Address to Onehunga Rotary Club
Remembering Corporate Purpose The most important role a leader plays is to help a company, organisation or profession remember its primary purpose.
- A school or university provides education for students
- A company delivers a product or service of value to its clients
- A doctor or hospital seeks to enhance the health of patients
- A government provides infrastructure, and facilitates the well-being of citizens
- An accountant exercises stewardship of resources
- A church provides pastoral and spiritual resources for its members and the community.
Diversions from Purpose In any organisation two things divert us from purpose :
- Preoccupation with the frenetic pressure of daily workplace demands. We enjoy the familiar saying :“It’s hard to remember you’ve come to drain the swamp when you’re up to your *rse in alligators”. Stephen Covey (Seven Habits of Highly Effective People) points out that short-term, urgent demands usually take precedence over longer-term directions : we may be ticking off daily tasks but oblivious to the fact we are drifting off course. Corporate failure may be the result of corruption by a few, but more often stems from the loss of awareness of overall purpose.
- Preoccupation with fiscal bottom-line objectives. In a seminar I ran once for board members and senior executives of a large metropolitan hospital there was a long debate as to whether their ultimate goal was to achieve a balanced annual budget, or to seek to meet the health needs of the people of their region. The two are not mutually exclusive, but the first is an operational objective, the second to do with the overall purpose of their existence. When operational goals displace overall purposes, we lose our way. The task of a leader is to hold the purpose of the organisation always before us.
Why be Ethical? The philosophical answer to this question takes as its starting point what we believe about people and society. Margaret Thatcher once said that there is no such thing as society – only individuals and families. According to this approach we each get on and do our own thing, whether as individuals, families or companies, and let others get on with theirs. There are a few basic road rules to prevent major foul-ups, but for the most part we each look after our own interests.
Another approach affirms the importance of individual endeavour and responsibility but recognises that we are also part of a wider community. Accordingly we conduct our affairs in a way that recognises the need to consider the wellbeing of others who can be adversely affected by our actions, just as we can by theirs. “They” are part of “us”, and at the end of the day our fortunes are bound together. We need their active goodwill to prosper, just as they need ours.
A common response to the latter view is that while obviously a broader perspective of purpose is desirable, yet is it possible without consigning one’s company to financial disaster? Is fiscal responsibility compatible with broader social and environmental purposes? Research indicates that corporations that follow socially responsible objectives perform at least as well as those that do not. (In the USA over 12 years the S&P 500 achieved growth of 10.1% pa, the Domini Social Equity Fund 9.8%. In Australia over two years the Sustainable Future Share Fund achieved 10.92% growth, compared with 6.1% for the ASX 200).
Triple Bottom Line It is a growing trend today for companies to move to the Triple Bottom Line approach, also known as Sustainable Growth, whereby goals are set each year to achieve financial, social and environmental outcomes. The annual report is based not only on a financial audit, but on social and environmental audits as well.
A Leader or a Manager? It has been said that today we train and employ managers rather than leaders. The authentic leader is more than a competent manager. The authentic leader is one who has an eye to the broader social and moral purpose of an organisation, and works to build an organisation that reflects that purpose.
In his book The Great Economic Debate, J Philip Wogaman writes : (We can) help to keep the focus upon the deeper human value questions and to promote the consciousness that what is at stake in economic questions is the well-being and community relationships of the whole human family, each of whose members is a person of incalculable worth.
Leadership Style Over the years I have observed many styles of leadership in different settings. There are those who feel that leadership is about giving instructions for people to follow, or see it as an avenue for achieving their own preferred projects or objectives. They see communication and consultation as an exercise in persuading the led to follow the leader’s predetermined view. They may often feel that now they are the boss they have the right to make unilateral decisions and expect that they will be followed.
The disastrous consequences of such an approach are immense. I worked in one large organisation where the leader was a person of great kindness and integrity, yet there was unhappiness at every level because of the lack of consultation with staff. The staff were experts in the operation of their own departments, and could see opportunities which would lead to improved performance. The lack of consultation on such matters not only led to reduced outputs, but was also the cause of low staff morale and job satisfaction.
Some years ago we stuck on our fridge door at home a poster which read “none of us is as smart as all of us”. It conveys the obvious truth that the collective sum of the wisdom and experience of a group of people far exceeds that of the leader, no matter how wise that leader that may be. True wisdom in leadership involves drawing on the reservoir of wisdom in the team one is called upon to lead.
