to spend $1 billion to revamp a chief corporate campus with a focus on new technology and shared spaces. Foster abilities that cannot be automated away: timeless talents like critical thinking, playing nice and effective writing. Moreover, do not be afraid to skip around to understand relevant skills. This assertion also resonates with the experience of the Watsons of I.B.M. fame. In his 1990 autobiography, Tom Watson Jr. recollects how his early years were overwhelmed by a sense of inadequacy vis-à-vis his father’s expectations that he take over IBM. Obfuscating the mix further were what amounted to ‘staged’ career achievements, such as when young Tom was assigned a coveted sales territory in downtown Manhattan that allowed him to meet his sales quota in just one day.

'When Generations Collide' by Lynne Lancaster, David Stillman (ISBN 0066621070) While generational issues do need to be discussed and resolved, I am troubled about making too big an issue out of them. We do not want to draw a line between two generations of managers and involuntarily disaffect them from each other. Instead, we need to learn to work together as we seek to help librarianship advance with the times to serve the needs of the public. Each manager, new or experienced, old or young, brings respected experiences, perceptions, skills, and ideas to the profession. We need to find a way to concede those assets and put them to trustworthy use.

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Posted in Management and Leadership

Con Artists Thrive When Opportunity Meets Predisposition

Con Artists Thrive When Opportunity Meets Predisposition

Con artists are artists. It’s all about the soft skills—there are no hard skills here. They are unlike a sleazy salesperson was trying to sell you something. As a con artist, you often don’t see them coming, you even don’t realize quickly that you have been conned because they are all about the soft touch. We’re all subject to credulity, how others exploit this, what we can do to spot would-be manipulators and guard ourselves, and how we can use the same principles of coaxing for good rather than evil.

The commerce between discourses of authenticity and the confidence games played by counterfeiters, both literal and literary, is the subject of two recent studies. Conning people is an art, conning is an artistic skill. Con artists never had to ask for anything—people give it to them—their conference, their trust, their money, their respect—to the con artists willingly. People don’t really understand, a lot of times, that they’re victims of a con because they believe it so much they want to keep believing. That is why it is often really difficult to prosecute con artists because it is often difficult to pinpoint what crimes they have committed. The psychopath and the con artist have at least two traits in common: lack of empathy and enough perception to isolate someone’s vulnerabilities or desires and take advantage of them.

New Yorker columnist and science journalist Maria Konnikova explores in The Confidence Game how con artists prey on our susceptibility for believing what we wish were true and how this explains the inner workings of confidence and duplicity in our everyday lives.

There is a con or two that people use at work—that people fall for at work. People at work often end up conning others without realizing what they’re doing or without it initially. A lot of people will start cutting corners—not only the accountants but anyone who has to deal with money—let’s say a trader who had a bad quarter or bad portfolio performance or anyone where the numbers are not quite right. It’s common not to see this only in finance, but also in academia, scientists where the data has not come out quite as expected. In an increasingly over-populated planet being depleted of its precious natural resources do we need any more objects polluting our environment even if they are traditional paintings or sculptures? To change the data just a tiny bit and fudge the numbers ever so slightly saying, “the data should have come out” or, “that trade should have gone my way.” They justified that they just need a little bit of extra wiggle room or an edge just for this quarter and then everything will be better in the future quarters. And then it’s all going to work out.

What ends up happening is that it doesn’t work out because there’s a reason it didn’t work out in the first time. Usually, what ends up happening is that you give yourself a license to deceive and now what you end up as with a slippery slope. You have to keep doing it because you have already done it once. Before you know it you are entangled in being an outright con.

'The Confidence Game: Why We Fall for It' by Maria Konnikova (ISBN 0525427414) There is one man that I write about in a company and I had a chance to speak with his lawyer who had been originally very sympathetic with the fact that this finance person have had a bad quarter. It was for his family, it was for his company, and he had a good heart. A con artist who doesn’t have the skills to hack into your data can buy it cheaply on the black market. He did it in one quarter and was overlooked, but when he did it in subsequent quarters and investigation revealed that he had cheated the company of thousands of dollars on the corporate court for also something for his family, vacations, private jets. The sympathy quickly evaporated.

People who take that moral license are the same people who keep going. Con artists are made when opportunity meets predisposition. There are a small number of people in finance, science, who, if given an opportunity will have that side of their personality come out. he motivation for many of these peculiar constructions seems to be that people are gullible and easy to fool so why not do so? But this is simply not the case. People must place their trust in most societal interactions-with friends, colleagues, the media, and even strangers. If one should discover that someone or something is (intentionally) unreliable, their basic trusting nature will evolve into skeptical cynicism. Con artists aren’t just master manipulators; they are expert storytellers. Much as we are intrinsically inclined to trust, we are naturally drawn to a compelling story. Once they get away with it, the thrill and the knowledge that they got away with it will enable them to do it over and over again.

In academics, especially in social sciences, it’s easy to manipulate how you select your sample size, what statistical method you use, and do you use the statistical method to conform to you’re a priori hypothesis, the chances are slim that you are going to get caught.

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Posted in Mental Models and Psychology

The Social Responsibility of Business: Define and Live Your High Purpose

'Managing Corporate Social Responsibility' by Timothy Coombs (ISBN 1444336452) High-purpose companies survive to serve basic human needs, advance society, and nurture an advanced form of capitalism. They address serious problems and make more money as an outcome. For example, in 1997 British Petroleum took a stand on global warming. By 2003, the company had reduced its greenhouse gas emissions by over 10 percent, and become the foremost provider of cleaner-burning fuels and the second-largest manufacturer of solar panels. BP generated $650 million worth of value on a $20 million investment in ecologically friendly products and policies.

Examples of Corporate Social Responsibility

Examples of Corporate Social Responsibility

Comparable examples abound.

  • Interface Corporation, the largest commercial carpet and textile manufacturer, saved $230 million in overhead costs and increased market share because of its pledge to environmental sustainability.
  • Green Mountain Coffee Roasters grew fast because of its commitment to fair trade.
  • Stonyfield Farm Yogurt Company became the biggest organic brand in the U.S. though practices that helped struggling dairy farmers to survive.
  • Hewlett-Packard has positioned itself for long-term by helping close the digital divide.

Each of these companies is dedicated to a wider concept of social responsibility— no longer an postscript, a compliance issue, PR gimmick, or ugly stepchild to profit and strategy. It can help your business prosper. Rosabeth Moss Kanter of the Harvard Business School characterizes the approach of the new givers, “We fixed American business; now we need to fix charity.”

Five Keys to Purpose First, Profits Second

The ability of successful entrepreneurs to generate considerable wealth is obvious. As such, their capacity to contribute from their resources to projects and organizations with a specific social enhancement agenda is also apparent. This potential for successful entrepreneurs to improve the quality of the society or societies in which they live and to become role models of philanthropic attempt is exemplified by the recent commitments of two of the most high profile and successful entrepreneurs in the United States, Bill Gates and Warren Buffet. There has nevertheless been little scholarly investigation into the comparative tendency for entrepreneurs to participate in philanthropic endeavor, and whether entrepreneurs are inclined to adopt specific forms or tactics to their philanthropy.

Here are five keys to cultivating your performance via social responsibility and a high-purpose strategy:

  • 'People Over Profit' by Dale Partridge (ISBN 0718021746) Face the truth. To take up a higher purpose, you need to “own up” to your past. Carefully evaluate your company’s impact on society and the environment. Often, this review can divulge opportunities and can serve as a powerful catalyst to stimulate your organization and enable it to move in unison towards the best solutions. Today’s new rich have the opportunity to shape America-and the world-just as intensely as Andrew Carnegie and John D. Rockefeller did. However, so far most have declined to take it.
  • Choose a relevant crusade. Your company can create more social and financial value by supporting a cause that directly relates to your business. What problems are unique to your company or category? What issues are most pressing to your customers, employees, suppliers, or shareholders? Discover financially self-sustaining charitable models that are relevant to your business. Effective charitable programs pay for themselves. The purpose of the crusade is to provide communities with practical experience in philanthropy and the opportunity to think consciously about giving back to society.
  • Do something that no one else can. What does your company do better than anyone else does? How can you use the company’s fortes, resources, and expertise to help solve the chosen problem? Develop an line of attack that cannot be easily mimicked. This way your core assets become recognized as being of service to humanity, thus rising the company’s value.
  • Put the problem first. Although every company should aim to secure rewards from their high-purpose initiatives, the character of the chosen social or environmental problem should point the direction. Take a needs-based approach. Study the problem, the circumstances surrounding it, and the people most affected by it. Then, engineer business-building solutions.
  • Expand definitions of success. Rather than define success solely in terms of short-term cost-effectiveness, build value and sustainability in all forms. Define and monitor your performance. The firm set up the foundation by means of its growing role in society. Managers faced operational and strategic quandaries concerning the host-countries’ poor public healthcare provision and in coming up with operative solutions.

Importance of Corporate Social Responsibility

Importance of Corporate Social Responsibility

The paybacks that you gain through high-purpose strategies range from competitive edge and growth opportunities to better stakeholder relationships, higher innovation, quality, efficiency, and lower overhead costs. This approach to philanthropy increases dependency and reduces initiative and enterprise. It doesn’t create the necessary human capacity to make communities self-sustaining and independent.

Today you must deliver social value. Companies that compete unfairly or function without regard to the collective interests will fail in the long term. High-purpose strategies do not disrupt companies from achieving the highest financial returns for shareholders. On the contrary, they build business, making them one of the best investments a company can make. Globalization is weakening the ties that bound companies to the communities that gave them birth.

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Posted in Business and Strategy Management and Leadership

Closing Governance and Finance Gaps

Thousands of articles have been written about the failures of Enron, Tyco, WorldCom and others. Lessons from these debacles have caused some changes in the ways public corporations and their boards function, but most analyses focus on modifications driven by governmental regulations and professional policies. Very little has focused on what companies are doing voluntarily to change.

Here are the voluntary ways many firms are closing potential governance and financial gaps.

Closing Governance and Finance Gaps

Internal financial controls.

Reviews are being conducted to assess how current financial procedures and control functions might be improved and tightened. More board interest is centered on potential regulatory, financial, and ethical concerns to make certain these issues are being carefully considered in the decision-making process.

Reporting processes are changing for internal auditors. Some auditors now report directly to the CEO and the board audit committee. Larger contracts are scrutinized by high-level managers and board members. Subsidiary financial controls are also scrutinized, and the results reviewed by the board. Compliance committees operate at unit levels. Summary unit compliance reports are submitted to the unit’s general manager and the corporate compliance committee. Included in the report is a representation letter signed by the unit’s general manager and CFO.

Special attention is paid to assure the board that there is proper accounting recognition as to what is a capital expenditure and what is current income.

Companies are reviewing procedures once considered routine to ensure that financial and accounting translate complete rigorously and ethically and to validate the information developed by business units has validity.

Internal and external financial communications.

More financial information is becoming available, especially to analysts during quarterly earnings conference calls. Disclosures in various SEC reports are being expanded.

The board and its audit committee are involved in earnings reporting systems. The audit committee chair may review earnings press releases before making them public. Board members now have access to external auditor’s financial documents to affirm the firm’s financial status. Some firms are stating in their 10-Qs that they do not have any off-balance sheet financing.

The trend is to expand the ongoing communication with the financial community between the quarterly reports. The increased disclosures from the operating units may portend a trend to communicating unit reporting more openly, like separate businesses.

Ethics codes and procedures for employee behavior.

Companies are reviewing their ethics codes and seeking ways to improve their visibility. One company is requiring all financial managers to sign a statement that they will abide by the Financial Executives Institute’s Code of Conduct. These statements are then reviewed the board audit committee. Another plans to ask all financial managers to sign an annual statement of compliance. To identify potential conflicts of interest, one firm may require all top executives to submit their personal tax returns for review by its outside legal firm.

Employee “hotlines” are being established, so that the compliance committee and management can review major complaints. If warranted, complaints are then forwarded to the board audit committee. Initial attention is given to improving policies where specific rules and regulations can be implemented.

External auditors and board audit committees.

Many firms no longer have a relationship with Arthur Andersen. The number of meetings of the board and its audit committee is increasing.

One company has its board and audit committee meeting in executive session with external auditors six times a year. Membership of audit committees is increasing to allow at least half of the members to have a financial or accounting background. As audit committees become more independent of management, more detailed disclosures will appear in proxy statements, in detailed financial transaction reviews, and in audit committee reports.

Boards are also defining, or restricting, the types of services that can be purchased from audit firms. Use of different firms for auditing and consulting services appears to be the major change. Companies are now require audit committee pre-approval for new services purchased from an external auditing firm.

Several companies had outsourced their internal audit function. These firms are now developing an internal department, reporting to the CFO, as well as having a reporting relationship with the board audit committee. Some have internal audit reporting directly to the CEO.

Companies are analyzing the “protective measures” being taken by external auditing firms to reduce the audit firm’s risk level. Quarterly meetings between the board audit committee and the external auditors are being held accountable to keep the audit committee more informed. In one firm, the audit committee will review quarterly results and question the external auditor, before the earnings statement is released to the public.

The relationships between client firms and auditors become unstable as auditing problems become public. As boards become more vigilant, look for more conflict-ridden based changes.

Board of directors.

Senior managers will meet more frequently with board members, either formally at board meetings or informally at other times. For its board members, one firm is offers weekly communications on progress.

Attention is being directed to Directors and Officers liability policies to assure directors that coverage is adequate. Audit committees are encouraged by their board colleagues to be more proactive and to provide more specific directives to management. This might be done annually or periodically through individual projects. Director education is becoming more popular, as firms want directors to become more comfortable with their responsibilities.

Increasingly active boards, along with more active committee chairs will become common. The big question is whether they will become sufficiently active to help avoid future failures.

Long-term Management Implications

While voluntary changes in procedures often take considerable time, the impact of several highly visible bankruptcies will create significant changes in how Corporate America does business. The examples of voluntary options being implemented or considered by CFOs are many. What remains to be seen is whether it will take legislative action or SEC directive to put teeth into the changes. Clearly, many of the items reported are self-protective, directed at keeping the company out of trouble with its stakeholders. How well those stakeholders will be protected may be determined by the initiatives developed by external forces. Political considerations, inertia, self-delusion and other factors may inhibit more meaningful changes being instituted voluntarily.

Reducing corruptive influences should be the goal of regulators managers and directors as they make voluntary changes.

Conclusions

Compare the voluntary actions your firm has taken against this list to assess whether your firm has some major governance gaps.

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Posted in Business and Strategy Management and Leadership

How to Lead A Life of Integrity

How to Lead A Life of Integrity

Living a whole life means doing things in a way that is consistent with our values and vision—standing firm on tough issues and making difficult choices. Here are four ways to achieve integrity and become a Trust Me leader.

  • Gain a firm understanding of the principles that guide your life. And have confidence in those principles to instill and build integrity. Bold acts issue from an unshakable assurance. Know the values and principles that drive your behavior. Only then will you have the confidence to act boldly in spite of peer pressures or prevailing opinions.
  • Act boldly when faced with compromising decisions and actions. You will have no fear when you are founded on values and driven by a deep need to maintain a life of integrity and trust.
  • Approach all you do with a joyful, positive, uplifting mindset. The pursuit of integrity requires what is best and noble in your character. You can’t afford the polluting influence of a negative outlook. Stay focused on the positive. Be true to your vision and values. When you are one person in the mirror and another person to employees, doubt will overshadow your attitude and your performance.
  • Balance competence with character. Trustworthiness is based on both character (what you are) and competence (how well you do what you do.) You may have one quality and not the other. But when integrity is the cornerstone of your character and competence is clear, you will be a leader people can trust.

Building trust takes time. We can inspire trust through our integrity, but years of baggage associated with us or our leadership style can slow the process. Patience is necessary as we seek the trust of others.

Integrity, with the trust it creates, is a leader’s most valuable asset. It is difficult to build a company without it.

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Posted in Philosophy and Wisdom

Leadership Connection: Listen and Speak Authentically

Leadership Connection: Listen and Speak Authentically

Connection is the glue of leadership, bonding parts and revealing synergy. Power emanates from our connections with those around us and helps us to go beyond what we once thought possible. Gita Bellin wrote, “The impossible is possible when people align with you.”

Genuine connection requires authentic listening and authentic voice.

Authentic Listening

Most executives consider themselves to be good listeners. They can capture and comprehend a vast array of facts, data, and content from various sources, but they often miss the underlying fears, beliefs, and unspoken messages. Good listeners hear what is said; great listners hear the unsaid.

To become a great listener, you need to learn authentic listening. “In Finding Your Voice”, Larraine Matusak, writes, “When we want to see something better, we sometimes squint. So, if we want to hear something better, perhaps we should squint with our ears.” Squinting with our ears requires having empathy for the often unrevealed concerns of others. Dan Goleman affirms, “Empathy requires being able to read another’s emotions; at a higher level, it entails sensing and responding to a person’s unspoken concerns and feelings—understanding the issues or concerns that lie behind another’s feelings.”

Authentic listening requires going beyond what is” to penetrate the deeper reality. The result is genuine connection and relationship.

To engage in more authentic listening, observe these guiding principles:

  • Honor what the person has to say, even if you don’t agree with it.
  • Value his or her unique contribution and self-expression.
  • Be open to learning from every situation and person.
  • Give the gift of presence by giving your undivided attention.
  • “Squint your ears” to hear the fears, concerns, and beliefs.
  • Seek not to be understood, but to understand.
  • Ask questions to clarify, open up possibilities, and uncover messages.
  • Express appreciation, even when you don’t agree.

Authentic Voice

You may be an accomplished speaker. You can master a topic, get in front of a group, and deliver a message. Your audiences are often impressed by your brilliant analysis, depth of details, and command of data. However, something is missing. People feel informed but uninspired. You need to develop more authentic voice by balancing your analytical competence with more emotional competence. Good leaders master the art of communicating with their heads; great leaders master the art of communicating with heart and head.

An authentic voice genuinely connects with people. It can be defined as shared feeling, shared meaning, shared understanding, and shared mission. These words capture the process of leading from the inside out. It requires a life-long commitment to personal development and emotional engagement with others. To develop a more authentic voice, observe these guiding principles:

  • Risk more openness, vulnerability, and emotion in your relationships.
  • Explore the traumas and privileges of your life to connect to what is important to you.
  • Remind others what is important to help them rise above circumstances.
  • Beyond sharing concepts, facts and data to inform people, share stories to inspire people.
  • Exhibit genuine energy and passion for what you care about.
  • Balance the head and the heart, analysis and emotions.
  • Be the mouthpiece for that still, quiet voice resonating in your heart.
  • Remember that the heart can leap over barriers built by the mind. Measure the value of your legacy by the connection you add.
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Posted in Education and Career Management and Leadership

Social Responsibility is a Business Imperative

Social Responsibility is a Business Imperative

Is your company and industry doing enough to fulfill its social responsibilities?

Obviously, we can all do more. It’s not just a responsibility—for us it’s a business imperative. When we work to make our communities more vibrant, beautiful and prosperous, we’re investing in making them more attractive to our visitors and giving them a reason to travel. Of course social responsibility is not just about investing in places—it’s also about investing in our people.

A guiding principle at our company is when we take care of our associates, they take care of our customers. When we provide a community’s young people with education and training, we enhance the quality of the labor pool. And when we do our part to make entire communities or countries more prosperous, we broaden and deepen a global middle class who can afford to buy the services we sell.

Community service initiatives are laboratories for leadership. They help identify and develop promising leaders, build teamwork, and improve loyalty. And obviously, when our companies demonstrate social responsibility, we add to our industry’s reservoir of goodwill from governments, customers, and the general public.

Real and effective social responsibility is shared by the entire company. Although we set policies for Marriott’s “Spirit to serve our communities” program, our leaders worldwide are strongly encouraged to get involved on a personal level in their communities.

Knowing what a community needs is critical to social responsibility. Just swooping in and offering some global cookie-cutter program and acting as though we know bestjust doesn’t work. Our communities know best what they need—and how to achieve it.

In 47 cities—worldwide, our general managers form business councils representing all of the brands in their market. One top priority is to pool their capital and human resources to serve the needs of their communities.

Of course, there are many needs, and we can’t meet them all. So, we try to leverage our core expertise. That might mean offering ballroom space for charitable fundraisers, or donating surplus furniture to housing programs.

It also means tapping the experience of our leaders. For instance, 50 percent of Marriott’s managers come from the hourly ranks, and those people personally know how rewarding it is to climb the economic ladder. And those same leaders have helped to bring thousands of chronically unemployed people into the work force. Our leaders are the spirit behind a program we call “pathways to independence” —where people learn to find and keep good jobs.

In our pathways program, we match participants with mentors, train them, and help them with solutions to problems that get in the way of work-like childcare and transportation. When they complete the program, they’re guaranteed a job offer.

Environmental protection is another example of social responsibility. In environmentally fragile areas, we might support the community and its tourism-reliant economy by protecting endangered species. For example, at the JW Marriott Phuket Resort nearly 2,500 guests and locals gathered at sunset to release 10,000 baby turtles into the ocean—helping to raise awareness about the plight of these creatures.

Sometimes meeting local needs means building a roof over someone’s head. At a recent Habitat for Humanity project in Costa Rica, associates and top executives from Marriott worked side by side to help build several homes for local families. We’re doing the same in Washington, D.C., and many other cities.

We also need to invest in our communities by investing in our people and improving their lives. Travel and tourism is a 24/7 business, so we help our people deal with this. Every parent knows childcare can be a challenge, but when you’re working the overnight shift at a hotel, it can be almost impossible. That’s why we offer several resources to help families. One example is our associate resource line, which provides access to local services for help with family, legal, and other issues. We also coordinate closely with our people to find flexible and creative solutions to childcare needs. At our Desert Springs resort in California, for instance, six housekeepers with 11 children formed a “childcare cooperative” where they take turns caring for each other’s kids. The property helps coordinate their work schedules—and it works!

Now, all of these ideas are fine, but meaningless if we don’t address our industry’s challenges. We need to work together to get people traveling again.

Travel and tourism’s “perfect storm” has created great challenges. Yet, in every dark cloud there is a silver lining. The events of the last three years have significantly raised awareness about the vital importance of travel and tourism.

Our industry has top-of-mind awareness among world leaders. We must continue to educate our leaders about the tremendous value of our industry. We need to be active champions for our industry and continually ask, “Are we doing enough to make travel and tourism work for everyone?” We are doing a lot, but I hope we never allow ourselves to believe it’s enough in social responsibility, as in leadership, success is never final.

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Posted in Investing and Finance Management and Leadership

How to Recapture Trust and Have People Follow You

How to Recapture Trust and Have People Follow You

Somewhere, in some company, a CEO does something to violate the trust of employees, stockholders, and the public daily. As a result, now seven in 10 people distrust CEOs. Eight in 10 are convinced these top executives would take “improper actions to help themselves at the expense of their companies. In recent months, the percentage of people who perceive big business as a threat to the nation’s future has doubled to 38 percent.

The lack of trust originates from leaders’ disregard for personal integrity. People want leaders they can trust. They expect honest answers to questions.

So, what must CEOs do? Become a Trust Me leader, focusing on the welfare and success of the people around them rather than on their own. Ironically, this ensures their own welfare and success more surely. They hold firm under pressure and maintain their focus. Above all, they possess integrity.

Integrity is intrinsic to a Trust Me leader and is so compelling that people naturally want to follow leaders who have it. People are most willing to follow someone they can trust. They must be sure foe person will be straight with them, follow through faithfully on their stated intentions, and remain true to their expressed values.

What is integrity? What does it look like? What can a leader do to become a Trust Me leader? The root word for “integrity” is integer—a whole, indivisible number. Leaders who focus on integrity choose to live a whole life, neither divided nor fractured through compromise, hypocrisy, instability or dishonesty. They won’t do it perfectly, but in spite of expected human frailties, a Trust Me leader strives to be whole and undivided. He or she is “the real deal.”

In “The Soul of the Firm”, William Pollard wrote, “We must be people of integrity seeking to do what is right, even when no one is looking.”

Barriers to Integrity

Becoming a whole leader of integrity is easier contemplated than achieved. Before exploring the attitudes and actions that build a life of integrity, let’s examine some stumbling blocks not easily seen or surmounted on the journey.

When leaders are paralyzed by fear, they tend to lose perspective and often make decisions or act in ways that do not support integrity. Fear also causes them to lose vision .and hope. They vacillate and lose heart. They simply give up and a life of integrity sinks below their radar. They expect, or others expect, them to deliver results, but they are bound by such fear that they lose their sense of direction and their heart.

The compromise of values is a sad and gradual corrosion of golden intentions, happening over time—a little lie or indiscretion leads to another until, almost imperceptibly, integrity and character begin to crumble. Finally, their integrity is completely ruined.

The root word for hypocrite is lzupokrisis. It was used in classical Greek as part of theatrical acting and evolved to mean acting a part. In this sense, the great actors are hypocrites-they assume a role and act out a part. Their acting roles are separate from their real lives.

In leadership, integrity is about actions matching beliefs. Do leaders “act” the part or are they genuine? Does their walk match their talk? Hypocrisy, like fear and compromise, can destroy integrity and render leaders trustless.

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Posted in Management and Leadership