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A True Green CEO: Unilever’s Paul Polman

October 20, 2014
Planet Money talks and bullshit walks.

I use this expression, and so do countless others, except that it’s useful to understand its origin. Attributed to Congressman Michael “Ozzie” Myers in 1980, resulting from his expulsion from the House of Representatives for accepting bribes and his subsequent 1981 imprisonment, the former longshoreman was referring to putting money down to make things happen; in other words, putting your money where your mouth is.

So if that puts me in the company of a foul mouthed ex-longshoreman, ex-Congressman who went to prison, so be it. I like the expression because it relates well to the corporate world when it comes to CEOs, presidents and chairmen espousing how committed their companies are to environmental and social business practices.

However, the informed public knows it just ain’t so. And as consumers educate themselves on the growing stresses our planet is facing, with the resulting increased expectations on companies, there’s a huge disconnect. But there’s some good news. Some corporate leaders are following Michael Myers maxim.

ray-anderson 1 I’ve written in the past about Ray Anderson, former CEO of Atlanta-based Interface Inc., a flooring company which continues to push the envelope of trying to get to zero emissions. Anderson, who died of cancer in in August 2011, was referred to as the world’s greenest CEO because of his total commitment to reducing Interface’s environmental footprint. He was succeeded by Daniel Hendrix, who wears the fancy title of Chairman, President and Chief Executive Officer. Nevertheless, Hendrix is continuing Anderson’s battle to make Interface Inc. as green a company as possible.

Toronto-based Globescan’s sustainability survey in 2014 showed some interesting and surprising results on where various companies (heavily American) are at when it comes to leadership in sustainable business practices. Interface, according to the analysts polled, earned 7% of their votes. Patagonia, an outdoor apparel company, received 9%. Down the list came other well-known firms:

-Marks & Spencer: 6%
-Nestle: 4%
-Nike: 4%
-GE: 4%
-Walmart: 3%
-IKEA: 3%
-Coca-Cola: 3%

But at the top was Anglo-Dutch-owned Unilever at a whopping 33%!

A huge conglomerate which makes everything conceivable, from the Red Rose and Lipton green teas that I drink, to laundry soap, to food products, to mops and cleaning products, Unilever is a huge company that is taking very seriously the footprint it is leaving on planet Earth.

So who’s behind this monumental leadership charge, because to initiate and maintain the needed momentum requires an exceptional leader and human being.

paul-polman Meet Paul Polman, CEO of Unilever since January 2009 (recruited from Swiss rival Nestlé).

Not content with Unilever’s approach to corporate social responsibility, Polman launched his Sustainable Living Plan in 2010 aimed at making the company the premier example of how to integrate capitalism with social and environmental needs. Akin to the Triple Bottom Line (informally people, profits, planet), Polman doesn’t see his philosophy and Unilever’s business practices as charity but rather as making smart business sense, all the while contributing to the world’s social needs and reducing the company’s environmental footprint.

This type of sustained effort requires not just leadership from the executive suites but from employees as well, for without an engaged workforce Unilever would not have achieved its success in just a few years. And with an engaged workforce has come a high level of employee satisfaction.

By 2020, Unilever intends to have, in addition to a smaller environmental footprint (e.g., waste reduction and lower greenhouse gas emissions) and sourcing its raw materials respecting sustainable practices, assisted one billion people improve their health and overall well-being. Not too shabby an empowering vision, one that will likely be realized.

Of course, taking a longer term approach to corporate business practices, including financial returns, demands a leader who is able to convince investors of the benefits to Unilever. Polman has worked diligently at changing the mental model of investors and stakeholders from a quarterly results mindset to one that has a much longer time horizon. So far he’s accomplished a great deal; but the best is yet to come.

Paul Polman isn’t from the BS school. He’s putting Unilever’s money and resources exactly where he believes it needs to go. Take a moment to check out this May 2014 interview with Polman on his vision and plan to make Unilever the most sustainable company on the planet.





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Brutalized by an Airline: How Corporate Culture is Reflected in Poor Customer Service

October 12, 2014

airplane-rain-clouds This is a story about leadership and customer service; or to be more precise it’s about the absence of both.

One of my daughter’s recently got married. The wedding venue was an hour west of Ottawa in a beautiful setting. With a large family on my wife’s side, there was a decent-size contingent which drove and flew up from the Province of New Brunswick (1,000 km away). We were thrilled that both our daughter’s godparents were able to come. And this is where this sad story of abhorrent customer story is focused, specifically Joanne’s god mother, Karen.

The guilty culprit in this saga is Air Canada, once an internationally respected airline for its safety record and very good customer service. While its safety record is still excellent, unfortunately the company’s customer service aspect has deteriorated to the level one might expect to find in a banana republic.

Here’s Karen’s story.

Karen drove to Fredericton from Saint John with a cousin to join another cousin to take an Air Canada flight to Ottawa. Two of the three had no problem getting on with their carry-ons; Karen’s bag would have to be checked but the desk agent said that it was too late. She would have to miss the flight and get another one eight hours later.

Having flown out of this airport dozens of times in the past when I lived in Fredericton I’m very familiar with its size (two gates) and that planes are parked 50 feet from the building. To add insult to injury, when her two cousins walked across the tarmac to the plane (with Karen left in the terminal) another Air Canada employee said there was no room on board for any more luggage but that he’d put it the cargo hold.

frustrated-customer What?

It’s called communication, which apparently was not present early that fall morning.

Why the inconsistency?

No explanation was ever given to Karen. To add further insult to Karen, Air Canada staff, who made every attempt to be rude, said that she would have to buy another ticket. Fortunately, for some unknown reason, one of the employees later waived the fee. However, even though she did get a flight a few hours later, she had to wait in Montreal for several hours for her connector. Interesting, since there are six afternoon flights from Montreal to Ottawa.

The story got much more perverse when Karen was preparing to fly home two days after the wedding. When she went online the evening before to get her boarding pass a message appeared telling her she would have to go to the desk to check in; her two cousins had no problem with obtaining boarding passes online.

Once at the ticket counter (her cousins accompanying her) she was then told that the flight was overbooked and that she would have to take a flight the next day. The only thing that saved Karen in the end was a woman getting sick in the waiting lounge, prompting the arrival of four paramedics with masks and gloves on (undoubtedly fearing Ebola or some other communicable disease).

Frustrated-woman 2 There were so many mistakes made by Air Canada staff in both Fredericton and Ottawa that it’s difficult to know where to begin. But let’s take a shot anyway. Here are some dos and don’ts on customer service:

1) DO treat each and every customer with the respect he or she deserves.

2) Do not treat customers with contempt, no matter how you, as an employee, may be pissed off at your employer.

3) DO take the needed time to explain why certain decisions have been made. Communicate.

4) Do not treat customers as being not being worthy of explanations, such as with company policies.

5) DO smile and even, where appropriate, use subtle humor.

6) Do not pretend that the crappy service you’re providing masquerades as being adequate–find another job.

7) DO be pro-active by thinking creatively on how what may appear to be an insurmountable problem actually has a solution. Place yourself in the customer’s shoes.

It’s becoming abundantly clear that most of North America’s airlines (notably the large carriers) could care less about customer service and giving people a pleasant flying experience. The major airlines have become bullies by implicitly colluding to jack up fees, squeezing out as much space as possible on their airplanes and making the bottom line the primary focus. The situation will likely deteriorate further.

In the case of Air Canada it’s a very sad story, that a wonderful gentle person who rarely flies was, in effect, bullied by a once-proud airline.

Those involved in Karen’s very unpleasant experience should all hang their heads in shame and reflect on whether they should continue working in the airline industry. And it’s very clear that leadership from the top of the company is missing in action. Until that is corrected, not much will improve in the area of customer service with Air Canada.


The customer’s perception is your reality.

Kate Zabriskie


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10 Valuable Lessons for Aspiring Leaders

October 6, 2014
happy-people1 The motivation for this post stems from my own leadership journey over the past 25-plus years, during which time I moved in and out of formal management positions, worked as a project manager, thought leader, and economist. After concluding a three decade career with the Canada’s public service in 2010, I did independent contract work for a few years and then returned to work in the private sector. Coincidently, I began my working career in the private sector in 1978, specifically in consumer lending.

In addition to learning a lot from a two-year Masters in leadership program in the late nineties, ongoing reading on new concepts and developments in the leadership field, and networking with like-minded people, many of my most powerful discoveries occurred earlier on in my career when I became a new manager. We like to talk about learning experiences, but mine were especially jarring as a young manager. But I picked myself up, dusted myself off and continued on. It’s all about learning through trial and error.

The following 10 lessons are not aimed at just those who wish to move into managerial positions; they’re also for those who work as project managers, team leaders, thought leaders, relationship builders, etc. And of particular note is that those holding senior positions in organizations should reflect on these lessons.

It’s important to remember that management is an appointment to position; leadership is earned. If you have no willing followers, then you’re not a leader. You may rule through dictate and compliance as a manager, but to have a true followership means enrolling others in your vision.

Young People Here are my ten lessons. And please note that they are not in any particular order.

1) Create and nurture a learning environment where people develop the skills and competencies that will become their toolbox for life. Don’t expect traditional loyalty to the organization. As a leader, your job is to bring out the best in people and to maximize their creativity, productivity and output.

2) Constantly walk the talk. Don’t be a cave dweller, hiding out in your office behind a closed door. And don’t just be physically visible but be present in body, mind and spirit. Oh, and park the smart phone when you’re at meetings and speaking to people.

3) Show that you really care about the people you lead and with whom you work. Don’t nickel and dime people on their work hours. If you set the right tone and climate in the workplace, you’ll see an impressive increase in people engagement, creativity and accomplishment.

4) Develop an effective BS meter, where you know fact from fiction, truth from hype. By avoiding getting swayed by organizational manipulators and by sticking to your values, people will respect you all the more.

5) Realize that organizational cultural change is not a tactical exercise in ticking off the task list. It’s about people engagement and relationships. It takes time and patience – plenty of the latter.

6) Link training and learning to job performance and when it’s needed. But it’s also necessary to take the long view: investing in people for the long-term demonstrates your commitment to them.

7) Be honest when you ask for feedback, whether from small or large groups. Bringing people together at workshops, conferences, townhalls, etc. to generate ideas and recommendations, and then to ignore them, is the ultimate act of disrespect. Honour and value people’s contributions.

8) Focus on results. Let people figure out how to do their work. Coach, but don’t smother them. Micro-management is for the insecure, and something to avoid at all costs.

9) Share the leadership. Step back when you realize that you’re not the best one to lead at the moment, regardless of how high you are in the hierarchy. Let go of your ego.

10) As a leader you’re also a change agent. Be open to outcome, not attached to it. Learn to love the unknown and the opportunities and challenges it presents. Know fear; respect it; value it; transcend it.

So there you have ten lessons for leaders at all levels. This is certainly not the definitive list of what leaders need to pay attention to, but it’s a start. It will help guide you through tumultuous times, keeping you focused, energized and centered. I’ll give the last word to 6th Century B.C. Chinese philosopher, Lao-Tzu:

A leader is best when people barely know he exists, not so good when people obey and acclaim him, worse when they despise him. But of a good leader, who talks little, when his work is done, his aim fulfilled, they will say: “We did this to ourselves.”


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Revisiting Teamwork Fads

September 28, 2014
Sky Divers “What goes around, comes around.”

This well-known expression is intended typically in a negative context. In this post I’m adapting it to fit within the organizational bureaucracy, specifically on the topic of teams and teamwork. I’ve written plenty on teams in the past (see links at the end of this post), given my extensive past work, both within the public and not-for-profit sectors.

What’s unfortunate is that fads on team work, as with numerous other management fads (Management by Objectives, anyone? Or how about Total Quality Management), fade away, only to resurface later, promoted by those who either who don’t have a clue about teamwork or who are trying to make a quick buck.

Let’s take matrix teams (matrix management) as an example. First off, don’t confuse these with cross functional teams, several of which I formed and led in years past and which worked very well when it came to addressing project-specific organizational issues.

My first hands-on exposure to working in a matrix team setting was when I moved to Ottawa in 2000 when I worked for the federal Department of Transportation. Matrix teams were in vogue in the regional office in another federal department where I had worked for many years. I just hadn’t been subjected to them.

At Transport Canada, the split reporting relationships to team leaders proved hugely confusing at times, with the leaders (managers) engaging in frequent conflict over priorities and deadlines. Indeed, I recall watching the leaders argue at times over who had the priority with respect to getting staff to do specific work. To put it bluntly, in a matrix team environment if the leaders don’t have their shit together then tensions rapidly rise, leading to stressed employees, a loss of productivity, delays in getting results accomplished and a loss of focus on customers or clients.

Third post Pic Matrix teams – matrix management can quickly become a lose-lose proposition for all stakeholders involved unless particular attention is paid diligently to team dynamics and that the right individuals are chosen to function as leaders.

In the nineties another fad struck: self-directed teams. I took training courses on this new fad, which to me at the time seemed really exciting. Except that two key criteria must be present if a self-directed team is to have a chance to succeed:

a) the composition of the team: people who want to assume responsibility and to be held accountable,

b) the team’s members are very clear on the inter-dependency of their efforts and, especially, how it connects with the organization’s broader purpose and goals and the context in which the team is operating.

Self-directed teams can be messy creations, but produce longer-term lasting results. However, some situations demand strong individual leadership roles, with more formal team reporting relationships, such as para-military organizations, construction and the financial industry.

Kevins Entrepreneur and social media guru Derek Sivers, founder of CD Baby (an independent music online seller which he sold several years ago), recounts in his book Anything You Want his experience with self-directed teams. Sivers took a hands-off approach to managing as his small online business became a huge success. He wanted his employees to manage themselves. However, he came to realize that while good in theory his new management approach caused problems relating to customer service and productivity.

There is no perfect solution to how people should work together, and that applies especially to the concept of teams and teamwork. Check out these links at your leisure to explore the different dimensions of teams: the good, the bad and the ugly.

Are You Frozen by Too Much Collaboration and Teamwork?

Rethinking Teams, Getting over the Guilt Complex

Lessons in Teamwork: Winning Despite Trenchfoot, Leeches and Hunger

Is Your Team Really a Team?

The Five Levels of Teams

How Do You Build Team Performance?

What Kind of Team Player Are You?

The Four Stages of Team Development

Turning People on to Teamwork


The ability to perceive or think differently is more important than the knowledge gained.

– David Bohm


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Under-Promise, Over-Deliver: Amazon’s Dropped Ball

September 21, 2014
sad-face I have an admitted obsession with customer service. It all started in 1978 when, as a new college grad with a B.A. in economics, I worked in consumer lending. Half of my job involved building loan and mortgage business; the other half required me to hit the road in the company car to collect delinquent loan accounts. In those days, it was none of this current day harassing phone calls (I did that, too). If you wanted money paid back you knocked on doors and hoped you didn’t get the crap beat out of you.


I lasted two years. At that point we had a little girl and I was finding it really distasteful hounding single moms for their monthly family allowance cheques. I quit my job and went back to university to earn a Masters degree in economics. I lucked out during the nasty 1981-82 recession and bagged a job with the federal government, where I worked for three decades. My most challenging, rewarding and inspiring work was working in and managing service branches. Working in policy units in the nation’s capital, where I transferred to from a regional office after almost 20 years, was a soul searching experience.

I love customer service. And it’s why, after leaving government four years ago, I work in retail, the last year being in outdoor gear and apparel.

It’s a buzz helping people. They learn from me, and I learn from them. That’s the reciprocity of customer service; it’s not a one-way street if it’s done properly.

One thing I learned long ago was to honor promises made. There is nothing more frustrating than being a customer and being told that something will be done–guaranteed–only to discover days later that your item isn’t in, that an invisible employee forgot to follow-up, or that the call center rep didn’t input the notes into your file that she promised to do.

Always under-promise, and over-deliver.

ALWAYS.

Tom Peters, the ultimate customer service champion, emphatically tells you that. Follow this advice and not only will your job as a customer service champ be easier but your customers will hug you. Yes, I’ve been hugged–by guys– at work. Usually they just shake my hand. If only they knew how rewarding it feels to be acknowledged by a hand-shake and a sincere thanks. Money means nothing in this context. It’s about two humans connecting at a brief moment in time, one helping the other.

That brings me to a story. Yes, one of my many stories.

happy-face-sad-face As much as I try to patronize local stores, sometimes, for whatever reason, I’ll order online. I tried eBay a few times and the experience was good. However, more recently I’ve ordered from Amazon on several occasions. For specific, hard-to-obtain items Amazon’s pretty good. Just a few weeks ago I ordered two small items for my smart phone. I wasn’t going to pay Rogers Communications the outrageous prices they demanded.

Amazon has been bugging me for a while to try out their Prime service, which costs $99 per year and has a two-day delivery service. In the case of my recent small order, I could use Prime, free for a month, and get the two items delivered with no shipping charge and with a guaranteed delivery date. Okay, I’m in, I decided. Maybe the 99 bucks is worth it.

I placed my order at the end of the week and received an email which included the statement that my order was guaranteed for delivery on the following Monday. Pretty cool, I thought.

Monday rolled around and after Canada Post dropped off the mail in the afternoon I checked my mailbox. No Amazon order. What??? This was not life and death stuff, let alone of national importance. But a “guaranteed” delivery date is a guarantee. Period. You can’t negotiate that. Well, okay, maybe I’m being a bit rash. Had there been a tsunami I would have been more understanding. But I live 1,000 kilometers from the Atlantic Ocean. Hurricanes? None that week. Tornadoes? Not in this neck of the woods.

So I emailed Amazon since I was curious what they would say. I received a number of replies, in what became a circular, mind-numbing loop. Here’s a sample of an email reply on Amazon’s failure to meet its Guarantee promise under Prime:

Hello from Amazon.ca,

I’m sorry to hear that your order didn’t arrive by the estimated delivery date.

We are aware that our choice of delivery services reflects on our business as a whole, and we understand your concern. I have passed your message along to our shipping department, as I know they will want to read about your experience.

In my experience, late packages arrive not long after the estimated delivery date. Please wait until end of September 9, 2014 before requesting a refund or replacement. Otherwise, you might have to deal with returning a package.

September 9 is just an estimated date to consider this order as lost. I’m sure that your order is still in transit, you can expect the order to be delivered soon.

We’re aware that our choice of delivery services reflects on our business as a whole, and our shipping department will take appropriate action against the carrier.

Unfortunately, in spite of all of our efforts, there can sometimes be unforeseen delays, and in this case we would ask that you wait a little longer.

We take full responsibility if any item become lost or damaged while being delivered and we’re more than happy to replace these items at no additional charge.

Occasionally, the carrier website does not display any information for a delivery confirmation number. But the vast majority of packages still reach their destination, even when no tracking information is listed online.

To ensure you receive this shipment, I’ll personally keep track of your package and send another e-mail on September 10. If you haven’t received your package at that time, I’ll make sure to get a refund or replacement for you.

One of our aims at Amazon.com is to provide a convenient and efficient service; in this case, we haven’t met that standard. I’m truly sorry, and I hope you’ll give us another chance in the future.

We look forward to see you again.

Best regards,
Priyadharsini S


Guy yelling at phone There’s a lot of mumbo jumbo in this email reply, in all likelihood a form letter with fill-in-the blank specifics. Indeed, it’s such a pathetic reply that I broke out laughing at one point, since every time Amazon sent me an email it asked for my feedback on three customer service points. Each time I responded honestly, which produced poor scores, which in turn prompted another email. It had the potential to become a never-ending loop, reminiscent of Bill Murray in the film Groundhog Day.

As I pointed out to Priyadharsini, he was incorrect in his statement on estimated delivery. Guaranteed means what it is: Guaranteed. There’s no room for Amazon to maneuver on this point. It failed to meet its Prime guarantee, and the company needs to be called out on this aspect of its service, which is usually quite good. And as I listen to online music stations I keep heating the Amazon Prime ads with the two-day delivery promise. And no, Priyadharsini never followed up as he promised.

The lesson for Amazon and any other company–small, medium or large–when it comes to customer service is this: Always under-promise and over-deliver.

Always.

It’s clear to me that Amazon has become so big that it’s losing contact with its customers. In that case, the company may already be over the top of the curve; all that’s needed is for an emerging service (competitor) to beat Amazon’s sloppy customer service.


Customer service is not something to be negotiated, debated or frittered away; it’s something to be nurtured 24/7.

– James Taggart


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Stress Test: Leadership through Integrity and Humility

September 14, 2014
Tim I never liked Timothy Geithner from the start when his tight-lipped, grim face began appearing regularly on the nightly news during the 2007-2008 financial meltdown and the ensuing Great Recession. Although he was the president of the Federal Reserve Bank of New York and subsequently Treasury Secretary, he came across in the media as shifty, arrogant and a man not to be trusted. That perception held until 2014 when I became enlightened.

I’m usually a very good judge of character, something passed on to me by my late dad. Tim Geithner, to me, was a fat cat, a Wall Street clone who was protecting the CEOs of the huge banks and investment companies who came close to collapsing the international financial system.

And then I saw Geithner interviewed on a few talk shows during the release of his new book, including Jon Stewart’s The Daily Show (ironically, Stewart’s show was one of the few that Geithner regularly watched during the financial crisis). Geithner seems okay I thought to myself. He seems pretty self-deprecatory in his use of humor and not caught up with a big ego, and he’s smart and very knowledgeable on financial crises. Given my long work career in economics I decided to buy Geithner’s book Stress Test: Reflections on Financial Crises.

It was a wise decision on my part, not just because the book is incredibly informative on what took place behind closed doors during the lead-up to the financial meltdown and subsequent efforts to mitigate the effects of the Great Recession, but because I viewed Geithner through a leadership lens.

What emerged clearly for me is an intelligent man who exhibited a high degree of personal integrity during his tenures running the Treasury and the New York Federal Reserve Bank. Both he and his wife sacrificed hugely during the span of five years. He was regularly beaten up by the press and suffered false accusations by Congressmen who knew better. Yet Tim Geithner kept his head high and maintained his sense of humor and self-dignity throughout. His propensity for self-deprecation is especially prevalent in his book.

Fed Reserve2 As he states in the closing pages of his book: “…despite the stream of absurdity emanating from Capitol Hill, Congress did not ultimately block us from doing what needed to be done to save the financial system and the economy. In fact, at moments of extreme peril, enough of the nation’s lawmakers–mostly Democrats, occasionally joined by a few Republicans–were willing to do the right thing to prevent an already tragic situation from metastasizing into a second Great Depression.”

He recounts how President Obama at the start of his second term took Geithner’s wife, Carole, for a walk at an event. Obama knew that Geithner wanted out of Treasury, having worked tirelessly for four years. However, Obama stated unequivocally to her that “I can’t let Tim go now. I need him.” The President, who delegated to Geithner and others during the financial crisis and recession because he knew they were capable of effectively addressing the problems.

One of the most surprising aspects to Tim Geithner’s key involvement during the crisis was the widely held perception among the public, politicians and the media that he had worked on Wall Street, similar to Treasury Secretary Hank Paulson (former CEO of Goldman Sachs). Geithner never worked on Wall Street, or in the financial community for that matter (it’s only since leaving Treasury that he now works for a private equity firm). He was a policy wonk, with a Masters degree in international relations and economics, who worked at the New York Federal Reserve and then as Treasury Secretary for four years after Paulson left. It’s actually amazing how some senior members of Congress at committee hearings insisted that Geithner had worked on Wall Street.

What this says is how closed minded we can be on issues where our mental models have become so cemented that when faced with the truth we still cling to our incorrect views.

Tim 2 One aspect of Geithner that especially resonated relates to leadership. He recounts earlier in his book that as the new president of the New York Federal Reserve he insisted that in his briefing notes that the phone numbers be included for the staff who prepared the materials so that he could call them directly with questions. This may seem like a small point, but it speaks a lot about Geithner’s leadership and respect for people. Two Canadian public service examples come to mind.

At the federal level, where I worked for three decades, one incredibly bright and hardworking deputy minister, who later became the Clerk of the Privy Council and head of Canada’s public service was Kevin Lynch. When he was deputy minister of the Department of Industry Lynch was known for insisting that lower level managers and indeed the policy analysts who prepared the briefing notes be available for questions. This is rare in the public service, where big egos and hierarchy are the order of the day.

A second example was at the provincial level, in a province where I spent my first two decades in government. Premier Frank McKenna, who worked grueling hours as he strove over the 10 years he was in office to pull the province up by its boot straps to be less dependent on federal handouts, operated similar to Kevin Lynch. McKenna was also known to walk into a policy analyst’s office, bypassing senior management, to ask a question or to express his thanks.

This is about leadership, and Tim Geithner measured up to the best. His humility combined with insight is striking. Here he is talking about his lack of confidence early on in the financial crisis when the prevailing view was that derivatives and other financial innovations were designed to distribute risk:

“I had no particular knowledge or insight into whether the new financial innovations were stabilizing or destabilizing, but I was reflexively skeptical of excess conviction in any form, especially excess optimism. …in this new age of mobile capital, trauma in one part of the world or one corner of the financial system could spread quickly. I didn’t see how a few years of calm or some clever financial innovations would cure the basic human tendency toward mania and self-delusion. History suggests that financial crises are usually preceded by proclamations that crises are a thing of the past.”

Tim3 Geithner is also able to very clearly paint a picture of just how bad the situation was at the outset of the financial meltdown, something that is still poorly understood, thanks to a largely financially illiterate media and some prominent right-of-center economists who don’t seem to have gotten it. As Geithner eloquently puts it:

“We had just suffered a financial shock worse than the one that had led to the Great Depression. Market volatility was more than a third higher than it had been after the crash of 1929; bond spreads would rise more than twice as high; the percentage of household wealth lost would be more than five times worse than in 1929.”

Stress Test is an excellent book, one that will be a go-to source years down the road as future economists, policy wonks, politicians and business people try to understand why the world’s financial system came to the brink, only to be saved by a handful of dedicated people who clearly understood the consequences of inaction.

Add it to your reading list.


Most consequential choices involve shades of gray, and some fog is often useful in getting things done.

– Timothy Geithner


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Lead Through Mutual Commitment, Not Compliance

September 7, 2014
Angry Male BossI was a young greenhorn economist with just a tad of related work experience. I’d worked in consumer lending after college for two years, but had grown disgusted with the countless hours I had to spend collecting loan arrears, knocking on doors and harassing single moms. So it was back to university for two years, all the while our first born was still in diapers.

So I thought I’d hit the jackpot when in the midst of the 1981-82 recession I scored a term job as a labor market economist with the Government of Canada, in what was then called the Department of Employment and Immigration. My annual income shot up 100%, and not long after starting I got on full time. I thought things were pretty good, though we still didn’t have a car, so taking a toddler on the bus to the grocery store and doctor’s appointments was always a challenge.

But I liked my work, except for one key aspect: in contrast to the finance company branch manager I’d had a couple of years previously, whom I respected as a good boss, my new government boss was completely different. Bruce was a control freak, and a mean one. When he arrived at work, always after we underlings were already busy writing reports (no PCs then), he would stop, all six foot two of him, survey his mini kingdom, taking everything in, then walk into his office.

Bruce managed through compliance (perhaps ruled is a better word). He was always trying to find fault with our work, insulting us, ridiculing us in the presence of our provincial colleagues and other federal regional office employees. He took great joy in his approach to what some could euphemistically call “leadership.”

It took two years, but Bruce was almost fired twice by his boss, the region’s executive head. Bruce’s transgressions were:
a) having an affair with a young female economist (Bruce’s marriage subsequently collapsed),
b) abuse of managerial power.

Yes, the federal government takes its time getting around to some HR issues. But it snapped Bruce out of his control-oriented approach to managing and after that he became an okay boss. He moved to Ottawa a few years later and your correspondent became the branch manager for the next six years.

Angry Female Boss I learned a lot from that two-year experience (hell-hole is not an over-exaggeration). And it was a few years later when I was leading a team of economists that I switched executive bosses from what I’ll describe as a deceitful executive male boss to a progressive female boss. Louise and I would cement a wonderful working relationship which lasted many years (indeed, while we’re both retired from the federal government and live 1,000 miles apart we still stay in touch).

It’s amazing how shifting from a compliance mindset, where managing is transactional: do this task and you stay on the payroll; to mutual commitment: you share in your leader’s vision, feel valued and are trusted. It’s a world of difference.

I well recall a conversation I had one day in Louise’s office back somewhere around 1999. I was moaning about problems I was having with some of my managerial peers who were pushing back on a change initiative. Louise turned to me, looked me straight in the eye and stated emphatically: “Jim, when you represent me at meetings you have my power.”

Powerful words, which I’ve never forgotten.

Leading through mutual commitment versus managing through compliance (tantamount to fear) produces a very different dynamic in an organization. And for an organization, public or private, to reap the economic benefits of leading through mutual commitment it is vastly preferable to do so from the top. When a CEO, president or deputy minister practices this type of leadership and demands it of her senior managers, then the process will cascade down through the organization.

Trying to inject leading by mutual commitment at the middle level, all the while contending with an executive office compliance mindset, is not just very difficult but probably futile in the end.

Tiger2 Cultural change typically comes slowly to large bureaucracies, especially governments. Therefore, to change how leadership is practiced requires the organization’s top managerial leaders to demand it and to live this every day through their actions.

Employees want to contribute to their organization’s success. They want to be treated like grown-ups. And they want to be held accountable for their assigned tasks and projects. But you can’t accomplish this when you work in fear of being humiliated by your boss when he’s having an insecure moment, or not knowing if your boss has your back when you make a mistake, or not receiving constructive feedback on your work.

Managing through compliance has no place in today’s organization. The world is changing too fast, with new economic competitors demanding that companies be agile and quick to respond to marketplace changes. Governments (national, provincial, state and municipal) need to ensure that taxpayers’ dollars are spent wisely and efficiently. And not-for-profit organizations, in the face of competing for limited funds, need to enable their employees to be at their best.

You can’t achieve any of the above if employees–human beings–are running scared with their heads down, too scared to look up and question their bosses’ actions.

Throw managing through compliance out the window and embrace leading people through mutual commitment.


Rigid identities give rise to rigid organizations.

Margaret Wheatley


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