The Leading from the Heart Workshop®

Welcome to the Age of Corporate Governance

“You will be confronted with

questions every day that test your morals. Think

carefully, and for your sake, do the

right thing.”

“Ex-Tyco Chief Executive Kozlowski Sentenced to 8 to 25

Years”Headline / Bloomberg.com / 09.19.2005

Strong Fundamental Values

“We must demand of ourselves and of each other the highest standards of individual and corporate integrity. We safeguard company assets. We comply with all company policies and laws.”Source: The Tyco Guide to Ethical Conduct

“We safeguard company assets.”

Regency mahogany bookcase, c. 1810, $105,000

George I walnut arabesque tallcase clock, $113,750

Custom queen bed skirt, $4,995

Custom pillow, $2,665

Ascherberg grand piano, c. 1895, $77,000

Chandelier, Painted Iron, c. 1930, $32,500

Pair of Italian armchairs, c. 1780, $64,278

Persian rug, 20 feet by 14 feet, $191,250

“In corporate America, crime pays.

Handsomely.

Grotesquely, even.”

Arianna Huffington Pigs at the Trough

“Ebbers’ luck runs out in sweeping victory for feds”Headline / USA TODAY / March 16, 2005

“Chretien takes fall for AdScam:

Gomery”Headline / Ottawa Sun / November 1, 2005

I said, “Ship the documents to the feds.”

She heard, “Rip the documents to shreds.”

“There’s a hole in the moral ozone and it’s getting

bigger.” Michael

Josephson

BERNARD EBBERS DENNIS KOZLOWSKI MARK SWARTZ SCOTT SULLIVAN HARRY STONECIPHER HANK GREENBERG JOHN RIGAS TIMOTHY RIGAS JEFFREY SKILLING KENNETH LAY ANDREW FASTOW

Brian Shapiro University of Minnesota

“”

It’s as if we have given the CEOs

weapons of mass destruction—at least

economically.

“The stock market boom may be over, but the business scandal boom is on.” James Ledbetter, Slate Monday, March 25, 2002

“No-Bid Contracts Bring Scrutiny to N.J.

Health-Sciences University”

Headline / Chronicle of Higher Education / 06.17.05

“These aren’t presidential

decisions. It’s micromanaging, and

it’s beyond my competence.”

Stuart D. Cook, former President University of Medicine and Dentistry of New Jersey

“A lot of this is nickel-and-dime stuff. I regard it, and

many of my colleagues regard it, as a real

distraction from the mission of the university.”

Emanuel Goldman Faculty Senate President,

UMDNJ

“New Study of High School Students Reveals High Levels

of Cheating, Theft and Cynicism Despite Stated

Convictions and High Self-Esteem Concerning Ethics,

Character and Trust”2004 REPORT CARD: The Ethics of American Youth

Josephson Institute of Ethics

“The inconsistency seems to be explained by high levels of cynicism about the ethics of successful people.”

Press Release Josephson Institute of Ethics

CYNICISM59 percent agreed that “in the real world, successful people do what they have to

do to win, even if others consider it cheating”

42 percent believe that “a person has to lie or cheat sometimes in order to

succeed”

22 percent believe that “people who are willing to lie, cheat or break the rules are more likely to succeed than people who

do not”

Press Release Josephson Institute of Ethics

ONLY HALF,ONE OUT OF TWO,

U.S. EMPLOYEES

TRUST THEIR

SENIOR LEADERS.

DO YOURS TRUST YOU?

Source: Watson Wyatt’s WorkUSA 2004 Survey

51%

“With fewer than half of employees expressing confidence

in senior management, no company has been left untouched by the fallout from recent turmoil

in the business environment.”

-Ilene Gochman, Ph.D., Watson Wyatt

Consistency between an organization’s stated values and the actual

behavior of its leaders is critical to credibility.

When there is discrepancy between what leaders say

and what they do, the leaders are exposed as

frauds.

used-car salesperson…slick

insurance agent…pushy

politician…dishonest

personal injury lawyer…greedy

postal worker…postal

business leader…justice-obstructing, debt-hiding, earnings-overstating thief who uses company funds to purchase personal artwork and to put on lavish birthday parties for

family members

People aresearching for leaders

with integrity who prove

their credibility

continuously.

Values-based

leaders demonstrate

six vital integrities.

They:

Accept challenges and take risks

Master both listening and speaking

Live by the values they profess

Freely give away their authority

Recognize the best in others

Have a vision and convince others to share it

Vital

Integrities

Leadership actions that, when practiced

proactively, demonstrate your organization’s

existing values and further establish your credibility

as a leader.

vital integrities

[1]Accept Challenges and Take Risks

values-based leaders:

Risk seeking separates values-based leaders from the yesteryear-theory

bureaucrats who sit around supervising the work. Why is that important?

Leadership is proactive, as people can only follow leaders who are moving.

Risk Seekers…while others seek out opportunities to lead.

Risk TakersSome people respond to challenges that are presented…

Other leaders are adventurers, continually placing themselves in positions to discover new challenges. They volunteer for the tough jobs and always question the status quo.

For most leaders, the opportunity to meet a

challenge is an assignment. Those

leaders rise to a presented challenge.

PROACTI V E

Leadership requires the courage to surround yourself with

employees who are potentially better at their jobs than you are

at yours.

Admitting Ignorance

By owning up to a lack of knowledge and deferring to their

expertise, you’ll show workers that you are willing to risk your

pride to get the job done.

PROACTI V E

“In a time of constant change, one thing hasn’t changed:

Organizations are still resistant to change.”

Pushing for Change

“The change agent of the old economy worked in an

environment where incremental change was all that was needed

—and all that was tolerated.”

Robert Reich

PROACTI V E

Challenging Bad Decisions

“If you are in middle management, don’t be a wimp.

Don’t sit on the sidelines waiting for the senior people to make a

decision so that later on you can criticize them over a beer—‘My

God, how could they be so dumb?’ Your time for participating is now.”

Andrew Grove, CEO Intel

PROACTI V E

“Leadership is going first in a new direction—and being

followed.”Andrew Grove

Volunteering to Go First

As a leader, you must summon the courage to chart the course,

venture into the unknown, challenge defeat, and risk

disappointment. Your initiative will encourage others.

“Doing what Ann and Liv did is much harder than reaching the peak of the mountain, flying a flag, and saying, ‘We’re heroes, take us to the parade.’”

Will Steger

“Real leadership is not about getting to the top. In this game, leadership is about coming back alive.” -Will Steger

How we

assess risk

determines

how we

take risk.

First, we weigh our chances of success.

Next, we measure the importance of success.

We also gauge how much control we have in the outcome.

We assess our own skill.

A values-based assessment should override all other assessments of risk. That is: does taking this risk demonstrate your adherence to the organization’s values, or not?

“I’m always wondering, how will I act at my

moment of truth? Will I rise

up and do what’s right, even if every

fiber of my being is telling

me otherwise?”

Ann Bancroft

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RiskSeeker

[2]Master Both Listening and Speaking

values-based leaders:

The way we communicate with our employees impacts how workers

understand our messages, and what actions, if any, they take in response.

vital integrities

Boyd Clarke and Ron CrosslandThe Leader’s Voice

“”

The biggest problem with leadership

communication is the illusion that it has

occurred.

disconnect synergy buy in TLA human capital quality circle good people dog & pony show ball park figure carpet vs. concrete work-in-process job ready paradigm shift quality circle rightsize fuzzy math outsourcing talk offline surplused just-in-time

jargonjargon

Jargon is a specialized vocabulary coined by, and intended for, a particular profession or discipline.

Industrial phrases, buzzwords, and acronyms are used as

verbal shorthand to streamline communication among

colleagues.

“Let’s talk offline after the MSA quality circle. We need to do some global thinking and examine best

practices to find synergy in our co-curricular activities. I’ll meet you later

in the living room of the campus to discuss a seamless, student-centered

solution to our disconnect.”

“Sure, I can tell you how to get to the VC. Turn left at the Green, go past the Quad, take a right at the

STAC, and continue past the Commons. You can’t miss it.”

“I pulled an all-nighter with ALICE and finished my

research paper. Now I’ve got to get over this netlag, because I’m planning on seein’ the Governor

tonight.”

“I gotta bounce to a chalk and talk taught by a TA who speaks

EFL. I hope that sage on the stage can keep me awake.”

“Say what?”

JARGON often includes

euphemisms used to substitute inoffensive expressions for those considered offensive.

These actions will “align our resources

with market needs and adjust the size of

our infrastructure.” – Chad Holliday, DuPont CEO

announcing the elimination of 3,500 jobs

why jargon?Speakers sometimes invoke workplace jargon to impress others, or to establish their membership in an elite faction. Some use jargon to exclude or confuse others, or to mask their own inexperience or lack of knowledge.

“Although jargon is used by bureaucrats of all kinds to facilitate

their own interactions, it seems to me that, in education, bureaucrats

additionally employ jargon to keep their real agenda (the socialization of

students) and their dismal academic results hidden from parents and

taxpayers.”

Barry Kavanagh, former Ontario college teacher

“The educational suitability assessments of this student’s official record of achievement indicate that

his outcomes have not been at a level deemed appropriate for

satisfactory completion of any of his courses. Therefore, he is not institutionally prepared.”

20 percentof employees are regularly confused about what their colleagues are saying, but are too embarrassed to ask

for clarification

More than a thirdadmitted using jargon deliberately—as a means of either demonstrating control or

gaining credibility

40 percentfound the use of jargon in office

meetings both irritating and distracting

One out of

ten

dismissed speakers using jargon as both pretentious and untrustworthy

Source: Office Angels

“It is impossible even to think without a mental picture.”

Aristotle On Memory and Recollection

358 B.C.

Hugh

Storiescreate the emotional

perspective listeners needto connect with your

message.

“The age-old secret to generating buy-in is to

strategically design, target, and deliver a story that projects a

positive future.”

Mark S. Walton Generating Buy-In: Mastering the Language of Leadership

[3] Live By The Values They Profess

values-based leaders:

Now, since the onslaught of corporate scandals, we conceive of business

leaders as justice-obstructing, debt-hiding, earnings-overstating thieves who use company funds to purchase personal

artwork and to put on lavish birthday parties for family members.

vital integrities

Values cannot simply be expressed in the words of a mission statement or marketing slogan. Values must be demonstrated in the leader’s character and actions.

1. Wal-Mart$288.2

2. Home Depot 73.1

3. Kroger 56.4

4. Costco 47.1

5. Target 46.8

6. Albertsons 39.9

Source: www.stores.com

Top 100 Retailers in 2004 Revenue in Billions

WAL MART >

HOME DEPOT + KROGER + COSTCO + TARGET + ALBERTSONS

“Even though small businesses are one of the fastest growing sectors of the economy, access to

capital remains a key barrier to growth for women- and

minority-owned businesses.” -Jay Fitzsimmons, senior vice president of finance and

treasurer, Wal-Mart

“We are lowering the costs to make health insurance more affordable.” Dan Fogleman

Wal-Mart Spokesperson

 “For us, there is virtually no distinction between being a

responsible citizen and a successful business. They are

one and the same for Wal-Mart.”

H. Lee Scott Chief Executive, Wal-Mart

“These moves would also dissuade unhealthy people from coming to work

at Wal-Mart.”

Internal memo from Wal-Mart benefits director Susan Chambers

Source: Walker Information - Commitment In The Workplace: The 2003 National Employee

Benchmark Study

Workers who believe their organizations act with

integrity are nine times

more likely to stay in their current jobs.

Source: Walker Information - Commitment In The Workplace: The 2003 National Employee

Benchmark Study

But when they mistrust their bosses, or are ashamed of their organization’s

conduct,

workers say they feel trapped at work and are likely to leave their

jobs soon.

4 out of 5

“Employees are assets with feet. They’re the only resource companies have

that make a conscious decision to return the next

day.”

Press Release, Walker Information

EVERY DAY

REHIREyour employees

[4] Freely Give Away Their Authority

values-based leaders:

Why the emphasis on giving away authority? Giving authority to others demonstrates trust in people. Trusted

employees are more effective, creative, and satisfied. And a funny thing happens

when you trust people—they trust you back!

vital integrities

“Hierarchy is an organization with its face toward the CEO

and its ass toward the customer.”

 

-Kjell A. Nordström and Jonas Ridderstråle

Funky Business

Giving away our authority is a personal challenge. It involves sharing influence,

prestige, and applause, while forcing us to deal

with our personal insecurities.

Wally who?

Once you abandon those concerns, you

will recognize empowering others as

its own reward.

Manager: “But my employees don’t want to be empowered!”

The bottleneck is at the top of the bottle.

Gary Hamel

“

”

MicromanagersMicromanagers operate from a lack of trust—they distrust their employees—so they feel the need to maintain complete control. As a result, they set modest expectations for employees.

Highly negative managersThese leaders strip employees of their self-esteem. Employees may wrongly attribute their powerlessness to their own incompetence. To the delight of negative managers, their employees often feel too inadequate to seek other positions.

Poor communicatorsLeaders who are unable to explain the “big picture,” or simply don’t share their vision, deprive employees of an understanding of why certain actions are taken. S

TY

L E

“Not all malcontent employees are mavericks,

but virtually every maverick is a malcontent.”

Wayne Burkan, Wide Angle Vision

If you attribute free thinking to

disrespect, your personal biases and preconceptions may

result in missed opportunities.

disagreeordisrespect?

If your mindset makes every outcome a foregone conclusion,

your risk takers will stop challenging the status quo and you’ll find yourself left with a

staff made up of past perpetuators.

Ralph Nader

“”

I start with the premise that the function of

leadership is to produce more leaders, not more

followers.

[5]Recognize the Best in Others

values-based leaders:

Values-based leaders recognize that each person’s talents are unique and

that a person’s best opportunity for growth is in exploiting those strengths.

vital integrities

“Geeks are different from other people. If this comes as a shocking statement to you, you’re either oblivious

to others or unusually charitable with your opinion about others.” –Paul Glen, Leading

Geeks: How to Manage and Lead People Who Deliver Technology

Just when you understand the difference between a megahertz and a megapixel,

geeks start talking about link rot and packet jams.

GEEKSPEAK

Geeks resist mainstream or official authority structures.

They respect technical knowledge far more than

where a person resides on the organizational chart.

As leaders, we would prefer that geeks

behave like the rest of us. But our geeks’

personalities, even if grating to some, are

immaterial to their productivity.

greatness achieve

When we force our employees to strive for proficiency in everything, we miss the opportunity for them to

or mastery in something— in the one area where they may, indeed, achieve just that.

When striving for improvement, most of us do the same thing: we take our strengths for granted, and concentrate all our efforts on conquering our weaknesses.

The vast majority of organizations appear

to believe that the best way for

individuals to grow is to eliminate their

weaknesses. So they instruct workers to

recognize and focus on their deficiencies.

Gallop survey

question:

“At work do you have the

opportunity to do what you do best

every day?”

Strongly Agree (20

percent)

Strongly Agree

38 percent more likely to work in business units with higher

productivity

44 percent more likely to work in business units with high customer

satisfaction scores

50 percent more likely to work in business units with lower turnover

Source: Now, Discover Your Strengths Marcus Buckingham and Donald Clifton

Identifying each person’s strongest talents permits

everyone the opportunity to contribute what they do

BEST.

[6]Have a Vision and Convince Others To Share it

values-based leaders:

We often describe children as having wild or active imaginations. The best

leaders never outgrow their imaginative gift.

vital integrities

Have a

Vision

Good leaders have a vision. They

hold in their minds pictures of what is possible.

Vision is the power to

conceive a future that’s better

than the present.

Convince Others to Share

It

Great leaders convince others to share their visions by articulating them in memorable and inspirational ways.

Old story:Two stonemasons, working on the same project, are asked, “What are you doing?”

The first stonemason replies:

The second stonemason replies:

“I’m cutting stone.”

“I’m building a great cathedral.”

“I have a dream that one day this nation will rise up and live out the true meaning of its creed: ‘We hold these truths to be self-evident: that all men are created equal.’”

“I have a dream that one day this

nation will rise up and live out the true

meaning of its creed: ‘We hold

these truths to be self-evident: that all

men are created equal.’”

Martin Luther King, Jr.Delivered on the steps of the Lincoln Memorial

inWashington D.C. on August 28, 1963

Emphasized Common Values

“It is a dream deeply rooted in

the American dream.”

Described the Importance of the Values “And if America is to be a great nation, this must become true.”

vision’sopponents “I have a dream that one day down in Alabama, with its vicious racists, with its governor having his lips dripping with the words of interposition and nullification, one day right there in Alabama, little black boys and black girls will be able to join hands with little white boys and white girls as sisters and brothers.”

disparagedthe

FORECASTED SUCCESS“When we allow freedom to ring…we will be able to speed up that day when

all of God’s children, black men and white men, Jews and Gentiles,

Protestants and Catholics, will be able to join hands and sing in the words of the old Negro spiritual, ‘Free at last! Free at last! Thank God Almighty, we are free

at last!’”

“…we will not be satisfied until justice

rolls down like waters and

righteousness like a mighty stream.”

Adapted from Amos 5:24

Selected Emotional Language

“Let the nation and the world

know the meaning of our

numbers…we are not a mob. We

are the advance guard of a

massive moral revolution for jobs

and freedom.”Asa Philip Randolph

August 28, 1963

“No one could remember an invading army quite as gentle as the two hundred thousand

civil-rights marchers who occupied Washington today.

The sweetness and patience of the crowd may have set some

sort of national high-water mark in mass decency.” Russell Baker

“George wears his passions on his sleeve.

He needs to learn to hide his emotions from

his employees.”-From every performance review I’ve ever gotten

“Before you can inspire with emotion, you must be swamped with it yourself. Before you can move their tears, your own must flow. To convince them, you must yourself believe.”

Churchill

vital

integrities

values-based leadership

Accept challenges and take risks

Master both listening and speaking

Live by the values they profess

Freely give away their authority

Recognize the best in others

Have a vision and convince others to share it

SIX

Leadership is a craft, with the best

practitioners guided by their values.

The Leading from the Heart Workshop®

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