The best negotiating book I've ever read

Am I a good negotiator? I've negotiated several dozen contracts, from short-term consulting agreements to broad, highly-complex strategic alliances. I've done deals in the US, Europe, Latin America and Asia. I feature negotiation on my resume.

But hold on a second. According to Deepak Malhotra and Max Bazerman of Harvard Business School, authors of the book "Negotiation Genius," experience does not equal expertise in negotiation. Through many quirks of human nature, we are capable of making the same mistakes over and over again, even in terribly important efforts. (Click here if you'd like to hear about one of my poorest negotiating efforts.)

If practice doesn't make perfect, what is someone who wants to be a better negotiator to do? Well, read "Negotiation Genius," for one, and apply its lessons. Despite that awkward title, it's a fantastic book on a subject that too rarely gets serious treatment in the business press.

The authors use countless examples and are not afraid to get complicated. As enlightening as it was to read through once, I think "Negotiation Genius" will be a valuable reference that I'll use again and again, whether contemplating, preparing for, or engaging in a business negotiation.

The book covers:

• Getting more than your fair share of the negotiating pie
  
• Increasing the size of the pie
• How to respond when you'd like to immediately agree to an offer
• How to bargain when you have little power
  
• How to deal with lying or deception
• etc.

In other words, "Negotiation Genius" has everything a quick-read, how-to negotiation book has plus an exhaustive explanation of the underlying psychological factors (referencing specific research, especially the behavioral economics work of Daniel Kahneman and others). Finally, there are so many relevant examples, including experiences of the authors, that every assertion in the book feels grounded and reasonable.

And there is humor, too, including how the most difficult negotiating counterpart can be one's own spouse (my Vice President of Common Sense would attest to that).

Here's an excerpt on how our emotions can harm us in negotiations:

If you are angry with a negotiating counterpart, you may want to do or say something that you know will harm you in the long run.... Still, in the heat of the moment, it can be difficult to resist the urge to lash out or to retaliate. Similarly, if the other side makes you an attractive offer, you may be so excited that you are tempted to accept right away, though you know it would be smart to try to negotiate a better deal.... Note that you would not advise a friend to act rashly in either of these two situations--yet, at the same time, you might find it hard to do otherwise. (P. 127)

Wise words. "Negotiation Genius" is full of them. Read it if you want to be a better negotiator. There's no other book on the subject I can recommend more highly.

Further Information:

Here is a Shop Talk Podcast on one of the concepts Malhotra and Bazerman discuss, the BATNA, or Best Alternative To A Negotiated Agreement.

negotiation, psychology, dealmaking, reading list

There's no such thing as bad publicity

A few years ago, I was at a party in New York City and there I met an older entrepreneur. We got to talking about public relations and newspapers and so forth and he recounted a story to me. He had been interviewed by the Wall Street Journal for an article in their newspaper and when he saw the article a few days later he was appalled. He'd been misquoted, the article was negative in tone and it just wasn't at all what he had anticipated.

He was really disappointed and depressed and he was trying to figure out how he could do damage control on this terrible article. Anyway, over the next several days, he kept getting congratulatory phone calls and emails and people he'd meet on the street would come up to him and say, "Hey, great article in the Wall Street Journal the other day."

He told me after that he never worried about trying to spin public relations. He just did his thing and whatever came out was OK.

Voice-to-Screen messaging - powered by SpinVox

spoken post, public relations, Wall Street Journal, marketing

Shop Talk Podcast #3 - Traci Fenton on democratic workplaces

On this edition of the Shop Talk Podcast, I talk to Traci Fenton, CEO of WorldBlu, a business design studio that helps companies adopt democratic processes. Her company created the World's Most Democratic Workplaces list, featuring companies like Linden Lab and Rite Solutions who embody these ideals.

Traci and I talk about what constitutes a democratic workplace, how it is to work in this type of company, discuss some examples, and learn that while some decision-making may be slower due to seeking consensus, implementation is that much faster and success more assured as a result.

Click here to download the podcast.

Companies mentioned in the podcast:

Linden Lab
Rite-Solutions
General Electric
Whole Foods Market
Southwest Airlines
Motek
SRC Holdings

Errata:

1. I continually called Linden Lab, the creator of Second Life, Linden Labs. Traci said it right every time, and I never got the hint. My apologies.
2. If you listen carefully, you will hear a couple of Skype blips during the podcast.
   

democracy, leadership, management, organization, podcast

How to read a web newspaper

OK, so I know that everything on the web is miscellaneous. But I've been wondering why I interact with two highly similar web sites so differently.

I subscribe to both the New York Times and Wall Street Journal newspapers, and read both online (especially when traveling, like today).

When I read the NYT online, I meander through the sections--sports (yay Red Sox), technology, business, arts, books. Pretty much in that order. I just about never read the front page. I go right for the detail.

With the WSJ online, I invariably seek out the button that says "Today's Newspaper." Clicking this loads a page where articles are listed in the order they appear in the paper, with page number headings--A1, A2, etc. It's not laid out like the paper, but for example Marketplace is the second section, starting with page B1, just like the hardcopy edition.

Why do I use these two sites so differently? In part, I've always navigated the Times miscellaneously. (Sunday paper reading order--sports, arts, books, business, week in review, styles, magazine. I recall my astonishment seeing my friend Gerry Halstead read the Sunday Times front section once, beginning to end, each article in full. It took him a good hour.)

But I do read the Journal in order: section A (glance at the op-ed page but not too closely so I don't get annoyed), section B, skip section C (not enough investments to worry about that), section D, if at all, over lunch.

And so it is online. The cool thing about the web, and with well-organized web sites, is that the user can choose. Read it our way, read it your way. Whichever you prefer.

organization, knowledge, websites, New York Times, Wall Street Journal

In Praise of Hierarchy

After last week's look at "The Future of Management," it seemed appropriate to look back at one of my favorite HBR articles, "In Praise of Hierarchy," by the late Dr. Elliott Jaques (link - $$). In this article, published in 1990, Dr. Jaques asserts that "35 years of research have convinced me that managerial hierarchy is the most efficient, the hardiest, and in fact the most natural structure ever devised for large organizations."

Despite appearances, "In Praise of Hierarchy" is not diametrically opposed to "The Future of Management." Dr. Jaques is open and candid about hierarchical organizations' many failures. He blames poor implementation of hierarchy and states for years we've been attacking the wrong problem:

...One of the most widespread illusions in business [is] that a company's managerial leadership can be significantly improved solely by doing psychotherapeutic work on the personalities and attitudes of its managers.... The problem is that our managerial hierarchies are so badly designed as to defeat the best efforts even of psychologically insightful individuals.

Dr. Jaques' goes on to state that responsibility is best determined by looking at the time span of an employees' longest task, program or project, and that "the boundaries between successive managerial layers [should] occur at specific time-span increments."

Meaning that an engineer who's working on a module that is due in two months has a time span of two months. The project manager who is in charge of the new version that is six months out has a six-month span. The product manager who is planning the two year roadmap has a two-year span. And so on.

Dr. Jaques solution for improving hierarchy is simply this:

1. assure that managers have "just enough authority to ensure that their subordinates can do the work assigned to them"
2. create a quantum time-span difference between managerial levels (Dr. Jaques suggests examples of three months, 1 year, 2 years, 5 years, 10 years and 20 years)

The above always felt right to me when I was a manager. When conflicts arose it was typically because my manager and I (or I and my subordinate) were managing roughly the same time span. The layers got too crowded--typically on the short end. Everyone was worrying about the next six months!

One would imagine that in the seventeen years since this article was published, there would have been progress. Instead, I think things are worse. I've read about CEOs who want to sit up high and assess at some times, and dig into the details at other times. Or we get so enamored with terms like "self-organizing systems" that we want to throw the baby out with the bathwater.

Instead of fixing our hierarchies, we're patching them or trying to discard them. Maybe we should take a new look at Dr. Jaques' old idea.

organizational behavior, hierarchies, leadership, management, Harvard Business Review

Larry David as archetype: "the inappropriate guy"

This week's New Yorker Talk of the Town features an item by Jacob Ward about a novel approach to teaching schizophrenics how to overcome their own social difficulties.

Don't do what Larry David does.

Larry is the creator and main character of "Curb Your Enthusiasm," a comedy on HBO. In the show his ability to act inappropriately in social settings is nearly matched by his well-practiced skill at apologizing.

David Roberts, the psychologist who developed this approach as a summer intern while in graduate school, noticed that many otherwise-unresponsive schizophrenic patients enjoyed comedic television that focused on awkwardness with others ("Monk," as another example). Writes Ward in the New Yorker:

Roberts considers Larry David to be the perfect proxy for a schizophrenic person. “On his way into his dentist’s office, he holds the door open for a woman, and, as a result, she’s seen first,” he said. “He stews, he fumes, he explodes. He’s breaking the social rules that folks with schizophrenia often break.” He went on, “Or the one where Ted Danson and Mary Steenburgen invite Larry and his wife to a concert: the night arrives, they don’t call, Larry assumes they don’t like him, then it turns out he got the date wrong. It’s a classic example of a major social cognitive error—jumping to conclusions—that schizophrenic patients are prone to.” As the patients watched David flub situation after situation, they laughed, and they willingly discussed with Roberts how they might behave in the same circumstances.

So in this case, Larry is an archetype, a figure who acts like the patients sometimes act, but isn't them. The distance created allows them to analyze and learn from Larry's mistakes (and see humor in them) without the pain of confronting their own failings directly.

In this way, self-deprecating comedy is an act of selflessness, of generosity. A description that would, I imagine, appall Larry David himself.

Thanks to the WSJ Informed Reader for the pointer.

worst practice, archetypes, learning, mistakes

New iPhone advertisement a remarkable example of storytelling

I saw a new iPhone ad this weekend a dozen or more times. In it, an airline pilot tells how by using his iPhone he helped his flight avoid a three-hour weather delay and got his happy passengers to their destination on time.

(You can view the commercial on Apple's website here. You'll need Quicktime to view.)

This is an outstanding example of storytelling. There is a simple, compelling, 30-second narrative, related by the person involved. As he talks, he demonstrates how he used the iPhone to check the weather (artfully using many of the distinctive features of the phone, such as the display that reorients itself as you turn the phone and the zoom via touching). I can't imagine a more concise, effective way of helping people understand just what the phone can do.

It's the precise opposite of the glitzy iPod ads featuring wildly dancing silhouettes, which look great, but don't convey much.

Simple, compelling, engaging. Now I want one.

marketing, advertising, storytelling, narrative, apple, iPhone

On Gary Hamel's "The Future of Management" part 5 - Final thoughts

Hamel talks frequently in the book of enrolling the entire company in innovation. Among all the obstacles to achieving this--the lack of democracy, the weight of inertia--the biggest one in my view is the information gap. Comparing the volume and depth of information I had access to when I was a senior executive to the paucity I had in any other position--the difference was staggering. (Note: you can find excerpts of "The Future of Management" here.)

It's no wonder that people can't or won't contribute meaningful ideas for the future when they don't know what the strategy of the company is, or what the core competencies are, or what happy customers like and angry customers hate about the company.

And companies simply won't share enough information for employees to be a valuable part of the innovation process. (If the guy in the printing department is limited to knowledge and context of printing, he's not going to be able to contribute as much as he could.) Perhaps it's concern for confidential information leakage, or for PR fallout, or that management simply doesn't trust in the employees' ability to add value to innovation. At any rate, there isn't nearly enough information sharing with the rank and file.

So where does this leave us, at the end of "The Future of Management"? For one, with a feeling that the top-down, hierarchical, command-and-control model of management is in decline. But also that the next model has yet to be even devised, never mind perfected.

It will certainly be technology-driven. It will be more collaborative, and less proprietary (like P&G's open innovation process). It will be more engaging and rewarding for most employees. There'll be even less job security, and few places to hide if you want to skate for a while (and get paid for doing so).

But will companies look like Google, which for all its innovation still relies on hordes of internal staff; or like movie studios, which form and reform teams of independent contractors for each project; or like open-source communities, which solicit volunteers and manage via a peer-review process and offer of public recognition?

Will people be paid a salary, a price per innovation, or in equity?

What will managers do? Collect and distribute data, perhaps? Administer the market-making systems? Or vanish entirely?

Over the next twenty or twenty-five years, we shall see. It will be an interesting journey.

Other posts in this series:

Part 1
Part 2
Part 3
Part 4


innovation leadership creativity reading list democracycommunication

On Gary Hamel's "The Future of Management" part 4 - Learning from highly-adaptable systems

After lengthy case histories of some new-management examples (W.L. Gore, Whole Foods Market and Google), Hamel gets down to helping us imagine what the new management model might look like. In Chapter Eight of "The Future of Management," "Embracing New Principles," he lays out models for highly-resilient, self-organizing systems, so that by example we could create some rules and practices for new corporate managment. The systems are:

Life - by its limitless diversity, life has adapted to every calamity and catastrophe that has befallen the earth in the last billion years or more. It's instructive that most life "experiments" are failures--virtually all species become extinct, most mutations don't survive. Yet the overall results are anything but a failure.

Markets - they rapidly incorporate information from buyers and sellers, and set prices without any ultimate authority. Investment abandons poor investments quickly to seek higher potential or lower risk, and there are numerous sources from which to raise money.

Democracy - gives each citizen a stake in his governance. By giving voices to many, dissent is prevalent. Which leads to slower, but sounder, decision-making. And, transparency of information is the rule--which tends to create a more egalitarian environment and one where citizens feel empowered to protest what they see as injustice or inequity (you should have seen the uproar when this news was published in my local paper).

Faith - gives meaning to people's everyday lives, and allows them to persevere through tragedy and heartbreak.

Cities - they reinvent themselves continuously by taking on the character of their inhabitants--usually a highly-diverse, creative, enterprising group--and providing variety and space for self-expression. By their layouts, they "increase the odds for serendipity" by allowing people from different viewpoints and areas of expertise to collide, dialogue and perhaps collaborate.

The question Hamel poses in this section is: are any of these traits found in your company? The answer will be, for the vast majority of us, no.

Corporate hierarchies don't allow for many failures to find the one great success; they don't move quickly to defund bad ideas, and are terrible at speculation; they aren't democratic in the least; a higher mission or calling is rare (certainly a deeply-felt mission); they are laid out to reduce costs, not increase the environment to collaborate.

All of this points to the fact that (a) instituting such change will be difficult and (b) those who can do it will achieve outsized rewards, for imitating it will be a challenge.

Ending again with a quote:

Indeed, the more one learns about what it is that makes things adaptable, the more one is tempted to question the very foundations of modern management theory. After all, when compared to large companies, the most adaptable things on the planet are either under-managed or, Mon Dieu, un-managed.

Other posts in this series:
Part 1
Part 2
Part 3
Part 5

Note: you can find excerpts of the book here.

(Photo by echobase via stock.xchng)

innovation leadership creativity reading list democracy adaptability

On Gary Hamel's "The Future of Management" part 3 - Making innovation everyone's job

"Making innovation everyone's job" is a section heading in "The Future of Management." The question is why isn't this done? Hamel (and his co-writer Bill Breen; I've been negligent in not crediting him earlier) give three reasons:

Creative Apartheid - the belief that only special people can be creative, so most people are not allowed to innovate.

The Drag of Old Mental Models - a.k.a. the trap of past success. The authors bring up Dell, a perfect example. Their direct-selling model had been so successful for so long, the company was very slow to catch onto the shift of PCs as a business product to a consumer product--making a retail sales model advantageous. And the move from desktops to laptops, which allowed less customization--a Dell specialty.

No Slack - this is one of the most interesting observations in the book. By increasing efficiency and making sure directly-measurable output was optimized, executives and their consultant enablers squeezed out time for people (including themselves) to be innovative. Innovation requires clear thinking and reflection, and who can do that when they have to close eight trouble tickets this hour, or bill forty-five hours this week, or do twenty performance reviews this month?

Writes Hamel:

Every day brings a barrage of emails, voice mails, and back-to-back meetings [sound familiar?]. In this world, where the need to be "responsive" fragments human attention into a thousand tiny shards, there is no "thinking time." And therein lies the problem. However creative your colleagues may be, if they don't have the right to occasionally abandon their posts and work on something that's not mission critical, most of their creativity will remain dormant. (p.55)

Other posts in this series:
Part 1
Part 2
Part 4
Part 5

Note: you can find excerpts of the book here.



(Photo by fireball45 via stock.xchng)

innovation leadership creativity reading list

On Gary Hamel's "The Future of Management" part 2 - Why do we need a new management model?

What's wrong with today's style of management, anyway? It's earned trillions of dollars of profits. It's slimmed-down, delayered and re-engineered thousands of companies. It supports hundreds of graduate schools emitting newly-minted MBAs every year (including your author).

It's also led countless companies into turnaround hell.

Hamel discusses this at length in "The Future of Management." He writes:

Nearly all accounts of deep change...are stories of turnarounds.... Sadly, [deep change] is rarely opportunity-led, continuous, and a product of the organization's intrinsic capability to adapt. (p.42)

A turnaround is a transformation tragically delayed. (p.43)

It seems that after two-and-a-half thousand years, we are still unable to follow this simple advice from the Tao te Ching:

Act before there is a problem.
Bring order before there is disorder.

Countless management books recommend creating a crisis environment to push through needed changes. Hamel asks, why is this necessary? Why isn't it possible to create a corporate environment that taps the ability to change that we all have inside us?

Our management model prevents us from doing that. The words "command and control" encapsulate what's so limiting about the way we've organized ourselves. In an organization of any size, commands from the top have a limited effect on what people do every day at the bottom. And the ability to "control" employees only seems possible when it's what you've been taught as a manager to try to do. (The only thing that's controlled at most companies is information, and that's a very very important problem with management today, an issue that Hamel takes up later in his book.)

I coach six- and seven-year-olds at soccer. Practice, unless it's fun and engaging, quickly deteriorates into chaos--spitting competitions, staring at the sky, a pig-pile. I can no more control my kids than I can control the weather. The best approach is to keep the games coming, and from time to time to ask them what they want to do. And mostly just let them play.

But when I managed lots of people, I did try to exert control. That's what I'd been taught, and what was valued in the organizations I worked for. (I enjoyed it, too.) It worked better than with my soccer team--these were professionals, after all. But how much fun was it, for me or them?

What would have happened if I had tried to organize the work to be more fun and engaging? What if I had asked the team what they wanted to do, or how they wanted to meet our objectives?

I think that's what Gary Hamel is trying to say here.

Other posts in this series:
Part 1
Part 3
Part 4
Part 5

Note: you can find excerpts of the book here.

management leadership organizational development reading list

On Gary Hamel's "The Future of Management" part 1 - Management Innovation

When we think of innovation, we think of products. The Segway, the iPod, the Roomba, the hot cellphone of the quarter. It's not surprising: they make good copy, and they can be photographed.

But, according to Gary Hamel, in his new book "The Future of Management," product innovations are a short-lived form of competitive advantage. A highly-successful new product gives you only a few years of excess profits before imitators and, yes, more innovative products commoditize it. (Doesn't it seem that the RAZR's heyday was a thousand years ago?)

What about business model innovations? Examples cited by Hamel include Zara ("chic but cheap couture") and Southwest's low-fare airline model. While more sustainable than product innovations, global consulting firms and the ever-growing practice of outsourcing allow new business models to spread rapidly across industries.

Finally, for companies desiring long-term advantage, Hamel points to management innovation. These are entire new ways of organizing, orienting, incenting and acculturating staff and leadership. Significant management innovations are rare, but they can provide decades of value. Hamel cites historical examples such as DuPont's development and utilization of return on investment, Procter & Gamble's brand-management approach, and Toyota's use of each employee's ability (see how Toyota describes its approach here). In each case, the companies achieved advantages that lasted decades.

Why are management innovations so sustainable? Here's Hamel's explanation:

Amazingly, it took nearly 20 years for America's carmakers to decipher Toyota's advantage. Unlike its Western rivals, Toyota believed that first-line employees could be more than cogs in a soulless manufacturing machine [JC note: ironically, the result of a much earlier management innovation--Frederick Taylor's division-of-labor model]. If given the right tools and training, they could be problem-solvers, innovators, and change agents. Toyota saw within its workforce the necessary genius for never-ending, fast-paced operational improvement. In contrast, US car companies tended to discount the contributions that could be made by first-line employees, and relied instead on staff experts for improvements in quality and efficiency. (p. 29)

In other words, management innovation is hard to imitate because it goes against the training, experience and culture that a company has developed over its recent history. It means rewriting tacit rules that have gone unquestioned and that in most cases have led to the company's success in the past.

This, of course, means that establishing management innovation is terribly hard work, full of complexity and requiring learning and development on the part of all staff. But most importantly it requires unflagging commitment of the leadership, since they have the most invested in the status quo.

More tomorrow on "The Future of Management."

Note: you can find excerpts of the book here.

Other posts on this topic:

Part 2
Part 3
Part 4
Part 5

innovation strategy management leadership strategy product development reading list learning organizational development

Next week preview: Gary Hamel's "The Future of Management"--a must read

Gary Hamel's new book "The Future of Management" changed the direction of my career--eleven months before it was even published.

Let me explain. Last November I saw Hamel speak at the now-defunct Fortune Innovation Forum and was struck by the power of his words and performance. (Here's my post from that week.) Hamel was saying that the last one hundred years had not brought us far in the maturity of management. And that companies remain woefully inadequate in engaging their employees and fueling their passion. To paraphrase Hamel as he finished his speech, "Try to figure out how to get all employees to give 100% of their capabilities to their work. That is an interesting management problem for the 21st century."

I was hooked. I started to examine my own work, and what I wanted out of it. I made changes--due to a lot of factors, but not least because of what Gary Hamel said.

At long last, then, his book is out. And it's a must-read. It's full of inspiration, a bit of scolding, and lots of ideas for making companies far better than they are today. So we'll devote next week to breaking down "The Future of Management." See you then.

management innovation reading list strategy

How significant is Boeing's 787 delay?

The Wall Street Journal reported today (link - $$) that Boeing has pushed back the launch of their 787 Dreamliner aircraft by six months, due to delays from partners supplying key subcomponents. Boeing's stock fell nearly 3% on the news.
But what's the long-term impact? Using the framework set out in "Reinventing Project Management," by Aaron Shenhar and Dov Dvir, we can evaluate the project and get an idea of the long-term cost of a schedule slip. (Here is a prior post on this book.)

"RPM" looks at projects over four dimensions: novelty, technology, complexity, and pace.

Novelty: on Shenhar and Dvir's scale of extension, platform, breakthrough, the Dreamliner project is a new platform.

Technology: on their scale of low-tech, medium-tech, high-tech and super-high-tech, Dreamliner is high-tech--using technologies proven in military applications in commercial aircraft for the first time.

Complexity: scale is assembly, system, array. Dreamliner is an array project (most new product developments are system projects, but given Dreamliner's unusual complexity--e.g., subcontractors work on their pieces across the world, then subassemblies are shipped for final assembly to the US inside 747 transport planes, I'd rate it an array project).

Pace: on scale of regular, fast/competitive, time-critical, blitz, the Dreamliner project is fast/competitive--typical of new product introductions.

The "RPM" map, then, would look like this.


Projects of array complexity in particular are subject to delays. As mentioned in the WSJ article, Boeing's extensive use of subcontractors lessens the control it has to respond to issues in the supply chain. (See this prior post for discussion about how outsourcing, regardless of its benefits, lessens direct control.)

But the Dreamliner will be a platform that contributes to Boeing's income for thirty years or more, if the 737 and 747 are any predictors. So on the face of it, a six-month delay is not significant.

What would be significant is if the project management approach that Boeing used differed from the needs of the project. As far as I can determine, Boeing knows what it's doing. The biggest risk would be to rush the plane out prematurely, in which case any operational problems would raise questions about the suitability of the entire platform. Paradoxically, announcing a delay should raise confidence in the project, as it demonstrates that Boeing won't put the plane in the air until it works.

So, a six-month delay is... embarrassing? yes. Costly? yes, in the short run. Long-run significant? No.

project management aviation alliances reading list Wall Street Journal

How globalization can help the environment

I argued in a post yesterday that Lloyd Field's condemnation of globalization in his book "Business and the Buddha" was erroneous. Here's one area where I think globalization is a big help: reducing business's harm to the environment.

Most multinational companies can't/won't choose to do business only in countries with lax environmental standards. Doing so removes large swaths of the marketplace from their reach. And in selling or producing in many countries, they also submit themselves to multiple forums of regulation and oversight. And typically, since it's difficult to change fundamental product makeup for different markets, products are architected to surmount the highest bar and then sold everywhere with surface modifications.

(Frankly, a bigger danger to the environment are smaller local or regional companies. Operating under the radar and having local political power insulates them from national or global standards.)

In the US, California frequently serves as the most difficult regulator. Thus California's environmental mandates, immediately or later, become national norms of doing business. Similarly the EU is more willing to be first with environmental standard-setting. And very, very few companies will pull out of doing business with the EU, especially since they know that their standards will migrate to Asia and the US sooner or later.

The change in the corporate dialogue about carbon emissions illustrates this. In the October Harvard Business Review, Alyson Slater of the Global Reporting Initiative talks about how publicizing carbon emissions is good for business (free link). Such an article in a business publication would have been unthinkable even five years ago. Yet it shows how rapidly corporate thinking has changed.

And we have to give globalization at least part of the credit for that.

(Photo from triffo via stock.xchng)

corporate social responsibility environment Harvard Business Review

The business world needs more wisdom, ethical conduct and compassion

"Business and the Buddha" is a book I expect will be widely ignored. And that's a bad thing, because it is one of the most thought-provoking books I've read in many years. It gets to the heart of many issues that trouble me about the business world, and how our societies have managed the free enterprise system. I suspect many others, were they to read it, would at least feel a mild unease at the base of their stomachs.

The author, Lloyd Field, uses the lessons of Gautama Siddhartha, the Buddha, to critique and recommend changes to business and free enterprise to increase its humanity and concern for the welfare of the planet and its inhabitants. Its focus is on three groups of guiding principles: wisdom, ethical conduct, and compassion.

Who could argue that we have enough of any of these in the business world?

It's a daunting analysis and prescription, however. Not because it's complex, but because it's so simple: Why do we work in companies that load us down with soulless tasks, enmesh us in petty politics, and treat us as disposable? Why are leaders drawn into ethical gray areas and beyond? Why is it acceptable to threaten and act in bad faith in the world of corporate bankruptcies?

"Business and the Buddha" is brief--180 pages including appendices. And it's an exceptionally well-written book, with sentences that are well-constructed and easy to read and free of errors that I could find.

It's not without flaws. The blanket condemnation of globalization didn't work for me--while it's a mixed bag, in the long run factories opening in a country will do good for a country's citizens, and keeping them out won't do good. I also disagree with his condemnation of competition as wrong behavior. While competition among firms can certainly go overboard and negative, competition is essential to much of the good that free enterprise offers. Better products, environmental breakthroughs, innovations, new ways of looking at the world come about by competition. And lack of competition nurtures bureaucracy and stasis--like the old Soviet Union, an ostensibly fair society that couldn't get a lot of the basics done. (Remember the photos of the empty food stores in the 1970's?)

But these criticisms are minor compared to the overall strength, coherence and simple good sense of the book. Especially from page eighty-five on, I was hooked. Notable quotes:

Too often, the good intentions underpinning corporate values and guiding pricniples are thrown to the wind when unexpected opportunities present themselves or when profitability is in question. (p. 125)

When push comes to shove, a profit-and-loss statement will almost always outrank a values statement. This betrayal...is usually accompanied by a good dose of rationalization, thereby reshaping the company's ethical reality. (p. 130)

"Business and the Buddha" also includes the best illustration of the union-management problem that I've read anywhere:

As long as corporations treat their employees as disposable, unions will have no incentive to seek out alternative value systems. Likewise, as long as unions, in the supposed best interests of their members, cause suffering for corporations, employees have no incentive to seek out other values systems. (p. 139)

Perhaps most challenging, Dr. Field urges companies to adopt a "Cause No Harm" values statement, including in part: "We will not acquire any raw materials, or design, manufacture or sell any products or services, the doing of which will be harmful to beings or to the environment."

It sounds impossible, even crazy, but think about this: so did "Zero Defects" forty years ago. (Sounds like a BHAG, an echo of an earlier, slicker business book.) You can also see the beginning of progress toward this goal, as companies take more accountability for their subcontractors and pledge carbon neutrality.

It's important to note: this is not a religious book. It doesn't preach, urge you to convert, or cite more than the barest bones of the Buddha's story to make its points. The focus is on the ideas, and putting them to use. And like a lot of Christian teaching, with which I'm familiar, the lessons are simple, but following them is hard, hard, hard.

(If you're interested in more business-related ideas inspired by the Buddha, check out "The Art of Happiness at Work" by the Dalai Lama. It's a very pleasurable read, and gives lots of practical advice to those who want their work to be more meaningful and their work lives more contented.)

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