Sacred Responsibilities in Times Such as These

As I talk and consult and read and study, I’ve asked myself … where is the ‘sacred responsibility’ to make thoughtful, responsible, and extremely hard choices for the good of the whole amongst our corporations?

Last week I had the opportunity to meet with the executive director of the Boys and Girls Club of America with which I have been very involved professionally over the past year.

This particular executive, with whom I have worked and supported, is actually based in the BGCA in Fort Worth, Texas. She has done an exemplary job of building a strong team and overall organization; yet, as with all non-profits in this economic climate, is contemplating what to continue doing and/or start doing to better position the organization, not only to meet the current demands of the families they support; yet to also prepare for the future. Reduced funding is a reality, yet the demands from families increase in these times; thus she faces a challenging paradox.

What to do?

In contrast to this scenario, a few of my other clients, who are Fortune 100 companies, have experienced relatively strong performance up until now. In the case of Hewlett-Packard, a shining star with good results until this quarter, announced their first quarter results at the end of January, and even though services buoyed its profits, the lack of overall sales growth was terribly disappointing. In fact, for the first quarter, they missed analyst forecasts with sales suffering in nearly all business areas — from personal computers to enterprise servers and even to ink, perhaps the biggest surprise of all.

What to do?

Finally, as if these two examples were not glaring enough, there was an article in my hometown paper, The Dallas Morning News, a few weeks ago outlining the troubles even our most sacred institutions – churches, temples, spiritual houses – are facing in this climate. A few of the statistics cited are:

• Thirty-two percent said their church was definitely having economy-related financial difficulties, up from 14 percent in an August 2008 survey.
• Forty-seven percent said their church had frozen or reduced staff benefits, up from 18 percent in August 2008.
• Twenty percent said they had had staff layoffs,
• Twenty-six percent reported postponing a major capital project. Also up from August 2008.

What to do?

Obviously, the answers are not easily found or surely we collectively would have found them!

“What to do” is not typical ‘blog fodder’ in its purest sense. It is sort of like trying to boil the ocean one cup at a time! Furthermore, it goes without saying that the approaches for improvement can be drastically different, as well. Nevertheless, I do have a few thoughts and observations around what I consider to be our ‘sacred responsibilities.’

1. Slashing jobs is not the only answer – there are alternatives.

According to Forbes, layoffs for January 2009 at America’s 500 largest public companies topped 163,662 last month alone.

Walt Disney, Conoco-Phillips, Xerox, Texas Instruments, IBM, Wellpoint and even Google (only a fraction of the publicly traded companies) have had massive layoffs or reduced headcount. No vertical industry has been spared.

Interestingly and refreshingly, some companies have taken a more thoughtful approach to reducing costs and improving profits. Hewlett-Packard (which is also juggling the ongoing integration of EDS and the subsequate job reductions and restructuring this requires) plans to focus on other areas on which they can control, such as grabbing market share and increasing profit margins through tighter cost controls of items including the CEO’s own paycheck. The company plans to slash Mark Hurd’s base pay of $1.45 million by 20%, while reducing other executive-level salaries by as much as 15%. Paychecks for other employees could be cut by up to 5%.

Some may argue that this executive compensation (and countless others) is still out of bounds. How can we justify an executive getting paid $2 million in base salary – and the real picture comes into more absurd focus with the stock and bonuses – which can exceed 100’s of millions. I am not confused at how this plays out – nor are the tens of thousands of individuals who may lose their jobs in the next 6 months.

This is what I am talking about … where is the ‘sacred responsibility’ to make thoughtful, responsible, and extremely hard choices for the good of the whole?

Often the most expedient choice is massive layoffs, workforce reduction, RIF’s – whatever you want to call it. However, I am wondering why reduced executive pay, universal salary reductions, delayed bonus structures, spin-offs of less profitable divisions, or creative accounting with vacation days couldn’t be considered equally? I realize this is not always possible; yet, believe it’s worth more serious consideration by “leadership.”

2. Culture can be strengthened and built in hard times.

In hard times, a company can build not only their financial capital for the future, but also their emotional capital within its company and throughout its market.

The benefits derived from alternative approaches do not stop with cost reductions and profit improvements. There is magic when people are truly all ‘in the boat’ together. When each and every person is truly pulling for each and every other person, there is real alchemy, because the ‘life’ of the group depends on it.

Now, before the ‘socialist’ argument comes to mind, let me state that I am unequivocally not a proponent of socialism in any veiled or unveiled manner. I believe free enterprise is what built this country; and, I equally believe capitalism is what continues to breed our strength as an economic force in the world.

My analogy of ‘being in a boat together’ is not meant to level everyone to a unilateral station. What I do want to say is this: when a collection of individuals is asked by senior leaders to ‘step up’ for the good of the whole – this breeds a culture of teamwork, of unity, of collaboration and of ‘together in/with the world.’ When that happens – and I have witnessed this in other companies, as well as having been a part of this personally – the magic is undeniable. This magic does not stop at the boundary of the company; yet, explodes into the market resulting in a magnetic force attracting clients, alliance partners, and vendors.

The net result is a place that weathers the current storm, and uniquely positions and differentiates itself for the future.

I need to make one critically important distinction – this ‘call to action’ is only successful if the leaders are truly authentic and are willing to ‘share in the pain and the wealth’ equally.  I have been part of this ‘call to action’ when the senior leaders are banking millions of dollars, backdating stock options, and stashing large year-end bonuses. The ‘call to action’ rings false – because, at its deepest level – it is false.

Once again, the key to leveraging this, or any other, adverse situation into a positive cultural change is all about authenticity, showing/sharing vulnerability, and embracing the sacred responsibility of each and every employee – at each and every level – especially the executive level.

A final example of how our choices in these hard times can, and often do, spell out our future:

What do General Electric, Disney, Hewlett-Packard and Microsoft have in common?

They were all startups during steep declines in the U.S. economy. GE started during the panic of 1873, Disney started during the recession of 1923-24, Hewlett-Packard began during the Great Depression in 1939, and Bill Gates and Paul Allen founded Microsoft during the recession of 1975.

How did they do this? What were their secrets? How did they not just weather the storm – yet thrive and grow? Let’s take just one example:

In 1939, Bill Hewlett and Dave Packard were actually starting their company in their infamous ‘garage’. Their first ‘big job’ was making the audio oscillator for Walt Disney’s movie Fantasia  (another innovative company which thrived in those hard times). When the opportunities really started coming in for “Bill and Dave” they could have gone on a wild hiring/firing spree – risking immediate layoffs due to the volatility of those times. Instead, they deliberately were very conservative in their growth. They built a reputation – even at that early stage in the development (of, now, the world’s largest technology company) – for looking after their people – those already on the payroll, and those yet to be hired. This reputation held them fast, as the ‘boy scouts’ in the industry, for decades.

Did it pay off? You be the judge. Are the current stewards of this long-respected company, maintaining those same values? Again, you be the judge. (I hope for your comments!)

So, why did I entitle this blog “Sacred responsibilities for times such as these?”

Full credit for instilling the unique phrase ‘sacred responsibility’ in my mind goes to a new friend of mine from my Rotary Club. He is a leader on many levels. It was his perspective of ‘sacred responsibility’ that got me thinking. It is his belief that we, as the generation of adults facing this unparalleled set of challenges, have the sacred responsibility to lead our youth and all those who are watching us, and show them how to maneuver through this jungle, with our integrity, our grit, and our conscious fully intact. I agree with him 100%.  (Read my blogs on authenticity and the power of vulnerability)

This is truly our time for leadership. Our choices will define our generation and us. It is truly our sacred responsibility.