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18 Things I Believe about Business — a Manifesto

I Believe …

  1. The best businesses are honest with their customers and their employees.
  2. The best companies have a win-win relationship with their customers and with their employees.
  3. Management is about focusing the work of the employees by assigning tasks which best align the company’s interests with the employees’ interests.
  4. Executive management is about focusing the work of the company by setting objectives which best align the customers’ interests with the stockholders’ interests. These objectives define the company’s interests.
  5. Management and leadership are different. Management makes sure that things are done right. Leadership ensures that the right things are done by focusing on the right things and diverting effort from the wrong things.
  6. Both management and leadership are performed at all levels in the organization. The scope of your decisions is greater when you’re higher up in the organization, but there is both management and leadership going on at all levels.
  7. We can and should motivate employees without making them afraid.
  8. It’s possible for employees to balance work and family life, and still achieve company objectives.  This balance should be an employee goal, and companies should encourage and support their employees in the achievement of this goal.
  9. Bad companies try to take inappropriate short-cuts. An appropriate short-cut is an ethically responsible improvement to a business process that is planet-friendly, customer-friendly, employee-friendly and generally people-friendly.  On the other hand, inappropriate short-cuts use resources without replenishing them — ecological resources as well as people resources. They pollute, they destroy, they burn out people and throw them away.  This results in short-term profitability but long-term loss — for our planet, for our people, and for the companies themselves.
  10. Every business, ecological or financial failure can be traced back to attempts to take inappropriate short-cuts. I have no evidence for this, but I believe that it is true.
  11. A company that refuses to take inappropriate short-cuts is not at a competitive disadvantage.  Indeed, I believe such a company has a competitive advantage.  Customers want to deal with a company they can trust.  Employees want to work for a company that treats them fairly.
  12. Most new companies start off on the right path and don’t take inappropriate short-cuts.  But most new companies reflect the good values and ethics of the individuals who start those companies.
  13. As companies get bigger, they tend to lose their connection with individual people.  The reputation of a company no longer reflects the values of its founders, and the executives and boards of directors lose their way.  Success leads to overconfidence and feelings of invulnerability.  The executives and board members begin to believe their own hype, and they think they can get away with violating ethical rules.  Groups of people (e.g., boards of directors, gangs, mobs) — especially groups of people who consider themselves superior — will do things that individuals would never do.  Ethics are diluted in groups.
  14. Greed and impatience are the motivation for most inappropriate short-cuts.  People want a result without having to pay the fair and appropriate price.  And they begin to think that they’re entitled to take these short-cuts because of their reputation, their status or their wealth.
  15. A company that takes inappropriate short-cuts is essentially saying, “My company is more important than the planet, more important than sustainable life, more important than employees, more important than anything.” That’s wrong.
  16. An inappropriate short-cut is first proposed by someone in a company — particularly someone in a leadership position — who has lost their way, at least temporarily.  It’s up to other people in the company to say “no.”  I can forgive a temporary lapse in judgement for the person proposing the inappropriate short-cut.  But how can we tolerate the other people who agree to go along?
  17. In a sense, lack of integrity in business is like cancer in the human body.  Cancerous cells are constantly being created in everyone’s body — in each and every one of us.  But healthy bodies quickly shut down the cancerous cells to prevent them from growing bigger.  The difference between a healthy body and a cancerous body isn’t in the creation of the cancer cells — it’s in the body’s ability to shut down the cancer cells before they grow bigger.  Lack of integrity in business works the same way.  It’s human nature to occasionally want to take an inappropriate short-cut.  But in the good businesses those thoughts of inappropriate short-cuts are shut down before they’re implemented.
  18. All employees have the ability to say “no” to inappropriate short-cuts.  In many cases it’s difficult to do so, but we do have the ability.

I’ve painted this as a black-and-white issue, but it’s really more like shades of gray. Each executive, board member and employee in a company influences the direction and overall integrity of the company. Higher-ups in the organization have more influence, but everyone has some influence.

I’m not suggesting you immediately start saying “no” to the least little thing that seems wrong to you. This is more of a statement of direction.  So pick your battles, and through a gradual change in approach we should be able to make things better.

I believe in the fundamental goodness of people.  And I believe that we can have fundamentally good businesses as well.  We just need to make it a priority.

There are a number of good businesses in existence right now, and there are also bad businesses.  Which kind do you work for?  What are you going to do about it?

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