Though this article is mainly aimed more at those who teach one to one, it has implications for all those who have incorporated thinking about learning styles into their programme designs. The Kolb Learning Cycle, and the Honey Mumford questionnaire that applies it so engagingly, have become part of the dialogue of course design and have shown that we are thinking about learning styles when we prepare sessions and courses. ‘Our people are activist learners so we must build in engaging, interactive exercises throughout’ is a typical dialogue during a design meeting.
But this article questions the idea that you should tailor sessions to the learning styles of individuals or groups. It quotes recent research in the USA and a report published in 2004, both of which say that there is no evidence that individuals have distinct learning styles. The counter argument is that people learn in many ways and we should be building on these differences rather than narrowing methods down. We should design learning programmes that contain a mix of learning methods for each individual and group. The simplistic allocation of learning style labels to individuals can be counter-productive, a handicap rather than an advantage to learners.
The second challenge to common assumptions is the view that learning has to be enjoyable to be effective. It is a commonly heard view that if course members are enjoying the business simulation or leadership exercise, this will create effective learning. Here the article’s research evidence is not so strong and it only quotes Peter Honey as justification for challenging this view. Honey argues that enjoyable learning can be too easy and that ‘no pain, no gain’ applies. This not only questions the choice of method but also the typical reliance on happy sheets. Though the challenge to conventional thinking is interesting here, I was not convinced of its application in practice; commercial organisations like MTP believe that those who have suffered pain on our programmes tend not to come back for more!
The authors go on to suggest that, though matching learning styles to individuals or groups may be counter-productive, there is benefit from dialogue with learners before methods are agreed. Here we have to remember that the focus of the article is individual learning and again this would be less practical in a course or workshop context. However it makes a strong case for explaining up front why particular learning methods have been chosen, which is more practical and appealing in a larger group context. It also makes it more feasible to use ‘painful’ methods while still receiving the right level of acceptance.
The article closes by arguing for a particular questionnaire to form the basis of these discussions – the Hermann Brain Dominance Instrument – though I was not convinced that this would lead to any better discussions than, say, Honey Mumford. It may merely be an example of the authors arguing for the instrument that they know and love.
It is difficult to know how much weight to give to the views of two learning consultants who might be challenging existing thinking as a way of gaining attention. But the article is thought provoking and a wake-up call for those who are unquestioning in their reliance on the language and concepts of Kolb and Honey Mumford.
Click here to read the article in full:
http://www.trainingjournal.com/search/?searchType=&q_author=Carolyn+May+and+Andy+Radka&q_time-period=Past+year
Friday 6 May 2011
‘Capitalism for the Long Term’ by Dominic Barton, Harvard Business Review
The author is MD of McKinsey’s global operation and the article has to be seen in this context. The essential thrust of the article is that, following the trauma of the global recession, companies cannot go back to business as usual, and this is not just about the banks. The argument is that there has been a general failure of governance, leadership and decision making and, based on several surveys, a loss of trust from the public. I am not sure that CEOs in all sectors would agree but I guess it is in McKinsey’s interests to make us believe it and allow them to provide the cure.
The answer according to the author is to move companies away from their short term orientation and serve the interests of all stakeholders and not just those shareholders who are looking for short term return. And to do this they need a board of directors that should govern the companies as if they were the long term owners; the problem as seen by McKinsey is that the ownership of the company has become dispersed and disengaged, so that management have been able to get away with managing in their own interests. The article fails to quote the obvious reason why shareholders of a public company fail to act like other owners – they can sell their shares any time they want to.
The author sees this as a key difference between business in East and West and a factor in the East’s competitive advantage; CEOs in Asia think much longer term, partly because they have greater security of tenure when short term results are adverse. They can therefore take the difficult decisions and make the long term investments that are constrained by the short term focus on quarterly profitability.
Though this makes sense, it is not exactly new thinking and there are already examples of top western companies breaking out of the cycle of short term profits, for example Unilever, Coca Cola and Ford have stopped issuing short term guidance. There is also some similarity between this thinking and the recent articles by Michael Porter, advocating ‘shared value’ between stakeholders and a longer term approach to running businesses. But I guess that McKinsey would not want to credit their thinking to a mere academic!
Where this article does improve on Porter’s ideas – see January Blog – is that there are some interesting suggestions for delivering the longer term approach. The author rightly points to the increasing trend towards short term shareholdings as ‘Hyperspeed’ traders move in and out of equities on a daily basis; apparently the average holding period is now seven months rather than seven years in the 1970s. His interesting suggestion is that the voting rights should be greater for those with longer ownership periods. There is also a suggestion that CEO compensation should be more oriented towards long term performance
Even more important is for boards of directors to ‘act like they own the place’, in particular to make sure that they understand the business and know what is going on; far too many are there because of who they are and whom they know, rather than for being able to challenge the CEO with the right questions. To achieve this aim the non-executive directors need to devote more time to the role and acquire more industry knowledge so that they can have independent and informed views on the strategy and the risks involved.
Whilst it is hard to disagree with many of the sentiments in the article, there is the same problem as the British Government trying to curb the excesses of bank practices and remuneration. There has to be some incentive for companies to make these changes and many CEOs who are less confident than Coca Cola, Ford and Unilever, might feel like turkeys voting for Christmas. And it is only when the shareholders, and the analysts who advise them, take the same view, that such long term thinking will really become embedded.
Click here to read the article in full:
http://hbr.org/2011/03/capitalism-for-the-long-term/ar/1
The answer according to the author is to move companies away from their short term orientation and serve the interests of all stakeholders and not just those shareholders who are looking for short term return. And to do this they need a board of directors that should govern the companies as if they were the long term owners; the problem as seen by McKinsey is that the ownership of the company has become dispersed and disengaged, so that management have been able to get away with managing in their own interests. The article fails to quote the obvious reason why shareholders of a public company fail to act like other owners – they can sell their shares any time they want to.
The author sees this as a key difference between business in East and West and a factor in the East’s competitive advantage; CEOs in Asia think much longer term, partly because they have greater security of tenure when short term results are adverse. They can therefore take the difficult decisions and make the long term investments that are constrained by the short term focus on quarterly profitability.
Though this makes sense, it is not exactly new thinking and there are already examples of top western companies breaking out of the cycle of short term profits, for example Unilever, Coca Cola and Ford have stopped issuing short term guidance. There is also some similarity between this thinking and the recent articles by Michael Porter, advocating ‘shared value’ between stakeholders and a longer term approach to running businesses. But I guess that McKinsey would not want to credit their thinking to a mere academic!
Where this article does improve on Porter’s ideas – see January Blog – is that there are some interesting suggestions for delivering the longer term approach. The author rightly points to the increasing trend towards short term shareholdings as ‘Hyperspeed’ traders move in and out of equities on a daily basis; apparently the average holding period is now seven months rather than seven years in the 1970s. His interesting suggestion is that the voting rights should be greater for those with longer ownership periods. There is also a suggestion that CEO compensation should be more oriented towards long term performance
Even more important is for boards of directors to ‘act like they own the place’, in particular to make sure that they understand the business and know what is going on; far too many are there because of who they are and whom they know, rather than for being able to challenge the CEO with the right questions. To achieve this aim the non-executive directors need to devote more time to the role and acquire more industry knowledge so that they can have independent and informed views on the strategy and the risks involved.
Whilst it is hard to disagree with many of the sentiments in the article, there is the same problem as the British Government trying to curb the excesses of bank practices and remuneration. There has to be some incentive for companies to make these changes and many CEOs who are less confident than Coca Cola, Ford and Unilever, might feel like turkeys voting for Christmas. And it is only when the shareholders, and the analysts who advise them, take the same view, that such long term thinking will really become embedded.
Click here to read the article in full:
http://hbr.org/2011/03/capitalism-for-the-long-term/ar/1
‘How CFOs can keep strategic decisions on track’ by Bill Huyett and Tim Koller, McKinsey Quarterly, March 2011
McKinsey have the knack of writing about practical issues that impact those who run the finance functions of major companies, which is very much in line with MTP’s coverage on our finance programmes. This time the relevant topic is the avoidance of bias in strategic decision making and the CFO’s responsibility for identifying and overcoming biased thinking.
It could be argued that the finance team should overcome bias by the production of objective quantitative information. But it is rarely as simple as that because hard information is not always taken into account when decisions are made and research indicates that there are many causes of bias, including overconfidence, team motivation, CEO pressure and the risk profiles of the people involved.
The authors make their points through a conversation in Q& A style with the Director of their Paris office Olivier Sibony, who has apparently written many articles on the topic of bias. I would have been rather more impressed if the conversation had included a real life CFO but the article nevertheless has a convincing and practical flavour. The emphasis is on the importance of establishing an effective decision making process, involving the judgment and insights of a number of people, rather than being driven by one biased party.
Sibony is of the view that, in successful companies, over-confidence is ‘hard-wired’ and many managers fail to learn from their mistakes; it is also very difficult to change this mindset, there is a view that ‘next time it will be different’. It is however possible for a multi-person process, that involves structured questioning and challenging, to overcome these built in biases. This can reduce the reliance on financial evaluations that may be driven by biased assumptions; the article quotes the all too common practice whereby M & A evaluations are driven by the answer that is wanted and not by the likely risks and outcomes.
The authors’ suggestion is that decision making meetings should be more like courts of law with for and against arguments, rather than a one way presentation by the project champion. McKinsey’s research of decision making processes indicates that the latter is the normal practice, usually accompanied by the underlying assumption that the project will go through, one way or the other. Instead McKinsey recommends that someone takes the role of devil’s advocate, looking for uncertainties and downside risks to counter the natural biases of the champion. There is even a suggestion that for acquisitions there should be two deal teams, one arguing for and one against. It was here that I began to have some reservations about the practicality because factors of urgency and cost would be sure to arise.
There is also a suggestion that teams should use the concept of the ‘pre-mortem’; each of the key players has to think of several reasons why the deal is going to fail and then discuss what has been done or can be done to overcome the potential problems. At this stage I wondered if maybe this is taking the question of balance too far to the negative side. There would be a danger of changing to a different, pessimistic form of bias that ensures that no decision is ever taken.
The article is interesting but falls short on specific quantitative analysis tools to help in the removal of bias, for instance sensitivity, range and probability analysis. The only techniques quoted are around the analysis of past projects and the discussion of lessons learned. It seems that this thinking is driven much more by the softer behavioural arm of McKinsey than by their harder financial side. But it still provides excellent food for thought.
Click here to read the article in full:
http://www.mckinseyquarterly.com/How_CFOs_can_keep_strategic_decisions_on_track_2750
It could be argued that the finance team should overcome bias by the production of objective quantitative information. But it is rarely as simple as that because hard information is not always taken into account when decisions are made and research indicates that there are many causes of bias, including overconfidence, team motivation, CEO pressure and the risk profiles of the people involved.
The authors make their points through a conversation in Q& A style with the Director of their Paris office Olivier Sibony, who has apparently written many articles on the topic of bias. I would have been rather more impressed if the conversation had included a real life CFO but the article nevertheless has a convincing and practical flavour. The emphasis is on the importance of establishing an effective decision making process, involving the judgment and insights of a number of people, rather than being driven by one biased party.
Sibony is of the view that, in successful companies, over-confidence is ‘hard-wired’ and many managers fail to learn from their mistakes; it is also very difficult to change this mindset, there is a view that ‘next time it will be different’. It is however possible for a multi-person process, that involves structured questioning and challenging, to overcome these built in biases. This can reduce the reliance on financial evaluations that may be driven by biased assumptions; the article quotes the all too common practice whereby M & A evaluations are driven by the answer that is wanted and not by the likely risks and outcomes.
The authors’ suggestion is that decision making meetings should be more like courts of law with for and against arguments, rather than a one way presentation by the project champion. McKinsey’s research of decision making processes indicates that the latter is the normal practice, usually accompanied by the underlying assumption that the project will go through, one way or the other. Instead McKinsey recommends that someone takes the role of devil’s advocate, looking for uncertainties and downside risks to counter the natural biases of the champion. There is even a suggestion that for acquisitions there should be two deal teams, one arguing for and one against. It was here that I began to have some reservations about the practicality because factors of urgency and cost would be sure to arise.
There is also a suggestion that teams should use the concept of the ‘pre-mortem’; each of the key players has to think of several reasons why the deal is going to fail and then discuss what has been done or can be done to overcome the potential problems. At this stage I wondered if maybe this is taking the question of balance too far to the negative side. There would be a danger of changing to a different, pessimistic form of bias that ensures that no decision is ever taken.
The article is interesting but falls short on specific quantitative analysis tools to help in the removal of bias, for instance sensitivity, range and probability analysis. The only techniques quoted are around the analysis of past projects and the discussion of lessons learned. It seems that this thinking is driven much more by the softer behavioural arm of McKinsey than by their harder financial side. But it still provides excellent food for thought.
Click here to read the article in full:
http://www.mckinseyquarterly.com/How_CFOs_can_keep_strategic_decisions_on_track_2750
‘Blended approach extends reach’ by Delia Bradshaw, FT.com, March 2011
This article is quite short but is revealing about the extent to which business schools are embracing on-line learning in their programmes. It starts by claiming that the last twelve months have seen major developments in the use of learning technology at Business Schools. However the extent to which this is progress compared to the activities of major companies is questioned by the follow up statement that business schools are beginning to embrace ‘blended learning’, combining face to face and virtual technology. If this really is a new development it is at least ten years behind the practice in many forward thinking companies.
The example quoted is a joint programme between Brown University and Spain’s IE school and the Dean of the latter makes a perceptive point about the benefits of virtual sessions run by an online facilitator with typed in chat by participants. He says that ‘everybody participates, even the shy people; you think twice as hard about writing something as you do about saying it in the classroom’. This is a benefit of live virtual sessions that can easily be overlooked. However prospective students might be put off by the $95000 fee that is quoted for this 15 month programme; it makes our University tuition fees a bargain by comparison!
There is also mention of Ashridge’s progress in the blended learning area, though we would question the quoted benefit of being able to reduce cost by recycling recorded video lectures; our experience is that this is of limited value as it loses the benefit of genuine interaction and learner focus. They do however make the valid point that the recent improvements in bandwidth have widened the scope of what can be delivered virtually, even though there are still some parts of the world that lag behind.
An example from Queen’s school in Canada makes one wonder if the business schools have really seized the full potential of the technology. Apparently they have been running a ‘video conferencing MBA’ for a decade and have seized upon the new technology as an opportunity for the same content to be covered at students’ desks, rather than travelling to a video conferencing centre. But there is no mention of the opportunity for interactivity which is what really makes virtual learning come alive; watching and listening to a business school professor on a screen is not, on its own, the most effective form of learning.
The article is interesting but it is difficult to assess whether the sample of schools quoted is in any way typical of business schools as a whole. It would have been good to hear for instance what Harvard, LBS and INSEAD are doing; I suspect that they would be much further down the road and more in line with the practice that we see in top companies.
Click here to read the article in full:
http://www.ft.com/cms/s/2/53a0a23e-4b71-11e0-89d8-00144feab49a.html#axzz1LZYn2ask
The example quoted is a joint programme between Brown University and Spain’s IE school and the Dean of the latter makes a perceptive point about the benefits of virtual sessions run by an online facilitator with typed in chat by participants. He says that ‘everybody participates, even the shy people; you think twice as hard about writing something as you do about saying it in the classroom’. This is a benefit of live virtual sessions that can easily be overlooked. However prospective students might be put off by the $95000 fee that is quoted for this 15 month programme; it makes our University tuition fees a bargain by comparison!
There is also mention of Ashridge’s progress in the blended learning area, though we would question the quoted benefit of being able to reduce cost by recycling recorded video lectures; our experience is that this is of limited value as it loses the benefit of genuine interaction and learner focus. They do however make the valid point that the recent improvements in bandwidth have widened the scope of what can be delivered virtually, even though there are still some parts of the world that lag behind.
An example from Queen’s school in Canada makes one wonder if the business schools have really seized the full potential of the technology. Apparently they have been running a ‘video conferencing MBA’ for a decade and have seized upon the new technology as an opportunity for the same content to be covered at students’ desks, rather than travelling to a video conferencing centre. But there is no mention of the opportunity for interactivity which is what really makes virtual learning come alive; watching and listening to a business school professor on a screen is not, on its own, the most effective form of learning.
The article is interesting but it is difficult to assess whether the sample of schools quoted is in any way typical of business schools as a whole. It would have been good to hear for instance what Harvard, LBS and INSEAD are doing; I suspect that they would be much further down the road and more in line with the practice that we see in top companies.
Click here to read the article in full:
http://www.ft.com/cms/s/2/53a0a23e-4b71-11e0-89d8-00144feab49a.html#axzz1LZYn2ask
‘Tales from the talent war’, by Dominic Midgley, Director, April 2011
This article is quite typical of those in the Director, excellent choice of topic, some great insights but a lack of depth that leaves you wanting more.
It starts by drawing attention to the risks taken by companies who rely on a few talented individuals whose creativity is critical to growth and maybe even survival. It makes the distinction between those companies that are ‘process driven’ and therefore less likely to be dependent on individuals, and those that are ‘people facing’ and are therefore highly vulnerable because of this dependence. I was not entirely convinced that this kind of black and white distinction is as easy as was implied – would Johnson and Johnson (J & J) agree that they are not people facing? - but it nevertheless provides a useful framework for the rest of the article.
Johnson and Johnson are featured as an example of what leading companies are doing to develop top management talent and to overcome the dangers of their being underdeveloped and ‘hoarded’ by bosses who do not want to lose them. J & J’s solution is a leadership development programme for high performers which is very similar to those we see in many top companies. The author then quotes a recent article in HBR which suggests that 70% of those chosen for such programmes are found not to be suitable for top level jobs. This is not too surprising and is probably a desirable weeding out process but the reasons for the failure of the 70% are interesting. Based on three requirements for top level success – engagement, aspiration and commitment - there are three types of drop-out:
• Engaged dreamers, who have engagement and aspiration but not ability
• Disengaged stars, who have ability and aspiration but lack commitment
• Misaligned stars, who have ability and engagement but lack aspiration
For the people facing businesses it is suggested that losing people probably means losing clients and future innovations. The article therefore suggests that, rather than identifying winners and organising development programmes, the priority should be retention via personal development opportunities. The key people must be given freedom to grow in ways that suit them, rather than feeling like a ‘cog in a machine’. This includes including them in high performing teams with people of like minds and potential, so that they can feel they are both contributing and learning.
There is another reference to Harvard, this time to Professor Boris Groysberg in whose book – ‘Chasing Stars’ – there is an interesting quote from an experienced bank executive, that running the research department of an investment bank is like ‘managing a movie set with 100 Jack Nicholsons’. Groysberg’s work shows that, in this type of job, those who move around from one company to another usually face a sharp drop in performance after moving; thus it is in the interests of all companies to maximise retention of the key creative people in the sector. It should also be a warning to those who try to steal people from competitors; retention of creative talent is the key to success.
There is a further interesting quote from an HR Director in a people facing business; ‘Creative people will only stay if you can offer them a great place to work, in which to express their cleverness, and other clever people to work with’. Yet the same HR Director is defeatist when it comes to competition, suggesting that nothing can stop competitors from stealing your best people if they really want them.
The article closes by saying that, despite the above arguments, some companies believe they can solve the retention problem by the traditional route of throwing money at it. The surprising example is Apple who have tied their second (to Jobs) creative genius Jonathan Ive to a golden handcuff deal worth $80 million. Yet there are reports that he is still reluctant to commit himself full time to Silicon Valley. The eventual outcome will be interesting to watch.
Overall this is a thought provoking article that lacks depth but still encourages you to read the books that are quoted. I will certainly do so – look for reviews in future blogs.
Click here to read the article in full:
http://www.director.co.uk/MAGAZINE/2011/4_April/talent-war_64_08.html
It starts by drawing attention to the risks taken by companies who rely on a few talented individuals whose creativity is critical to growth and maybe even survival. It makes the distinction between those companies that are ‘process driven’ and therefore less likely to be dependent on individuals, and those that are ‘people facing’ and are therefore highly vulnerable because of this dependence. I was not entirely convinced that this kind of black and white distinction is as easy as was implied – would Johnson and Johnson (J & J) agree that they are not people facing? - but it nevertheless provides a useful framework for the rest of the article.
Johnson and Johnson are featured as an example of what leading companies are doing to develop top management talent and to overcome the dangers of their being underdeveloped and ‘hoarded’ by bosses who do not want to lose them. J & J’s solution is a leadership development programme for high performers which is very similar to those we see in many top companies. The author then quotes a recent article in HBR which suggests that 70% of those chosen for such programmes are found not to be suitable for top level jobs. This is not too surprising and is probably a desirable weeding out process but the reasons for the failure of the 70% are interesting. Based on three requirements for top level success – engagement, aspiration and commitment - there are three types of drop-out:
• Engaged dreamers, who have engagement and aspiration but not ability
• Disengaged stars, who have ability and aspiration but lack commitment
• Misaligned stars, who have ability and engagement but lack aspiration
For the people facing businesses it is suggested that losing people probably means losing clients and future innovations. The article therefore suggests that, rather than identifying winners and organising development programmes, the priority should be retention via personal development opportunities. The key people must be given freedom to grow in ways that suit them, rather than feeling like a ‘cog in a machine’. This includes including them in high performing teams with people of like minds and potential, so that they can feel they are both contributing and learning.
There is another reference to Harvard, this time to Professor Boris Groysberg in whose book – ‘Chasing Stars’ – there is an interesting quote from an experienced bank executive, that running the research department of an investment bank is like ‘managing a movie set with 100 Jack Nicholsons’. Groysberg’s work shows that, in this type of job, those who move around from one company to another usually face a sharp drop in performance after moving; thus it is in the interests of all companies to maximise retention of the key creative people in the sector. It should also be a warning to those who try to steal people from competitors; retention of creative talent is the key to success.
There is a further interesting quote from an HR Director in a people facing business; ‘Creative people will only stay if you can offer them a great place to work, in which to express their cleverness, and other clever people to work with’. Yet the same HR Director is defeatist when it comes to competition, suggesting that nothing can stop competitors from stealing your best people if they really want them.
The article closes by saying that, despite the above arguments, some companies believe they can solve the retention problem by the traditional route of throwing money at it. The surprising example is Apple who have tied their second (to Jobs) creative genius Jonathan Ive to a golden handcuff deal worth $80 million. Yet there are reports that he is still reluctant to commit himself full time to Silicon Valley. The eventual outcome will be interesting to watch.
Overall this is a thought provoking article that lacks depth but still encourages you to read the books that are quoted. I will certainly do so – look for reviews in future blogs.
Click here to read the article in full:
http://www.director.co.uk/MAGAZINE/2011/4_April/talent-war_64_08.html
‘The good, the bad and your business’ by Jeffrey Seglin, published by Wiley
The more you read about the topic of business ethics, the more you realise that this is a subject that everyone who reaches a position of responsibility should read about, think about and talk about in their company. And the more you read, think and talk the more you realise that ethics is a topic that is highly complex and cannot be covered by general rules and statements.
This book is well written and easy to read, as one would expect from an author with a journalistic background. His academic qualifications may not be as strong as others who have written about the topic but, considering the author has not had much business experience, it comes across as highly practical, without the preaching and religious fervour that can be a feature of writing on this topic.
The book is structured into three main sections – money, people and ‘the common good’. The author tries to build a conceptual framework around these three aspects of the topic but it doesn’t really work; the chapters within each of the three sections do not always relate to the section headings and there is a lot of overlap between them. This shows how difficult it is to structure ethical issues into a standard framework because there are nearly always trade-offs and dilemmas to cloud the more difficult decisions.
The balance between what is right and what is legal is covered particularly well. Two chapters are devoted to this theme and both make the important point that there is a difference between what is legal and what is right and that situations are rarely as black and white as managers would like them to be. There is often a temptation to refer decisions to lawyers or fall back on legal justification, when in fact there is often much more flexibility than is pretended. It can be right to take a risk of prosecution or civil litigation if the course of action is the ‘right thing to do’.
And it is this definition of ‘the right thing’ that makes ethics such a fascinating and important topic. Companies try to solve this problem by making a statement of their values and ethical principles and this can be of major benefit, as long as these are seen inside and outside the business as compatible with what is really happening in the business. This is covered particularly well in the people section; the point is made that all the statements about treating people fairly will not be believed if there are examples of people leaving under clouds of unfairness.
I would like to have seen more examples of well-known companies facing ethical dilemmas; there are some examples but most are anonymous or from small American businesses. One of the most powerful stories is one of the most famous; how Johnson and Johnson decided to take drastic action to withdraw products after someone had inserted cyanide into their Tylenol product, even though it was not their fault. This illustrates a message that comes out in all books on this topic, that immediate, decisive action, based on what is right, will usually pay off over the long term. The delays, the lies and the cover-up have much more potential to damage a company than the initial problem.
This is why Seglin takes the same view as Jerry Fleming whose book I reviewed in January. Ethical behaviour will over the long term improve shareholder return, even if there is short term damage to reputation. This book will certainly help those who share this belief.
Click here to buy the book:
http://www.amazon.ca/Good-Bad-Your-Business-Choosing/dp/0471347795
This book is well written and easy to read, as one would expect from an author with a journalistic background. His academic qualifications may not be as strong as others who have written about the topic but, considering the author has not had much business experience, it comes across as highly practical, without the preaching and religious fervour that can be a feature of writing on this topic.
The book is structured into three main sections – money, people and ‘the common good’. The author tries to build a conceptual framework around these three aspects of the topic but it doesn’t really work; the chapters within each of the three sections do not always relate to the section headings and there is a lot of overlap between them. This shows how difficult it is to structure ethical issues into a standard framework because there are nearly always trade-offs and dilemmas to cloud the more difficult decisions.
The balance between what is right and what is legal is covered particularly well. Two chapters are devoted to this theme and both make the important point that there is a difference between what is legal and what is right and that situations are rarely as black and white as managers would like them to be. There is often a temptation to refer decisions to lawyers or fall back on legal justification, when in fact there is often much more flexibility than is pretended. It can be right to take a risk of prosecution or civil litigation if the course of action is the ‘right thing to do’.
And it is this definition of ‘the right thing’ that makes ethics such a fascinating and important topic. Companies try to solve this problem by making a statement of their values and ethical principles and this can be of major benefit, as long as these are seen inside and outside the business as compatible with what is really happening in the business. This is covered particularly well in the people section; the point is made that all the statements about treating people fairly will not be believed if there are examples of people leaving under clouds of unfairness.
I would like to have seen more examples of well-known companies facing ethical dilemmas; there are some examples but most are anonymous or from small American businesses. One of the most powerful stories is one of the most famous; how Johnson and Johnson decided to take drastic action to withdraw products after someone had inserted cyanide into their Tylenol product, even though it was not their fault. This illustrates a message that comes out in all books on this topic, that immediate, decisive action, based on what is right, will usually pay off over the long term. The delays, the lies and the cover-up have much more potential to damage a company than the initial problem.
This is why Seglin takes the same view as Jerry Fleming whose book I reviewed in January. Ethical behaviour will over the long term improve shareholder return, even if there is short term damage to reputation. This book will certainly help those who share this belief.
Click here to buy the book:
http://www.amazon.ca/Good-Bad-Your-Business-Choosing/dp/0471347795
‘Defining moments’ by Joseph Badaracco, Harvard Business Press
Although this book is by a Harvard Professor, it is refreshingly practical, short and easy to read, much more so than the Seglin’s book. Badaracco shares Seglin’s view that ethical issues can only be decided in the context of each company and situation but provides an effective conceptual framework and more helpful examples. There are excellent three case studies that are introduced early on and then recur as the various themes are introduced.
Badaracco sees decision making around ethical issues as being a balance between work choices and life choices, which will be revealed and tested in ‘defining moments’. He rejects suggestions that such decisions can be treated as a choice between right and wrong; on the contrary, it is more likely to be ‘right versus right’. This is illustrated by the dilemma in one of the case studies – do you sack an employee who is performing less well and working less hard than other colleagues, even though by normal standards that performance would be acceptable? And do you take into account that employee’s personal circumstances and the motivation of the rest of the team? He makes the point that managers are right in the middle of such dilemmas and it is almost impossible to avoid ‘dirty hands’.
Another case study is about a black man who finds out that he has been chosen to make a pitch to a major client because he is black, thus gaining favour compared to his peers. Other examples are more corporate and larger scale; for example do Hoechst carry on with abortion related products even though there are boycotts of products and unwanted publicity?
For this type of dilemma the author suggests three sources of information and supports for judgment:
• The company’s mission/values statement
• Legal responsibilities
• Moral philosophy
The other distinctive feature of this book is that the author goes back to philosophers of the past for guidance on the third of these sources; to John Stuart Mill who suggested the criterion should be the ‘greatest happiness to the greatest number’ and less helpfully to Immanuel Kant who believed that ‘moral law and duty’ should prevail. He also quoted Plato and his pupil Aristotle who believed that ethical issues were more emotional than factual, that decisions had to ‘feel right’ to be ethically justified.
This insight was the origin of what the author and other writers on ethical issues call the ‘sleep test’ – can you sleep at night after making this decision? Another version is - can you look yourself in the mirror?’
Perhaps the best advice for managers is to read books like this and establish principles in your own mind so that you are prepared to make the ‘most right’ choice when ethical dilemmas arise. If it is only possible to read one book on this topic, this practical, readable book would be my choice.
Click here to buy the book:
http://hbr.org/search/%252525E2%25252580%25252598Defining%25252520moments%252525E2%25252580%25252599%25252520by%25252520Joseph%25252520Badaracco%2525252C%25252520Harvard%25252520Business%25252520Press/
Badaracco sees decision making around ethical issues as being a balance between work choices and life choices, which will be revealed and tested in ‘defining moments’. He rejects suggestions that such decisions can be treated as a choice between right and wrong; on the contrary, it is more likely to be ‘right versus right’. This is illustrated by the dilemma in one of the case studies – do you sack an employee who is performing less well and working less hard than other colleagues, even though by normal standards that performance would be acceptable? And do you take into account that employee’s personal circumstances and the motivation of the rest of the team? He makes the point that managers are right in the middle of such dilemmas and it is almost impossible to avoid ‘dirty hands’.
Another case study is about a black man who finds out that he has been chosen to make a pitch to a major client because he is black, thus gaining favour compared to his peers. Other examples are more corporate and larger scale; for example do Hoechst carry on with abortion related products even though there are boycotts of products and unwanted publicity?
For this type of dilemma the author suggests three sources of information and supports for judgment:
• The company’s mission/values statement
• Legal responsibilities
• Moral philosophy
The other distinctive feature of this book is that the author goes back to philosophers of the past for guidance on the third of these sources; to John Stuart Mill who suggested the criterion should be the ‘greatest happiness to the greatest number’ and less helpfully to Immanuel Kant who believed that ‘moral law and duty’ should prevail. He also quoted Plato and his pupil Aristotle who believed that ethical issues were more emotional than factual, that decisions had to ‘feel right’ to be ethically justified.
This insight was the origin of what the author and other writers on ethical issues call the ‘sleep test’ – can you sleep at night after making this decision? Another version is - can you look yourself in the mirror?’
Perhaps the best advice for managers is to read books like this and establish principles in your own mind so that you are prepared to make the ‘most right’ choice when ethical dilemmas arise. If it is only possible to read one book on this topic, this practical, readable book would be my choice.
Click here to buy the book:
http://hbr.org/search/%252525E2%25252580%25252598Defining%25252520moments%252525E2%25252580%25252599%25252520by%25252520Joseph%25252520Badaracco%2525252C%25252520Harvard%25252520Business%25252520Press/