The Week in Ethics: How Market Basket’s Board Misread Employee Engagement

Posted July 26, 2014 by Gael O'Brien
Categories: Culture, Governance, Leadership, Trust

Tags: , , , ,

In a battle of cousin against cousin, how important is the culture of a family owned business?  Thousands of voices among the 25,000 employees and the customers who shop at the 71 New England locations of Market Basket (a supermarket chain with $4 billion in annual sales) have made clear in their rallies and online petitions that culture does trump everything.

They are demanding the reinstatement of former CEO Arthur T. Demoulas ousted last month by his cousin Arthur S. Demoulas and a majority of the board now controlled by him.

It is hard to imagine employees of Goldman Sachs, or most other companies for that matter, taking to the streets and putting their jobs on the line in support of an ousted leader. Or that customers would also stand up to fight for the value they received.

However, employees on a Save Market Basket Facebook page align with customers and vendors saying “Together We are Market Basket.” They took to Facebook to make clear they will refuse to work for anyone beside the ousted Demoulas. While the impact of the protests has huge business implications (reports indicate business was down 70 percent this week), it also demonstrates what employees are willing to risk for jobs they love and a leader who inspired the culture behind it.

As a result of protests this month, store shelves are depleted, deliveries aren’t made, and customers are staying away at the request of employees to put pressure on the board to rehire Arthur T. Demoulas. The drama continues to escalate as the board already hired two co-CEOs to replace him, the new leadership team has fired some employees for their role in the protest, and the ousted CEO made an offer to buy out his cousin and other family members. The board said in a statement July 25, 2014 that it will review Arthur T. Demoulas’ bid and others they receive, but they expect all employees to return to work (promising there will be no retaliation for the protests).

Current and former Massachusetts and New Hampshire state and local elected officials praised the company as a leading corporate citizen with most announcing support for the employees’ position:  The Lowell Sun reported that a statement by a number of officials said in part: “…the leadership of Arthur T. Demoulas is the reason Market Basket has been able to keep prices low while delivering quality products to mainly under served areas. The current actions of the board and officers is one motivated by greed and will only serve to destroy the legacy the Demoulas family has worked generations to establish.”

The “good guy” stories that employees have shared about the former CEO reaffirm what they say it felt like to work for a company where they felt respected — paid more than industry average — and part of a culture where they were seen, heard and cared about. Employees give Arthur T. Demoulas high marks for walking the talk about what it means to be a family business.

Interviewed at rallies, employees gave examples of things Arthur T. Demoulas had said or done that mattered: he remembered employee names, knew who had a child or spouse with a health crisis and would seek that employee out in store visits to see how things were going and then remember the conversation the next time.

Customer and employee loyalty is in short supply in most businesses, especially where relationships are simply transactional. When a leader makes it more than that, he or she can inspire trust, allegiance and transform how those who work and shop there experience a business. It can feel like community.

Market Basket under Arthur T. Demoulas apparently demonstrated it was a business that had soul.

In a tug of war of competing visions, Market Basket’s new board majority misread how compelling soul was to employees and customers. Or without it just what it is they will have to sell.

The Week in Ethics

Gael O’Brien, July 26, 2014

Gael O’Brien is The Ethics Coach columnist for Entrepreneur Magazine. She is also a columnist for Business Ethics Magazine where her July column is “American Apparel: Sex, Power and Terrible Corporate Governance.”

The Week in Ethics: Marathon Runners and Lessons of Resilience

Posted April 22, 2014 by Gael O'Brien
Categories: Leadership

Tags: , , , , , , , ,

photo (26) The 2014 Boston Marathon grew into a symbol. It wasn’t just a race; it was about facing down hate and destruction with community and courage.

It showed how runners, spectators, individuals and families affected by the 2013 bombing at the Marathon finish line handled tragedy and came to embody and teach resilience.

It is also became a story of how a city known for past divisiveness became One Boston.

Tragedies breed choices. A fitting legacy of the April 2013 bombing would be that a city acting as one community feeling a shared sense of loss and purpose in running to help those injured, then in honoring those killed, and then in supporting those grieving and healing would demand of itself that it sustain the spirit of humanity that has characterized much of the last year (with a lapse or two), insisting on nothing less from itself going forward.

Martin Richard Marathon Memorial (326x159)In the weeks after the 2013 bombing, a memorial sprung up a block away in Copley Square for tributes: to eight-year old Martin Richard (see left), 29-year old Krystle Campbell (known for her beauty and kind heart) and Boston University graduate student Lingzi Lu killed by the bombs; MIT police officer Sean Collier murdered the next day by the bombing suspects; and the 264 people seriously injured in the bombings.

In the April 21, 2014 Boston Marathon, many of the 36,000 runners had the names of those who died or were injured on their bibs or in their hearts.

There have been tragedies in all-too many cities and towns: including  places like Sandy Hook Elementary School (Newtown, CT), a movie theater (Aurora, CO), Sikh Temple (Oak Creek, WI), Columbine High School (Littleton, CO),  Oklahoma City, New York City, Boston and any street where drunk drivers, drive-by shootings or other acts of violence claim lives.

In the aftermath, there are families, neighbors, friends, strangers, businesses, runners and others who step in, give voice to values and heart to actions. They offer help and encouragement when acts of man or nature create such pain those impacted are stopped in their tracks.

And when the time is right, there is the metaphor of the marathon, a spirit of humanity that lifts others up, taking them with it, so that in the movement forward the signs of hope that fuel resilience are more evident.

Through it all there is leadership…..servant leaders who act with humility and empathy, holding a belief in what is possible as they quietly lead the way.

And if a city is lucky, there are enough of these leaders so that the spirit of community, the sense of One Boston, One Anyplace, can be sustainable.

The Week in Ethics

Gael O’Brien, April 22, 2014

Gael O’Brien is The Ethics Coach columnist for Entrepreneur Magazine. She is also a columnist for Business Ethics Magazine where her March column is “How a Culture of Purpose Can Help Business Thrive.”

 

 

The Week in Ethics: GM’s New CEO

Posted February 13, 2014 by Gael O'Brien
Categories: Diversity, Leadership

Tags: , , , , , , , , , , ,

Update: March 27, 2014, GM CEO Mary Barra will testify before Congress next week, answering questions about consumer safety and the process (a decade before she became CEO) of how GM handled faulty ignitions without recalling cars impacted (which resulted in at least 12 deaths). NYT piece speculating about what in GM culture might have contributed to its ethical failures in behavior here.

This column originally appeared in Business Ethics Magazine, January 30, 2014 entitled “GM’s New CEO: Demonstrating How Less Can Be More.” This week (February 10, 2014) GM Chairman Theodore Solso  announced new CEO Mary Barra’s “total compensation is in line with her peer group and properly weighted so that most is at-risk.” Her salary had originally been reported as lower than her predecessor’s, giving rise to criticism about gender bias.

I’m reminded of a line in the lyrics of a song from the movie My Fair Lady which asks, “Why can’t a woman be more like a man?” Seeing the film at an impressionable age, the refrain lived in my head for years. Was the message that women needed to be more?

The very small number of women who’ve made it into the CEO pipeline has given rise to ongoing articles analyzing why so few, and research by Catalyst and others making the case for diversity. Currently, less than 5 percent of Fortune 500 companies and less than 10 percent of the Fortune 1000 are led by women.

In January 2014, Mary Barra, an engineer and General Motors (GM) veteran became its first woman CEO. In spite of a number of talented women in leadership positions at GM, a woman leading GM or any global automotive company is a well-heralded first. Also in January, with far less media acclaim, another woman engineer from another field considered traditionally-male become CEO of a Fortune 500 company. Jacqueline Hinman was promoted after a long career at CH2M Hill, a global engineering firm.

The start of the new year brings the total of women heading Fortune 500 companies to 23 or 4.6 percent. In cross referencing their backgrounds, 16 were promoted internally after being tested in many roles. Of the seven brought in from the outside, four have been CEOs five to ten years so far, and the remaining three (HP’s  Meg Whitman (2011), Avon’s  Sherilyn McCoy (2012) and Yahoo’s  Melissa Mayer (2013) held long-term senior positions at their previous companies. Whether an insider or outsider is a good CEO fit depends on factors like personal attributes, strategy, execution, support, culture, and how they engage others to work for the company’s success.

Given the tiny pool of women CEOs, there is the understandable lament of the loss to organizations of not having more senior women. And beyond diversity of gender and ethnicity, the critical need to have more diversity of thought, approach to problems, and ways of leading that bring out the best from stakeholders. Because there are so few women CEOs, there is also a danger that in celebrating them we can go too far — celebrity status conferred on, cultivated or accepted creates a rock star status which when associated with leadership has real risks.

Barra has had a low key reaction to the considerable attention about her heading the 7th ranked Fortune 500 company. When asked about being an inspiration to women, she replied  she hoped her credentials as an engineer make her a role model to inspire young men and women to go into science.

She has deflected focus from herself to GM’s products and team, which suggests she will successfully resist rock star celebrity, something that characterized much of Carly Fiorina’s tenure at Hewlett Packard (HP) 15 years ago when she became the first woman to lead a Fortune 20 company. (There were only eight other women CEOs on the Fortune 500 list when she was ousted in 2005 when her approach didn’t yield expected results.) Yahoo’s Mayer in her first year continues to attract significant visibility as a CEO, mom and geek fashionista, with a personal brand “hotter” than her company’s.

Celebrity and leadership generally aren’t a sustainable combination because when the focus is allowed to stay on the leader and not redirected back to the organization, it becomes a story of “I” and not “we” which leaves the company and employees behind. While there may be short-term publicity value if a CEO becomes a darling,  as JP Morgan’s Chairman and CEO Jamie Dimon did after the financial crisis, attention allowed to stay too long on the leader backfires, especially when a company makes mistakes.

It has only been four years since GM emerged from reorganization and bankruptcy after a federal government bailout. Expectations for Barra’s leadership are enormous against the backdrop of a turnaround occurring in an unpredictable, constantly changing global environment. However, by not letting it be about her, the entire company is called to meet the challenge.

In interviews about her leadership attributes, colleagues have volunteered Barra has a passion for GM and its products, focuses on team building, seeks consensus, is fact-based and decisive, “an outstanding listener,” challenges thinking about assumptions and is very methodical, logical and fair. Others have pointed to her openness and inclusiveness, active seeking of others’ opinions, lack of big ego and “the self-described ‘nerd’ qualities that guide her gut.”

Many of these qualities are also reflected in general in women’s leadership styles. “What Women Bring to the Exercise of Leadership”  cites a 2008 Pew Research Center study where 2,250 adults (almost equally split between men and women) “ranked women better than or equal to men in seven of eight primary leadership traits.”

And yet, how hard it continues to be in many organizations for women to be given opportunities that allow them to be considered for the top jobs. Time and experience teach us that no gender, male or female, should be THE standard in leadership. To the degree that has been ignored in an organization, women have had to work much harder to do and be “more.”

“More” is an archaic standard that only fuels more and higher expectations that can cause good people to bow out because leadership seem too great a sacrifice. Or can self-justify why the story is about “I” not “we.” The more the expectations, compensation and hype are ratcheted up and accepted, the greater the chance of failure for all concerned.

Photo: © General Motors

The Week in Ethics

Gael O’Brien, February 13, 2014

Gael O’Brien is The Ethics Coach columnist for Entrepreneur Magazine. She is also a columnist for Business Ethics Magazine where this column was originally published.

The Week in Ethics: Why Purpose Matters to Leaders

Posted January 24, 2014 by Gael O'Brien
Categories: Leadership, Social Conscience, Social Responsibility, Sustainability, Trust, Uncategorized

Tags: , , , , , , , ,

Leaders who unite their teams around a purpose beyond creating profit redefine what is possible. They show a road map for how collectively each person can have a positive impact on customers, an industry, community, and society. The lens these leaders hold up allows individuals to see how they can make a difference, a key element in employee engagement.

We don’t hear a lot about companies that are focused on a bigger purpose because they are far less likely to derail and become headlines in scandals or crises. They are grounded by company values which creates a common language and sense of “we,” which is a ballast in the constant change of our unpredictable world. Unilever and its Sustainable Living Plan is an illustration of purpose in action that is part of a business strategy. It sets out a plan that expects the company to double in size while also decreasing its environmental footprint and increasing the company’s positive social impact.

Business can no longer afford to be a bystander,” according to Unilever’s CEO Paul Polman, “content to sit on the sidelines doing the minimum necessary to acquire its ‘license to operate.’” Polman is also one of the founding leaders of the B Team, a global initiative calling for a new kind of leadership — more inclusive and driven by a moral compass. The B Team seeks to redefine obligations to stakeholders — replacing maximizing profit with a focus on people, planet and profit.

The “business as usual” short-term profit lens has spewed out all kinds of red flags morphing into the recent financial meltdown among other problems. Last fall, a Washington Post column “How the cult of shareholder value wrecked American business” addressed the “self-reinforcing cycle in which corporate horizons have become shorter and shorter” with reduced CEO tenures and patience for the long-term, as well as the decreased average time stocks are held (now less than six months).

The irony, columnist Steven Pearlstein wrote, is that the focus on maximizing shareholder value hasn’t actually done that much for shareholders.  “My guess,” he said, “is that it will be a new generation of employees that finally frees the American corporation from the ­shareholder-value straightjacket. Young people — particularly those with skills that are in high demand — today are drawn to work that not only pays well but also has meaning and social value.”

The push for purpose has many advocates in addition to Gen Y employees. The impact social entrepreneurs are having on creating positive social change as well as global giants like Unilever demonstrate that innovation, financial gain and societal benefit can fuel each other. Research also supports that purpose is as great a motivator as profit as Daniel Pink pointed out in Drive.

Purpose matters.

Inspired leaders know, says Simon Sinek, that “people don’t buy what you do, they buy why you do it.”

The Week in Ethics

Gael O’Brien, January 23, 2014

Gael O’Brien is The Ethics Coach columnist for Entrepreneur Magazine. She is also a columnist for Business Ethics Magazine; her December 2013 column is “Why Do Good People Do Bad Things? The Role of Spiritual Intelligence.”

The Week in Ethics: Is Ethical Leadership Contagious?

Posted July 24, 2013 by Gael O'Brien
Categories: Code of Conduct, Culture, Ethical Behavior, Ethical Leadership, Influence, Integrity, Leadership, Tone at the Top, Trust

Tags: , , , , , ,

If you were trying to foster ethical leadership in your organization, could anything make it “contagious?”

For starters, labeling it as “ethical leadership” might not take you as far as you’d like. How often do people say they are on board, “get it” and don’t need more?  While they might be willing to read about or take courses in strategic or global leadership, for example, many equate ethical leadership with what they learned growing up; if they need to spend more time talking about it, it might look like they are deficient in Golden Rule 101.

That’s the problem with blinders leaders, high potentials and any of us can have about our own ethical development — why it can suddenly be hard to give voice to values (because we’ve never thought about a potential conflict that suddenly surfaces) or why decisions are made weighing only legal and financial consequences (without noticing the potential for unintended ethical consequences) or why we need to be right.

When we talk about ethics and leadership in organizations, we need to translate it into values and behaviors we want visible in the culture that in turn build off a company’s values. While we say that ethical leadership encompasses the highest personal and organizational standards that vagueness creates an abstraction where everyone “gets it”  in theory, and can overlook it in practice.

Our language sets up creating the norm of what the organization stands for — and the behaviors supporting that — which then demystifies and brings the type of leadership we want to see and cultivate into day-to-day reality. If those qualities are talked about in examples and stories when the CEO meets with the board, direct reports and others; if they are linked to business success, reinforced in informal and formal mentoring programs, meaningfully incorporated into performance reviews, and play a role in why people get recognized, promoted or let go: the norm can be imitated and then owned.

Emotional Intelligence (EQ) is increasingly being reinforced in organizations as a way to develop leaders and help them succeed. (See Daniel Goleman’s What Makes a Leader.) Reinforcing EQ reinforces attributes important in ethical leadership so it is a win-win.

Some resources for thinking about how ideas can take hold in a culture include Contagious: Why Things Catch On by  Jonah Berger (video above) and the books that fueled his thinking: Gladwell’s The Tipping Point and the Heath brothersMade to Stick.

Applying that to what could make ethical leadership contagious involves first looking at what  natural advantages exist in your culture to tap into to help ideas take hold. Then, what ideas might offer perceived value. For example, creating a special leadership forum site with links to good articles, blogs, book reviews and news stories fosters leadership development that reinforces the norm you want, with triggers to keep the subject top of mind, while saving leaders’/potential leaders’ time in finding useful information they can apply and share with others. Launch it with a sense of exclusivity: perhaps needing a password. Enlist the support of admired leaders in the organization to make reference in meetings to an article on the site they liked, and find other ways to have the site talked about and positioned as a place high potentials go for useful leadership tips. Who wouldn’t want to be considered “high potential”?

How do the values and attributes of ethical leadership become contagious in organizations?

They are modeled by the board, CEO and other leaders. They are talked about and interrelated with business and personal success. They are mentored and cultivated, enmeshed in the culture’s stories and allied with how people feel/see they can make a difference. They are linked to reducing stress. They are connected to what stakeholders’ value, attached to what it takes to belong and reinforced throughout the organization.

Gael O’Brien July 24, 2013

The Week in Ethics

Gael O’Brien is The Ethics Coach columnist for Entrepreneur Magazine. Gael is also a columnist for Business Ethics Magazine; her November 6, 2013 column looks at whether loyalty is owed when a boss acts as a good leader. 


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