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History, Leadership, and a Vision for Corporate Life
By James O’Toole, Graduate School of Business, University of Southern California
In 1983, Max DePree served as Chief Executive Officer of Herman Miller—one of “the 100 Best Companies to Work For in America.” Herman Miller was extremely profitable, ranking 7th in terms of total return to investors over 10 years. They were the industry’s most productive in terms of net income per employee.
As a leader, Max—like his Dad who founded the company—believes in the rule of “abandoning oneself to the strengths of others” and trusting the strengths of all Herman Miller employees.
Employees care for the company’s success because they are owners. 100% of employees who have worked there at least a year own company stock, and more than 50% regularly purchase shares in addition to those that come as a benefit of employment. DePree likes to say, “Around here, the employees act as if they own the place.”
A 1988 Fortune poll picked Herman Miller as one of the nation’s “ten most admired companies.”
The leader is the “servant” of his followers in that he removes obstacles that prevent them from doing their jobs. In short, the true leader enables his or her followers to realize their full potential.
The true leader is a listener. The leader listens to the ideas, needs, aspirations, and wishes of his followers and then responds appropriately.
DePree says, “Leadership is an art, something to be learned over time, not simply by reading books… Leadership is more tribal than scientific, more of a weaving of relationships than an amassing of information.”
On Diversity
DePree explains that understanding and accepting diversity enables us to see that each of us is needed—admitting that we cannot know or do everything.
In fact, diversity allows each of us to contribute in a special way—to make our special gift part of the corporate effort.
What Is Leadership?
The last responsibility of a leader is to say thank you. In between the two, the leader must become a servant and a debtor.
The signs of outstanding leadership appear primarily among the followers. Are followers reaching their potential?
Try to think about a leader, in the words of the gospel writer Luke, as “one who serves.”
Leaders should leave behind them assets and a legacy. Leaders can decide to be primarily concerned with leaving assets to their institutional heirs or they can go beyond that and capitalize on the opportunity to leave a legacy—one that provides greater meaning, more challenge, and more joy in the lives of those whom leaders enable.
Leaders owe a clear statement of values of the organization. Values should be broadly understood and agreed to and should shape our corporate and individual behavior.
Leaders are responsible for future leadership. They need to identify, develop, and nurture future leaders.
Leaders owe people space, space in the sense of freedom. Freedom in the sense of enabling our gifts to be exercised—space to grow, to be ourselves, to exercise our diversity.
Leaders are obligated to provide and maintain momentum. Momentum comes from a clear vision of what the corporation ought to be, from a well-though-out strategy to achieve that vision, and from carefully conceived and communicated directions and plans that enable everyone to participate.
Leaders are responsible for effectiveness.
Leaders can delegate efficiency, but they must deal personally with effectiveness.
Leaders must take a role in developing, expressing, and defending civility and values.
Participative Premises
The most effective contemporary management process is participative management, which begins with a belief in people. However, participative management is not democratic. Having a say is different from having a vote.
Leaders need to foster environments and work processes within which people can develop high-quality relationships. Here are five steps to turn ideals about relationships into reality:
- Respect People.
- Understand that what we believe precedes policy and practice (both corporate and personal value systems).
- Agree on the rights of work. Rights: to be needed, to be involved, to have a covenantal relationship, to understand the corporation, to affect the destiny, to be accountable, to appeal, to make a commitment.
- Understand the respective role and relationship of contractual agreements and covenants.
- Understand that relationships count more than structure.
Consider this: would you rather work as part of an outstanding group or be part of a group of outstanding individuals?
Everyone’s Gifts
In almost every group, nearly everybody at different times and in different ways plays two roles: creator and implementer. This key relationship is often misunderstood in the light of “boss” and “subordinate.” Hierarchy is inappropriate. Oftentimes, implementing has to be as creative as the creative act to which it is responding.
Here are 8 Essential Rights of Employees:
- The right to be needed. Can I use my gifts?
- The right to be involved. Here are three elements of employee involvement:
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- System of input: Leaders must arrange for involvement on everybody’s part;
- System of response: A great error is to invite people to be involved and to contribute their ideas and then to exclude them from the evaluation, the decision-making process, and the implementation; and
- Take action: Translate our interaction into products and services on behalf of our customers.
- The right to a covenantal relationship. Covenantal relationships fill deep needs, enable work to have meaning and to be fulfilling.
- The right to understand. Together, we need to understand our mission. Everyone has a right to understand his or her career path. We need to understand our competition and understand and be “at home” in our working environment.
- The right to affect one’s own destiny. The processes of performance evaluation, promotion, and transfer should always take place with the person’s involvement.
- The right to be accountable. Employees should be given opportunity to share in the ownership of the group’s problems and also the inherent risk. At the heart of being accountable is the matter of caring.
- The right to appeal. We need to offer a nonthreatening avenue of appeal to ensure against arbitrary leadership.
- The right to make a commitment. To make a commitment, any employee should be able to answer “yes” to the following question: Is this a place where they will let me do my best?
Roving Leadership
Roving leaders are those indispensable people in our lives who are there when we need them. Roving leaders take charge, in varying degrees, in a lot of companies every day.
Roving leadership is a key element in the day-to-day expression of a participative process. Roving leadership is the expression of the ability of hierarchical leaders to permit others to share ownership of problems.
Roving leadership demands a great deal of trust.
Intimacy
We should be concerned with intimacy when we design the organizational structures which, after all, are the road maps that help us to work together.
Intimacy with our work directly affects our accountability and results in personal authenticity in the work process. A key component of intimacy is passion.
Three of the key elements in the art of working together are how to deal with change, how to deal with conflict, and how to reach our potential.
Covenantal relationships induce freedom and rest on shared commitment to ideas, issues, values, goals, and management processes. Words such as love, warmth, personal chemistry are certainly pertinent.
Whither Capitalism? (1 Corinthians 9:7-9)
To understand the capitalist system, begin with a concept of persons.
From 1 Corinthians 9:7-9: Who serves as a soldier at his own expense? Who plants a vineyardand does not eat its grapes? Who tends a flock and does not drink the milk? Do I say this merely on human authority? Doesn’t the Law say the same thing? For it is written in the Law of Moses: “Do not muzzle an ox while it is treading out the grain.” Is it about oxen that God is concerned?
DePree explains, “As a Christian, I believe each person is made in the image of God. God has given people a great diversity of gifts. So, God has provided us with a population mix for which leaders are held accountable.”
Leaders who have an inclusive attitude think of themselves as owing the following:
- Space: A gift to be what I can be
- Opportunity to Serve
- Gift of Challenge: We don’t grow unless we’re tested
- Gift of Meaning: Not superfluous, but worthy. Not superficial, but integral; not disposable but permanent.
Inclusive capitalism requires something from everyone. People must respond actively to inclusiveness, recognizing that being faithful is more important than being successful.
Corporations can and should have a redemptive purpose.
We need to become vulnerable to each other, willing and ready to take risks. We need to be learners together.
Giant Tales
Giants see opportunity where others see trouble.
As a company, we strongly believe that the diversity of the population must be reflected in our company’s population.
Here are two lessons from Giants:
- While productivity is important, giving space to giants is much more important.
- Giving space to giants lets them and others practice “roving leadership.”
These two lessons may, from time to time, be hard on the hierarchical leadership. But if you want a corporation to be truly effective, you will need to help corporations be open to giants at all levels.
Tribal Storytelling
We are dedicated to quality.
The dictionary recommends looking up the word honor to describe integrity: “A fine sense of one’s obligations.” This is the way to look at quality.
We are committed to a high sense of initiative in doing everything we can to make capitalism an inclusive system of relationships, not an exclusive structure of barriers.
Who Owns This Place?
In the position of owners, we become more accountable for our personal performance. Owners cannot walk away from concerns. So, the accountability of all of us begins to change.
The capitalist system cannot avoid being better off by having more employees who act as if they own the place.
Communicate!
In most vital organizations, there is a common bond of interdependence, mutual interest, interlocking contributions, and simple joy. Part of the art of leadership is to see that this common bond is maintained and strengthened, a task certainly requiring good communication.
Communication through behavior happens all the time. Information is power but it is pointless power if it is hoarded. Power must be shared for an organization or relationship to work.
Communication performs two functions, described by words of action:
- Educate: Lead or draw out. Only through communication can we learn the needs and demands of our customers. We also convey and preserve a common corporate vision.
- Liberate: Good communication liberates us to do our jobs better. It’s as simple as that. Good corporate communication allows us to respond to the demands placed on us and to carry out our responsibilities. Leaders can use communication to free the people they lead.
An increasingly large part that communication plays in expanding culture is to pass along values to new members and reaffirm those values to old hands.
New and Different Ideas
DePree was asked, “What is one of the most difficult things that you personally need to work on?” DePree responded, “The interception of entropy.”
Signs of entropy include:
- Tendency toward superficiality
- Dark tension among key people
- No longer having time for celebration and ritual
- Growing feeling that rewards and goals are the same thing
- When people stop telling tribal stores or cannot understand them
- Recurring effort by some to convince others that business is, after all, quite simple
- People begin to have different understandings of words like “responsibility” or “service” or “trust”
- Problem-makers outnumber problem-solvers
- Folks confuse heroes and celebrities
- Leaders seek control rather than liberate
- Pressures of day-to-day operations push aside our concern for vision and risk
- Leaders who rely on structures rather than people
- Loss of confidence in judgment, experience, and wisdom
- Loss of grace and style and civility
What’s Next?
Reviewing performance should be done in a timely way, with the direct involvement of the person whose performance is being reviewed. Both the people and the process should be directed toward reaching human potential.
Mahatma Gandhi once wrote that there were seven sins in the world:
- Wealth without work
- Pleasure without conscience
- Knowledge without character
- Commerce without morality
- Science without humanity
- Worship without sacrifice
- Politics without principle
Performance considered in light of those seven sins would be a well-reviewed performance indeed.
Promoting Senior Leaders…
The Herman Miller company requires several things from leaders, including personal performance and achievement but also the potential for continuing growth and accountability. Leadership appointments should be more a matter of expectancy and challenge than of reward, personally, professionally, organizationally.
The organization requires several things from the people chose to be future leaders:
- Integrity (Personal character must be uppermost)
- Cherishes heterogeneity and diversity
- Open to contrary opinion
- Communicates easily at all levels
- Leads through serving
- Vulnerable to the skills and talents of others
- Intimate with the organization and its work
- Able to see the broad picture
- Spokesperson and diplomat
- Tells why rather than how
When talking about leadership, one always ends up talking about the future, about leaving a legacy, about the most important aspects of an organization: its people and its future. DePree explains, “We need to proceed very slowly and carefully.”
DePree’s Last Words:
The visible signs of artful leadership are expressed, ultimately, in its practice.
May you practice the Art of Leadership, as you shoot for the stars!