LEADERSHIP & ETHICS

Leadership is the art of mobilizing others toward shared aspirations. Leaders must take care of employees who, in turn, are responsible for taking care of customers, stakeholders, and related outside parties, such as the government and the community, in an ethical manner. This approach also considers implications for the environment and results in profitable growth combined with an increase in the welfare of all parties involved.

Great leaders are visionaries whose intuition helps them to recognize and capitalize on business opportunities in a timely manner. Their success is based on surrounding themselves with like-mind professionals who complement them to help reinforce their strengths and eliminate their weaknesses. They build teams consisting of individuals who complement one another in a way that ensures consistent performance in line with corporate goals. This is in direct contrast to mediocre leaders who surround themselves with yes-people who, by their very nature, are unable to contribute positively to the bottom line!

In situations where consensus cannot be reached, they have an uncanny ability to cut to the chase and make informed decisions. They foster an environment that encourages the sharing of ideas through brainstorming.

True leaders realize that business involves human beings and that profitable growth results from fruitful relationships. Formal power is entrusted to them by virtue of their position in the company. Informal power results from their core belief system. They lead by example, thus earning the respect and admiration of their peers and subordinates. As a result, employees are enthusiastic about going beyond the call of duty for ethical leaders. 

Great leaders structure employee compensation packages in a way that promotes and reinforces the right behaviors and rewards people on the basis of individual as well as team performance. They believe that a base salary pays the bills, whereas variable compensation, including earnings before interest, taxes, dividends and amortization (EBITDA)-based bonuses, motivates employees to challenge themselves and increase their contribution to the firm on a consistent basis. These leaders find reasons to pay bonuses as opposed to those leaders who find reasons to deprive employees of bonuses they truly deserve!
Ethical leadership calls for morals, fairness, caring, sharing, no false promises or unreasonable demands on others, etc. Is ethical leadership an oxymoron?

Ethics:

Ethics is concerned with "doing the right thing" but moral standards differ between individuals depending upon their upbringing, traditions, religion, social and economic situations, and so on. Hence, the existence of grey areas. Therefore, state the “moral” problem in a simple manner and review feedback so that an acceptable decision can be made with minimal overall harm/lossi.e., we are concerned with Pareto optimality, which is related to the net balance of benefits over harm for society as a whole.

Although most businessmen believe that proints and cash now are very important, there has been a move toward the recognition of social responsibility.

The blind pursuit of proïntt has resulted in bribes, environmental problems, injured workers, unsafe products, closed plants, and so on—this is unethical. Many business schools emphasize the philosophical, rather than the practical aspect of ethics. We need a practical approach to the solution of ethical problems.

I have a policy of distributing free abridged versions of my books on leadership, ethics, teamwork, motivation, women, bullying and sexual harassment, trade unions, etc., to anyone who sends a request to crespin79@hotmail.com.
Maxwell Pinto, Business Author
http://www.strategicbookpublishing.com/Management-TidbitsForTheNewMillenium.html

Battlefield Innovation Lessons for Business Leaders

Let's be clear, business is not war. But if you are operating in a fierce marketplace then it can feel like it. Many of the methods we use in our sales campaigns, marketing strategies and competitive tactics are based on military analogies. So what lessons can business leaders today learn from the history of warfare? Here are some that seem particularly relevant.

David vs. Goliath - 1000 BC?

Goliath was a giant and the Philistine's champion at man-to-man combat. David was a young shepherd boy. Goliath expected to overwhelm his opponent in a sword fight but David chose to fight on different terms. He defeated Goliath by using an unusual weapon, the sling, with pinpoint accuracy.

Lessons: It is no use going up against someone who has an 8-ft spear with a 4-ft spear. You need a different weapon. If you are smaller you have to be agile and different. If your competitor is the giant in the market, you need a radical approach so that you can strike rapidly and accurately. This is what Direct Line did when they used telephone technology to sell car insurance directly while the major players were using brokers.

Battle of Crecy - 1346

The English army of about 14,000 men under Edward III had ravaged northern France. They were finally confronted on August 26, 1346 by an army of some 40,000 Frenchmen under Philip VI. Battles were normally fought by knights on horseback and the French, with such a numerical advantage, felt confident. But the English had a new and superior technology, the longbow. Their archers were trained in rapid fire and could sustain a rate of over 10 arrows per minute. Each arrow could penetrate armor. It was the first time that such a mass volley of arrows had been used in warfare. The French attacked in waves and they were cut down relentlessly by the power, speed and range of their opponents' archers.

Lessons: One of the best ways to beat an established competitor is with a new technology. Innovation can overcome a strong opponent. Focus your firepower on the target. Amazon used internet technology to directly address the needs of book buyers and to run rings around the established high street vendors.

Battle of Trafalgar - 1805

Traditionally, naval battles were fought by lining up two fleets in parallel line so that they could deploy the maximum firepower from their canons. At the battle of Trafalgar, Villeneuve, the French admiral, formed his fleet of 33 ships into a line. But Nelson did not line up in parallel. He split his 27 ships into two squadrons and attacked at right angles to the French line. In the hectic battle that ensued Nelson died but the British were victorious and established a naval supremacy that lasted over 100 years.

Lessons: If you do not have a superior force or superior technology then try a different tactic. Surprise your opponent with a fresh approach. Virgin, Benetton and Body Shop are examples of businesses that used surprise tactics to disrupt incumbent market leaders.

First World War - 1914 to 1918

The scale of the slaughter of soldiers in World War I was appalling. Over 8 million military personnel died. The main tactic on the western front was to repeatedly attack strong defensive positions with waves of men. They were massacred. It was believed that with sufficient artillery bombardment and pure weight of numbers a breakthrough could be achieved. But the way to overcome barbed wire defenses and machine gun posts is not with lines of infantrymen. What was needed was the rapid development and effective deployment of the tank.

Lessons: Effort, courage and hard work are not enough. If you are competing with a well-entrenched opponent who has a strong defensive position then you need a new technology or approach to achieve a breakthrough. A long war of attrition debilitates both sides. Retail banking was a stodgy business until Egg, First Direct and Cahoot came along to shake it up and take millions of accounts away from the big players.

Maginot line - 1940

The British and French high commands assumed that the new war with Germany would be similar to the First World War, with huge static armies facing each other. The French built a massive defensive line along the entire border between France the Germany, the Maginot line, consisting of enormous fortifications. But when the Germans attacked in May 1940 they did some lateral thinking. They used fast-moving armored divisions and paratroops. They swept through Holland and Belgium and around the Maginot line. The British and French were outmaneuvered and France fell in five weeks.

Lessons: Assuming that new contests will be similar to previous ones is dangerous. The best way to combat an opponent who has a strong defensive position and barriers to entry in a market is to go around those barriers and find a new way to the market. This is what Direct line, Amazon, Netscape and Easyjet did.

Battle of Britain - 1940

After the fall of France, the British retreated across the Channel, leaving most of their equipment behind. The German army, having raced across Europe was rampant while the British army was demoralized and under-equipped. The Germans planned an aerial assault followed by an invasion, and many thought that Britain would fall as quickly as France, Holland or Poland. But the British had some things that the others had not - the channel, the Spitfire, radar and Winston Churchill. Churchill gave the people a vision, purpose and belief that enabled them to sustain the blitz, oppose the might of Germany and eventually triumph.

Lessons: In tough environments, winning CEOs are those who have a clear vision, can communicate it to their people and motivate them to achieve the goal. Sir Arnold Weinstock, Bill Gates and Jack Welch are recognized as this type of visionary leader.

Defeat of Hitler - 1945

After his great successes in the early part of the war, Hitler was convinced that he was a military genius and the German Wehrmacht could overcome any obstacle. When he attacked Russia in the summer of 1941, he was so confident of victory that there were no plans for a winter campaign; no winter coats for the soldiers and no winter oil for the tanks. He ignored the advice of his generals and pushed his forces down towards Stalingrad and then refused to allow them to withdraw or regroup when the communication lines became overextended. His arrogance and overconfidence built a barrier to criticism and meant that he never used the full talents of his team. Eventually Germany was overwhelmed by the weight of Russian, American and British forces.

Lessons: A narcissist CEO will lead the business to disaster. Plan a fallback scenario. Strong vision and belief are essential but a leader who blocks constructive criticism, ignores the input of his team and fails to build consensus is doomed. To mention them by name would be libelous but take your pick from the CEOs who have led mighty companies to disaster in recent times.

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Paul Sloane writes, speaks and leads workshops on creativity, innovation and leadership. He is the author of The Innovative Leader published by Kogan-Page.

Opportunity equals risk

Entrepreneurs, just by their very nature, are greater risk takers than the average person on the street. In most cases, the process of starting a business requires that the owners put everything they have worked for on the line, based on a belief that their efforts will lead to success. And once the risk of starting up is over, other risks…with the potential of even greater opportunity…continue to tempt business owners.

Large contracts, new products, partnerships, and expansions into new markets are just a few of the reasons entrepreneurs need to take a serious look at placing the business at risk again. When an opportunity comes along, the hard question is, “Is the risk worth the possible reward?” Although there is no foolproof way to answer this question, when the following six questions are answered honestly, making a decision becomes easier.

What is my tolerance for risk? This is the first and most important question that must be asked. One business owner may be content putting his business on the line every year, while another person may be unwilling to put her business at risk unless the probability of success is very high. Both are correct.

To succeed at a venture, especially one that involves substantial risk, you need to understand how you feel as you go through the process. If high stress, unhappiness and sleepless nights will be the end results of the decision, it is obvious that the opportunity is not worth the reward. And a successful outcome is less likely.

What is the probability of failure? It is this question that burns most business owners because they are not honest with themselves when they answer it. Many opportunities have come wrapped in paper that says, “You Can’t Lose!” When a person starts to believe the wrapping paper, it is obvious they have not completed their homework.

One hard rule every entrepreneur needs to follow is: If you do not have the time to determine what the downside is, pass on the opportunity.

What could be done to reduce the risk? Although it may appear so at the time, risks are seldom fixed. If you look at the opportunity creatively and objectively, there are often many ways to decrease the downside and reduce the risks.

For example, when a manufacturer of plastic molded parts was offered a large government contact, the company needed additional capacity that was going to cost over $500,000. Although the contract was lucrative and expected to last for years, it contained a clause stating that it could end with a 90-day notice. After carefully reviewing the situation, the company decided to reduce its risk by subcontracting with a competitor to make some of the parts. By sharing some of the profits, the risk was substantially decreased.

What is the contingency plan? Even though the majority of time and effort spent evaluating an opportunity will not, and should not, be directed towards the downside, it is important to have a back-up plan. The contingency plan needs to start with the question, “If the worst were to happen, what could I do to recover?”

From there, a step-by-step plan can be designed. The major value of having a contingency plan is that if the ship starts sinking, benchmarks and plans to take action have already been devised. A contingency plan can also help keep you focused on going forward with the knowledge that a back-up plan is in place.

What do your trusted advisors think? At times like this, you need to rely on the opinions of your advisors. Talking to the company’s accountant, banker, attorney, or other “solid” business people can provide a wealth of information based on their professional or life experiences.
The purpose of listening to these individuals is not necessarily to do what they say, but to build a foundation of information upon which to base the decision.

What do your instincts say? No matter how crazy it may sound, you need to listen to one more opinion source—your gut-feeling. Many great businesses were formed despite conventional wisdom that said they were impossible.
Fred Smith created overnight service with Federal Express when everyone said it couldn’t be done and no one would pay for it. Disney World was started despite comments that no one would want to go to central Florida for a vacation. This is not to say these individuals jumped in blindly. Just the opposite is true. Each one listened, researched the pros and cons, and understood what had to be done in order to succeed. However, parts of their decisions were based on their gut-feelings that the rewards were worth the risk.

If your instincts and mind do not agree, stop and determine what could be causing the difference. Although there may be no scientific proof as to why instincts are correct, they are often the results of information missed by the conscious mind. If, despite all of the positive information something stills feels wrong, think twice…or three or four times…before risking your business.
Are the answers to these questions foolproof? Of course not. That’s why they call it risk. But by answering these six questions, chances are you will be right more often than not.

BusinessTruth® : Opportunity equals risk. You must manage it wisely.

 By: Laddie Blaskowski

Underestimation

“Pretend inferiority and encourage his arrogance.” Sun Tzu

It is good to be underestimated in business.

Most entrepreneurs want to be a media darling, land venture capital and star in their own movies. But arguably, it is even better to be the underdog — deemed inferior and not worth watching.

In recent months, “Google’s Bradley Horowitz fired back at Mark Zuckerberg’s claim that the company is “building its own little Facebook” saying that Google is “delighted to be underestimated” by its rival.” Why, because Horowitz and others who have been vastly underestimated realize the depth and breadth of competitive advantages that await them.

If you’ve ever been underestimated in business remember that “You can’t connect the dots looking forward; you can only connect them looking backwards (Steve Jobs).”

Never give up, because:

1. Henry Ford failed and went broke five times before he succeeded.

2. Beethoven’s teacher called him “hopeless as a composer.” He then went on to write five of his greatest symphonies while completely deaf.

3. R. H. Macy failed seven times before his store in New York City caught on.

4. Albert Einstein did not speak until he was 4-years-old and did not read until he was 7 … teachers described him as “mentally slow, unsociable, and adrift forever in foolish dreams.”

5. Walt Disney was fired by a newspaper editor because “he lacked imagination and had no good ideas.”

6. After his first audition, actor Sidney Poitier was told by the casting director, “Why don’t you stop wasting people’s time and go out and become a dishwasher or something?

The underlying theme is simple; underestimation is a distinct competitive advantage.

If you’re developing a new technology (and you’re underestimated) you can be first to market. As a startup you can virtually fly under the radar and solidify your position, as Pinterest did — going unrecognized for four years and suddenly being coined an “overnight success.”

Last year, “the creators of Angry Birds (Rovio studios) announced that they had taken $42 Million in funding. They currently hold the record for the best selling iOS game ever. There is talks of a movie being produced featuring Angry Birds.” But most don’t know that the guys over at Rovio spent eight years working on other games before they finally caught a huge break.

There is tremendous power in being underestimated – leverage it.

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Erica Nicole is the Founder and CEO of YFS Magazine