Lessons Learned: Basic Principles
by Vart Adjemian |
| Chief Operating Officer Vart Adjemian |
The
total collapse of the Enron Corporation, followed by the quick meltdown
of WorldCom, seriously put into question all the buzzwords and fancy
management theories that have been advertised and advocated over the
last few years.
Hopefully, the US justice
system will be able to get to the bottom of these and other companies'
shenanigans and unmask the illegal machinations. The integrity of
corporations has been shattered and the fallout for investor trust has
been dramatic.
Why did this happen?
One reason is that companies
became too concerned with fashionable concepts, such as demonstrating
entrepreneurial, charismatic leadership or visionary zeal, and began to
see these as the measure of their success. This led to a neglect of the
basics, and in many cases to unethical and greedy conduct bordering on
intentional fraud. It’s true that vision, creativity, and
entrepreneurial spirit are all important qualities that can make an
organization and a person successful, but in the process the more
fundamental traits of discipline, integrity, honesty and common sense
should never lose their critical importance and weight.
Moreover, another crucial
point should not be overlooked: businesses exist to make money for
their owners, whether the shareholders of a public company or the
owners of private companies. All businesses have other important
constituencies: customers, employees and the communities they work in,
but when investors, who put their capital at risk, ultimately evaluate
the business, the bottom line has to be the bottom line. This is basic.
In my opinion, investor confidence will not be restored until companies
start producing profits consistently.
There is no question that
the world is changing. It has changed continuously--imagine when
electricity and telephones were first invented--and will continue to
change. We can even argue that the scale and pace of change are greater
today than at any time in the past. But this does not mean we should
stop practicing the timeless principles that have proven to be right.
We need to get rid of smoke and mirrors and go back to basics.
In the recently published book Good to Great
by Jim Collins, business leaders have been rated at five levels, 1-5.
Level 5 is the highest level in a hierarchy of executive capabilities
that were identified by the research team.
As food for thought, here is
a summary of the qualities that make up "Level 5 Leadership." It is not
a revolutionary new concept. It basically reconfirms and asserts
qualities that time and time again have proven to be right, to work
well and produce results.
- "Level 5 Leaders embody a paradoxical
mix of personal humility and professional will. They are ambitious, to
be sure, but ambitious first and foremost for the company, not
themselves.
- Level 5 Leaders set up their successors for even greater success.
- Level 5 Leaders are fanatically driven, infatuated with an incurable need to produce sustained results.
- Level 5 Leaders display workmanlike diligence, more plow horse than show horse.
- Level 5 Leaders look out the window to attribute success to
factors other than themselves. When things go poorly, however, they
look in the mirror, taking full responsibility."
These are simple and clear principles--more important today, and more crucial for effective leadership, than ever before.
Vart