Ethical business and leadership; throw out the old rulebook

Written by
Changeboard Team

18 Jan 2010

18 Jan 2010 • by Changeboard Team

Leadership and change

The businesses which have thrown out the rulebook and responded to the Challenge of the recession are the ones which have done the best.

Theres no doubt the recession is forcing companies to think about change and while initially those changes may shake up old working styles and conditions, that can have many Benefits. Considering new markets, new processes, new ways of working and new working terms. Positive or negative, its an adrenalin rush and we are thinking in basic terms again. 

Often it is only during a crisis or recession that companies are seriously confronted with implementing new working practices and leaders recognize that courageous change, including downsizing or a change in suppliers, can create huge Benefits during an unpredictable economic climate. Likewise, leaders are also learning to value of re-evaluation of current business models. Not only does this impact the long term future of their business but also their own leadership style.

Brain and Brawn - visionary leadership

One inspiring example is the Formula One team Brawn GP. In March 2009, Ross Brawn announced a last minute buy-out of Honda F1 under the new name of Brawn GP. Almost half the workforce was made redundant. Jenson Button took a significant pay cut and they didnt have an engine until Mercedes stepped in. I have listened to CEO Nick Fry talk about this experience and it is clear that things got pretty desperate; they were a hair away from going down the tubes.

The success they enjoyed was shared by all the people who put themselves out there getting a car ready in the shortest possible time ready for the first race. It is testament to the characteristics like belief, courage and commitment.

Of course a number of elements have to come together, held together by sheer hard graft. A friend of mine works alongside the Brawn GP team and he confirms that it is half the people doing twice the work and its better.

Its about making sure that the leader has a vision and that the team has the desire and correct attitude to getting the work done. Its also important for managers to understand how to motivate their staff in some cases, redundancies might mean that in some organisations one person is doing the work of two so there has to be an acceptance that its for the greater good and can be important for the businesses survival. So, ultimately, the biggest lesson has been that flexibility is essential.

What's next for leadership in 2010?

Leaders have the opportunity in 2010 to look back on the previous year to reappraise objectives. Often, change is progressional and the activity that created green shoots last year should be expanded upon. This can sometimes completely change a companys culture for the better, with areas of business that had been neglected in the past boosted due its cost effectiveness or to its effect on staff morale.

Good, old-fashioned house-keeping practices such as cutting back on luxury stationary, business class travel, bonuses, expenses - highly featured in the media in 2009 - should most definitely extend into 2010 as a standard practice now in all businesses.

2010 should also be a year of response and not reaction. Downsizing for example, may have to take place over a longer-term period in 2010 as areas of the economy pick up slowly. We have recently seen chinks of light coming through the almost flat 2009 property market; a good sign that confidence is returning. So, while the coming year will certainly be challenging, it could also be a great opportunity to establish great changes in the long term.

Thinking long-term is key

Businesses have learned that long-term goal setting should never be lost in the day to day grind that many businesses have found themselves immersed in during the last year.

Focusing on five, 10 and even 20 year plans is integral to building a thriving brand. Firms are looking to the once poor relatives of the world economy India, West Africa and of course China and taking note. These nations have followed a long-term strategy and the rewards are being paid.

British firms are now being forced to relocate branches of their business to these countries and to outsource to them, to ensure the long-term success.

Also, thinking long-term regarding premises and transport has never been more important strategists are looking at the rising costs of property, rentals and of course oil when calculating the viability of business five, ten and 15 year plus plans.

Best practice leadership

In terms of countries, again leaders should be looking to West Africa, India and China certainly for cost effectiveness. Do these countries adhere to best practice some would ask? Well, they are the key players in the league of accelerated economies of the past the 10 years and will remain so for at least the next 10 years too and longer.

This has been based on a tireless commitment to expansion and serious investment in their infrastructure. However, at what cost? There are clearly ethical issues faced by these economies such as low wages and questionable working conditions.

Countries such as Sweden and Holland are spearheading very responsible working practices going green, recycling, better working conditions, maternity and paternity rights, shorter weeks and cost-effective work-from-home provision. Certainly, the rest of Europe and indeed the world should be looking to them as a good model and many are adopting these practices already.

Tough times no excuse for dropping ethics

Consumers are increasingly focused on a companys ethical standpoint and make their decisions based on a companys actions in relation to their own beliefs.

In the past, making an ethical business decision was balanced against doing the best thing for the shareholders - being ethical for profit.

Even now, many companies view the introduction of ethical practices as a box ticking exercise. What tends to happen is that the board decides the core values of the business and then make lots of noise when they introduce them.

However, with people taking longer over their purchasing decisions and looking carefully at the businesses or suppliers they buy from, having the right ethical practices could make the difference when it comes to making the sale.

Social media. How has our work style changed?

We are living through profound changes in the workplace but the recession is only one of many factors. For the professional and management classes, the bigger picture includes the advance of the Blackberry and iPhone culture where people are always available and connected to the workplace.

The rise of social media like Twitter is also interesting. People are increasingly accessing work-related communities and being bombarded with information and ideas as never before on their own time.

These technology-led changes do beg work-life questions about the frankly massive blur between the office and home.

Work is a big part of your sense of identity. Are you completely defined by your job? For some the answer will be Yes, and thats ok thank you very much. But for some, this divide needs guarding and managing, Turn off that bloody phone has become a familiar lament in many households.