The Fourteenth Banker Blog

June 4, 2010

The Era of Behavior

Filed under: Running Commentary — thefourteenthbanker @ 12:08 PM

This HBR article is worth a read. It describes the increasing transparency of our media age as a catalyst in changing the conditions under which business must operate.  Adding the quality of behavior to the quality of product and marketing will be increasingly required as citizens become more discerning about whom they do business with.  To do that, tin ear managers cannot just put on a happy face as they have with diversity of gender and skin color, but not thought.  They must actually open up the talent evaluation process to include new kinds of managers.

What must companies change about themselves in a world where people judge them by how they do business as much as by what they produce or provide? The first priority is to promote managers with a mindset of sustainability, and assemble orchestras around them who share and amplify it. This mindset needs to inform environmental management, certainly, but it also needs to extend beyond green concerns to social issues that affect employees, customers, and other stakeholders — in other words, to guide the company’s conduct in all affairs and in all corners of the world.

I often speak to groups of business leaders, including CEOs, and I ask a simple question: “How many of you, in partnership with your head of HR, can quickly compile your list of top performers?” Most are sure in their response — hands fly up, showing how proud they are of systems and structures to identify that talent. Then I ask: “How many of you can do the same with regard to your top ethical leaders — the people who exemplify your organization’s values and standards for doing business?” The hands sink from the air.

As so many of the readers of this blog have commented, the current consensus is to do just the opposite.  Managers feel increasingly threatened by the new transparency and try to control messages with empty marketing campaigns, making up values to fill a vacuum. But the challenge to the system is arising from within. Upcoming generations are not “company men” with loyalty to the firm coming above all other loyalties. Quite the opposite. Managers that do not open up or step aside for new ethical leaders eventually find themselves on the defensive. That is a good thing.

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5 Comments »

  1. What a tremendously powerful statement, and one that needs to be made more than ever! In my line of work (Performance Consultant) this is one of the things that we talk about quite often. For organizations to be successful, there needs to be transparency and communication at, from, and to every level. Of course, one of the issues seen when this happens is the extreme end of the continuum, which is information overload. The idea that more information is better is not always the case. The caution is to make information available to everyone, internal and external, but to focus the daily/regular communications to make them more efficient and effective. This means creating just-in-time (JIT) communications to the right people as established by the organization, that creates value and increases the successful completion of their job. Anything else simply becomes information “scrap”.

    Another important component here is the fact that more and more, organizations are finally realizing that business is both systemic and systematic, and therefore everything needs to work in harmony to increase performance (and thus increase output/throughput/profit) and reduce waste (such as wasted time/money/people power). Even in organizations where things seem to be working well there can really be a benefit to look at the organization systemically and systematically to identify if, in fact, anyone is supporting the values and beliefs of the organization, if their personal values match with the organization (which is important to create engagement and support of the “mission”), and to find any other gaps that may be present that can be filled to increase overall performance.

    You can check out my blog at http://www.provativebizblog.wordpress.com, which talks about this kind of topic constantly, and I will definitely be keeping up with yours!

    Comment by Christopher M. Janney — June 5, 2010 @ 8:13 AM | Reply

  2. When economic times are good, it is difficult to make bad business decisions that cannot be hidden. During these times management promotions are given to members of the in-group leading to a good old boys management team. When times get tough these folks are clueless and make things worse. Then things get shaken up and competent management gets put in place (if the company survives) and things get better. In the 60s times were great. In the 70’s the good old boys took over. In the 80’s competent managers took over and in the 90’s time were good again…then in the 2000’s the good old boys made grade and now that we are in the 2010’s, these folks will be replaced and things will start getting good again if the good old boys haven’t messed things up beyond recovery.

    Comment by oldgal — June 5, 2010 @ 9:18 AM | Reply

  3. 20% real unemployment in the United States? School is out for summer break? The BP oil spill is washing ashore. The ecological disaster from the BP oil spill and global financial crisis are caused by the same mind set. The ecosystem damage underway is depressing and criminal.

    Living here in Vancouver I am mystified. Is there any mobilization by local citizens in Lousiana, Alabama, Florida to work together to try and protect their beaches and wetlands?

    Is there any contrition on the part of the TBTF bankers? Can they show some civic leadership and dip into their cash reserves and leadership skills to help in the emergency response in the Gulf states? Or are they too mired in their own sludge? Can they think out of the box and help fight the oil disaster washing ashore? Can they get their hands dirty in the right way?

    Comment by tippygolden — June 6, 2010 @ 12:26 AM | Reply

    • It is not a stretch to link the BP oil disaster with the financial markets. After all, the oil industry plays a huge role in the markets, including hedging on the price of oil, which has fallen by about 50% since its peak at about CND $160 a barrel. The demand for oil is what is driving oil exploration and drilling.

      Sigh … No I don’t expect TBTF and hedge fund managers to understand they share some responsibility in the Gulf oil disaster. Margaret Thatcher apparently claimed, ‘there is no such thing as society, only individuals’. I completely disagree. Society (and this includes the financial system) is an ecosystem.

      Comment by tippygolden — June 6, 2010 @ 10:21 AM | Reply

    • No doubt banks in the vicinity will soon be purchasing full page ads claiming to be helping somehow, probably by using government backed SBA disaster loans or deferring payments on some loans that have gone sour anyway. The important thing from a banking standpoint is to take no additional risk, but get full credit as if you did.

      Comment by thefourteenthbanker — June 6, 2010 @ 10:56 AM | Reply


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