Leadership: Transforming Culture and Company Performance

For most of our life on this planet we worked in small and intimate groups - the hunting party or the family farm. This was the "natural" way of getting work done, until the industrial revolution, large organizations in large buildings with specialized work. Intimacy and trust were lost. Our challenge now is to recreate organization that instill trust and social intimacy. This can only be accomplished by a dedication to principles that create unity, common purpose, and trust.

Countries are founded on principles such as freedom of religion, speach, and press. But, principles alone are not enough. Those principles must be embedded into the structure and systems of the organization or country. The nature of structure, the flow of information, the systems of motivation, are all designed based on an understanding of principles.

Principles are the foundation for the entire process of wealth creation. There are five forms of capital, one leading to the next: Spiritual capital, social capital, human capital, innovation capital and financial capital. Without a firm grounding in principles wealth is not likely to be achieved or sustained.

Spiritual Capital is the pursuit of a worthy purpose that creates collective energy.  This is the first act of leadership that unites the energy and effort of others toward common purpose. It is the Word that is in the beginning. 

There are two key elements of spiritual capital - a worthy purpose and a dedication to a set of values. 

Social Capital a set of values or norms shared among members of a group that permits cooperation among them.  If members of the group come to expect that others will behave reliably and honestly, then they will come to trust one another. Trust is like a lubricant that makes the running of any group or organization more efficient.

“One of the most important lessons we can learn from an examination of economic life is that a nation’s well-being, as well as its ability to compete, is conditioned by a single, pervasive cultural characteristic: the level of trust inherent in the society.” Francis Fukuyama

“As a rough rule of thumb, if you belong to no groups but decide to join one, you cut your risk of dying over the next year in half. If you smoke and belong to no groups, it’s a toss-up statistically whether you should stop smoking or start joining.” Robert Putnum, Bowling Alone

We all have a need to confirm our self-worth. Self-worth cannot be achieved in the absence of a sense of contribution to some higher purpose. Leaders fulfill this need.  They communicate purpose to those who follow. The ability to communicate a valued purpose is a rare art among corporate managers. Achieving return on equity does not, as a goal, mobilize the most noble forces in our souls.  The most successful companies have defined their aims in terms of product or service and benefits to customers in a manner that can inspire and motivate their employees.  Most corporations do serve a worthy purpose. Individuals seek to identify with it.  The competitive leader will make the connection between our souls and our work, and will benefit from the energies released.  

Our corporations maintain the traditions of a class society. We maintain the distinctions of management, labor, salary-hourly wage; exempt, nonexempt, thinker, doer. They are all false distinctions, the old, useless baggage of a deceased society, carried forward into a new world. We live in an age of unity, of integration, when distinctions that disunite and limit people are inherently counterproductive. There are other traditions from our past to which management must return. There was a time when ownership and identity with the job were a source of pride. The industrial age, with the anonymity of mass production, swung the pendulum from ownership to alienation. The electronic age, with its emphasis on information, the flexibility of information technologies, and the psychological needs for community, identify, and a source of personal worth, will swing the pendulum back toward ownership. The competitive corporation will accept the value of fully involving the individual in its workings and decision making so that he or she again feels in unity with and ownership for his work.

Unity within the organization is a function of many things. It is, in part, a function of the worthy purpose articulated by the leader of the organization. It is also a result of the habits, the culture of the organization. Those habits and culture are in large part a direct response to the nature of the organizational systems, structure, skills, symbols, style and stories.

One of Honda America Manufacturing’s principles is to create unity among associates, with the company, and with customers. Read the attached case study and consider how they employ each of the six S’s to create a culture of unity.

Then ask yourself, “What can we do, in our organization, to create greater unity within and with our customers?” Use the following chart and discuss this with your study circle. 

Decision making in our organizations has become dominated by a concern for legalisms, regulations, and precedents. Integrity is the foundation upon which must be built all other values, and upon which rest the trust and relationship between individual and corporation. The ability to discriminate between what is honest and what lacks honesty is a skill that is critical to the establishment of the new corporate culture. We live in a society of law and legalism in which the lawyer has become the corporate high priest of right and wrong. That which is honest has become confused with that which is permissible by law. Our managers and corporations generally adhere to what is legal. However, the law does not specify what is right, and it is a poor guide to making the decisions that will establish trust and unity between individuals and organizations, between customers and suppliers. These relationships have deteriorated to the point where they represent a drag not only on productivity within major corporations but also on their ability to market their products in this country. When managers are able to discern and act on that which is honest in spirit, trustful business relationships will be reestablished.   

Arrogance is the enemy of learning. Humility the lubricating spirit that enables individuals and organizations to learn, reflect on strengthens and weaknesses and make continuous progress. Arrogant leaders may create obedience, but never genuine loyalty or devotion. Humle leaders bring out the best in their team members and in the organization. 

“Companies succeed only if customers want their products, employees want to work for them, suppliers want them as partners, shareholders want to buy their stock, and communities want their presence. Figuring out how to maintain these relationships is the central challenge of corporate leadership.” HBR May-June 2017, p 58.

The job of the company leader to recognise the need to serve all these stakeholders.

Excellence is...

§Not a place to be…not a position, award, status, or achievement.

§It is never a “condition of ease”, but rather the “creative dissatisfaction” of the pursuit itself!

§It is not a note of music or the applause, but the melody, the rhythm that is sustained. Don’t look for “it”, listen to the music.

§It is a never ending process of growth, of learning, of emergence,  of challenge.

§It is the spirit within, the spirit of life that turns an acorn into an oak tree.

While "engagement" has become associated with short lived programs, the instructor describes how engagement must become a fundamental  belief and a system of management in the organizatiion. High performing organizations are designed into team structures that enable the ownership of work processes every day, by every employee.

Empiricism is...

§Knowledge comes from “sensing”, emphasizes the role of empirical evidence, rather than tradition, ideology or theory.

§It is based on experimentation and evidence.

§It is the foundation of human progress over the past two hundred years.

§All managers should be SCIENTISTS!

§What is the data telling us?

§What experiment have we conducted or can we conduct?

§What have others learned that should inform our decisions.

"The wave of the future is not the conquest of the world by a single dogmatic creed but the liberation of the diverse energies of free nations and free men." John F. Kennedy 

• Unity in Diversity is the Future of the World
• Men hate each other because they fear each other, and they fear each other because they don't know each other, and they don't know each other because they are often separated from each other. Martin Luther King, Jr.