The Measure of National Happiness

For the Nobel-Prize economist Joseph Stiglitz happiness is just as important as the measure of the economic success, or failure, of a society.  For Stiglitz, along with a growing number of serious economists the question is whether a single-minded objective to economic growth has led to governments neglecting other important goals.  Goals such as social and moral growth.  There is also an increasing acknowledgement of the heavy costs of much of economic progress in terms of pollution, depletion of national resources etc.

Meanwhile, psychologists along with a number of economists have, over the last few years, been gathering a large body of evidence indicating that beyond a certain level simply boosting national wealth does not make a given population of a country, or region, any happier.

Other findings have highlighted the fact that people living in what can be understood as more equal societies tend to be happier.  Such findings ought to be a wake-up call in those societies that encourage very high earnings and bonuses to particular elites within in the world of banking, sports, the professions, business, the civil service etc.

In his book “The Challenge of Affluence” (2006) Avner Offer – an Oxford historian talking about family breakdown – the prevalence of obesity etc., that we witness in wealthy modern societies –  tells us that wellbeing is more than simply having more.  Towards the end of his book Offer writes:  ” Wellbeing is a balance between our own needs, and those of others, on whose goodwill and approbation our own well-being depends.”

Soon after David Cameron was elected Conservative leader he told a Conservative conference:  “It’s time we admitted that there’ s more to life than money, and its time we focused not just on GDP (Gross Domestic Product), but on GWB general wellbeing”.  The question is:  Will he, as a politian, remain true to such a noble stance?

In relation to the growing disparity in income as witnessed over the past number of decades – even when the average GDP looked relatively healthy, it was distorted by the lavish share taken by those at the very top, while the pay of those in the middle actually declined in real terms.  For example, in the USA medial income has been decreasing by half a percent a year for the last eight years while the increase reflected in its GDP went to the few people at the top.

It follows that if you are grading an economic system that leaves most people in a society somewhat worse off, that is in relation to wellbeing, than before, then you cannot give that society a grade A.   Money and wealth of a society, just as it is for an individual, is not an indication of general wellbeing, as many thinkers and philosophers have been telling us for centuries.

This post is a response to an article by Heather Stewart in this weeks Sunday Observer. 

You can visit the Leadership and Learning Pathways website at:  http://www.exercisingleadership.com

Socrates, Money and Happiness.

Most people think that if they had posses an abundance of wealth they would be happy and successful, however such a belief is certainly not necessarily true.  According to the Greek philosopher Socrates the quest for profit and wealth is fine as long as such a quest is accompanied by knowledge.   The philosopher argued that having wealth will not help, or benefit, us unless we use it.  Just as thinking that to possess brushes, paint and a palate benefits an artist if he never uses them.

For numerous great and wise thinkers throughout history wealth and profits are beneficial only in the sense that we use them in the right way.  A good example is to think of money like a dangerous implement lying around in the shed, if we use it in the wrong way it can do us, and possibly others, great harm.  However, with what Socrates calls knowledge it can be used to benefit us and others.  In short, for Socrates knowledge enables us to use wealth and profits rightly thus achieving happiness and success.

Socrates likens knowledge to the craftsman’s knowledge of his craft.  It is the carpenter’s expert knowledge of his craft which enables him to use his appliances and materials in the right way so as to build a successful product, or structure.   Again for Socrates knowledge is really the only unconditionally good in the world, and ignorance and stupidity the only unconditional bad.  Everything else, money included, is made good through knowledge, or bad through ignorance, or stupidity.

The Banker, the CEO etc., who pushes for greater and greater profits despite having made, or acquired, more than enough simply allows their appetites and greed to blunt their reasoning.  In addition the less sensitive and emotional they become.  Soon they are caught in an interminable process of pursuits and acquisitions with each round contributing to more demands, and so the more immoderate and foolish responses.

Nevertheless, there is somewhat of a paradox, or reverse effect, in Socrates’ approach to wealth and happiness and that is when we arrive at a point where we begin to understand that our happiness, or success, in moving through life consists in the harmony of our reason, our understandings and our knowledge.  It is then most likely that we begin to realize that we do not need to acquire much money, or wealth, at all.

For Socrates a harmonious mind instills in us moderate pursuits.  Once we realize what it means to be happy we will likely reject, or at least limit, many of out financially related pursuits.  Again, for Socrates, as with most great thinkers, we can obtain happiness and contentment without accumulating excess worldly effects.  Indeed, such accumulation takes us further from a harmonious, happy and contented life.

For a more in depth reading go to Business Ethics (http://www.isfp.co.uk/businespathways/ ) and Kristian Urstad ‘Socrates:  Money and Happiness’.

You can visit the Leadership and Learning Pathways’ website at http://www.exercisingleadership.com

The Exercise of Leadership and the Successful Enterprise

The successful enterprise requires the exercise of leadership.  Why?  Because such an enterprise needs to be able to adapt, and adaption depends on the exercise of leadership.  Simple?  Yes and no. 

Yes: because the exercise of leadership is in no way mysterious, or something understood and practised by great, or ‘extraordinary’ leaders.  Instead, it can be practised by practically everyone who is not driven by greed, or a hankering after overall power etc. 

No: because the exercise of leadership often focuses on the most difficult and intractable business and organizational challenges.  Challenges that defy easy solutions simply because they can involve deep-seated conflicts, value laden issues, as well as strongly held loyalties.  It is these, and other complex issues that people who are exercising leadership are coping with in order to ensure the continuing success of the enterprise.

Exercising leadership often entails having to ask people to give up things they may hold dear, their views of themselves, their ways of doing business, or ways of working along with their understandings where they are in the broader scheme of things.  As Marty Linsky of Cambridge Leadership Associates (www.cambridge-leadership.com) says : “…because such adaptive challenges belong to those belonging to the enterprise itself.  They cannot simply be resolved by experts or standard routines.”

In exercising leadership we maybe encouraging others to give up things they take for granted, or seen as important to them for one reason or other, and doing so for some potential and future possibility.  In other words, encouraging people to adopt new ways and give up familiar and often comfortable ways of doing things.

Finally, managers and others exercise leadership are showing the courage to point to the difference between espoused values, and behaviour that is a variance with those values.

The Summer of 2009 (British Isles)

It rained and it rained and rained and rained.  The average fall was well maintained.

And when the tracks were simply bogs, it started raining cats and dogs.

After a drought of half an hour, we had a most refreshing summer shower

and then the most curious thing of all a gentle rain began to fall.

Next day was also fairly dry, that is apart for a deluge from the sky

which soaked the party to the skin and after that the rain set in. (Anon)

The Myth and Danger of the Powerful Leader

There are no leaders, or managers, without personal frailty or imperfections.

One of the crucial issues confronting organizations, and indeed societies, is the nature of the association between management and employees, between leaders and lead.  At the centre of this linkage is the issue of power and control.  Unhappily, as leaders gain power and influence all too many tend to become preoccupied with their own way of looking at things, giving little thought to how their colleagues and others perceive the matter.

Even the most democratically elected leaders, even those with the best of purposes in mind, have a tendency to become part of an elite furthering their own interests, and with a tendency to hang onto power at all costs.

In relation to the world of business, and that of organizations, too many people treat CEOs as some kind of exulted, omnipotent leaders.  The real danger is that all too many leaders start believing that stuff.  Meanwhile, unlike nearly everyone else in the corporate world chief executives enjoy  enormous power that goes largely unchecked.  They rarely undergo any formal performance appraisal , and in most instances they have the power to make decisions without being challenged.

Thus, is all too often we find that CEOs become intoxicated with power, as indeed do some political and world leaders.  It could be said that those hung-up on power have psychopathic tendencies.  Of course it is not only CEOs, or world leaders who can become intoxicated with power, you can find such people in many walks of life. 

The problem is that most have the ability to hide such tendencies behind a veneer of respectability. Nevertheless, they share a number of character traits such as egocentricity, lack of empathy, impulsiveness and most disturbing of all, they possess a strong tendency to bully and display a high degree of irresponsibility for their actions.  The results of such bullying and lack of responsibility are costly. 

What cost the actions of the financial leaders to the millions of taxpayers and others in recent times?  Millions, billions, even trillions of dollars, pounds, euros etc?  What cost the shortsightedness, greed and hunger for power of all too many of our business, political and other leaders?  What cost the damage inflicted on the lives of millions of people across the world?

In relation to matters concerning the successful running a small business why not visit the Leadership and Learning Pathways website at: http://www.exercisingleadership.com

Why the Exercise of Leadership?

The purpose of Leadership and Learning Pathways is simply to promote an understanding of leadership that will help you as an owner, or manager, of a small to medium business, or organization, motivateemployees to make a commitment, as well as to create an environment to retain key people and to reduce absenteeism and turnover.

The exercise of leadership also encourages people throughout the enterprise to continue learning and to grow in the knowledge of how things can be improved.  The idea of improvement means getting everyone in the enterprise to evaluate continually how every job, every system and every product, or service, can be improved.

The exercise of leadership properly understood allows the business, or organization to adapt, to change when necessary and indeed if called for to reinvent itself in order to cope successfully in times of unpredictable and rapid transformation.

For more information and useful tips about maintaining a successful and sustainable enterprise visit: http://www.exercisingleadership.com

The Secret of Business Success

The two most important factors in business, social and organizational success are:

(1) The exercise of leadership.  (2) The willingness to learn.

If those, and especially those who lead the enterprise, exercise leadership in their dealings with people within the enterprise – that is, investing time in people, making deliberate efforts to improve things – while at the same time doing the same for customers, or clients, then this is what in general people will see.

If we fail to to help and encourage people and instead spend too much time on ‘trivial things’ to the detriment of employees, customer relations and overall performance, such action will also be clear to people.  Such behaviour sends a signal to others what for you is important – and that which is not.

The second driver regarding sustainable success is about the overall willingness to learn.  The reason being that learning is central to ongoing fortune.  The willingness to learn acknowledges the possibility that we can be, and indeed are often wrong.  Thus the importance of clear and honest feedback that the exercise of leadership encourages.

Again, the exercise of leadership is about challenging the way the business, or organization, is run so as complacency does not become the norm.  The focus must always be on: “What can we do to make things better?”

You can visit leadership and Learning Pathways website at:

http://www.exercisingleadership.com

Sir Fred and Corporate Responsibility.

In the Royal Bank of Scotland’s (RBS) Corporate Responsibility Report (2007) you can read the following:  “…our goal as a group (RBS) is to run our business in a responsible manner.”  Who wrote these words?   No other than the infamous Sir Fred Goodwin who scampered away with a pocket full of £1,000,000 notes as a reward for helping the RBS to report the biggest loss in British banking history.

In the Report Sir Fred continues:  “We rely on our people to deliver responsible business management through their daily actions and decisions (Just as I am doing.  Chuckle, chuckle.).  He continues:  “This year(2007) the issue of most concern to the majority of our stakeholders is financial crime.”  (In 2008 and 2009 their concern will be me, however, they don’t know that yet.  Never mind.)

Again Sir Fred:  “…the fundamental responsibility of a bank is to keep its customers’ money and personal information secure.”  (Well, by 2009 at least my own personal information and whereabouts will be secure and their money, that is the money left after my gambling in the financial markets, will also be secure in my own private piggy-bank.  I don’t trust those big corporate banks, never did.)

Sir Fred:  “The group (RBS) is at the forefront of industry’s efforts to counter fraud. (Luckly, not gambling, especially gambling with other peoples’ money.).  He goes on: “During 2007 we invested £5.8 million in fraud prevention. (Nearly a quarter of what I will be  getting over the next year or so.)

In the Report Sir Fred states:  “Our internal security equates to that of the City of London Police.” (That is nearly as much as I get.  Never mind.)  Fred, sorry, Sir Fred goes on: “This shows the level of importance we at RBS attach to tackling financial crime and our aim (Wait for it!  Wait for it!) is to make the RBS Group the safest place to do business.  (Well, it certainly is for me.  Ha!  Ha!)

“In 2007 we (the RBS) tend to ensure that our employees have the opportunity to earn a similar reward (to mine.  Only joking.) for both service and sales…In 2007 we provided more information on our activity regarding issues that matter most to our stakeholders (Except that is information regarding my gambling with your money and losing, for which I have been very well rewarded.  Thank you all very much.)

Sir Fred finishes: “This Report enables us to chart not just where we have come from but also where we are (I am) going.”  (Switzerland, Monaco, the Caribbean etc. for the next number of years of happy retirement).  “I look forward to providing you with an update on RBS’s (my) success in 2008.” 

Sir Fred Goodwin

Group Chief Executive   Royal Bank of Scotland Group.

(P.s.  Must remind myself to start stacking the money away now,  just in case I have to do a runner before 2009)

For the 2007 Royal Bank of Scotland Report go to http://www.rbs.com/downloads/pdf/about_rsb/2007_cr_report.pdf

You can visit Leadership and Learning Pathways (still work-in-progress website at:  http://www.leadershipandlearning.org

The Cost of a Lack of Corporate Social Responsibility

In 2006 Trafigura were responsible for the dumping of 400 tonnes of toxic waste from the cargo vessel Probo Koala in the port of Abidjan, the capital of the Ivory Coast.  The waste was loaded on to trucks and dumped near the city.  Over the following weeks thousands of local people found themselves choking and coughing, some vomiting.  At least 10 were said to have died and many still  carry the scars.

The executives of Trafigura simply denied that it was responsible for the dumping of the toxic waste or that the waste contained any hydrogen sulphide.  (Trafigura trades in commodities such as crude oil etc., and provides the ships and facilities to store and transport such commodities.  It operates in 37 countries and employs 1900 people.)

The reason for Trafigura dumping its cargo of toxic waste on the Ivory Coast was simply that when the Dutch company Amsterdam Port Services (APS) saw that the waste was highly toxic  they informed Trafigura that the cost of dealing with it would therefore be higher.  However Trafigura refused to pay for the increased costs and found a company in Abidjan with no previous experience in toxic waste removal willing to do the job for 20 times less than that quoted by APS in Amsterdam.

Meanwhile, in order to avoid responsibility Trafigura has employed one of the U.K.’s most aggressive libel law firms Carter-Ruck to pressure the media and those jouralists who question Trafigura’s irresponsible action.

Earlier this week documents have emerged which detail for the first time the potentially lethal nature of the toxic waste dumped.  More than 30,000 people from the Ivory Coast claim that they were affected by the poisonous waste and are currently bringing Britain’s biggest-ever group lawsuit against Trafigura.

Meanwhile, an offical Dutch analysis of the samples of the waste indicate that it contained approximately 2 tonnes of hydrogen sulpher, a killer gas.  As one chemist told BBC Newnight the other evening that if the quantity and mixture of chemicals had been dumped in the middle of London…”You would have people being sick for several miles around…millions of people.”

Not much leadership, nor social responsibility, being exercised by the leaders of Trafigura.  The cost for the people of the Ivory Coast has been very high with regards to their well-being, for Trafigura the costs will prove high in regards to its finances.

See http://www.fairplay.co.uk  16th April 2009 (International Shipping News website).  See also http://trafigura.com/our_risks_responsibilities  where Trafigua states:  “We constantly strive to reduce the nature and level of all the risks we face.”

Its a pity it doesn’t do the same for those who suffer from their lack of their corporate social responsibility.

Big Business and Lack of Corporate Social Responsibility

In 1964 Chevron (then Texaco) began drilling for oil in the remote northern region of the Ecuadorian Amazon.  Prior to that this pristine rain-forest provided both the physical, spiritual and cultural requirements of the many indigenous inhabitants of the area.

Over the following 25 years or so Texaco made deliberate, cost-cutting operational decisions that resulted in an environmental catastrophe.  Its mode of operation simply rendered it almost impossible for the indigenous peoples to continue with their traditional ways of life that had survived for numerous generations, and replaced it with a vast public health crisis.  Indeed, today the region’s native peoples find themselves struggling for survival.

Meanwhile, by handling its toxic waste in ways that at the time were illegal in its home country, the U.S.A., Texaco saved around $3 per barrel of oil produced.  However the cost in terms of the quality of peoples lives has been incalculable.

In 2001 Chevron inherited Taxaco’s toxic legacy.  and in 2008 a court expert recommended that Chevron pay out $27 billion reflecting contamination related deaths from pollution as well as clean-up costs.

For an example of a lack of Corporate Social Responsibility (see http://chevrontoxico.com/).  Clearly what we see here is a policy of profit  regardless of any negative impact on people and the environment that sustains them.

As the article in Common Dreams(http://www.commondreams.org/view/2009/05/09-1) points out, what we have here is the classic instance of decisions that simply took only the shortest-term impacts into consideration, yet decisions that would wreck havoc on the world’s largest forest and its people.

Today, over 40 years later the toxic waste pits remain, all the while leaching toxins into the rivers and streams of the Amazon.  Yet, here in 2009, Chevron’s executives continue to deny and delay actions regarding the damage caused. (see: http://amazonwatch.org/documents/equador-press-kit/chevrons-t )

This post is based on an article by Paul Paz y Mino, Managing Director of Amazon Watch.