The Integrity Based Business
by Mark Goulston

With most of a difficult year behind him, Company X's CEO, whom I'll call John (who asked that his real name and company name not be used in this article), and I sat down for one of our regular Friday meetings, this one, half way between Thanksgiving and Xmas. The 53 year old grandson of the founder of a third generation manufacturer of high quality socket and ratchet tools, that had been progressively losing its market share for ten years, John looked ten years older than his age. On this occasion with the end of the year drawing near, he wanted to just talk. When I asked him where he wanted to be at this time next year, he shared poignantly, "Next year, I'd like to feel hopeful and proud, instead of afraid and ashamed, like I feel this year."

We began what became a heartfelt discussion about how he might turn his fear and shame into hope and pride. We kept going back to the same word--- integrity. Out of our talk, came an idea for an Integrity Based Business, one that if John committed himself to, had an excellent chance of getting him to the place he wanted to be next year, and out of the sad place he found himself now.

After meeting with him, I realized that although his baring his neck so completely was unusual, it was not surprising. I also knew that this ache to transform fear into hope and shame into pride applies to many Presidents, CEO's, COO's, and high level managers whose companies are going through hard times. As our plan for an Integrity Based Business has a good chance of working for John, so too may it work well for other leaders in the same dilemma.

The Integrity Based Business

  1. Integrity of Vision - create the greatest value service or product. By exceeding expectations in quality for the price, your customers will take satisfaction and your employees will take pride. If you do good business, it's good for business (to counter the shame of a company living off its past laurels and losing its commitment to customers and clients, and the fear of being exposed as mediocre). For John this meant improving the design, quality and reliability of the tools it manufactured to match what they had been in the company's "Heyday" twenty-five years earlier. So prized were it's earlier tools that they had become collectibles and John envisioned developing new markets for a younger generation that could become just as crazy about these tools as their parents had been. Creative pricing strategies would be developed by looking at and learning from the pricing leaders in the tool and other industries that are known to give customers great value for the money.

  2. Integrity of Mission - make your business' quality and worth the best that it can be. This applies whether you're contemplating selling your business or not. Work at all times toward increasing your company's value, by working to improve every part of it. Cut costs wherever possible without cutting quality (to correct the shame of cutting corners and putting out a half-hearted effort, and the fear that the competition has already passed you, but your customers have not caught on). For John's company, this involved a long overdue updating of the engineering and design departments to utilize new technologies and having the sales department reconnect with a new customer-centred driven enthusiasm to regular accounts and going after new markets. A rigorous cost/benefit analysis of expenditures would be undertaken, by asking the question (the company had been avoiding for years), "Is what we're paying worth what we're getting?"

  3. Integrity of Function - all functioning parts need to be the best that they can be (a strong engine won't make up for a weak transmission and vice versa) and to collaborate toward mutually agreed upon goals(to correct the shameful practice of departments acting like prima donnas with disregard and unconcern for other departments whom they interface with, and to expose those inadequate departments that hide their incompetence by counting on the left hand not knowing what the right hand is doing and finally to counter your fear as leader that your laissez faire attitude has already caused more damage than you thought). In John's company purchasing, engineering, and service would work together towards a mutual goal: higher quality products and improved customer satisfaction.

  4. Integrity of Individual - each person gives and does his or her best in all aspects of their job. Individuals show strength of character and commitment by giving their best effort to every responsibility in their job, even when they don't want to (called professionalism) or don't feel confident (in which case they'll seek assistance or training). Personal responsibility and accountability is a must at all times. Don't do anything behind someone's back that relates to the company that you wouldn't do in front of them (to correct the shame and counter productivity of excuses, blaming, not meeting commitments or keeping promises. Counter the fears of inadequacy by having individuals finally confront their deficiencies and fix them, and having them discover that it is easier to correct problems than hide them and be afraid of being caught). People who complained at John's company would now participate in finding realistic solutions and commit to taking action on them. Follow-through would be vigorously maintained by a positive (non-policeman-like) follow-up by supervisors and team leaders.

  5. Integrity of (financial) Compensation - all pay is tied to performance. The reward for a job is salary and benefits. Bonuses are for sustained performance above and beyond the call of duty (also tied to profitability of company), rather than an assumed part of compensation. And prolonged impaired performance needs to be tied to disciplinary measures or financial consequences. Set goals and create an objective method of evaluating performance through a combined effort between COO, supervisors and employees. This would culminate in a signed agreement that would tie pay to performance (to correct the shame of bonuses and raises tied more to popularity, political savvy, and squeaky wheels than actual work produced. Create a fair system of compensation based on work output as a vehicle for dealing with the anxieties around confronting under productive and/or overpaid employees. This may include the daunting task of confronting overpaid, overextended, high level executives--- perhaps including yourself--- if the health and success of the company are at stake. Fairness starts at the top.). Goals would be set for John's employees by both the employees and their supervisors for the upcoming year, divided into quarterly objectives. Payment was to be tied to how well people reached or exceeded their goals.

  6. Integrity of (non-financial) Compensation - respect, gratitude, and recognition is also tied to performance and attitude (to correct the shame of treating better those who stroke their bosses, than the conscientious and loyal workers who put out for the company. Counter the fear that by favoring the undeserving workers who know how to flatter their superiors, that the conscientious and responsible, who don't know how to play company politics, will react by starting to do sloppy work.). Supervisors at John's company would track the work of their subordinates, and take the initiative to recognize and acknowledge and praise based on good work and positive attitudes.

  7. Integrity of Security - develop a plan that allows for stability and security of employment in the face of the legitimate and inevitable changing needs, abilities, and stamina of devoted, conscientious, long-term employees, devised to give workers security (to cover the shame of executives taking excessive perks or treating employees like commodities and the fear of workers retaliating by stealing, lying, or doing poor work to make up for the company not caring about their security. If you take advantage of them, why should they not do likewise?). At John's company, some highly technical work required skills that good conscientious workers in their middle to late fifties were having trouble learning. But these people understood what the tools were all about. They were true "tool guys", so a program would be designed for developing managerial skills in these middle career employees, so they might coordinate the work of the younger and impart their "tool" wisdom to the more technologically current, but less seasoned workers.

The higher road of being dedicated to integrity at all levels of his company had enormous appeal to John. Even if it meant that he, too, might have to toe the line, the anticipated relief of the gnawing feeling in the pit of his stomach (that was tied to a guilty conscience) was well worth the sacrifice. After we made our list, he looked it over and visibly became enthused when he told me, "Now that's the kind of company, I would like to lead, work for, and buy from. And I haven't felt that way in years."


Mark Goulston, M.D. is a specialist in Emotional Intelligence and heads Sherwood's Executive Coaching, Team Building and Sales Training practices. For more information visit: www.shrwood.com. Contact Mark at: mgoulston@shrwood.com.

Many more articles in Leading Change in The CEO Refresher Archives

   


Copyright 2004 by Mark Goulston. All rights reserved.

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