Monday, April 14, 2008

Getting Past Mistakes - A Primer for Corporate Leadership





Richard Maybury says it best -- "Can you name one person in all the thousands of years of human history who rose to the top in politics by being honest?" As one political scandal dies down, don't be surprised when another pops up.
Maybury also quotes one of the most brilliant and infamous books in history: The Prince, by Niccolo Machiavelli. Maybury points out that it is oftentimes misquoted, but never seen for what it really is - the truth "about the inherent nature and behavior of government that few are willing to face."This is the way it has been throughout the 10,000 years of human history. So why are we shocked every time a leader, a politician or a man of the cloth, lets us down? Fifty years ago, good guys wore white cowboy hats and bad guys wore black cowboy hats. It seemed to be a simpler time with simpler choices. But today, life has gotten more complex and that complexity is reflected in our current leadership. Integrity, honesty and ethics have become a fuzzy line between what you see and what you actually get.

Maybury goes on - "One of my favorite chapters in The Prince is number 15, in which Machiavelli lists the characteristics generally thought to be desirable in a political leader: generosity, compassion, faithfulness, courage, purity, flexibility, religiousness, and others. He explains that the leader must fake these virtues but cannot actually have them, because they would ruin him."
So the next time you think a particular politician is there to save you, remember, it's just show business.Yet, not everyone is so easily corrupted. Just give some people the choice between leadership with perks, and leadership with both perks and power and watch what happens. Some put in these roles thrive, while others become corrupted. But, make no mistake about it, certain professions are made up of the hubristic and corrupt, and there is nothing we can do about it. When people let their lower animalistic nature run wild, there is no more control. As I said before, when one scandal dies down, be prepared for the next. It's the nature of politics.

But how does this affect leadership in general? At the political level it is one thing, at the corporate level, another. How would you handle a scandalous problem as an executive? Here are three suggestions to help get you back on track and save face.

1) Admit Your Mistakes (as Honestly and as Truthfully as You Can).
Being on the board of directors for K2 Design years ago was thrilling, but it was also a tough lesson in revealing to the public the right information at the right time. Yet at times, being unable to share it right away can leave one with a sense of frustration, especially when the news is groundbreaking and positive. But what happens when the news is negative and shareholders equity is at stake?

Speaking too soon can destroy a company and ruin shareholders trust. So pick your battles, and in most cases, take the blame and resign. Unfortunately, someone has to clean up your mess, and getting out of the way will expedite the process.

On the other hand, telling the whole truth up front and attempting to make things right may be what the doctor ordered to reestablishing your credibility as well as your company's. Who knows, you might even be forgiven. Turnaround specialists are masters at telling the truth, taking action and getting corporate profitability back on track. Take a page from their handbook and follow it.

Don't bury the truth. That serves no one but you. Schedule that press conference and come clean...today. Jack Welch, when he was at GE, mastered the delivery of bad news while balancing future potential. Study the masters.

2) Make Real Effort to Change Your Behavior
On the road to regaining trust, try actually changing your behavior. Just look at how many celebrities sign up for rehab. It is so effective that courtroom judges grant leniency when someone admits they have a problem with substance abuse and voluntarily checks themselves in. Changing your dysfunctional activities goes a very long way to regaining trust. Time may reveal duplicity on your part, but consider your immediate actions. They are the ones that show up in the history books.

Want to have an impact? Take a good look as to why you got into hot water in the first place. Are you greedy? Do you feel you're above everyone around you? Are you duplicitous by nature, assuming that everyone is the same? Is your behavior something that requires you to sneak around? If so, try not to wait until the public discovers your faux pas during the evening news. Get help now. If the press has reason to put you under a microscope, your reaction early on will be the one you are judged by.

And do us all a favor, don't fake it. Show up and do the work. You're not fooling anyone but yourself.

One thing that seems to be missing from our society these days is a sense of shame. You may not know this, but there is right and wrong behavior.

And last but not least...

3) Time May Be Your Only Ally
In a relationship, time will make things fester, but in the corporate world where trust has been destroyed and investors' actions are hinging on the next press conference, time is the only sure-fire strategy that will help put the events behind you.

Former Presidents Richard Nixon and Bill Clinton were able to put their pasts behind them because their legacy far outweighed their transgressions. Give it time. Eventually you'll look like the comeback kid. Who knows, maybe even a certain New York Governor will be able to return to some sort of public office someday.

Unfortunately, time may be all you have. Here are just a few samplings of companies that have successfully and unsuccessfully put the past behind them:

Volkswagen took over 25 years for global consumers to forget that their biggest spokesperson was Adolph Hitler. They made a huge comeback in the 60's by introducing the VW Beetle to the Hippy Generation.

In Bhopal, India, during the early morning of December 3, 1984, a Union Carbide subsidiary pesticide plant explosion released 40 tons of methyl isocyanate (MIC) gas into the air. The resulting deaths numbered over 3,000, but testimonies later on from doctors who provided medical assistance during the tragedy claim that over 15,000 was the real number.

Today, Union Carbide (now owned by Dow), is attempting to put the past behind them with a feel-good ad campaign. They introduce us to an element missing from the organic chemistry chart: Hu. It stands for the Human element and we are bombarded with eco-friendly scenes of people -- the driving force behind everything.

The Union Carbide website explains away their past by placing the blame on every possibility except Union Carbide. Lawyer-speak is inauthentic and stands out like a sore thumb on their site. Some things should never be forgotten. It's all a little creepy when you remember the past and the events of Bhopal.
Ironically Union Carbide is owned by Dow, the makers of Agent Orange.

Bear Sterns was showing signs of over extension a year ago. Who were they protecting? Not shareholders, who entrusted them with their money that's for sure. Bye Bye Bear Sterns.

In these turbulent times learn to be honorable and incorruptible. Then stand by your management style. Make changes to yourself and to your organization not because it affects the bottom line, but because it is the right thing to do.

Your staff will follow you anywhere so long as you have integrity, fairness and a vision. Without your people, you wouldn't be a leader. One can't exist without the other. But, avoid Machiavelli's suggestion that you should fake these qualities - who wants to follow an executive who's faking it? And believe me, people know.

Thanks again for reading,

Brad

Brad Szollose is the author of Liquid Leadership: From Woodstock to Wikipedia – Multigenerational Management Ideas That Are Changing The Way We Run Things


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