In 1806, one of the most
enduring and successful companies in America was founded as a soap and candle
company. Ranked 445 on the Forbes Global
2000 list, this business has paid dividends every year since 1895, even during
the world wars and recessions. Forbes
has ranked it as the 61st most valuable brand in the world. Colgate-Palmolive,
despite not being a sexy, cutting-edge Silicon Valley tech firm, stands out as
one of the premier businesses in America.[1]
Colgate has been successful
within a highly competitive business environment in which innovation and
flexibility are crucial to survival. At a time when Catholic colleges and universities
are coming under increased economic pressure, the experience of Colgate and
other prosperous corporations may offer some lessons in sustaining success within
a challenging environment.
Givers and Takers and Candlestick Makers
Sustainable organizations
develop leaders who create an internal culture in which employees are
respected, recognized as key value-creators, and are treated extremely well—from
top executives being on a first-name basis with frontline employees, to an
expectation that managers act with integrity.[2]
Current Colgate CEO Ian M. Cook, who has been honored with the Yale School of
Management Legend
in Leadership Award, acknowledged the importance of these values when he said,
"This is a world where I believe values and integrity are more important
than ever before….In the end, it is the quality of the leaders and the culture
of the company that drive long-term success."[3]
Based on the research findings of Zeynep Ton, Cook’s
statements are right on target. Leaders’ beliefs regarding employees, whether
conscious or not, have significant bearing on organizational sustainability. But
not all leaders have a mindset like Cook’s. In researching the retail industry,
Ton found that many leaders think about employees mainly as cost drivers,
resulting in significant uninterrupted negative implications for store operations, sustainability, and staff development: “Seeing labor
as a cost to be minimized is so common that some retailers even do
self-destructive things to minimize cost.”[4]
In his book Give
and Take: Why Helping Others Drives Our Success, Adam Grant
presents another common mindset akin to the “labor-as-cost” perspective: the
“taker” mentality. Simply put, takers like to get more than they give. “They
feel that to succeed, they need to be better than others. ...They self-promote
and make sure they get plenty of credit for their efforts.”[5]
Takers value wealth, power,
pleasure, and winning. Grant reports that as CEOs, takers tend to be
self-absorbed and view themselves as superior to others. Because they are so
self-focused, they can be very destructive to an organization or department. He
cites Ken Lay of Enron as an extreme example of a taker. While the
example of such a notorious leader gets the point across, the real threat for
most organizations come from those who are not so excessively destructive, but
tend to emphasize short-term results while failing to exert the time and effort
to unleash the full potential of their staff.
The taker mentality is something
that Pope Francis has addressed in the context of care for creation. In Laudato Si’, the pope wrote, “To stop
investing in people, in order to gain greater short-term financial gain, is bad
business for society.”[6]
Not only is this approach bad business for
society, but a growing volume of research suggests that it’s just plain bad
business. So, it’s not surprising that many successful companies, like Colgate,
tend to have a culture in which employees are viewed as important resources and
a key source of value. As Ton found, such organizations invest heavily in
employees and a “giver” mindset prevails among leaders. Grant describes givers as
those who value responsibility, social justice, and compassion, and says that
effective givers make more sustainable contributions.In examining how long it takes for effective management practices to be adopted by industry, Stanford Professor Jeffrey Pfeffer once boiled the hurdle down to two organizational problems, one related to knowing and the other related to doing. He identified those problems as: (1) not implementing what organizations know they should be doing based on experience or insight; and (2) not acting on the basis of the best available evidence.[7] In his research, Pfeffer found that “one factor looms large as an explanation for the difficulties: the mental models or mindsets of senior leaders.”[8]
While adopting best practices and improving processes to maximize performance are useful management actions, they are not the key to sustainable success. Pfeffer offered Southwest Airlines as an example. Its exceptional success “is not simply a result of not serving meals or flying only 737s on short hauls, something many other airlines have imitated. Instead, the key to Southwest’s performance is great service and outstanding productivity produced by (a) a strong culture built on a value system that puts employees first, customers second, and shareholders third, and (b) a way of thinking about and treating employees that has built loyalty and commitment even with a heavily unionized workforce."
Mindsets and Mission
In looking at companies like
Colgate, the overwhelming research evidence from the last decade supports the
premise that treating employees and managers as value-creators contributes to
long-term sustainability. Yet, many organizations do not promote a culture
consistent with this knowledge. This is a classic case of a problem involving
knowing and doing.
A generation ago, few Catholic colleges
and universities would have needed to consider the underlying mindsets of their
leaders. And while the unspoken cultural norm at most institutions holds human
dignity in high regard, an emphasis on short-term results and labor-as-a-cost prevail
in the wider society. As a result, Catholic higher education is wise to assess organizational
mindsets to ensure that mission-based values are infused throughout the
management of each institution—in both what it knows and what it does.
Pfeffer concluded, “Human
resources must be concerned with the mental models and mindsets of the people
in the company, particularly its leaders. Because what we do comes from what
and how we think, intervening to uncover and affect mental models may be the
most important and high-leverage activity HR can perform.”
As Catholic college and
universities face mounting budget pressures, an increasing number of
under-resourced students, and business model disruptions resulting from
technology and competition, campus leaders must be formed in the mental models
that foster outcomes of sustainability, innovation, and student success. These
outcomes are only possible if leaders see all faculty and staff as
value-creators, and those value-creators are committed and engaged.
Certain core mindsets,
especially those that relate to organizational sustainability and the common
good, should be nurtured among leaders. This nurturing could take the form of
increasing self-awareness by helping leaders become cognizant of their own
perspectives in light of a higher mission that values human dignity.
1 “The World’s Most Valuable Brands.” Forbes, http://www.forbes.com/companies/colgate-palmolive/. Colgate-Palmolive has paid uninterrupted dividends on its
common stock since 1895 and increased payments to common shareholders every
year for 52 years; see http://investor.colgate.com/div_history.cfm.
2 A number of inventories have been done to
assess what makes company culture attractive to employees. See, for instance, “The Best Companies
for Work-Life Balance.” Forbes, http://www.forbes.com/sites/kathryndill/2015/07/17/the-best-companies-for-work-life-balance-2/.
3 Yale School
of Management. “Colgate-Palmolive
CEO Ian Cook on Leadership,” http://som.yale.edu/news/2014/11/colgate-palmolive-ceo-ian-cook-leadership.
4 Ton, Zeynep. The Good Jobs Strategy: How the Smartest Companies
Invest in Employees to Lower Costs & Boost Profits (Boston: New
Harvest, 2014), pg. 51.
5 Grant, Adam. Give and Take: Why Helping Others Drives Our
Success (New York: Penguin Books, 2014), pp. 21 and 35.
6 Pope Francis. 2015. Laudato Si’: On Care for Our Common Home,
http://w2.vatican.va/content/francesco/en/encyclicals/documents/papa-francesco_20150524_enciclica-laudato-si.html, see paragraph 128.
7 Pfeffer, Jeffrey.
“Changing Mental Models: HR’s Most Important Task.” Human Resources Management, May 20, 2005, pp. 123-128. See http://homepages.se.edu/cvonbergen/files/2013/11/Changing-Mental-Models_HRs-Most-Important-Task.pdf.
8 Ibid., p. 124.
No comments:
Post a Comment