Bob MacDonald on Business

Sage Advice for Superior Business Management

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Are You Mining for Career Gold But Digging in the Wrong Place?

April 20th, 2014 · Business Ethics, Business Management

It is not just what you have to offer, but where you offer it that can determine a successful career.

No matter how capable or experienced a miner might be, if there is no gold in the mine, any and all efforts to find it will be futile. Likewise, no matter how talented and dedicated you might be in your desire to achieve success, if you are working in the wrong environment, then any and all efforts to realize it will be futile.

Trying to find success in all the wrong places mines nothing more than the tailings of wasted effort and deepening disappointment. That’s Successthe reason why, if you have the aptitude and a willingness to pay the price for success, you should consider not only what you can do for a company, but also start prospecting about what a company can do for you.

This reflection came to mind recently when a talented, focused and highly ambitious young man contacted me requesting some vocational guidance. Despite youth and relative inexperience – he was in his early 20s – he had a clear vision of what he wanted to achieve, but was facing with a career quandary. Here are the facts.

  • He holds a low-level management position with a company that is a recognized leader in his desired field of endeavor.
  • The job provides him the opportunity to gain valuable knowledge and experience in his field and offers the potential of a long-term secure career.
  • But the cultural environment of the company is so infested with bureaucrats and micro-managers he has become exasperated enough to consider, not just a job change, but even a career change.

He feels privileged to be working with such a successful, highly regarded company and recognizes the opportunity to learn and gain experience. On the other hand, he is troubled by the requirement that, in exchange for this opportunity and security, he must accept a stultifying work-environment. It’s an environment that, in his humble opinion, might never truly recognize his talent or provide him with the career success he desires; and even if it does, it comes with the requirement that he sell his soul to reach it.

Give the young man credit for being perceptive and mature enough to recognize the conflict he is facing. Some employees toil in the corporate mines for years searching for success, only to discover, after it is too late, that management’s promises were nothing but fool’s gold.

That’s why this young man’s dilemma is worth writing about. He’s far from alone in this kind of career predicament. The corporate culture bait and switch is giving millions of employees the shaft. But, as I counseled this young man, it can be avoided.

For those launching or in the midst of building a career, two issues should always be front and center: (1) Does the company offer career-path potential; and (2) is the culture of the organization one that will allow them to use their talents to their full capability?

These are good questions, but unfortunately the answers will not be found in the past or even current reputation of the company, but only by constantly assessing and understanding the cultural environment of the company; understanding how it is managed and led. Even if the company has achieved success in the past, you should be thinking about the future, and if the culture seems to be going down the wrong path, then you should look for another path.

Keep Your Eyes Wide Open

The good news is that employees themselves are in the best position to assess the culture of the organization and how that might impact their future. The key is to be observant and brutally honest about what you see and experience in your workplace. If you can’t do that and be honest with yourself, then know that you have begun to sell your soul. You’re digging your own future failure.

Conversely, you can spot the rich veins of a promising future by examining the attitude and philosophy of management. What type of organizational culture is management building? Does company management even recognize or care about creating a positive organizational culture? Or is it something they just give lip service to? The answers to these questions will go a long way toward helping you determine if you are mining for success in the right mine.

Obviously, the best starting point to find those veins of promise is to determine whether management of the company is ethical. The use of the term “ethical” in this context is not about lying, cheating and stealing. And if those adjectives (verbs, if you like) describe the modus operandi of management then the answer is simple. Update your resume. But for the purposes of this discussion, ethics refers to the attitude and operating philosophy of management. Do they speak with forked-tongue? Do they talk the talk of good culture, but operate in a closed, self-serving fashion?

A good example of management lacking sound ethics is when management fails to empower others. Empowerment of employees is the most-often talked about and the least-used management strategy in the corporate world. Empowerment is simple; it is not about giving up power, but about sharing power so that employees have the power to make a difference. Nothing motivates an employee more to do more than to be given the power to make a difference. Is it ethical to give an employee the responsibility to do a job, but to withhold the authority and power to do it?

Another sure sign of an ethically-challenged leadership is when a management group incessantly talks about how important the employees are to the success of the company, but there is no real empowerment and when black clouds are sighted on the horizon, the first actions of management are to “downsize” and “outsource.”

If you work for a company with a cultural heritage that holds to the belief that costs will be reduced and profits increased when important ethicsfunctions (and the people doing them) are outsourced to those with no knowledge of the company and with no concern for the future of the company (other than its ability to pay the outsourcing fees) and the future of its people, then it is reasonable to question the cultural ethics of management. And to ponder just how much of a future this type of culture provides the opportunity for the success you seek.

Again, let’s be honest. Corporate management is not required to be transparent, consistent, open and culturally ethical. In fact, in most organizations it is the antithesis of this attitude that is accepted and typical. But that does not make it right and it certainly doesn’t bode well for your plans for success. Sure, it’s possible to climb the corporate ladder working for a company that does not build an ethical culture – many do – but to do so you have to be willing to sell your soul and future to this type of soulless leadership. That may be okay for a while – and is your decision to make – but you have to ask yourself if you really want to live your life that way.

If you find yourself in the same position as my young friend, here are a few tips and telltale signs to help you determine if your job really offers you the opportunity to mine your gold of success:

  • Communication – Is the management open and honest in their communication with all employees? Is information about the company considered the exclusive purview of management? Are employees constantly caught off guard by the actions of management?
  • Trust Do management actions build a culture of trust? Can the pronouncements of management be taken at face value or do employees feel they have to question what they really mean? Are employees comfortable trusting their future to the actions and interests of management?
  • Parallel Interest Does management make an honest effort to align their interests, the interests of the company and the interests of the employees in parallel? Do the employees feel they will share in the success of the company that their efforts help to create? Is the success of an organization the success of all or is it management that takes both the credit and spoils for any success?
  • Power SharingIs the power to make a difference concentrated in the hands of a few or shared? Are employees given the responsibility for tasks, but not the authority, support and tools to achieve them? Does management often speak of empowering employees, but take actions that often denigrate the value and importance of the employees?

The value of such honest assessments is that they allow you to take and keep control of your future. And that, in and of itself, is success.

And the Moral of the Story …

If you are serious about your future and the success you want to achieve, it is incumbent upon you to take control of your future. There is no gold at the end of the tunnel when you allow others to control your future. Taking control of your future starts by putting yourself in a place that gives you a future.

As I advised my young friend, if you find yourself working for a company infected with the malady of an unethical culture, you know you are in the wrong place. You have two choices: You can give up and give in and place your future in the hands of a management group you neither trust nor respect. Or you can take control of your own future by finding an environment that provides you the opportunity to mine for the gold of success you seek.

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Distinctively Different Times Call for Distinctively Different Leaders

April 13th, 2014 · Building Better Business Managers, Business Ethics, Business Management

The long-held dictum that if you do what is expected of you, you will do well is no longer the sure path to success.

There have been more changes in business orthodoxy in the first 15 years of the 21st century, than occurred during the entire 20th century. When the last century ended, it marked not just a turning of the page, but also a closing of the book.

The world of accepted business mores and the time-honored requirements of success and leadership were hit with the unannounced suddenness and destruction of a 9.2 magnitude earthquake. This tremor of transformation shook the traditional concepts of business and leadership to the core, and the resultant tsunami of change washed away all that had been customary and comfortable. The result is that these new times call for a new type of leader; a leader who not only does what is ethical, but is cheerfully ready to go the extra mile.

Perhaps you think these comments are too dramatic and overstate the situation to the point of biblical hyperbole (Matthew 5:41, “And whosoever shall compel thee to go a mile, go with him twain (two).” Well, consider the following. It’s fair to say that the American economic system (if not the world’s) has been at war with itself since the start of this century. It was not so long ago when – in simpler times – top- and bottom-line growth (no matter how achieved) were the sole goals of business leaders. But over time, the simplicity of that model and the abuses it perpetuated ultimately caused the very fiber of the business world to unravel.

Think about it. In just a little more than a decade we have witnessed the illicit machinations and ultimate destruction of Enron, Tyco, EthicsAdelphia, Lehman Brothers and many others; all the result of slavish – to the point of being unethical – focus on top- and bottom-line growth. It is still hard believe that over a span of just a few years such icons as General Motors, United Airlines, AIG, Merrill Lynch, Bear Stearns, Fanny Mae, Freddy Mac, Citicorp and scores of other established institutions of business suffered the turmoil of restructuring, bankruptcy, dissolution or acquisition; but it happened.

The game is different now; meaning that for individuals to become successful leaders in this new environment, they are going to have to be different, too. The conventional concepts of ethics and leadership skills are not going to be enough to be successful. It will take more than the time-honored perception of being ethical and more than the classic traits of leadership if one is to emerge as a new type of leader who can be successful in these new times. The successful leaders of tomorrow will be those who employ new concepts and altered skill-sets.

The business world is filled with thousands of well-intended, dedicated individuals working diligently to meet the standards of ethics and to apply the accepted techniques of successful leadership. That is good, but it is not enough to stand out and distinguish oneself as a leader in these new times. If you want to be the one to rise above the rest and achieve truly unique levels of success as a leader in this new environment, you first have to come to grips with the understanding that it is no longer enough to simply follow the rules and lead like everyone else. You need to be willing to take a different approach than other hard-working, ethical individuals trying to achieve leadership and business success.

Believe it or not, it is possible – and not all that difficult – to absorb what has been learned in the past regarding ethics and leadership and then take it just one step further. Being willing to go “one step further” is what will distinguish the average leader from the exceptional one.

Traditionally, being ethical means doing the right things that are required to be done. Follow the laws and regulations and don’t lie, cheat or steal. That’s the way it has always been. However, to distinguish oneself as a new type of leader will require doing the right things that are not required to be done. It is a different philosophy of leadership that embodies the notion of simply doing more than what is required to be done and instead focuses on what should and can be done.

A Pregnant Idea?

The idea of “maternity leave” is a simple example of how this new concept of ethics in leadership might work. Most states have laws mandating maternity leave, a period of paid absence from work, to which a woman is legally entitled during the months immediately before and after childbirth.

Failure to comply with these laws certainly would be unethical as it is something required to be done. Compliance with the law is the accepted and ethical way of acting, but what if the mother is given the option to “take as long as she needs” to be with her baby? Even if taken without pay, allowing the mother to take as much time as she needs and keeping the job open for her when she returns is not required, but it is what should be done.

Many will argue that this type of approach will only increase costs and the payoff is not measurable; but they are wrong.

Leadership that is based on doing more than what is required becomes a social influence that encourages followers to reciprocate with increased loyalty and effort for the leader.

It is no coincidence that companies with a culture of leadership that is dedicated to doing more than what is required to do and doing what should be done do better. Many, in fact, are extending the concept of “parental” leave to include maternity, paternity, and even adoption leave. Smart move.

The Price of Merely “Being Ethical”

Another, more complicated, example of this leadership concept would be the current travails of General Motors. Ten years ago GM discovered an important safety defect in cars they were manufacturing. If you trace all the actions of GM management from the time they GMdiscovered the defect to the present, you will find the company complied with everything “they were required to do,” but not one leader stepped up and said, “We have to do more.” GM set about to discover the defect and find a solution; they reported the incidents and actions to the National Travel Safety Bureau, it made refunds to complaining buyers under “lemon laws,” but they went no further. The NTSB dropped the ball and did not order a recall and so GM did not do a recall. GM did what was required, but no more.

In the meantime GM profited from the sale of millions of defective cars that resulted in the deaths of at least 15 people killed and hundreds injured. No leader at GM stood up and said, “Look, we are being ethical by doing what is required to be done, but we need to do more than that.” They were playing by the accepted old rules of leadership and business; and look at the cost to GM is now.

If, 10 years ago, there had been leadership and a culture at GM that set the standard of not just doing what was required to be done, but what should have been done, then GM would have been transparent regarding the problem, recalled the defective cars and stopped making others until the problem was solved. No doubt it would have been time-consuming and expensive, but GM would be better off for it today.

And the Moral of the Story …

Times are different now and the old way of leading and doing business is not enough to assure success. What is needed now is a different attitude and approach from leaders and businesses. The old idea that doing what others are doing and just doing what is required to be done is the wrong thing to do now.

The new world calls for a new type of leader and corporate philosophy if real success is to be achieved and maintained. There is nothing complicated or secret about this new order of leadership. All it calls for is an attitude and a new standard for doing the right thing. Understanding that doing the right things that are required to be done is not enough and that the real standard for successful ethical leadership in the 21st century is doing what should be done.

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Corporations are People, and They Should be Free Like People, Too

April 6th, 2014 · Business Management

The attack on the activities of General Motors is just the latest example of wanton government interference with free market capitalism that is stunting economic growth.

Just show me one place in the constitution where the government is given the regulatory power to dictate how businesses should operate or to protect people against the alleged dangers of corporate activity. Look all you want, but you won’t find it, because the original intent of the constitution was to limit, not expand the powers of government.

Regulations imposed by the government on businesses are clearly nothing more than an attempt to countervail the limitations on GovernmentIntrusiongovernment power outlined in the constitution. The only thing that government regulations on business do is to increase the size, scope and power of government, while limiting individual freedom and stunting economic activity. Not only are the business regulatory actions of government an anathema to free market activities, they are unconstitutional; the fact is, these regulations do more harm than good.

Overstepping Constitutional Authority

Why should the government have the power to tell us we can’t smoke, eat all the “trans fats” we want, or that we have to wear seat belts and can’t text while we are driving? Even more flagrant is the government’s effort to regulate individual rights to own, carry and use guns. For Christ’s sake, it’s right there in the constitution: Citizens have the right to as many guns as we want! Besides, anyone with any experience at all knows it’s much easier to take down a buck with an AK-47 than a bow-and-arrow.

Government regulatory interference with business is even more brazen and constricting than its sometimes-draconian control on individuals. Remember, corporations are people, too, and they are entitled to be just as free from government intrusion as any individual. These regulations are clearly harmful to both the natural self-regulatory powers of the free market and the unfettered expansion of free market economic activity. What these power-grabbing government bureaucrats don’t understand is that these unwelcome and unnecessary regulations are preventing corporations from being “free” to do what they do best, which is to help the consumer, create jobs and stimulate the economy.

It has been estimated that U.S. businesses waste almost $2 trillion every year just to comply with existing government regulations. And don’t think these regulations don’t ultimately harm the consumers. All these costs are passed along to us in the form of higher prices so that corporate profits are not impacted by the costs.

Consider how much stronger the economy would be if businesses did not have to waste this $2 trillion every year to comply with government regulations. That’s $2 trillion in increased profits that companies could use to expand their business and hire new workers. Just imagine how many workers could be hired if you had $2 trillion to pay them! And you know that is exactly what the companies would do. Even if the companies just distributed the extra profits to shareholders, those shareholders would certainly re-invest that capital or buy more things like yachts, vacation homes and expensive trips; all of which would further stimulate the economy; creating more service jobs for those at the lower-end of the socioeconomic pyramid like maids, cooks and gardeners that would cause the benefits to trickle down to everyone.

God Bless the Free Market

These government mavens of regulation don’t understand the most effective regulation of the “free market” is the “free market.” That natural regulatory control of a free market is called “market forces.”

Here’s how it works: Let’s say some bank is making huge profits ripping off the consumer with abusive loan practices, high costs or excessive fees, the natural regulatory and competitive nature of “market forces” would encourage the other banks to take action in an effort to attract customers away from the abusive bank. Certainly the pure competitiveness of the free market would not have all the other banks jumping in to do the same thing, just for higher profits. And even if they did, those extra profits would just stimulate the economy.

Even worse than the economic cost, these government regulations run amuck even have the power to destroy a highly profitable, flourishing industry. The tobacco industry is a great example of this type of government abuse of power. The tobacco industry was once one of the driving forces of the American economy. It employed millions of workers; generated billions in profits and the industry’s efforts to export cigarettes and educate millions of people around the work to start smoking them, significantly enhanced America’s balance-of-trade. All of this happened because of a free market economy. In fact, the government even provided huge subsidies in an effort to develop the tobacco industry.

Then some government meddlers decided that just because tobacco caused cancer that the entire industry should be subjected to crippling regulation. Not only did this action interfere with the natural free market forces, it drastically reduced individual freedom by attempting to prevent individuals from exercising their constitutional freedom to decide if they wanted to smoke or not. Today, if it were not for the tobacco industry’s efforts to increase tobacco use in developing countries, the entire industry would be up in smoke. (I didn’t say that!)


Is this silly congressional oversight of GM really necessary?

General Motors is just the latest target of the government’s effort to interfere with the free market economy. It seems like 10 years ago or so General Motors became aware that some of the cars they were selling had a defect that could potentially cause death or the maiming of occupants. To their credit, when GM became aware of a potential defect, the company tried to identify and correct it. Sure, it took 10 years for GM to disclose and resolve the problem, but in the meantime the company was able to sell these defective cars – estimated at around 10 million – which generated millions in profits, created thousands of jobs and helped stimulate the economy.

The cost? Only 13 lives and a few hundred injuries. (That is barely more than the number of people who were on Malaysian Flight 370.) And General Motors has even graciously offered refund the price of the car and compensate the families of those who were killed and those injured.

But that is not enough for an intrusive government. No, it wants to embarrass General Motors with government hearings and even millions in fines. Don’t these self-serving politicos and bureaucrats understand that these actions interfere with the free market economy and could end up costing thousands of workers their jobs and millions in dividends to shareholders?

Of course, General Motors is not the only victim of government interference with the free market. Just last year MetLife was forced to pay $500 million to settle a multi-state investigation into unpaid claims for dead policyholders. It seems that MetLife discovered that thousands of their policyholders had died, but since surviving families had not filed a claim, the company simply kept the money. Then again just this past week MetLife was fined $60 million just for some pesky licensing violation in New York. Over the past couple of years Citicorp has been fined or entered into settlements with regulators worth almost $1 billion. Just think of how much more in shareholder profits these companies could have reported, how many jobs could have been created and how the economy would have been stimulated if the government had just minded its own business and had not interfered with the free market economy.

Here are a few things to ponder when considering the efficacy of the government regulation of a free market economy:

  • If the present plethora of government regulation of the free market has failed to stem the tide of abuse and collusion on the part of corporations, why should we think that even more regulation would be better? Instead, since they don’t work and are obviously costly, wouldn’t it be better to just get rid of them?
  • The constitution clearly gave every individual freedom of choice, so shouldn’t we – not the government – have the right and responsibility to decide what to do with our money, bodies and lives? If we want to risk cancer by smoking, shouldn’t that be our choice? If a bank gives us a mortgage we can’t afford, should the government take that choice away? If we want to buy a car, shouldn’t we be responsible to ask the carmaker for a list of known defects in the car?
  • Just remember that corporations exist just to help us. They can exist only when they provide us goods and services we need, want and are willing to buy. They create jobs, support communities and pay taxes; all in exchange for profits that further stimulate the economy. Regulations only increase costs and get in the way of corporations doing what they do best, so shouldn’t they be free to do what they want?

And the Moral of the Story …

The constitution of the United States was structured with an eye toward offering as much freedom to the people as possible and to limiting the power of government as much as possible. Operating under this philosophy America became a bastion of individual freedom and the most dynamic free market economy the world has ever known.

One thing that some people seem to forget is that corporations are people too. As such corporations should be just as free as individuals to go about their business. Corporations just want to help their customers, create jobs and help the economy grow, but unfortunately they are being hampered by a government that thinks it knows what’s best for people and wants to increase its size and power. To accomplish this objective, the government is taking more and more freedom away from corporations to act the way they want to achieve their goal of helping people.

This increasing burden of constricting and unnecessary regulations – the free market naturally regulates itself – not only are costly, cumbersome and ineffective, they take away individual freedoms from everyone. If we want to be true to the constitution we need to get rid of all the government regulations on business so that all people are free to do what they want to do. And the people can’t be free if corporations are not free to do what they want to do, too.







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