In November 2011, with the Galleon Scandal in the headlines, I wrote an article “Do the Right Thing”. This was picked up and published in the global media. It was also circulated in the Sri Lanka administrative/public service.
At a speech I gave in Colombo attended by senior managers and professionals, one participant remarked to me: “We loved and enjoyed your article on Raj Rajaratnam, former Mckinsey Chairman Rajat Gupta and the other players in the scandal”. I took the opportunity to correct this misconception and said to the audience: “The article was not about Raj Rajaratnam and Rajat Gupta. It was about every one of us…you and me…and every person in a position of leadership in business and government, pre- school teacher, educator, parent, student and employee. It is about what we are teaching in our homes, schools, colleges, universities, the public service and every training program in an organisation. It is about the kind of human beings, the people developers in organisations are developing. It is about how we behave and act in our homes, families, organisations and society.
There is a Raj Rajaratnam and Rajat Gupta in every one of us. Both of them are human beings like the rest of us. They are parents and husbands. Strangely, none of the indicted is a woman! Why is this?? Someone once said: “Power corrupts. Absolute power corrupts absolutely”. What do we do when no one is looking?”
Setting the right tone
We must rethink how we behave and act in our organisations, homes and in society. The primary function of every corporate board, parent, educator, government and religious leader is to set the right tone for individual and corporate behavior. How many times do we hear management gurus talk about “Leadership by example”?
My global team and I have done, and still do, a considerable amount of work in Sri Lanka and worldwide on Leadership Development, Strategy, Governance, Innovation and everything an organization must do today to create it’s future, execute it’s strategy and be prepared for the one thing that every person in a position of leadership in business and government globally fears the most, an uncertain future.
Research tells us that over 70 percent of leadership development efforts either fail or do not deliver the desired results. Those that succeed, stand the test of time and are ranked among the most admired companies in the world. They have leaders who lead by example. These organisations are characterized by transparency, equity, employee engagement, a strong sense of purpose and accountability. Leaders must be individuals that people want to follow.
Accountability? Yes, another critical function of a board of directors is to be accountable to employees first, customers second and then society, the environment and shareholders. Shareholders reap tremendous rewards when the first four are addressed. Corporate governance must begin here. Every board must reexamine its priorities.
Executive compensation must be at the bottom of the list. Employees and customers must come first. This requires a revolution in organisational thinking in board rooms globally and especially in emerging and developing nations.
The widening gap between compensation of senior management, other levels in the organisation and the front-line must not continue.
It is the front-line that really generates profits and brings in new customers. Compensation studies and consultants focus largely on executive compensation and not on the compensation of every single employee in the organization. Every board must answer the question, “Is our most valuable asset our people, our human resources, our talent”?
If the answer is really yes, then we must reexamine and rethink how this valuabl e asset is compensated and motivated. Can an employee in a nation like Sri Lanka really live on 7500 or 15000 rupees or US$ 75 or US$ 150 a month? This occurs in the factories and workplaces of so many developing nations. If yes, how can we expect them to provide exceptional customer service and be the primary profit drivers? No employee retention and motivation effort will really work if this continues.
So much research
At the San Francisco airport a few years ago, I saw the cover of an article in one of the most prestigious management publications in the world. It said: “The Value of Happiness: How employee well-being drives profits”. The cost of the magazine was US$ 35! Why on earth would anyone pay this amount of money to discover the obvious, I wondered? So much research is done to tell us what we know or should know already! The top management gurus are paid US$ 40,000 and more a day to tell us the obvious! We just want to hear it over and over again from them! But does our behavior change?
Consider one of the biggest industries in Sri Lanka, hospitality and tourism. Recently, I addressed some key people in the industry. One lesson stood out. The best talent in the industry has left the country. Compensation was the primary motive.
Just look at the lines outside embassies in Colombo. Sadly, they are filled with people sacrificing everything to earn more money overseas.
This can only be stopped if our leaders and consultants focused not on executive compensation but on how we compensate and motivate “ordinary” citizens. We must give them compelling reasons to stay in their own country and make a difference. This is what I told 170 student leaders in a leading college in Colombo a few years ago. Families, the foundation of any society, will be intact and not torn apart. Children, the future of any nation, will have both their parents.
Yes, employee well-being does drive profits. It always has since the beginning of time. We don’t need to buy a US$ 35 magazine to learn this! So let every leader and manager in our business and government organizations begin to rethink, reexamine and change the way we behave and act toward all employees, especially those in the front-line and those who do the real work of providing exceptional customer service and generating real and sustainable profits. Not the deal makers!
This is the right thing to do and must be taught in all our schools, universities and organisations which are preparing leaders for an uncertain tomorrow. Today’s leaders and boards must set the example. They must ask themselves the question: “is it right for me to make 30, 50 or 100 times more than my people, my human resources, especially those at “the bottom of the pyramid” in my organisation? Yes, we give them jobs, but can we really expect them to give their all and be fully engaged in the organization? You will see profits soar when you do the right thing and do unto others what you would want done to you.
Leaders, put yourselves in the shoes of your people who come to work often in the rain in buses and trains and rush back home to attend to family challenges and the raising of kids….and sometimes even spouses!!! So many of them travel two to four hours each day to earn 15000 to 30,000 rupees a month. Can you live on this? They cannot afford to step into five star hotels and shop in the Independence Square Arcade!
Return every phone call, reply to every e mail message and see the people who want to see you. You never know where your next source of revenue will come from. I have seen this in California where an ordinary looking man walks into a bank, was treated not as a potential “elite, private or privileged” customer, but rather poorly, and the bank lost millions of dollars in business, not counting potential referrals! Never make assumptions. Stop avoiding people you don’t like and maybe uncomfortable with for whatever reason. Don’t listen to, believe and spread vicious and unjust rumors about a person. Listen to both sides of any story. Everyone deserves a hearing. Because this is what you would want done to you. This golden rule is at the core of Buddhism, Christianity, Islam and Hinduism. It makes no sense to do wrong and then show up in a church, temple or mosque looking for forgiveness and redemption. What you sow is what you will reap. “There is none righteous, not one”. We are all fallible human beings.
In conclusion, the words of Bob Dylan must also be considered: “how many times can a man/woman turn his/her head and pretend he/she just does not see”? Our human resources and youth are watching their leaders, teachers and parents. We must rethink and reexamine everything we do in our lives, homes, centers of learning, organizations, places of worship and in our nation. We will be held accountable for what we do and what we fail to do.
(Gerard Muttukumaru is Founder/Chairman, Center for Global Leadership Worldwide LLC (USA) and Adjunct Professor of Global Business, MBA and Executive Education Programs, California, USA; Sinhala Edition of the book on “Marriage, Family and Relationships” now available at all Sarasavi Bookshops in Sri Lanka. firstname.lastname@example.org)