Leading Workplace Change™

…shared values are key to developing next generationof business leaders

Have you heard about the MBA Oath?  It was put together by a group of graduating Harvard Business School students in late May.  The Oath is a voluntary code of conduct created to bind together business school graduates with a set of shared values – values to guide their day-to-day actions and decisions as future managers and leaders.  It is part of a growing movement within the business school community to re-direct business management back to being  a profession with social, personal and organizational stewardship responsibilities.

The opening lines of the MBA Oath clarify its underlying purpose.

As a manager, my purpose is to serve the greater good by bringing people and resources together to create value that no single individual can create alone. Therefore I will seek a course that enhances the value my enterprise can create for society over the long term.

The MBA Oath is not as naive as you might think.  Other professional schools such as medical, require students upon graduation to take an updated Hippocratic Oath which focuses on the social as well as the clinical responsibilities of practicing physicians.  In most states in the U.S., law school graduates need to pass a professional responsibility exam, MPRE as part of their state-based bar exam to become an attorney-at-law.  Thus it seems reasonable to think of establishing professional standards, based on a set of shared managerial values for MBA students.

 We all know by experience that an MBA Oath on its own cannot guarantee consistent organizational leadership for the greater good, any more than the ethical standards and rules currently in place for physicians and attorneys can for their professions.  But, the potential is there to start setting expectations among graduating students to think of themselves as joining the profession of business management with ensuing obligations and benefits.  The profession can then use the strength of peer pressure and disciplinary action to enforce organizational stewardship standards rather than wait for regulatory or shareholder retaliatory actions.

These professional standards also have the promise of effecting the workplace cultures of the organizations MBA graduates will someday lead and the business world that we live and work in every day.  The culture of organizations are most strongly influenced by the personal beliefs and training of their founders and long-term leaders.  The behaviors they model and reward are one of the primary culture creating mechanisms of corporate culture.

So what better place to start to re-direct business management back into a profession than in the classrooms and within the formal practices of business school graduation ceremonies – “let’s all stand to repeat the MBA Oath!”

Tags: Values Inform Culture by Terri – older, but wiser white lady
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There is much self-reflection occurring in the business community today as we try to understand the underlying reasons for today’s economic crisis.  A recent article in the New York Times traces the role business schools most likely played in creating the “short-term and personal gain” focus of many of our current set of business leaders.  Rakesh Khurana, a professor at Harvard Business School is quoted in the article as saying -

…in the 1970s, the idea took hold that a company’s stock price was the primary barometer of success, which changed business schools’ concept of proper management techniques.  Instead of being viewed as long-term economic stewards, managers came to be seen as mainly agents of the owners – the shareholders…The new logic of shareholder primacy absolved management of any responsibility for anything other than financial results.

My perspective is that it is not just the leaders and their training, but also the corporate cultures shaped by these leaders that pushed us into the economic crisis of today.  I was first alerted to the gathering strength of a “short-term and personal gain” focus in workplaces when conducting a culture assessment of an energy trading company in the late 1990′s.  I was surprised and concerned to find the following attitude common among employees at the company.

An ‘undiscussable’ here is that you don’t want to be at odds with the executive team.  This place is a gravy train and no one wants to do anything to upset this train for themselves.  This is a once in a career opportunity.

Thus from a development of culture perspective – business schools influenced their students’ beliefs about the primacy of short-term financial results.  These students became the leaders of companies and started applying these new beliefs in the workplace.  The boards of directors of these companies liked the results and started rewarding leaders for  their short-term financial focus; and gradually, the traditional belief of managers as long-term economic stewards of a business became weakened.  

Over time, the new financial focus of leaders helped to create a new set of shared “rules of behavior” or culture that trickled down to all employees.  And, employees started to act day-to-day with a focus on their own short-term personal gain and like their leaders not on the overall health of their company.

I am happy to learn that some business school leaders recognize the need for change and are making efforts to re-think the fundamentals that drive their curriculum and training.  The NYT article mentions a number of efforts underway at business schools to focus more on long-term thinking; on the social value of management; and, how to make management a profession with a code of conduct.

My sense is that not all business schools will become leaders in this change effort.  But, those institutions that take on this challenge will most likely dig deep and find their own “win-win” cultural belief that what is important for the common good can be good for their business of education.

Here is an example of another heroes quest that will need to be taken on by institutions across the world in order for us to successfully re-fashion the structure of our global economy.

Tags: Good for Community - Good for Business by Terri Kruzan
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I am not alone in my belief that companies are capable of taking on heroes’ quests and be leaders in re-fashioning our global age.  The magazine Fast Company in their March 2009 issue comes up with a list of 50 innovative companies  …”that will re-define our future and point the way for a better tomorrow.”   # 48 on their list is Toyota Motor Company which I investigated recently as I wondered what in their corporate culture put them on the path of mass producing fuel efficient cars so far ahead of their peers in the automotive industry.

And what did I find? – another company culture with a long-standing “win-win belief” that what is important for the common good can be good for business.  In searching their company history on-line, I found the following statement describing the personal beliefs of the 19th century father of the founder of Toyota.

…Sakichi (Toyoda)…believed that he owed his success to the world at large and that it was important that Toyota be of service to humankind by working in good faith, not purely for monetary gain…

It is usually possible to track these kind of fundamental beliefs over time within companies in the writings of its leaders and how the company describes itself and what it values.  And yes, here is the same belief articulated today in a Message from Top Management.

…Under Toyota’s Guiding Principles, we practice openness and fairness in our corporate activities, strive for cleaner and safer car making, and work to make the earth a better place to live…

Now I have read many books on the histories of companies and read many an annual report, but Toyota does seem to be “walking its talk,” and using a traditional strategic belief to guide its business planning decisions.  Essentially, it was easier for Toyota to mass produce fuel efficient cars before its peers, because it was naturally supported by its corporate culture – to think long-term and find ways to build its business while serving the common good.

This strategic belief has served Toyota well as it is now the world’s top-producing automaker, albeit suffering losses today like the rest of us and most likely not perfect in every way.  It is also an example of a hero company with a “win-win cultural belief” that can lead in the re-fashioning of the fundamentals of our global economy.

Tags: Good for Community - Good for Business by Terri Kruzan
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Like many of us these days, I woke up this morning craving some positive news in the midst of our current economic instability.  Just as I was sitting down to write, our UPS delivery arrived for the day.  The driver is always friendly and at the same time efficient – never a wasted motion.  I was somehow reassured both by the normalcy of the delivery and also by thinking about the company behind it – United Parcel Service (UPS).  This is a company that does not make it into the news for any spectacular short-term gain, but is known for its steady and consistent growth.

I put on my organizational culture hat and thought that UPS is most likely a company with a strategic cultural driver of commitment to a long-term vision.  With this kind of driver in place, leaders are guided to balance their decisions concerning a possible short-term business gain against how well the decision will help the company achieve its long-term strategies.  Most likely, some portion of profit is re-invested into development of new products or services; and, leaders probably consider the needs of all stakeholders when making strategic decisions.  In the long-run this approach helps the company maintain a stable and committed workforce through good and bad business cycles.

Thus, I was not much surprised when I found the current CEO of UPS, Scott Davis expressing similar views in a recent interview with the Atlanta Journal & Constitution (Q&A / Scott Davis, Chief executive officer of UPS by Rachel Tobin Ramos, 9/20/08)

“We’re not really managing for the next quarter but many years into the future… It sounds folksy, but we really think our job is to leave the company in better shape for the next generation…We all feel very much involved in the outcome of this company (UPS). We still have about 30 percent of the company owned by insiders, both active employees and retirees.”

I do feel more positive about the potential of our country after thinking about UPS and the model it offers future company founders and the leaders of today.  We need to find successful models to guide us in how to transform our short-term gain focus into personal and organizational visions that balance what is good for today with what is good for the long-term.

Tags: Uncategorized by Terri Kruzan
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