With a pandemic and all of its attendant human suffering, with economic devastation and so much loss of livelihood and dignity, with painful but overdue and much-needed conversations about structural and systematic racial injustice and inequity, and with so much division, disdain, and distrust, we need good leadership more than ever. Not because it is a cure-all, but because it is a prerequisite for stemming the crises, healing the wounds, and getting us moving in the right direction. Not just leadership at one level, but leadership at all levels of society and organizations. Not top-down, but leadership all around.
Yet too often we encounter not just mediocre but bad or even toxic leadership, the kind that not only fails to match the moment but that takes us in the wrong direction.
David Gergen, senior advisor to four U.S. presidents (from both parties), and author of Eyewitness to Power, wrote, “Most books about leadership tell us what a person ought to do to become effective and powerful. Few tell us what to avoid. But the latter may be even more valuable because many people on the road to success are tripped up by their mistakes and weaknesses.”
No leader is perfect. We all have faults, flaws, blind spots, and shadow sides. But we have to understand and grapple with the problem of bad leadership if we are to figure out what kind of leadership is needed today and to develop the leaders needed for tomorrow.
Bad leadership comes in various degrees, starting with lacking desirable behaviors, moving to missing essential elements, and falling off a cliff when it comes to toxic leadership. We address each in turn below.
There are many things that can “derail” our leadership. We can avoid difficult tasks. We can be a bottleneck on decisions. We can struggle with effective communication, listening, or delegation. We can get caught up in firefighting—reacting to events without moving toward a worthy vision. We can be too hard or too soft (what we call “steel and velvet” in Triple Crown Leadership). We can be overly rational and not sufficiently emotional, or vice versa. We can be impulsive, insecure, or intimidating. We can be overly optimistic or pessimistic. We can be perfectionist, people pleasers, or procrastinators. There are many derailers, and most leaders have multiple derailers. Those willing to learn and develop and can turn to coaches, mentors, advisors, feedback, training, books, and more.
Some modern leadership frameworks can inform this discussion. Authentic leadership from Bill George incorporates purpose, values, commitment to relationships, self-discipline, and heart, and these in turn generate passion, connectedness, consistency, and compassion. It is easy to see how some leaders may struggle in some of these areas.
Servant leadership from Robert Greenleaf emphasizes that the leader’s essential role is to serve others—the team, the organization, the community, the nation, the world. At its best, servant leadership involves listening, empathy, persuasion, stewardship, commitment to people’s growth, and building community. Greenleaf wrote that its best test is this: “Do those served grow as persons; do they, while being served, become healthier, wiser, freer, more autonomous, more likely themselves to become servants?” Again, it is easy to see how many leaders might fall short in some or many of these areas.
Transformational leadership (from James MacGregor Burns, Bernard M. Bass, Bruce Avolio, and others) causes significant change in individuals and social systems. In contrast with transactional leadership, which focuses on exchanges of expediency between leaders and followers via contingent rewards, transformational leadership involves emotional influence, vision and inspirational motivation, stimulation of creativity and reflections on values and beliefs, and consideration of the needs of followers. Clearly, this is a high standard, and many leaders fall short of it.
Leadership scholars James Kouzes and Barry Posner, authors of the best-selling classic, The Leadership Challenge, have been surveying people around the world for decades on the “Characteristics of Admired Leaders.” More than 100,000 people worldwide have responded, and the findings are powerful and surprisingly consistent across nations: “for over three decades, there are only four qualities that have always received more than 60 percent of the votes… for the majority of people to follow someone willingly, they want a leader who they believe is
Clearly, leaders who lack honesty, competence, inspiration, and the ability to rise out of the present moment and look forward are not ones who will motivate and bring out the best in their followers. Honesty and credibility were far and away at the top of the list of things people want from their leaders:
“In every survey we’ve conducted, honesty is selected more often than any other leadership characteristic. Overall, it emerges as the single most important factor in the leader-constituent relationship…. First and foremost, people want a leader who is honest.... people want to follow leaders who, more than anything, are credible. Credibility is the foundation of leadership. People must be able, above all else, to believe in their leaders. To willingly follow them, people must believe that the leader’s word can be trusted, that they are personally passionate and enthusiastic about the work, and that they have the knowledge and skill to lead.” -James Kouzes and Barry Posner, The Leadership Challenge
What we want from leaders can be greatly influenced by the context. For example, during a crisis we want leaders who show humanity and grace under pressure; seek credible information from a diverse array of experts; form a brilliant crisis response team; communicate reality, urgency, and hope; make themselves present, visible, and available; maintain radical focus; make big decisions fast; empower leaders at all levels; restore psychological stability as well as financial stability; use purpose and values as a guide; create a sense that people are all in it together; build operating rhythm with small wins; maintain a long-term perspective; and anticipate and shape the “new normal.”
Bad leadership gets much worse in a hurry when leaders are deeply flawed with what I call mega-derailers. In my experience, ego and fear are the mega-derailers that are most pernicious, and that underly many of the other derailers. Cynicism, derision, and hate are also candidates for this list.
In her book, Multipliers, researcher and executive advisor Liz Wiseman notes that some leaders are “diminishers” who stifle others for their own benefit and aggrandizement, as opposed to “multipliers” who use their intelligence to amplify the smarts and capabilities of those around them. Diminishers include:
Importantly, Wiseman notes that there are also “accidental diminishers” who unintentionally shut down the intelligence and potential of others, for example by making others dependent on them by always rescuing them, overwhelming others with a flurry of ideas, consuming all the energy in the room, driving so hard or fast that others become passive spectators, or being so optimistic that others wonder if they appreciate struggles and risks.
Another version of bad leadership takes the benefits of transformational leadership noted above and twists it into pseudo-transformational leadership, which is characterized by self-serving yet inspirational leadership behaviors, discouraging independent thought in followers, and little caring for them. According to leadership scholars Bernard Bass and Ron Riggio, pseudo-transformational leaders are self-consumed, exploitative, and power-oriented, with warped moral values.
Recently, there has been increasing attention given to the “dark side of leadership,” often focused on narcissism (excessive need for admiration, disregard for others’ feelings, inability to handle criticism, and sense of entitlement), hubris (foolish pride or dangerous overconfidence), and exploitation (taking unfair advantage). To those we can add the scourges of bullying and harassment. And of course there is a long history of authoritarian and autocratic leadership, and unethical and criminal leadership.
Toxic leadership, according to Jean Lipman-Blumen of Claremont Graduate University and author of The Allure of Toxic Leaders, is “a process in which leaders, by dint of their destructive behavior and/or dysfunctional personal characteristics, inflict serious and enduring harm on their followers, their organizations, and non-followers, alike.”
Clearly, there is a range of bad leadership behaviors, ranging from mild to severe, but the important question remains as to why people continue to follow bad or toxic leaders.
Some scholars have written about a “toxic triangle,” a confluence of leader, follower, and environmental factors that facilitate destructive patterns:
For years, many have pointed to the allure of charisma (compelling attractiveness or charm that can inspire devotion in others) and charismatic leadership, with people being seduced by leader characteristics such as wealth, power, or confidence. We can also look at the “psychodynamics of leadership,” including the psychological underpinnings of leaders’ behavior. Harvard’s Joseph S. Nye, Jr. wrote in his book, The Powers to Lead, “People persist in looking for heroic leaders.” Abraham Zaleznik, a leading scholar in this field, asks, “Is the leadership mystique merely a holdover from our childhood—from a sense of dependency and a longing for good and heroic parents?” Many people just long for somebody to come along and fix things, abdicating their own agency and responsibility, and they believe it when some leaders make unrealistic promises.
Ethics scholar Kenneth Goodpaster has done important work that I believe may shed light here. He notes that many leaders and followers get caught up in “teleopathy,” an unbalanced pursuit of purpose (e.g., winning in politics or sports, being a market leader in business, launching a space shuttle by X date), which is driven by fixation on set goals, rationalization of questionable behavior and decisions (e.g., everybody is doing it), and detachment from our personal values as we pursue those aims. I wonder if people are willing to stick with bad or unethical leaders because they are so caught up in winning and will do whatever it takes to prevail.
Our brains (and evolutionary biology) may also be part of the story. Social psychologist Jonathan Haidt writes in his book, The Righteous Mind: Why Good People Are Divided by Politics and Religion:
“People bind themselves into political teams that share moral narratives. Once they accept a particular narrative, they become blind to alternative moral worlds…. If you think about moral reasoning as a skill we humans evolved to further our social agendas—to justify our own actions and to defend the teams we belong to—then things will make a lot more sense.”
Our brains have evolved to seek and defend tribes, and to be exceptionally good at rationalizing the behaviors and decisions of our tribe (and its leader), a phenomenon that is often unconscious (so exceptionally difficult to defend against).
As we can see, there are many reasons why good people continue to follow bad leaders, and these neurological, psychological, and social phenomena are complex and powerful (and subject to exploitation by savvy operators and marketers).
In the end, we want leaders who add and multiply, not subtract and divide. We want leaders who get great results, with integrity, and sustainably. We want leaders who create more followers and serve the larger good rather than themselves. We want leaders we admire, who make us better, and who call on our better angels. We need better leaders, and we need them now. But most of all, we need to be our own best advocates and changemakers.
Gregg Vanourek (@GVanourek) is an executive and award-winning author who trains, teaches, and speaks on leadership, entrepreneurship, and life and work design. He runs Gregg Vanourek LLC, a training and development venture focused on leading self, leading others, and leading change. Gregg is co-author of three books, including Triple Crown Leadership (a winner of the International Book Awards, and called “the best book on leadership since Good to Great”) and LIFE Entrepreneurs (a clarion call for integrating our life and work with purpose and passion). He specializes in the links between personal and professional excellence and has served as an executive in market-leading organizations.
Today’s Human Resources (HR) leader has a wonderful opportunity to make an important strategic contribution:
Become your organization’s Chief Culture Officer.
If your CEO already acts as the Chief Culture Officer, great. Then you can be his or her Chief Culture Execution Officer. But most CHROs aren’t that fortunate, and you may need some ammunition to persuade the CEO that focusing on building culture can be a source of competitive advantage:
“I came to see, in my time at IBM, that culture isn’t just one aspect of the game, it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value.” -Lou Gerstner, former IBM CEO
We think of organizational culture as “how we do things here”: how people behave. Culture forms over time and drives what happens when the bosses are not present. It sets the tone for the organization, the norms for what is acceptable behavior. Culture is a powerful force in determining how an organization operates and whether it succeeds.
Organizations with a toxic culture pay a heavy price in lost revenue, staff attrition, low productivity, damaged reputation, lawsuits, and more. Ego, greed, deceit, conflict, gamesmanship, mistrust, turf wars, backstabbing, and exploitation spawn toxic cultures.
Organizations with a nondescript, non-defined, haphazard culture (perhaps this sounds familiar?) do nothing to help their organizations compete and thrive.
By contrast, organizations with a high-performance culture of character—think of Southwest Airlines, Zappos, Patagonia, DreamWorks, Atlassian, Google, Warby Parker, REI, LinkedIn, Microsoft, Salesforce—set in motion a self-reinforcing, positive, and virtuous cycle with their stakeholders. Employees identify more with the enterprise and bring more of their talents, creativity, and commitment to their work. This healthy culture positively affects profitability, growth, productivity, staff retention, reputation, relationships with customers and suppliers, and more.
A healthy culture by no means guarantees success, but it provides the energy boost and commitment to build an exceptional organization. In a high-performance culture of character, everybody expects excellent, ethical, and enduring performance and impact—what we call “triple crown leadership.”
Culture is the legacy of leadership. A high-performance culture of character is the legacy of triple crown leadership.
So, what can Chief Human Resources Officers (CHROs) do to help their organizations excel? Here are some suggestions.
1. Become the Chief Culture Officer. Live and breathe culture-building, making it your top priority.
2. Persuade the CEO. Persuade your CEO that culture is critical. Volunteer to lead an effort to make your culture a competitive advantage. You probably don’t need more (or much more) money, time, or staff. You mostly need buy-in (and perhaps cover). Promise periodic updates on progress.
3. Align with Organizational Goals and Strategy. Make sure you have a seat at the goal- and strategy-setting meetings. Align your culture-building efforts to the goals and strategy. If you can’t gain that access immediately, ask another officer for a briefing.
4. Get a Baseline. Conduct a baseline assessment to determine what your current culture is. Your baseline can be as simple as gathering input on these questions: How do we do things here? What are the accepted norms of behavior? On a one-to-five scale, how does this culture contribute to or detract from the achievement of our goals and strategy? Use team meetings, employee interviews, online surveys, and/or town hall meetings to gather data. After a few weeks, you’ll have a good picture of the current culture.
5. Brainstorm and Synthesize the Ideal. Conduct a few sessions with some influential leaders at various levels in the organization. Explore questions like: What is our desired culture? How would we be operating if we were really the best-of-the-best in our field? From this input, you can synthesize a succinct and aspirational statement of your organization’s desired culture in a page or less.
6. Determine How to Fill the Gap. Now it’s time for some brainstorming and innovative thinking from you and your colleagues: “How do we fill the gap between the current culture and our desired culture? What must we do differently?” Be practical and specific. In the process, recruit committed volunteers and allies to begin the cultural transformation. Here are ideas for how to fill the gap:
7. Culture Change Plan. Once you have identified your culture gap fillers, draft a Culture Change Plan. It doesn’t have to be long. Share it with all your colleagues as the road map for culture change.
8. Model It. As Chief Culture Officer, be the exemplar of the desired culture. Everyone will be watching what you do more than what you say. If (when) you slip up, admit it, apologize, and ask for help to improve.
9. Be Resolute. Use your leadership authority and position to insist that everyone operate by the cultural norms you set together. No exceptions, even for top performers. They too must operate by the shared cultural norms or leave. Otherwise, your efforts will be undermined. Our experience is that when toxic superstars depart for values violations, the aggregate performance level of the remaining group actually improves.
10. Appoint Culture Champions. Empower a small group of trusted colleagues across departments to be proactive about culture recommendations and to take independent action. Meet with them often and assess progress. Keep their enthusiasm levels high. You can’t do it all, and you need their leadership.
11. Conduct Periodic Assessments. Monitor the culture through periodic assessments, formal or informal. Culture change is not a one-shot fix. It is a never-ending process that needs time, attention, and leadership.
12. Brief the Leadership Team. Brief the leadership team, including the CEO and board members, quarterly (or even monthly) on what is happening with culture to achieve the corporate goals and strategy. Keep the initiative visible. Downplay your own role, and celebrate what leaders throughout the organization are doing to build the culture.
By creating a high-performance culture, you will engage people, build trust, infuse meaning into people’s work, bring more joy into your workplace, and position the organization for greatness.
Core Concept: Building, a high-performance culture of character is an unappreciated and underused way of helping organizations thrive. The CHRO should lead that effort.
Bob and Gregg Vanourek, father and son, are co-authors of Triple Crown Leadership: Building Excellent, Ethical, and Enduring Organizations, a winner of the International Book Awards. Twitter: @TripleCrownLead, @GVanourek.
In our work with leaders across sectors and industries, we often get asked about how people can “lead from below”: how they can exert influence on the organization and its culture even when they do not have much (or any) formal authority, or when they work in middle management, or when they work for a bad or mediocre manager, or for a company with a toxic culture.
The short answer: you can do much more than you think.
Ronald Heifetz from Harvard has noted that, since we tend to conflate leadership and authority, even the idea of leading without authority can be perplexing. Authority is the right to make decisions, give orders, and enforce obedience. There are many leaders who operate that way, but leadership is fundamentally different.
Much of the important leadership we’ve seen in organizations comes not just from people with authority but also from people throughout the organization, regardless of their title. We have seen brilliant leadership in action from people with little authority, from new people, from interns. One of the advanced leadership practices we advocate in Triple Crown Leadership, based on our interviews with 61 organizations in 11 countries, is unleashing the latent leadership, creativity, and agency of people throughout the organization—viewing them as “stewards” of the organization’s shared purpose, values, and vision and its quest to be excellent, ethical, and enduring. That means developing and expecting leadership not just from above but also from below. That means that everyone has essentially two job descriptions: first, their normal duties, and second, defending the organization’s results imperative, ethics imperative, and sustainability imperative.
In addressing how to lead from below, we first note that there are real dangers associated with it. When handled poorly, it can cause real problems. You can become a lightning rod. You can be attacked. You can be the messenger who gets shot. You can become the scapegoat. You can lose your job. Some managers view leading from below by those they supervise as a challenge or insult. If they are insecure or arrogant, they may attack or punish you. Other times, your colleagues will view it as an attack on the group, and they may feel obligated to isolate you out of loyalty to the group. When leading without authority, you should expect some resistance, and you need to play it smart.
Note also that there are great rewards possible from leading from below, both for you and the organization. Here are some tips based on our own experiences and what we have seen in the leadership literature.
1. Embrace your own potential and abilities. Too often, followers give too much deference to their leaders and relinquish their own power and responsibility. With a more enlightened viewpoint, you may find that you have more potential and influence than you think arising from your knowledge, skills, relationships, work ethic, and access to information or people.
2. Reframe your mindset about your role (and your manager). Too often, followers give too much deference to their leaders or are too quick to throw up their hands and abdicate responsibility for what is happening in the organization, pointing fingers of blame at their colleagues who happen to be in positions of authority. The best followers do all they can to help the organization achieve its purpose, vision, and goals while operating within the bounds of values and ethics. This means shaking things up, taking risks, and helping leaders get better (e.g., by informing them of problems they may not be aware of, raising tough issues, asking provocative questions, letting their manager know what they need to succeed, and developing relationships of trust with all they work with). We should also check our beliefs about our leaders: do we hold them to unrealistic expectations of perfection or judge them too harshly even when we may not be aware of all the challenges they face, with the pressures and demands of leadership? Have we walked a mile in their shoes?
3. Have a bias for action. Too many people wait to be anointed before acting, or for conditions to be “just right” (which almost never happens). In Leadership without Easy Answers, Ron Heifetz writes, “many people wait until they gain authority, formal or informal, to begin leading. They see authority as a prerequisite. Yet those who do lead usually feel that they are taking action beyond whatever authority they have.”
4. Look for ways to increase your leverage by building informal authority. People generally respond positively to leadership regardless of whether it comes from positions of authority or not. Build up your bank account of informal authority by first and foremost establishing credibility through character and competence, as well as demonstrating trustworthiness, respect, courage, clarity, commitment, and effective communication and listening (even to people with whom you disagree).
5. Clearly establish your loyalty to the organization’s purpose, values, and vision so people know this is not a power play or selfish ambition. It must be clear beyond a shadow of a doubt that you have your colleagues’ and the organization’s best interests at heart. Be thoughtful about how you communicate to your colleagues, taking nothing for granted.
6. Identify allies, relevant stakeholders, and potential adversaries. Map out all the people, teams, and divisions involved, and see things from their perspective. Recruit as many allies as you can, especially those with deep credibility, influence, and insight into the organization—thinking also about who is trustworthy. Be open to new ideas, recognizing that you may be missing something that you cannot see clearly from your perch, and that other people come at it from a different perspective.
7. Determine your best approach, specifically whether you will try to get results by changing the mind or behavior of your manager or management team, or whether you will instead mobilize colleagues around you as change agents (or some combination). Too often, followers assume that they have to do the former, but in many cases the latter approach can be more effective over time.
8. Recognize that by lacking authority you have some advantages. The cons of lacking authority are clear and obvious, such as lacking power over people and resources. The pros are less obvious but often important, including more latitude to do things differently, freedom from political limitations, less need to account for an overwhelming array of stakeholders often with conflicting interests, more access to information on the front lines, and an ability to advocate for focused issues as opposed to the full array of considerations.
9. Speak up and raise concerns when needed. This is one of the most important aspects of leading from below, in part because it is so rare. According to the Corporate Executive Board (now part of Gartner), “Nearly half of all executive teams fail to receive negative news that is material to firm performance in a timely manner because employees are afraid of being tainted by the bad news, and “only 19% of executive teams are always promptly informed of bad news that is material to firm performance.” Leadership expert Warren Bennis wrote, “If I had to reduce the responsibilities of a good follower to a single rule, it would be to speak truth to power.”
How to speak up when needed? First, get all the facts and avoid jumping to conclusions. Our brains make extensive use of mental shortcuts and these can often lead to mistaken assumptions or biases. If the issue is in fact real, address it directly with the person in question, but ask and learn first (seeking to understand). No guns blazing with accusations. Be open to their input and try to see things from their perspective. If not satisfied or resolved after dealing directly with the person involved, then go up the chain of command to object or blow the whistle. Meanwhile, consider seeking allies (and legal or human resources help, if needed).
10. Be prepared to walk away, if need be. Before assuming too much risk, think through your professional options (i.e., where would you work if you left this organization) and your personal and family finances. Have you been living lean and diligently building up savings and investments so that you are not living paycheck to paycheck and beholden to an organization that may no longer fit with your values or goals?
The best way to develop one’s own leadership skills is to practice leadership, even if one lacks the formal authority to lead. Leading from below is never easy and not without risk, but it is a powerful way to learn while also providing a great service to your colleagues and organization.
Post-Script: Research on Leading from Below and Followership
There are many research findings that relate to the question of “leading from below,” and many of them arise from the study of “followership.” For example, Kelley (1992) created a widely known typology of followership:
Kelley notes that effective followers are good at: leading themselves and thinking for themselves, exercising control and independence, and working without supervision; showing strong commitment to organizational goals as well as their personal goals; building their competence and mastering job skills; being credible, ethical, and courageous.
Chaleff (2009) encouraged followers to take a proactive role and work with leaders to achieve common outcomes. He noted that followers need the courage to: assume responsibility for the common purpose, support the leader and the organization, constructively challenge the leader if the common purpose or integrity of the group is being threatened, champion the need for change when necessary, and take a moral stand that is different from the leader’s to prevent ethical abuses. His follower typology:
In another typology from Kellerman (2008), followers can be: isolates (completely unengaged), bystanders (observers who do not participate), participants (partially engaged and willing to take a stand on some issues), activists (determined to act on their own belief, often as change agents), or diehards (engaged to the extreme, totally dedicated to their cause, whether supporting or opposing the leader).
Too often, the research lionizes the leader (what Meindl called a “romance of leadership”), while neglecting the contributions of followers. Recent research highlights the positive aspects of being a follower, including:
In The Allure of Toxic Leaders, Jean Lipman-Blumen addresses the question of why people follow bad or toxic leaders (who are unethical or use people or their position for their own ends). She points to a number of human needs, desires, feelings, and fears, including: need for reassuring authority figures (especially in times of crisis), need for security and certainty, need to feel chosen or special, need to be part of a community, fear of isolation, and feelings of powerlessness to challenge bad leaders.
In Leadership: Theory and Practice, Peter Northouse writes about the cost of followers who fail to stand up to toxic leaders: “when followers are passive or submissive, their inaction can contribute to unfettered leadership and unintentionally support toxic leaders…. Followers can create contexts that are unhealthy and make it possible for leaders who are not interested in the common good to thrive.”
In The Leadership Experience (2005), Richard Daft notes several demands of effective followers, including:
In Exit, Voice, and Loyalty, Albert Hirschman noted that employees have several options when they are dissatisfied with their manager or organization:
Related Books and Articles:
Gregg Vanourek (@GVanourek) is an executive and award-winning author who trains, teaches, and speaks on leadership, entrepreneurship, and life and work design. He runs Gregg Vanourek LLC, a training venture focused on leading self, leading others, and leading change. Gregg is co-author of three books, including Triple Crown Leadership (a winner of the International Book Awards) and LIFE Entrepreneurs (a manifesto for integrating our life and work with purpose and passion). He specializes in the links between personal and professional excellence and has served as an executive in market-leading organizations.
Today marks the 50th anniversary of Earth Day, a day on which we honor our planet and recognize the importance of environmental stewardship and our mind-boggling interconnectedness. Since 1970, the world population doubled, from 3.7 billion people to 7.6 billion today. We have made great progress on some fronts, but not nearly enough.
In our triple crown leadership model, there are three mains aims: excellent, ethical, and enduring. We define the latter one, enduring, as “standing the test of time and operating sustainably.” Sustainability can be defined as “meeting the needs of the present without compromising the ability of future generations to meet their own needs” (United Nations) or, quite simply, as “the capacity to endure.”
We view sustainability as having two dimensions—external and internal—the latter of which is often overlooked:
Business leaders of course must address cash, profits, and growth as they manage their organization’s financial health. Here, it turns out, there are not just costs associated with environmental stewardship but real opportunities. Businesses operating sustainably have the potential for:
“We see that sustainability drives growth, cuts costs, reduces risk, and helps us serve a multitude of stakeholders.”
-Paul Polman, CEO, Unilever
Of course, these gains are not automatic. Leaders must figure out viable business models and strategies, leveraging innovation and efficient operations while engaging with partners in the community and their supply chains.
None of this can happen without leading people well. Organizations must have a conscious culture that allows people to sustain excellent and ethical work over time.
Here too, we have much work to do. Take, for example, the problem of burnout:
“Creating the culture of burnout is opposite to creating a culture of sustainable creativity.” -Arianna Huffington, Cofounder, Huffington Post, and CEO, Thrive Global
Wise leadership can help create the conditions for “conscious capitalism,” including:
There have been big developments on this front in the business world. For example, in Larry Fink’s 2018 Annual Letter to CEOs, he wrote about how companies must have a social purpose and pursue a strategy for achieving long-term growth:
“Without a sense of purpose, no company, either public or private, can achieve its full potential.” -Larry Fink, CEO, BlackRock
This was big news coming from the CEO of BlackRock, one of the world’s largest asset managers, with trillions of dollars in assets under management.
In 2019, the Business Roundtable published a statement on the purpose of a corporation. Columnist Barry Ritholtz wrote the following in Bloomberg about that dramatic statement: “For 47 years, the Business Roundtable has lobbied on behalf of corporate America. Much of that time, it maintained a fiction—that the sole purpose of a corporation was to maximize profits on behalf of shareholders. This philosophy has been under assault for several years now, and this week the Business Roundtable announced it wants to put it to rest. In a widely circulated memo, the 200-member organization reversed itself, writing that ‘shareholder primacy’ is no longer the sole purpose of a corporation. Instead, corporations must include a commitment to ‘all stakeholders,’ which includes customers, employees, suppliers and local communities.” By now, we should all be including the environment in our list of essential stakeholders, given our dependence on its resources and conditions.
According to management theorist R. Edward Freeman (creator of stakeholder theory), “Managing for stakeholders is not about trade-off thinking. It is about using innovation and entrepreneurship to make all key stakeholders better off and get all of their interests going in the same direction.” John Mackey and Raj Sisodia note that the way to enable such stakeholder synergy (avoiding trade-off thinking) “is to focus on value creation rather than on value division,” taking us back to the innovation imperative.
When it comes to the external aspects of sustainability, we are today seeing great advances in areas such as biomimicry, circular economy business models, carbon sequestration, regenerative and restorative practices, and more, in part capturing the attention of the world through the U.N.’s Sustainable Development Goals (SDGs).
These matters are not only the province of CEOs, entrepreneurs, philanthropists, and policymakers. They are our own.
“If the success or failure of this planet, and of human beings, depended on how I am and what I do, how would I be? What would I do?”
On this 50th anniversary of Earth Day, we must take careful stock and act appropriately—and urgently. So much is at stake.
Gregg Vanourek (@GVanourek) is an executive, changemaker, and award-winning author who trains, teaches, and speaks on leadership, entrepreneurship, and life and work design. He runs Gregg Vanourek LLC, a training venture focused on leading self, leading others, and leading change. Gregg is co-author of three books, including Triple Crown Leadership (a winner of the International Book Awards) and LIFE Entrepreneurs (a manifesto for integrating our life and work with purpose and passion).
“The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty and we must rise with the occasion. As our case is new, we must think anew and act anew.” -Abraham Lincoln
As an insidious virus spreads around the world, we are wise to stop and ask: what can it teach us?
Much, I think. One question I am drawn to lately is this: what does the pandemic teach us about the role of business in society?
“This moment is the curriculum.” -Jon Kabat-Zinn
First, some context. For half a century, an epic battle has been raging in board rooms and business schools about the purpose of business. Economist Milton Friedman took the first shot:
“There is one and only one social responsibility of business—to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” -Milton Friedman
His work laid the groundwork for “shareholder primacy theory,” the idea that shareholders should come first when business executives make decisions, that the primary purpose of business is to increase shareholder (owner) wealth, and that the ultimate measure of a company’s success is the extent to which it rewards shareholders. Jack Welch, former CEO of General Electric (in the 1980s and 1990s), is also credited with fueling this idea in practice.
This idea was so successful that, now, many people take it for granted, as business school gospel, as a law of nature. Of course the role of business executives is to maximize profits and reward shareholders. Right?
Not so fast. Edward Freeman, a business school professor, had a different idea:
“Business is not about making as much money as possible. It is about creating value for stakeholders.” -Edward Freeman
Freeman’s “stakeholder theory” focused not just on shareholders but also employees, customers, suppliers, communities, and the environment, since these are all necessary for the business to survive and thrive. This was not an exercise in wishful thinking or naive altruism. There is a systemic view and innovation imperative that fuels the engine of value creation:
“Managing for stakeholders is not about trade-off thinking. It is about using innovation and entrepreneurship to make all key stakeholders better off and get all of their interests going in the same direction.” -Edward Freeman
The battle was afoot, continuing even to this day.
What does this have to do with a tiny virus (SARS-CoV-2) that causes a global pandemic due to the rapid spread of a novel coronavirus disease (COVID-19)? Much, I think.
Today we see that our health care systems are strained, in some places to the breaking point. These systems are complex, relying on private, nonprofit, and public hospitals and chains and their personnel, equipment, technologies and related links like supply chains, research, labs, insurance providers, laws, regulations, information flows, and data models.
These complex health systems rely heavily on business products and services (e.g., ventilators, masks, vaccines, etc.), which arise from an amalgamation of complex business systems: raw materials, suppliers, manufacturers, distributors, customers, etc., each with their own business models, incentives, and limitations.
These business systems are heavily influenced by complex government systems at different levels—federal, state, and local—which are not used to close collaboration amidst the cascading timing crunches imposed by crises. These government systems include the three branches of government (executive, legislative, judicial) purposely designed to provide checks and balances to each other (i.e., slowing things down) and an array of challenges and sometimes bizarre influences (e.g., laws, regulations, court orders, campaigns, elections, lobbying, committees, messaging, press briefings, inspectors general, etc.).
During this health + economic crisis, those of us who are parents are also seeing how reliant we are upon a functioning education system, with its own complexities (federal, state, and local laws, regulations, and funding streams). When schools are closed, the impacts on families, workplaces, communities, etc. are vast.
All these systems are affected by a complex financial system. And transportation system. And travel industry. And food industry. And media industry. All of which are complex systems under strain.
All these complex systems exist not only within nations but also across borders, with each country having its own systems and context.
And all of this sits on our planet, itself a vastly complicated system of oceans, winds, climate, biology, chemistry, physics, and more.
Meanwhile, our own personal virus risk profile comes down to an interplay between our own internal systems, including our respiratory and immune systems but also our overall physical and mental health and our own decisions and context related to our work, families, home, movement, and social milieu.
In short, we see compounding strains on systems of systems of systems. In all the death, suffering, and disruption, we are faced with a powerful reminder of just how interdependent we all are, and how relevant systems are to our life, work, and leadership.
In an age of global pandemics that threaten our lives and livelihood, business has a vital role to play. Many business executives are facing their greatest professional trial. A retreat to previous thinking about narrow shareholder focus and short-term profits will be a recipe for disaster—for the business and its stakeholders (us). We need more—and must demand more.
This brings us to a newer idea: “conscious capitalism.” John Mackey and Raj Sisodia wrote a book about it and conceptualize it to include higher purpose, a focus on stakeholders (not just shareholders), conscious leadership, and conscious culture.
“Conscious businesses believe that creating value for all their stakeholders is intrinsic to the success of their business, and they consider both communities and the environment to be important stakeholders. Creating value for these stakeholders is thus an organic part of the business philosophy and operating model of a conscious business.” -John Mackey and Raj Sisodia, Conscious Capitalism
The conscious capitalism movement is dynamic and growing, but up against an entrenched ideology and powerful array of forces, interests, and funds. It is not wrong to view it as an epic battle between two versions of capitalism, but we should place this war of ideas in historical context: capitalism has been around for centuries. Many view Adam Smith’s classic book, The Wealth of Nations (published in 1776), as a landmark of capitalism, but we forget that his prior book, The Theory of Moral Sentiments, provided important underpinning to it.
Capitalism, business, entrepreneurship, and leadership are all social phenomena with ethical dimensions, and have always been so. What’s more, we have always had “flavors” of capitalism. Some are crass, mercenary, brutal, and short-sighted. Others not. Look to the current practice in northern Europe and the Nordic countries as intriguing examples, and that sync well with the way that many family businesses have operated for centuries (e.g., valuing workers, stewarding resources, taking the long view).
No, Milton Friedman does not have a monopoly on the industry of business ideas.
No, the choice is not between capitalism and socialism.
No, the answer is not to discard the dynamic engine of progress created by a capitalist system of enterprise that has lifted so many worldwide out of abject poverty and taken so many into days of prosperity.
No, businesses cannot just hunker down and maximize profits in a pandemic. They are part of the social fabric, with a vital role to play in getting us through the crisis.
And no, the purpose of business is not to make a profit.
Profit is the oxygen which allows the business to survive so that it can create value and pursue a higher purpose, for its people and its customers, and ideally also for its community and our world.
“The purpose of business is not to make a profit. The purpose of business is to find profitable solutions to the problems of people and the planet.” -Robert Fish, co-founder, Biggby Coffee
This is not about turning business into charity. It is instead a challenge to recognize the role of business in society and to look for ways for business to “do well by doing good”—a bold creative challenge. The idea, then, is not profit versus purpose. It is both.
“Just as happiness is best experienced by not aiming for it directly, profits are best achieved by not making them the primary goal of the business.” -John Mackey and Raj Sisodia, Conscious Capitalism
These are the hidden lessons of the virus. They are calling us to think and act anew. And the call is urgent.
Gregg Vanourek (@GVanourek) is an executive, changemaker, and award-winning author who trains, teaches, and speaks on leadership, entrepreneurship, and life and work design. He runs Gregg Vanourek LLC, a training venture focused on leading self, leading others, and leading change. Gregg is co-author of three books, including Triple Crown Leadership (a winner of the International Book Awards) and LIFE Entrepreneurs (a manifesto for integrating our life and work with purpose and passion).
Today, we are all being tested greatly, and so it is with our leaders. Individuals, organizations, and systems are all under strain, with some facing overload. Here are several keys to leading well in a crisis.
Radical Focus. When you are in a crisis, your immediate priority is survival. Crises require take fierce discipline in personal and organizational time management. Leaders should expect to use more “steel” (hard-edged leadership) than “velvet” (soft-edged) at the outset.
In a crisis, leaders must mercilessly cast aside all manner of ideas and projects—some with real merit—to ensure a tight focus on one or two key priorities needed for survival. Other priorities must wait. Even with this radical focus, leaders should look beyond the current storm, seeking creative ways to position the organization or group to flourish once the storm has passed.
Communicating Reality and Confidence. During a crisis, people need to know what is happening. Effective communications are essential, and it is imperative that the executive is factually accurate and forthright.
Leaders should block their calendar daily for time with their team and other key stakeholders. They must be visibly present inside and outside the organization—using all available technologies to enhance access.
Since people are stressed and worried as rumors fly, leaders must give people a sense of what to expect in the coming days and weeks, blending both realism about the current situation and confidence about the future if wise and bold action is taken.
It is essential to listen carefully and answer questions honestly. People need to be heard, and they deserve a realistic assessment of the situation and want solutions (or credible plans for how to get them). Credibility is a tremendous asset for the hard work ahead and must not be squandered.
Psychological Stability. In a crisis, many people are afraid, upset, or angry. The executive must establish not only financial and operational stability but also psychological stability. People need to be unfrozen, empowered to do what is required with confidence. Here is a tried and true process for establishing psychological stability:
Crisis Response Team. Facilitating the process above, the executive will get a sense for who would be reliable officers in the stormy seas ahead and who would be dead weight.
Selecting the crisis response team (and its associated roles and processes) is one of the most important things a leader can do. Skill set, character, emotional intelligence, resilience, courage, and buy-in with the shared values are good criteria to use in selecting the team. An effective organizational structure with clear roles and responsibilities, reporting lines, and communication channels are all required.
Operating Rhythm. A real risk in crises is that the initial momentum fizzles, causing the enterprise to spiral down again. To maintain forward momentum, leaders must establish a persistent operating rhythm with accountability follow-ups. Regular status reports and town hall meetings with employees (or constituents) are important.
The effort requires persistence. The group must hack away at the root causes of the problems, not symptoms. Together, they make slow and steady progress over time, reporting results and encouraging each other. Such feedback loops help foster alignment.
“A river cuts through rock, not because of its power, but because of its persistence.” -James Watkins, author
Sanctuary. In crises, leaders receive a barrage of body blows. To survive such an onslaught and to remain at their best, leaders need a daily practice of sanctuary to refresh mind, body, and spirit. Leaders must not lose themselves in their role, taking the inevitable attacks and setbacks personally.
“In moments of darkness you need to remember why you’re here and why you’re fighting that fight.” -Jacqueline Ros, co-founder and CEO of Revolar
Triple Crown Leadership Practices. Finally, the five “triple crown leadership” practices that are key to building excellent, ethical, and enduring organizations are all applicable to crises:
Additional Tips from the Field:
Gregg Vanourek (@GVanourek) is an executive, changemaker, and award-winning author who trains, teaches, and speaks on leadership, entrepreneurship, and life and work design. He runs Gregg Vanourek LLC, a training venture focused on leading self, leading others, and leading change. Gregg is co-author of three books, including Triple Crown Leadership (a winner of the International Book Awards) and LIFE Entrepreneurs. This blog is based on a chapter in the book, Triple Crown Leadership, co-authored with Bob Vanourek (Gregg’s father)
“The world breaks everyone and afterward many are strong at the broken places.”
-Ernest Hemingway in A Farewell to Arms
In leadership circles, too often the focus is on success principles for effective leading. That is all well and good, but often it can be more helpful to tackle things from the other perspective: what causes leadership to break down (and what can we do to avoid breakdowns)?
First, there is a connection between personal breakdowns among leaders and the breakdowns of their organizations. Here we reflect on both.
“Take rest; a field that has rested gives a bountiful crop.”
-Ovid, Roman poet
Even the best leaders are at risk of breakdowns or setbacks in their life and work. Many leaders have frenetic schedules of meetings and travel, or face constant stress and pressure. As the effects accumulate over time, exhaustion sets in. Though many just “suck it up” and ignore the risks, those who want to thrive and endure recognize the potential for danger, including losing their ethical moorings, making rash decisions, and damaging important relationships.
Leaders need regular exercise and movement, nutritious food, good sleep, and ways to find sanctuary (e.g., mindfulness practices, nature walks). “Triple crown leadership” (our model for excellent, ethical, and enduring/sustainable leadership) begins with leading ourselves. Failure to do so leads to problems with all three areas: excellent (in terms of performance problems), ethical (with lapses in judgment and impulsive compromises), and enduring (with an unsustainable pace that wreaks havoc on our health, judgment, and relationships, and that can damage our organizational culture). Leaders seeking to avoid organizational breakdowns should start by leading themselves.
“The cornerstone of effective leadership is self-mastery.”
-Patricia Aburdene, best-selling author and social forecaster
In today’s volatile environment, organizational breakdowns are common. Sometimes it is a quiet affair with an orderly dissolution of assets. Other times, it is a seismic crash with painful ripple effects. Sometimes an organization rises to the pinnacle and then slowly fades back in the field.
Most organizations do not break down before emitting warning signs. Normally, the financial signals, such as revenue declines and shrinking margins, are lagging indicators. Leading indicators are more important because leaders can address them before the financials go south. What are some early warning signals of potential breakdowns?
Early Warning Signals of Organizational Breakdowns
Some of the common causes of these breakdowns include: excessive deference to the top managers, failing to tap into the potential of people, leaders assuming they must make all the decisions and have all the answers, poor communication and secrecy, organizational silos, and lack of discipline and follow-through. All are failures of leadership.
As you encounter the early warning signs, you will need courage to take decisive and bold action to get the enterprise back on track. Often, this requires a rare blend of what we call “steel” (flexing to the hard edge of leadership, even if that is not a natural mode for you as a person) and smart use of people practices, such as unleashing the latent leadership potential of people throughout the organization, via what we call a culture of “stewards.”
We can avoid the breakdowns when we tap into the brilliant potential and goodwill of our team, aligning their work toward the organization’s purpose and vision, while guided by its shared values. Such resilience is the hallmark of triple crown organizations, and it can turn these challenges into amazing opportunities for transformation.
Gregg Vanourek (@GVanourek) is an award-winning author and changemaker who trains, teaches, and speaks on leadership, entrepreneurship, and life design. He runs Gregg Vanourek LLC, a training venture focused on leading self, leading others, and leading change. Gregg is co-author of three books, including Triple Crown Leadership (a winner of the International Book Awards) and LIFE Entrepreneurs. This blog is based on a chapter in the book, Triple Crown Leadership, co-authored with Bob Vanourek (Gregg’s father).
In our culture today, it is easy to assume that the proper frame for going about our working life is to pursue “climbing mode” as early and aggressively as possible. When I say “climbing mode,” I mean striving to move up the ladder of success, focusing on achievement and advancement. For many, this notion is so ensconced in our culture that it is invisible, unconscious, and wholly taken for granted.
But is it right? Is it helpful or harmful when it comes to living a good life and crafting good work? The assumption of course is that it is right and helpful, that by focusing on “climbing mode” one will build a financial foundation that will lead to success, freedom, and happiness.
No doubt there can be great value in climbing mode. When we focus on climbing this “ladder,” there are many benefits that can accrue: making more money (which can reduce financial stress, then lead to financial independence and freedom, and perhaps even wealth creation, which can lead to enjoyment, generosity, and more); obtaining status; obtaining new opportunities; learning many things along the way as we encounter obstacles and solve problems; growing and developing as professionals, and perhaps as people; feeling a sense of satisfaction for overcoming challenges and achieving goals; and much more.
Yes, I am a fan of climbing mode in part for all the benefits it can bring but also for the remarkable “flow” states one can achieve while applying oneself toward a difficult task.
But for all the benefits of “climbing mode,” there are also down-sides, and the problem is that they can be not only severe but also overlooked, a double danger that can compound over time. I see a few major drawbacks.
First, burnout. This has been called an epidemic in modern times among working professionals in many cultures. Many of us have experienced it, and in my work with emerging leaders and entrepreneurs and young changemakers, I see it over and over again even among young people.
Second, excess self-reliance. If we are busy climbing our ladder, it is safe to assume that most of our peers are also buy climbing their own ladders. Fair enough, but this can pull us away from the meaningful connections that are an essential part of a good life (and enjoyable work).
Third, self-aggrandizement. The whole point of climbing mode, for many, is simple: to get to the top. So that I can be on top. So that I can get what I want. So that I can have wealth, or status, or things. It’s all about me and what I can get. In other words, it can become an ego trip of epic proportions. And, oddly enough, this focus on me and what I want to get so that I can be happy, can make me, well, miserable. There are many reasons for that, including our need for meaningful relationships, the psychological phenomenon of “hedonic adaptation” (our tendency to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes.), and our longing for purpose and contribution in life.
We have a family friend who spent decades of her life in “climbing mode” (to great effect, by the way, with a nice family, a nice home in the mountains, and a stellar career with an impressive resume), only to feel, after all that time, “I lost a lot of time and wasted a lot of energy by running after achievements to validate myself. It was all about how many things I could have on my resume… trying to live up to others’ expectations of me. It was like living on junk food.”
And then the kicker: “It took me sixty years to trust myself.”
Yes, one of the costs of climbing mode is that we can lose ourselves in the process, no longer trusting our inner voice about who we are and what we long for, and instead adopting someone else’s view of the good life.
“Some time when the river is ice ask me mistakes I have made…. Ask me whether what I have done is my life.”
One of the problems here is that the pressures we feel when we are young can steer us in a direction that does not serve us well when we get older—and that it feels harder and harder to make changes in the meantime due to the systems that we work in and the “switching costs” that keep us in place.
The solution, though, is not to abandon climbing mode altogether. Again, great value can be found there.
The solution, I think, is to embrace something else: “discover mode,” which is learning about who we are and what we can do (e.g., values, strengths, passions, aspirations). It turns out the sages of old were right: one of the most important things we can do is to know ourselves. This ancient wisdom from East and West is something that feels like it is becoming lost in the modern world.
But let’s be clear: discover mode is not a replacement for climbing mode.
No, instead I think it is something that should come first. We should begin by doing the inner work of discovery, giving us direction for our climb.
And then we can throw ourselves into climbing mode.
But it does not end there. Seasons of life will come and go, and we will change, as will the people around us and our circumstances. So we will need to go back into discover mode again, and then climbing mode again. And so on. It becomes an iterative process of action and reflection, of “warrior and sage.”
Yes, there is a time and a place for climbing mode, but which ladder will you climb, and how will you decide? If you begin instead with discover mode, and then remember to flex between these modes, I think it will serve you well.
Gregg Vanourek (@GVanourek) is an award-winning author and changemaker who trains, teaches, and speaks on leadership, entrepreneurship, and life design. He runs Gregg Vanourek LLC, a training venture, and is co-author of three books, including LIFE Entrepreneurs and Triple Crown Leadership. For more on this topic, see his TEDx talk.
We face a barrage of challenges these days: rapid change, a barrage of demands on our attention, tension between work and home, and more.
There is one meta-skill that shapes how we respond to all these challenges: self-leadership. Without it, we cannot sustain ourselves for long.
Leading self may be obvious, but it is far from easy. We neglect it at our peril.
The task of leading self is the task of a lifetime. Here are ten keys to self-leadership:
Gregg Vanourek is a high-impact leadership developer, changemaker, and award-winning author who trains, speaks, teaches, coaches, and consults on leadership, entrepreneurship, and life design.