VALUES ARE THE KEY TO BUILDING VALUE

In previous posts I covered highlights from the outstanding line-up of thought leaders who spoke at The World Business Forum, 2009. (An Afternoon Of Concern and Contrast at The World Business Forum) One of the big observations that came out of the conference concerned an enlightened view of profit that encompasses both hard and soft assets.

More and more of today’s CEO’s now see a three tiered metric of profit as essential to building a strong and sustainable company. Dollar profit for fiscal sustainability. Emotional Profit of company stakeholders for a sustainable corporate culture and ethos. Greater Good Profit that extends benefits beyond the company for sustainable connected communities.

Now there is a study that seems to confirm that this enlightened profit perspective may do a lot more than just make a company CEO feel good. Valuing and building soft assets can actually be the key to delivering even better financial results and a healthier, stronger company. Recent research shows that CEOs who make it their business to place a higher priority on stakeholders’ interests and well-being rather than a relentless pursuit of  delivering dollar profit come out on top.

The research,entitled Unrequited Profit: How Stakeholder and Economic Values Relate To Subordinates’ Perceptions of Leadership and Firm Performance was conducted by some top people in the their field: Mary Sully de Luque, of Thunderbird School of Global Management; David A. Waldman, of Arizona State University West; and Robert J. House, of the University of Pennsylvania. Their findings are based on survey data gathered from 520 business organizations in 17 countries, including emerging markets. Here’s how the authors summed up their study.

We were testing the hypothesis that if a CEO’s primary focus is on profit maximization, employees develop negative feelings toward the organization. They tend to perceive the CEO as autocratic and focused on the short term, and they report being somewhat less willing to sacrifice for the company. Corporate performance is poorer as a result.

It turns out that this reordering of priorities and balanced perspective generate greater workforce engagement and extra effort that in turn yield significantly better operations and superior financial results. There also appears to be some risk to a CEO’s leadership effectiveness associated with a “profit above all else attitude”… the mantra of many a “hard driving” CEO. The exclusively profit driven CEO is seen as an autocratic leader and is less likely to garner employee commitment.

The values driven CEO is seen as a visionary, a motivator and is more likely to positively influence loyalty and inspire “extra effort”. He or she is viewed as a kinder, more empathetic breed of CEO superhero. This wholistic view being embraced by CEOs is Asset-Based Thinking at its best. It builds upon core asset-based leadership communication skills we call S.O.S. Leading with Substance. Sizzle. Soul. The hard assets of performance and skills are the substance…costs of entry. Sizzle is the personal style and presentation that gets attention. Soul is “why” it is personally important and meaningful….the secret ingredient that makes it all work.

I recently read a New York Times article about new values based organizations and business cultures and this bit of sage Asset-Based Thinking advice from Brandon Busteed, co-founder of Outside the Classroom really resonated with me. “Run like a business, act like a nonprofit, care to be better.”

Simple, smart, savvy advice for any business, non-profit or anyone just involved in the business of life.