Demand Ethical Leadership

Mom passed away early Christmas morning.  Her passing was a peaceful release from the body she was trapped in.  Thank you for the kind expressions of concern you offered over the past weeks regarding my mother and mother-in-law’s death.  At my age it’s strange to feel orphaned, but that’s my unshakeable feeling.

As I am preparing a eulogy for Mom, one of the things I most admire about her was her ability to somehow both forcefully and gently remind the strong men in her life to be virtuous.  Mom was kind and empathetic.  Living through a massive Depression followed by a World War that involved all her four brothers tends to amplify your compassion.  Today we live in times that call each of us in the same way.

So this morning I am watching the news about thousands of layoffs being announced by various companies across many industries.  Most of these layoffs are unethical acts of powerful leaders who think it’s responsible business.  It’s not.  It’s moral cowardice masquerading as a practical business decision.  I’m not just ranting here.  I am stating the most obvious flaw of financial capitalism that has emerged over the past 40 years.  This flaw is that short-term actions can generate short-term financial gains while destroying long-term value.  Business leaders are incented to cut jobs, investment, research, new technology and worse, pollute, mis-state earnings, corrupt lawmakers, and an endless list of shenanigans that hurt us all.  All of this, whether it’s legal, is immoral.  Here’s why.

The core standard of ethics is the mandate to never cause avoidable suffering.  Period. Is it asking too much?  Or does it ask us simply to be morally responsible for the consequences of our decisions?

One way to judge suffering caused by business decisions is something called switching costs.  Ethics requires us to consider how much it costs to the person my decision impacts to switch to another company.  So for investors the switching costs are very low.  For instance, Toyota recently announced two things.  They will likely lose money this next year, and they will continue their no-layoff policy for full-time employees.  (They are doing extra employee training during their manufacturing slowdown.)  So if an investor in Toyota doesn’t like this policy, they can sell their stock or “switch” to another one in 30 seconds online.  Switching costs for investors are very low.  Next to consider are customers.  The cost of switching from one brand of product to another of equal value is also very low.  There are so many substitute products today that consumers’ switching costs are nearly non-existent.

So what about employees?  Consider your own situation.  What if you involuntarily get laid off from a profitable business during an economic downturn?  What are the “costs” of switching to a new job or industry?  Huge.  Gargantuan.  Brutal.  The American Psychological Association reports that the two biggest traumas that are the most difficult to overcome are loss of a spouse (death or divorce) and job loss.  The suffering caused by these two events has severe long-term consequences not only on the individual directly involved but also their families.  The U.S. Department of Labor reports that 40 percent of white-collar workers over 40 laid off in the past fifteen years never achieve their previous level of income. Illness, chronic pain, abuse, divorce, alcoholism, depression, and suicide are markedly higher among laid off workers.  Is this the kind of society we want?  If a company is making money or has ample resources to continue operating, is pleasing Wall Street the highest moral good?

Is this the best business leadership we can imagine?  The much admired Jack Welch championed shareholders over all others also pioneered the mass firing of workers of GE’s profitable businesses to increase earning.  Fortune Magazine honored him as manager of the century. Right.  What’s hard about firing people and demanding everyone else work harder so we can make more money for shareholders who churn stock holdings faster than bank robbers running for their getaway car?

So if we can agree that willfully causing human suffering is immoral then profitable companies who layoff workers are by definition behaving immorally.  Consider this.  We just “donated” $350 billion to America’s banks without any oversight and they just laid off tens of thousands employees.  Meanwhile they continue to hoard our money, choke off lending to other businesses and pay their executives for their outstanding performance.  Is that okay?  Is that just “aw shucks?”  If a business leadership cannot find productive ways to use bright, loyal, hardworking employees, whose fault is that, the employee’s or the leader’s?

So how can we fix this?  Not through laws.  If we pass no-layoff regulation we’ll only succeed in making sure people don’t get hired at all.  One of America’s great advantages is our fluid workforce that allows us to change jobs and careers whenever we choose.  The difference, of course, is that when we have a well-led economy rich with job creation then employees have a playing field where we can bargain with our talent.  When we have a corrupt leadership creating fake economic gains we have mass suffering.

So what’s the best thing we can do?

Make noise.  Buy from ethical companies.  Demand ethical leadership.  A revolution is happening right now.  Employees and consumers worldwide are demanding that Corporate Social Responsibility be more than cosmetic.  We are seeing major strides in the reduction of waste and increasing sustainability.  This is all due to yours and my demands for a better future.

Now is the time to demand that Corporate Social Responsibility begins with responsibility to employees.  If Toyota and Honda can keep their employees when the car business has collapsed then so can nearly every other business if they have a will to.

I once had a large client who was going through a massive financial implosion during the dot-com era.  Their woman President didn’t layoff a soul.  She instead sponsored huge strategy workshops involving every employee in creating either cost saving or income increasing strategies.  The entire process was led by a senior maintenance man.  Yes, crazy, idealistic….well it worked.  Within 12 months the company was minting money and growing faster than ever.  Do you know why this visionary leader did this when her board was encouraging her to slash and burn?  She told me, “Our problems came from bad leadership decisions.  Firing our employees would have been immoral.”

It’s time for a new kind of leadership.

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What do you believe?

First of all, thank you all for your kind and inspiring words regarding my mother-in-law’s sudden passing and my mother’s plight as an Alzheimer’s victim.  Your insights and personal emails really matter.  It is so heartening to participate in a community of thoughtful, compassionate people who are striving to make their difference and to live lives of genuine inspiration.

Today I thought I’d just plunge in and take a big chance.  I am talking about belief in the Divine.  I know, I know.  Why do I have to bring it up at all?  Nothing is more controversial.  And it is because it matters so much.  So here’s what I propose.  I’ll tell you how I think about belief and non-belief and you tell me what you think.  No matter what, let’s agree afterwards to still be friends.

As I see it, there are two general possibilities, two scenarios. Both scenarios have their supporters.  Both sides use science to back them up.

Scenario #1 is that we are “accidental humans;” the result of a cosmic chemical spill.  A random mass of colliding electrons guided by unseen forces that proceed without any cause or meaning. Under Scenario #1, consciousness is just a by-product of biochemistry––an epiphenomenon, as the scientists say. If we accept this possibility, then all meaning is self-invented, a comforting illusion to save us from despair. With Scenario #1 values are simply the preferences we invent to help us get along. When humans decide they are the pinnacle of all intelligent life, it opens the door to genocide and child abuse being just as legitimate as charity work because if there are no universal values, life is simply about survival of the fittest. If you think this is far out, consider the long list of early 20th century leaders that believed in selectively breeding out what “science” said were low IQ races: Woodrow Wilson, Theodore Roosevelt, George Bernard Shaw, John Maynard Keynes, William Keith Kellogg, Margaret Sanger, and Winston Churchill to name a few.  Eugenics was a very popular fake science.

This view of accidental humanity is quite popular among the highly educated. In fact, it has become de facto religion in most of our colleges and universities. Several well-known twentieth century tyrants used their own version of Scenario #1 to justify their actions.  We all know what happened.  It led to the slaughter of over 150 million of us. If Darwinism is the soulless mechanism of creation, what we end up with is a life based on competing for power instead of one of meaning.

I know there are people who claim religion has done more to harm humanity than non-belief ever has.  But all the wars, intolerance, and torture didn’t happen because of a belief in a divine unseen world.  It happened because humans are corrupt.  The fact that religion doesn’t tame man’s evil doesn’t mean that life is meaningless.  To the contrary.  It makes life’s intrinsic meaning even more important.

All attempts of the “accidental humans” camp to create secular meaning are in the end meaningless. After all, if meaning is made-up, then it really isn’t meaningful. And living without real meaning is not fulfilling—never has been.  It also makes science, art, spirituality, and love meaningless. Just diversions on the road to nowhere.

Scenario #2 says that there is something more to us.  It says that we are significant humans. We are part of something that goes deeper than the electrical wiring of our brain. We are connected to a greater intelligence, a transcendent spiritual energy that is at the core of everything.

Scenario #2 isn’t made-up woo-woo. It, too, has science behind it. Its reality begins with understanding E=MC2––Einstein’s discovery that matter and energy are one and the same and that energy cannot be destroyed, only transformed.  Every physical thing, according to Einstein, is really just energy in a particular form that our particular senses interpret as matter. And energy cannot be destroyed, only changed in form. We don’t actually live in a material world.  Matter is just energy.  It is technically non-material. And the name we commonly use for things non-material is spiritual.  Spiritual energy, imagine that.

What’s wild is that the laws that govern how energy changes form seem to depend on consciousness.  Decades of repeated experiments performed by scores of mainstream renown physicists have categorically shown that human intention powerfully affects the behavior of matter/energy.  Period.  It’s no longer up for debate.  In fact it’s this property of physics that makes electrons behave in ways that make electronic circuit boards possible.  It’s ironic that every computer chip is a reminder of an invisible unexplainable reality.

Our awareness is not an after-effect but a prerequisite. It comes first, not second.  Thanks to new super-sophisticated brain surgery we now have clinical evidence the individual human consciousness does not depend on our brain being alive.  That’s right.  We now know that we can have zero brain wave activity for prolonged periods and still have conscious awareness of what is happening while our brain is switched off.  Now that’s amazing. (If you want to read about a clinical account of independent human consciousness, read The Scalpel and the Soul  by Allen S. Hamilton M.D.

So in Scenario #2, we are not, at our essence, physical, biological hunks of matter that have learned to think. Rather our biological bodies are only the temporary manifestation of some essential, eternal energy––what spiritual teachers have for millennia called our souls. In that case, the source of our true desires and noblest intentions is much deeper than our individual story, our personality, or our brain chemistry. It is an abiding, universal consciousness temporarily housing itself in our body.

What’s the importance of all this? Well, if Scenario #2 is true, then most everything we tell ourselves is important isn’t. At least not in the way we think it is. With Scenario #2, our soul belongs to a deeper spiritual reality. And in that reality love does matter.  In fact, it matters most of all.  I don’t know about you, but I’m putting my chips on Scenario #2.

What do you think?

Love Giants

This past week has been an emotional Tsunami.  My wife and I were on a plane taxing down the terminal when she got a phone call that her mother, Barbara, had suddenly died.  Those are calls we refuse to believe will ever come.  Her mom was 74 and she had wrestled with the diseases of old age, among them diabetes and arthritis and two knee replacements, but her sudden death was unexpected.

In some ways she’d outlived her body.  Nearly five years ago when Barbara was racked with relentless arthritic pain and exhausted by serial illness she seemed to get very close to death.  My wife Debbie wouldn’t stand for it.  She sat on her mother’s bed and told her that she had to stay for her father’s well-being.  For reasons beyond reason her mom rallied and lived in a broken body with her big, zesty personality turned on high until last week.

What happened to Debbie’s dad, AJ, during these past five years was what was remarkable.  AJ was born to work.  He’s 80 today and still operates his business as if his pants were on fire.  But for the past 5 suffering years he also took care of his wife.  He learned to clean, cook and gently help her.  He took her shopping and out to lunch and often just sat and listened.  He learned patience and self-sacrifice in ways he’d never learned for his first 75 years of life.  All Barbara wanted was just to be with him.  Just in the same room.  Not that she was quiet.  We once took her to see My Big Fat Greek Wedding, and she shrieked so much unrestrained laughter the audience started laughing at her laughing.  Barbara loved life so much she fought for every sacred second of it.  But AJ was transformed by her struggle.  He went from just being a powerful man to a man overpowered by his own love for his wife.

Two days after Barbara passed, my brother Tom called to tell me my mother was slipping away fast.  She is nearly 91.  She’s lived a full and amazing life.  As a girl she ran like wind and could hit the long ball.  She played first base on an all boys team.  She married Dad, moved from Los Angeles to live on a cattle ranch and help build our tree house.  She was also a community leader and the prettiest mother in my school. Four years ago she got full-blown Alzheimer’s.  The tragedy of it was she knew she was losing her mind.  Her memories went from being on mental videotape to a slide show to just an empty slide tray.  She has steadily regressed.  She became a teenager again making silly jokes and pouting when she was limited from climbing the stairs.  Recently she became like a toddler having lost her vocabulary and having to point at what she wanted.  Debbie and I flew back to California and drove 6 hours to Mom’s house.  When I saw her I was shocked.  She has become as an infant.  She simply smiles now and holds my hand and strokes my face.  She’s peaceful.  She’ll probably live a few more months.  My brother Tom rearranged his business firm so he could operate out of Mom’s house for the past 4 years.  He hired a couple of aids to help him and he’s been the primary caregiver.  Tom is 55.  He’s in many ways a typical bachelor.  He has a messy room and loud ideas.  But what’s bigger are his ideals.  What’s happened to him is a transformation.  He is so kind, so loving, so caring to Mom it is nothing short of heroic.  The word selfless doesn’t begin to describe him.  And he says there is nothing he’d rather be doing.  He’s become a very tender man.

When Debbie and I got to the emergency room to see her mother’s lifeless body, I was struck with the realization that everything we think is important isn’t.  Not the daily life stuff, not the job stuff, not the geo-political stuff or the economic stuff.  What’s really important is how much we love.  It was plain to me.  And as for my brother and father-in-law…well, they are love giants.

ChangeING

I just finished a two-day leadership workshop for ING, the giant Dutch global bank, insurance, and investment company.  They were pretty calm despite the carnage of the financial services industry over the past six months.  It’s hard to rattle the Dutch.  They’ve endured everything:  World Wars, depression, and the great tulip bubble.  Their mantra is “steady, steady…now breathe.”  It’s a refreshing change from the shrieks and howls of Wall Street crybabies.

What struck me about ING is that they are on another planet (literally) about Corporate Social Responsibility than most American firms.  Just go to their homepage (ING.com) and click on Corporate Responsibility and prepare to be impressed.  As a huge international concern with 135,000 employees they are dedicated to educating the illiterate of our world with their Chances for Children program.  They hooked up with UNICEF to provide volunteers in places like rural Brazil, India and Ethiopia.  They are a serious player in microfinance, and they participate in just about every environmental heal-the-earth campaign around the world  (The FTSE 4 Good Index, Dow Jones Sustainability Index, the Carbon Disclosure Project, The European Academy of Business in Society, Equator Principles, Global Reporting Initiative, Oikocredit, Round Table on Climate Change, Amnesty Round Table on Human Rights, UN Global Compact, and several more.)

They also have a great start at integrating sustainable strategies to spur market growth and distinguish their brand.  In Europe they lease cars that rolls in fees to offset the cars CO2 emissions.  But their biggie is their social and environmental risk policies that they apply to every lending decision.  Loans will only be authorized if the purpose of the loan meets social and environmental criteria.  Huh?  I am sure like all big companies ING is not perfect at implementing its lofty ideals.  But that’s not the point.  What is amazing is the speed of the sustainability revolution.  When huge global organizations create policies and strategies aimed at creating a sustainable future we are witnessing the first energy pulses of a massive wave of change.  And it’s only the beginning.  But at least it is.

Insuring the Uninsured

Yesterday morning I helped the board of a Phoenix based non-profit develop a “business” plan to grow during our economic crash. Right now many non-profits are sucking air because people and businesses are thinking about their own survival and hanging on to their money.

This non-profit, the Keogh Health Foundation, is a master at doing the most good with very little. Their goal is to make sure every Arizona resident has health insurance, especially women and children because they are the most vulnerable. They go to poor neighborhoods and enroll at-risk moms and kids in one of the many underutilized public assistance insurance programs available. They’ve developed a simplified enrollment process that gets qualified people insured in 30 minutes via a laptop and Internet connection.

The Keogh Foundation is led by business people with a purpose. They’ve seen the statistic that insured poor children are sick far less than the uninsured. Yes, insured children cost taxpayers less money, and they do far better in school academically (68% better). It turns out that our massive number of uninsured, costs us far more when they finally do get health care than if they were enrolled in assistance programs already funded. And talk about an efficient non-profit. The average cost for the Foundation to get someone access to health care is $6. That means for every $6 raised by the foundation, another mother or child is covered. The Foundation also teaches seminars helping people understand how to get job training, apply for a job and of course get health insurance. What we did this morning was develop sources of sustainable funding to expand their program and create strategies to involve college students as volunteers to help enroll the uninsured.

Whenever I help smart people with projects like this I am greatly encouraged at the quality of our civil society. This Foundation is run primarily on brainpower. Its budget is tiny and its impact is huge. The real capital that supports this organization is vision, intelligence and energy.

It was started by one woman. A woman who just decided to do something about the uninsured. She started without a formal plan but with a noble idea and practical view of reality. The reality of, “How do we erase the barrier of bureaucracy to get the benefits of our tax dollars used for what they are intended for.” Then she surrounded herself with knowledgeable colleagues and just started. One thing led to another and last year 72,000 people got access to health insurance that otherwise would not have because she did something. 72,000!

So what’s the greatest thing we can do…whatever you’re waiting to do when the time is right.

The time is right. Just start.

This Election is Only the Beginning

This weekend I flew up to Las Vegas to meet my wife and her father and mother.  Debbie’s mom and dad were making their annual trek south to Arizona to get relief from arthritis.  Her dad is 80 now and his willingness to drive 12 hours a day is a little scary.  And speaking of scary, Las Vegas on Halloween night is downright frightening.  What people seem willing to do when they are anonymous is a little out there.

We were up early on Saturday morning and made the drive to Phoenix.  What I found was a state buzzing about the Presidential election.  It seems even here in John McCain’s home state the Obama-mania has hit hard.  Not so much that he’s likely to win the state but more from a everyone’s-talking politics: the economy, energy independence, foreign policy topics.  I mean everyone.  I cannot remember a time when so many people have opinions, hopes, dreams, and fears about an election and we’re open and willing to discuss them.  What’s great about it is the civic energy it’s produced.  No not everyone is well informed.  And yes many people seem to make decisions based solely on emotion, but at least we’re awake.  At least we’re engaged in a civic discussion.

The important thing is that the candidates have spent the past year or two traveling the country and listening to us.  When you want to be elected you really listen.  But then what?  As soon as whomever is chosen they become insulated from real people and are shielded by handlers, sucked up to by sycophants, and hounded by lobbyists.

If we are going to move in the right direction the election must be our starting place.  What’s important is what we do to make our voices heard during the next four years and beyond.  Otherwise we can just go back to shaking our fists instead of advocating for real solutions.  The only thing that will make our government honest is our voices.  The best thing we can do is to get to know our congressmen and senators’ email address.  Let them know what you think and that you’re watching.  Make some noise America!

Everything Matters

The past three days of surfing have been amazing.  San Diego in October is often mind-blowing.  All week temperatures have been in the low 80’s.  The ocean has been completely glassy, water transparent.  On days like this I surf until my arms turn to noodles because I am not sure when another day like it will come along.  The ocean is my gym.  Surfing and walking with Debbie are all I do for exercise.  Obviously I can’t surf everyday, but I try to everyday I am home because I find the rhythm of it keeps vibrating in my being and that rhythm seems to have nature’s wisdom in it.

Last night at 1:30 am one of my sons and his wife and my three grandchildren arrived for a week that will include Disneyland on Halloween.  Whenever I see my grandchildren my resolve to do what I can to create a sustainable future deepens.  In many ways my nine grandchildren are the music of the vibrating wisdom I feel from surfing.  I often feel there is a silent harmony underneath the chaos of our apparent life that is “real reality.”  Today was one of those days.  Everything matters, just not in the way we think it does.  It’s much more important.

The Next Ten Years…

“The next ten years will present us with moral, political, economic, military and spiritual issues no one has ever faced.  But it seems like all of the people in charge are just wrestling with their own underwear.  Flailing.  The problem is leadership failure.  Everywhere.”

Corporate Social Opportunity

“CSO [Corporate Social Opportunity] is the greatest opportunity of the 21st century.  It’s an opportunity to stand for something that matters, to make a difference in the lives of others, and it’s the greatest economic opportunity in the history of the world.”

Our McFuture

“We need leaders who have a vision of re-enthroning a productive economy based on invention, innovation and excellence rather than a future economy based on Wal-Mart and McDonald’s employees selling junk to each other.”