Would you like decency with that?

Helping your organisation develop a values based culture, how Bushido shows the way

Open a paper, turn on a TV, or click something that’s not bait and you will not have to turn far, wait long, or search hard to find a story about bad corporate behaviour. This is no better illustrated than by the recent Mossack Fonseca (Panama Papers) and Unaoil revelations (ably supported by a cast of local stories such as 7/Eleven, CommInsure, Wilson Security et al).

So, is the surfacing of these revelations a deterioration in corporate culture and associated decline in ethical standards, or has this always been the way in which the spinning of the globe has been oiled and there has just been a rise in investigative reporting that has brought these issues out into the open?

The answer is likely a mix of the two, however the naïve optimist in me would like to think that a fall in the standard of behaviour accounts for the majority of the stories that have been broken; as opposed to the alternative of low-standards having always existed out of view.

Progressing on that basis, the question arises how do organisations ensure that their much vaunted corporate values are adhered to in the pursuit of shareholder value and returns? As we know, dollars (or perhaps what they represent) are very powerful things.

Societal values are evolutionary in nature; by way of example I cite our acceptance of violence. It wasn’t so long ago that a punch up at the pub, though not encouraged, was accepted as a form of dispute resolution. Rightly, this is no longer the case.

I therefore contend that organisations (be they government, corporate, or not-for-profit) need to have an adaptive system in place that educates their operational headcount about what is, and is not behaviourally acceptable. A one-off, tick box exercise to satisfy a checklist would not be sufficient given that the subject matter is undergoing continual metamorphoses.

An enlightening parallel can be found in Bushido: The Soul of Japan, an explanation, if you will, written by Inazo Nitobe[1] of the moral principles that Samurai were required or instructed to observe.

The nature of the system was such that it was not a written code; rather it was a set of principles that were handed down organically (not unlike an oral history) either via word of mouth, or more impressively through deed.

Interestingly, the paid fighter was naturally recruited from some fairly rough and ready personnel, it was through the generational application of the ‘unwritten moral code’ that Samurai came to be highly respected and seen as both the exemplars and guardians of the highest behavioural standards.

It was a sorting of the wheat and chaff that conveyed enormous privilege and responsibility upon those within its ranks.

It is possible to make the argument that our leaders are those now charged with passing down through word and deed the standards that are expected of their charges. These standards must be the living representation of ‘Value Statements’ and take into account the evolving expectations of society at large.

As outlined by my colleagues Rob Masters (Contrite Contrition) and John Kananghinis (The Values Deficit) in this edition of Words and Insights society at large has had enough of hearing mealy mouthed platitudes laid at the foot of the most recent scandal. They want to see leaders who own the situation and the moment; leaders who embody their values statements through their actions; thereby laying the foundations and paving the way for the next generation of Samurai to follow them, and protect society’s behavioural standards.

For a brief history of Japan, click here

 

[1] Inazo Nitobe (1862-1933) was born in Morioka, Iwate prefecture. After graduating from Sapporo Agricultural School, he went to the United States and Germany, where he studied agriculture and economics. On his return to Japan, he held various positions in education. From 1920 to 1926 he stayed in Geneva as Under-Secretary General of the League of Nations. After retiring from that post, he dedicated his life to peace. In 1933 he died in Banff, Canada.

 

 

The Values Deficit

Reconciling the need for financial value with social values that drive reputation

Creating value is the foundation stone of all business – to make or grow something, to provide a service, to improve daily life.

This is the drive that results in surplus that can be traded and that has resulted in the interdependent global market in which we live.

But there is more to what is ascribed a value. To paraphrase the Bible, “man does not live by bread alone”. We seek community, family, security and, for some, spiritual certainty and fulfilment. To achieve those ends in a civilised society we develop a set of beliefs, behaviours and ethics; a guide to our actions. We give those actions value, typically based on what we perceive the results to be either good or bad.

Whilst there may be some cultural relativity, the core social values that are supposed to guide most of us are fairly common. Honesty, respect, tolerance and fairness are seen as essential social values. Their importance is attested to by the distress and anger caused when any, or a combination of those values are demonstrably absent in the actions of others. That is why we characterise such behaviour as criminal and seek to punish it and stamp it out.

The modern global village is made up of individuals, states and corporations. In the developed world we expect the same social values to drive ethical and fair behaviour by all. We probably hold the non-individual actors (i.e. governments, corporations et al) to a higher standard, particularly given the disproportionate power they wield. Amongst those who state that with great power comes great responsibility are Winston Churchill, Theodore Roosevelt and Spiderman.

That is where companies can find themselves in major trouble. In the drive to create monetary value, shareholder value and personal value for executives, they may forget the imperative to fit within the prevailing social values. That is, there is a Values Deficit TM. When that happens corporate reputation can, and usually is, destroyed.

The 24-hour news cycle means that corporate misbehaviour will quickly gain broad exposure and, sadly, there is no shortage of examples. The result is that not only are organisations held to a higher standard, but the general disposition of most of the community towards them is inherently cynical.

To gain and maintain trust, companies must align their values to community expectation and not only live those values, but also be seen to live them. When that does not happen we regularly hear complaints about a negative and poisonous corporate culture. Complaints that can justify the business equivalent of a lynching, or, at the very least, a pelting with rotten fruit.

Not aligning with expected social values, yet still seeking to profit from the community that shares them, is the Values Deficit TM that can turn any business into a market pariah.

Any organisation that does not do a regular check of its values, the culture those create and assess if its actions and messages convey the desired values, runs a serious risk of drifting into a Values Deficit TM. The very nature of fast-paced competition can hasten that drift and create damage to reputation before it is even realised.

RMKA are highly experienced in working with organisations to assess expressed and lived values and to communicate values alignment with the communities and stakeholders that support any organisation’s licence to operate.

Donald Trump – Man of the Year?

In 2006 the late, great Robin Williams starred in a Barry Levinson film called Man of the Year. The premise was that a political comedy/talk show host (think Jon Stewart) runs for President, as an outsider, and wins.

Levinson thought the possibility of this actually happening so slim that he wrote in a sub-plot of irregularities in a new electronic voting system that preferences candidates with double letters in their surname (Williams’ character was Tom Dobbs) to explain how the TV star turned a wave of populist appeal into an electoral college win.

Ten years later Levinson must be thinking ‘why did I bother’? The far fetched is becoming reality as Donald Trump rides a tsunami of populist appeal to primary win after primary win in the race for the Republican Party Presidential Nomination.

The real test of Super Tuesday primaries is almost upon us but, win lose or draw on that important day, Trump and to a considerable extent the Democrat “outsider” Senator Bernie Sanders, have redrawn the American political map and perhaps the way all western politicians will frame their future campaigns.

The mythical Tom Dobbs initially struggles to compete with establishment candidates but when he bursts out of the political mould, turning the switch to vaudeville (as they say in showbiz) to make his points his popularity rockets. His messages are simple, simplistic in fact, but they are delivered with naïve sincerity and are undeniably entertaining. As a result, he taps into a deep dissatisfaction with the rigid and harshly partisan two party system.

Trump has shown that he can mine that degree of voter frustration with broad statements of objectives and with often offensive comments that would see career politicians crash and burn. But he just gets stronger. He took on the Pope for heaven’s sake, and the Pope issued a clarification!

Sanders is a 25 year veteran of the Senate who is running as an “outsider” by to positioning himself as a Democratic Socialist. A term that until recently would have seen any American politician laughed off the stage. Yet he is tapping the same frustration, just with a younger audience.

Politics as usual is becoming anything but. Hillary Clinton may still prevail through tight organisation, demographics and getting out the vote, but the political scene has changed, forever.

We have had our brush with shallow populists in Australia. Think Pauline Hanson and Clive Palmer. However, our electoral system does not offer the opportunity to catapult to the top job without first earning at least some political stripes. That’s probably a good thing. It allows time for the imposters to unclothe themselves.

In a multi-media, instant gratification, increasingly superficial message driven world it will be a brave politician who ignores the lessons already provided by the USA’s electoral process.

In 1976 the Sidney Lumet film, Network, written by Paddy Chayefske, had Australian actor Peter Finch, as top rating news anchor Howard Beale, deliver rants against the comfortable coalescence of media, business and politics, always ending with a trade mark cry of :

” We’re mad as hell and we’re not going to take this anymore.”

Hollywood may have proven to be more prophetic than even it could imagine.

The Icarus effect and the VW Diesel Scandal

Only weeks ago, VW CEO Martin Winterkorn must have been celebrating a new multi-year extension of his reign at one of the largest companies on earth. Just days ago, at the Frankfurt Motor Show, he confidently predicted that VW would secure the world automotive manufacturer number one spot. Today VW’s reputation is in tatters and he is gone.

It is safe to say that when the German Chancellor takes time out from dealing with thousands of refugees beating down the door to admonish your company and launch an investigation how you cheated emissions regulations, your days at the top are at an end.

Shooting for the automotive number one position seems to come with a curious Icarian curse. Ford suffered the Firestone /Explorer crisis, GM the faulty ignition switches, Toyota the floor mats sticking accelerators down and the Takata airbags and now VW.

In fairness to VW no customer’s lives are at risk (unless they breath-in too many exhaust fumes). In fact it is almost unique amongst such automotive industry failures given that vehicle operators are not at any risk. The risk is all at the company end. As the scale of the deception continues to unfold the reputation of VW, to say nothing of the share price, will take hit after hit.

A brand is a trust-mark and VW have shown they cannot be trusted. They have been devilishly clever, but they cannot be trusted. At least not the current management who must have/should have known about the highly sophisticated masking of emissions performance.

A senior management, and probably a board level, blood-letting will ensue. VW will, of course, survive but many more dark days are to come before one of the most recognisable brands in the world can regain the consumer and community trust it craves and needs.