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We all have a tendency toward selfishness and greed. Most of us are tempted by power, money, and fame. Some of us will act in inappropriate ways to get these things. A clear set of corporate values helps protect us from ourselves.
When our mission is to serve others, we don’t think as much about ourselves. Channeling our energy toward worthy pursuits is infinitely more effective in governing behavior than draconian compliance programs.
Listing the key principles of an organization on a wall plaque will never make them part of a company’s collective thinking. If values and principles are to set the tone for organizations and guide their decisions, they must become part of every task, plan, discussion, and operation.
Most employees make corporate decisions on the basis of what they believe their leaders value.
Corporate values are worthless unless they are: (1) shared by the majority of people in the organization, (2) lived with some consistency by leaders, (3) considered at least equal to economic criteria in all major decisions of the organization, (4) taught to employees by senior leaders at every opportunity, and (5) constantly communicated to people and stakeholders outside the organization, including shareholders.
It takes courage to present the company’s shared values and principles to financial institutions, shareholders, and even governments because these constituencies expect “serious” businesses to focus almost exclusively on the bottom line.
Three purposes or goals—service to society, economic health, and ethical values—should drive a company in equal measure.
Major business decisions should be evaluated both on the basis of economic and noneconomic criteria. Strategic planning should start and end with an assessment of whether a plan serves all three elements of a company’s purpose.
Board members and other company leaders should stress the reasons that the organization has goals beyond economic success.
In hiring and firing decisions, a person’s performance in non-economic areas should get heavy consideration.
The most important questions in business are often never asked: What is our motive? What is our purpose? Are they worthwhile?
goals should not be set according to whether they’re easy or hard to measure. They should be set because they’re right.
Every job is or should be in a constant state of change.
I believe that dividing people into management and labor is morally unsupportable. It results in an unfulfilling workplace regardless of whether the two groups get along.
The people at AES are very self-motivated and highly dedicated to the company values,
Team work and leading by example are key traits to have.
It is fascinating to see how many times we hire people whose backgrounds are similar to our own.
The strategy of hiring clones is questionable to begin with, but it is especially inappropriate when we are trying to find people for jobs unlike our own.
People generally know best when they’re ready to take on a particular responsibility and, in the process, contribute to the team.
Employees should indicate their readiness by requesting to take on a role.
most people will flourish in a liberated workplace. Age, sex, educational background, political inclination, union membership, color or ethnic background, and even IQ have little effect on whether someone will come to love and succeed in this kind of workplace.
Some people are scared of change for fear that they cannot survive or do well in such an environment. Others are beaten down by the years of being regarded as little more than a machine—a “human resource.” Some never become fully adult in the sense that they shy from responsibility and accountability.
Intelligence and education are not as important as an organizational culture that treats people of every background as creative, capable, responsible and trustworthy.
the current emphasis on hiring “the right people” in order to be successful is oversold.
I found that a place with too few people is likely to be a much more fun place to work than one that has too many. This is easy to understand when you shift the paradigm from “work is hard, difficult, and something I have to do” to “work is my calling, a chance to exercise my gifts, and an opportunity to make a positive difference in the world.” The latter model requires far fewer people.
After AES gave people freedom in the workplace and got rid of central staff specialists, we discovered that we could double the effectiveness of new acquisitions with half the original number of employees.
in the United States had 30 to 40 percent fewer people than the industry average.
In the dynamic world in which we live, every job is or should be in a constant state of change.
Every individual changes constantly. We gain new knowledge and skills, and we develop new interests and goals. These changes make it imperative that we move to different jobs that offer challenges that fit our personal growth.
When each person is given a measure of responsibility for the business, when “every person is a business person,” the number of people needed diminishes dramatically.
the changeover from a company you know to one you don’t can be traumatic. I strongly believe that these difficult transitions are a necessary evil that forces employees and organizations to adjust to a dynamic world.
Part of the joy of work is learning new roles and taking on new responsibilities. Job security is attractive gift wrapping, but seldom is there anything of lasting value inside. Joy means using our work skills to meet fresh challenges.
I know of no credible evidence that an organization that chooses to allow important decisions—such as purchasing, planning, hiring, and budgeting—to be made “low” in the organization experiences more mistakes than those who use traditional central management and financial controls. Nor have I found any credible evidence that organizations with a control mentality perform better economically over the long term. To the contrary, most recent research reaches just the opposite conclusion.
From Drucker to Waterman to Block to Spitzer, leading business analysts suggest that a decentralized approach creates a much higher probability of economic success.
most large organizations continue following rules of management that date to the Industrial Revolution. They are either unaware that there’s a better way—or unwilling to try it. This has had a negative effect on economics wor...
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living by shared values and principles does not automatically lead to financial success or make a “great” company. Even if adherence to certain principles gives an organization a better chance to succeed financially, it is a meaningless objective because it would take so long to show up.
neither is there convincing reason to believe that nice companies with great values and selfless purposes finish first. Financial success is the function of many forces, including luck.
linking principles and the bottom line diminishes the company in the eyes of its employees.
Imagine that I tell my son I love him unconditionally for who he is, but in reality I feel close to him mainly because his athletic success or his outstanding academic record give me status with friends. My motivation is built on a hypocrisy that will inevitably damage our relationship. I am afraid that many CEOs like me are guilty of this sort of hypocrisy when we push the latest “management technique” among our people. We know that jacking up our profits or stock price will not stimulate loyalty, productivity, initiative, creativity, and discipline among our employees. But Wall Street looms
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The skills required of a top-down emergency manager are very different than those needed to be a servant leader
Most organizations go through periods of crisis. Almost nothing about the management approach that is needed during emergencies applies to the long-term needs of a company that stresses service, decentralization, and collegiality.
I believe that certain values, principles, and beliefs transcend time and culture.
As I think back to my beginning year with the company, the organizational change from a traditional management style to the team concept was huge. The idea to make the workplace fun and enjoyable with few levels of management gave an extreme amount of decision-making power to all levels. This leadership style is what I believe really enhanced my opportunities to flourish and develop as an AES person.
Soviet managers told workers what to do and when to do it. In Western democracies, people are free almost everywhere except at work. They elect their political leaders, choose where to live, and decide what goods to buy. But the majority of Western investors and corporate executives continue to believe that some people are ordained to lead and others to follow. The followers are replaceable parts in the economic machinery. When practiced this way, capitalism resembles a command economy. It lacks a moral dimension. Individual freedom and human dignity, which are the cornerstones of democracy,
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Workplace passion comes from doing something that we believe is important. If only we could all be as passionate about our work as Michael Jordan was when he played basketball. Passion means that no one keeps track of time. No one says “it’s just a job.” We can create these kinds of workplaces by linking the skills and aspirations of individuals to organizations dedicated to serving the needs of society in a manner that is economically strong and consistent with the highest ethical values and principles. To attain this goal we should allow every working person to be free to take actions and
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leadership is about humility and serving others. It reminds me not to be ashamed of my weaknesses, for it is in weakness that I can best help others to excel as human beings, rather than presuming I am strong enough to manage them as if they were resources or machines.
It is love that allows us to give up our power to control.
With appropriate humility, we accept our inability to control the world, even the world of business. We quit searching for the secret to profits that rise quarter after quarter, to a stock price that ticks ever upward, to always winning. We accept that losing is part of life, as are making mistakes and falling on our faces. We do not fear adversity or suffering. We accept and even embrace problems. Out of them comes new learning, new growth, new hope, and new life. These principles apply not only to individuals but also to organizations of every sort. Where there is success, let there be
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