Setting Higher Standards for Business Leadership
by Judith McGee

Where do you find the courage every day to run your business, tolerate the threats of litigation and economic loss, and believe in your company's future - confidently? What drives you day by day to lead with boldness and risk just about everything you have? Why do some businesspeople become rich and others fail?

A public company's Board of Directors is conscious of media scrutiny, fiduciary liability, and corporate governance issues. Once boards were ready to sign off and back their visionary CEO. Today they are timid, some dissent, and others challenge.

As a leader, you encourage dissent and want a devil's advocate challenging your theories before board agreement. A board of directors that rubber stamps management's decisions is legally vulnerable -- improperly exercising their oversight responsibilities. And, a board that is rigid won't be quick to make decisions and may impair the success of the company.

Some CEO's embody an attitude of "Lead, follow or get the Hell out of the way!" In small businesses, it's called being an entrepreneur. As businesses mature and take on stakeholders, the corporate dance changes. Public companies are governed under Securities and Exchange rules now dominated by the 2002 Sarbanes-Oxley Act, a legislation designed to enhance corporate governance standards. It attempts to enhance corporate accountability, tightening securities disclosure requirements and increased regulatory oversight of auditing firms. It also created new federal crimes and increased penalties for existing federal crimes.

Approximately 90% of businesses in Oregon are considered small businesses and few of them are public companies. Sarbanes-Oxley sets a federal standard and the trend is to hold business leaders and boards more accountable.

When things go well, the business owner gets the credit, fame and the money, but when they go wrong, they take the fall. When employees fail to live up to the standards expressed by management, the business loses credibility.

Stever Robbins, Harvard Business School MBA, believes that the new regulations and oversight rules are too left brained, too logical, to be effective. Compliance is about setting up and following rules. People make decisions by emotion and justify them with logic. One way to decrease risk is to help your people make wise decisions about what and what not to do. You'll have to work with the emotions of your organization.

Your employees take their behavioral cues from watching you, their leader. Just like your kids, they tune out when you lecture. They tune in when you're off balance, having a bad day and when you're vulnerable.

Leaders who sink to a less than high standard are immoral and unethical. They get noticed and are followed. They'll be followed right out of business. Beware if you cheat on your taxes, charge personal expenses to the business, or stretch the rules or regulations just a little? The "little things" imply your business values.

A positive way to spread your values throughout your organization is to tell stories. You may have some wonderful ones to spread throughout your company. Share your history, your wins and your passions. Your stories can illustrate your high standards and values. It is a way to help others understand the heart of your business. They tell others and your reputation grows one story at a time.

Complimenting others through stories of an individual's values and accomplishments gives the person a reputation to live up to. They will see themselves through your eyes and others will recognize their value, too. Practice this technique as a motivator. Help others make value-based judgments. Professional facilitator, Barbara MacKay uses the story technique with great success. She asks mixed small groups of employees to share "Kodak-moments" with each other - moments in their work where they have felt really proud. From these stories, she has participants identify the values that these stories espouse. Voila - the company or organization creates a value set they hold in common. The next step is to match company practices with those values.

Good leadership was once defined as "a smart guy who got rich." Today, leading without accountability doesn't work. Employees used to stay with a company for a working lifetime. Now, they are mobile and on the watch for better opportunities. Leaders need to inspire others to follow. Their organizations thrive with a social culture that encourages performance and accountability while caring for the success of the business and the individual.


Judith McGee is the President/CEO of McGee Financial Strategies. Contact Judith at 503-597-2222, e-mail: Judith@mcgeenet.com and visit www.mcgeenet.com for additional information.

Many more articles in Creative Leadership in The CEO Refresher Archives

   


Copyright 2005 by Judith McGee. All rights reserved.

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