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.

Corporate Social Responsibility (2 of 2)

The concept of corporate social responsibility (CSR) incorporates three key ideas:

• The idea of ethical responsibility.
• The idea that business and organizations, just as with individuals, can be held responsible for their actions.
• The idea of obligations towards society at large.

However, certainly in business and corporate world, CSR is generally treated with cynicism.  This is unfortunate and in many ways self-defeating in that people, including investors and shareholders are gradually tending to become increasing concerned about where their money is going and indeed, what it is being used for.

Already many investors, shareholders and buyers are taking account not only financial rewards, but also social concerns and benefits when parting with their money.  They are concerned about the damage to the environment, as well as pollution. 

Again, following the recent behaviour of some of the worlds banks and investment institutes there is increased focus and concern about accountability.

All this is somewhat at odds with the orthodox economists’ view of human beings being motivated primarily by self-interest.  And as we have witnessed, particularly over the past number of months, greed is not good.  Indeed, from a CSR perspective it is simply a disaster.

Of course competition is part and parcel of the business world.  Nevertheless, concentration on competition to the neglect of cooperation is really not the best way forward for the overall health of the enterprise, nor that of the broader community.

In a Paper by Geoffrey Klemper (from Business Philosophy) presented in Prague College on the 24th February 2006, long before the major bank’s bonus scandals, the author pointed out that: “The best thing a board can do for its company is to abolish the bonus system.”   As Klemper clearly states: “So long as executives and managers have their eyes fixed on their yearly bonus any attempt at developing a longer-term strategy is subverted and undermined.”  How right he proved to be.

The sad reality is that the business and corporate worlds pay little, or no attention, to philosophy, particularly the philosophy of business.  Again, Klemper reminds us:  “Our wealth is not just the totality of our money and possessions, but the quality of our lives, the values of the society in which we live and the environment which all human beings ultimately have a share.”   Indeed totally depend on.

Why not visit the Leadership and Learning Pathways website at:  http://www.exercisingleadership.com

Corporate Social Responsibility (1 of 2)

The question is:  As a SME business owner, or organizational leader, why should I have anything to do with Corporate Social Responsibility (CSR)?

Well as Geoffrey Klempner (see: http://www.businessphilosophy.co.uk) points out:  “Apart from a few academic philosophers who have taken an interest in business ethics, or in the philosophy of business, all you will get when you say ‘corporate social responsibility’ (CSR) is a blank stare.”

In the meantime to discover all the things that CSR is, or might be, you have to look critically at the business world itself, and at the kind of things that the label of CSR has been associated.

The vast majority of business enterprises would acknowledge that there are minimum ethics requirements regarding acceptable business practice.  Requirements such as: legality, honesty, fairness and a genuine respect for persons etc. 

In most businesses there is usually an understanding about things as fair pricing, or fair competition.  There would also exist fair treatment of employees.  For example, a company about to initiate any significant change in their business activities should always be prepared to talk to those who might be affected, particularly if adversely affected.

Such procedure could be seen as the beginning of corporate social responsibility.  Ensuring respect for others can result in ethical dialogue.  Nevertheless, such dialogue is without meaning unless one is prepared to act.  There is a major step from allowing those effected to voice their concerns to actually granting them real power in the company’s, or organisation’s decision-making process.

CRS necessarily includes considerations of compassion and empathy, both closely related to the exercise of leadership.  Again, in relation to corporate social responsibility far from SMEs merely seeking to follow the example of big-business (generally hampered by their loyalty to their shareholders), could actually take the lead in CRS.

Why not visit the Leadership and Learning Pathways website at:  http://www.exercisingleadership.com

Leadership in Action

It must be said that attempting to link leadership to specific management tasks is a major challenge for the vast majority of organizations.

From a practical management perspective the exercise of leadership entails:  

• getting people to function at a higher level than has previously been the case.
• focusing the work of people in order to serve the overall success of the enterprise.
• identifying the skills and resources needed that will help to improve how people do their work.  

Leadership is a universal concept, however, we have largely forgotten how to identify leadership and how to exercise it so as to maximize organizational efficiency.  Instead of managing with a view to conformity, management, via the exercise of leadership, uses it’s authority to provide an environment in which people can excel.

The exercise of leadership helps to familiarize people throughout the business, or organization, with the goal(s) of the enterprise and its values.

It goes without saying that the vast majority of organizations under-utilize their people.  They rarely challenge them, involve them in planning and decision making, engage them or draw on their skills and talents to the enterprise’s own best advantage.

What happens when people are under-utilized, not motivated by the work etc?  They tend to leave.  Resulting in problems such as lack of continuity, loss of acquired knowledge and thus overall loss to organizational memory.  And in addition there are recruiting and training costs to consider.

The exercise of leadership entails:

• Defining agreed objectives and securing commitment to them.
• Linking individual objectives to overall business and organizational objectives.
• Involving people throughout the enterprise in the drafting of plans to improve the possibility of sustainable success.
• On-going support for those involved in goal achievement.
• Reviewing progress regularly, and particularly during any given change process.
• The encouraging a free exchange of ideas.
• Encouraging people to learn about their work and that of the enterprise of which they are a part.

Finally, the exercise of leadership acknowledges that ultimately, people – rather than plans, systems, structures and budgets etc., – make the difference between success and failure.

Why not visit the Leadership and Learning Pathways’ website at:

http://www.leadershipandlearning.org

Leadership: Not that Word Again?

It could be said that the term ‘leadership’ has been, and continues to be, misunderstood and overused by ‘experts’ in the business, organizational and political worlds to a point where the concept has simply ceased to have any real meaning.

A  ‘consultant’ who has never seriously studied, or understood leadership can call himself a leadership expert.  Indeed most do so.   Meanwhile, leadership is not some variation on management, or a derivation of an organizational or political elite.  It is a radical concept.

It is radical because it reaches below the surface of things.  It also seeks out the source of what it is to be human within the social and organizational context.

The exercise of leadership doesn’t offer easy help or cosy reassurances.  Instead, it demands that you re-evaluate your life, your behaviour and your projects.

From my own, as well as other ongoing research, it is evident that most, if not all, leadership consultancies, management and leadership schools and centres, leadership ‘experts’ etc., do not seriously attempt to get to the true understanding of leadership in any meaningful sense.  Thus the contradictions, paradox and ambiguity surrounding the issue.

In this, and future posts I am going to argue a case, while avoiding as best I can any opinions I have, concerning leadership and its exercise relating to business, organizational and social improvement.  In short, I am going to present the case that first drew me to take an interest in leadership, and consequently in the exercise of leadership.

If you think the case is valid, or at least that it is worth hearing, then Leadership and Learning Pathways will have achieved its objective.

In the following posts I will be looking at what ‘exercising leadership’ means.  In the meantime the exercise of leadership involves action.  The kind of action leading to improvements regarding both our social and organizational lives.

You can visit the Leadership and Learning Pathways’s  website at:

http://www.leadershipandlearning.org

Leadership in Action

For the 100th post let us see what the exercise of leadership means in relation to the real world.

An example of leadership in action was seen in this week’s debut in New York’s Carnegie Hall of the very first appearance of the YouTube Symphony Orchestra.

In today’s ‘The Independent’ newspaper, London, quoting Associated Press, we read that already the orchestra is ‘one of the world’s most inspiring.’

Everything about the concert, as well as about the playing of the orchestra, was a collective and participative endeavour.  In just over four months since the project was announced voters from among the 15 million viewers of www.YouTube.com/Symphony selected 93 winners from around 3000 videos submitted by both amateur and professional musicians from over 70 countries from around the world.

As recently as March 2009 the influential classical  music magazine ‘Gramophone’ also rated the YouTube Symphony Orchestra one of the top 10 most inspiring orchestras around, certainly in relation to ’democratising classical music on a global scale, making it truly all-inclusive’.

Again, as the article in ‘The Independent’ (http://www.independemt.co.uk) tells us: ‘From the joyous Third Movement of  Brahms Fourth Symphony which began the concert, to Tchaikovsky’s melodic Fourth Symphony at the end of the concert, the conductor, Michael Tilson Thomas lead the musicians in a remarkable performance.’

For a flavour of the achievement you can see Tan Dun’s “Internet Symphony No.1″ on YouTube (see above).

What was, and remains, most exciting about the event is the evident presence of the exercise of leadership that sustained everything that happened throughout the lead up to the concert, and the concert itself.  As the article in The Independent states:  “Despite the short preparation time the orchestra played like a finely tuned instrument.”

Yet again, as Roberto Diaz, president of the Curtis Institute of Music indicated: ‘The orchestra is a very talented group of individuals who nevertheless have developed a strong sense of group harmony which is a fundamental part of its overall achievement.’

Just as organizational unity and achievement is very much the result of the exercise of leadership.

The new Leadership and Learning Pathways  website will be launched soon.