Interestingly, the writing of this book coincides with recent, pivotal developments in the world of business—developments that will influence the way organizations view the social responsibility of business. We believe, in turn, that these developments will create more opportunity for the ongoing and focused development of leaders—including Best Bosses.
One such development comes from the Business Roundtable (BR). As described on their website as of February 6, 2021, the BR is a nonprofit association based in Washington, D.C., whose members are chief executive officers of nearly 200 major U.S. companies. Together with policy makers, workers, and communities, the leaders of the BR have a mission to strengthen the U.S. economy and its competitiveness and to create jobs through their research and advocacy efforts.
Periodically issuing Principles of Corporate Governance since 1978, the BR has endorsed principles of shareholder primacy (i.e., shareholder interests are a first priority among all stakeholders) in versions they have issued since 1997. However, in an August 2019 press release, the BR announced the release of a new Statement on the Purpose of a Corporation, signed by its 181 CEOs, with a dramatically different focus. They now advocate that corporations have a commitment to all stakeholders—customer, employee, suppliers, communities and shareholders alike—and their purpose is to promote a U.S. economy that serves one and all.
Executives in the Business Roundtable provided insightful rationale for this change. Jamie Dimon, Chairman of the BR and Chairman of JPMorgan Chase & Co. explained “the American dream is alive, but fraying… Major employers are investing in their workers and communities because they know it is the only way to be successful in the long term.” Alex Gorsky, Chairman and CEO of Johnson & Johnson and Chair of the BR Corporate Governance committee commented that the new statement “… affirms the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders.” This change comes with the idea that stakeholder interests are inseparable. In other words, an organization cannot successfully sustain itself for the long term when its “success” leads to the downfall of one or more stakeholders, as when the burning of fossil fuels contributes to the acceleration of global climate change, and in turn, harms humanity. BR leaders also took this opportunity to encourage investors to support companies focused on managing the long term, as well as the short term, by investing in the needs of employees among other stakeholders. We believe this opens the door for a more deliberate focus on strategic leadership development, including that of the Best Boss. See Table 12.1 for a Key Excerpt in the Statement of Purpose of a Corporation, released to the public on August 19, 2019.
In another recent development, it is interesting to point out that the 50-year anniversary of The New York Times Magazine’s September 13, 1970 publication of Milton Friedman’s famous article took place as we wrote this very chapter. In recognition of this milestone, The New York Times collaborated with DealBook to “revisit the legacy” of Friedman’s essay by sharing excerpts of it along with reactions of its impact from modern day CEOs and economists. While Friedman’s essay still has its proponents, we have captured in Table 12.2 some dramatic protestations of modern leaders whose remarks were published in the September 13, 2020 publication.
Table 12.1 Key excerpt in the statement of purpose of a corporation
While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders. We commit to:
• Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.
• Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.
• Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.
• Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.
• Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders.
Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.
Table 12.2 Some reactions to the Friedman Doctrine 50 years hence
Milton Friedman: “In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.” |
Marianne Bertrand, professor of economics at the University of Chicago Booth School of Business |
Milton Friedman: “The Social Responsibility of Business Is to Increase Its Profits” |
Marc Benioff, chief executive of Salesforce “I’ll never forget reading Friedman’s essay when I was in business school in the 1980s. It influenced—I’d say brainwashed—a generation of CEOs who believed that the only business of business is business. The headline said it all. Our sole responsibility to society? Make money. The communities beyond the corporate campus? Not our problem.” |
Source: https://nytimes.com/2020/09/13/business/dealbook/milton-friedman-essay-anniversary.html
So, it seems there might never be a better time to use momentum such as this to think through what it is that your organization can do, specifically, to influence the development of Best Bosses. To achieve this will provide great dividends for all stakeholders.
Detailed proposals for delving into your organization’s leadership development strategy and process are beyond the scope of this book. However, what can be done—regardless of where your organization stands at this time—is simply to start the conversation. That is where all good change begins. To facilitate this dialogue, we conclude this chapter with an “Open Letter to Our CEO” you can use as a template to address the development of Best Boss behavior within your organization.
Open Letter to Our CEO
Dear CEO,
As the individual who has risen to lead our organization, we invite you to reflect upon the people who were most helpful to you in your career journey. Most importantly, who was the Best Boss you ever had? Why do you see him or her in this way? What did he or she do? How did this boss make you feel? What was the impact of his or her leadership on your career? Recent research provides this “thumbnail sketch” of the five determinants of Best Boss leadership:
Demonstrating an interest in the direct report beyond immediate performance (i.e., Leads from a Higher Purpose), the Best Boss discerns and takes steps to Activate Potential, Promote Dynamic Autonomy and independent action-taking, and then Provides Pervasive Feedback and Inspires Continuous Learning in ways that make positive impacts on the motivation, job performance, career development, and even the personal life of the employee.
The truth is, this finding is backed by decades of research and evidence on the positive impact of leaders who exhibit these behaviors—on everything from engagement and performance, to retention, careers, and even personal lives. Abundant research also evidences the detrimental impact of “bad boss” behavior—not just the toxic impact on the aforementioned, but also the harmful impact on emotional adjustment and health.
Whether or not you personally have had that Best Boss experience, we urge you to consider the benefits our organization stands to gain in having as many leaders of people as possible develop and demonstrate more effective skills in these five dimensions, and to quickly take stock of our readiness and capability to deliver on this aspiration. Do we collectively lead our organization in a way that takes into consideration the dramatic impact that effective leadership can have on our people and in turn, our organization as a whole? If it does, how much time, attention, and resource do we invest at this time to identify, develop, deploy, and reinforce Best Boss behavior? Here are fourteen (14) determinants that are key indicators of readiness. We believe challenging our organization to gauge their current extent of use of these determinants will provide the most powerful starting point:
1. Organizational Culture: To what extent do you and our Board of Directors integrate Best Boss elements into our mission and values, define an explicit leadership “brand,” and expect senior executives set the example through their behavior?
2. Vision: To what extent does our organization have a philosophy of leadership that details what is expected of those who lead people, and why it matters?
3. Strategy: To what extent does our organization have an explicit strategy, plan, budget, and progress measures to develop leaders?
4. Structure and Work Arrangements: To what extent do we ensure that span of control and the work situation provides the supervisor opportunities to observe and interact informally with direct reports?
5. Recruitment and Selection: To what extent do we seek to hire, select and/or promote supervisors whose skills and traits are consistent with the Best Boss behavior model?
6. Performance Management of Employees: To what extent do we ensure that clear expectations, feedback, coaching, explicit linkage between performance and rewards, etc. are integral to the employee experience through the efforts of the person to whom he or she reports?
7. Performance Management of Those Who Lead Others: To what extent do we require that, in addition to providing employees the above performance management elements, supervisors are expected to address the professional development of their employees and seek upward feedback from direct reports?
8. Succession Planning/Talent Management: To what extent are individuals who display Best Boss leadership skills taken into account when identifying succession planning candidates for critical leadership positions within the organization?
9. Rewards: To what extent are leaders throughout the organization rewarded for their people leadership results?
10. Organization Communications: To what extent do we utilize social and print media, upward or 360-degree feedback, employee surveys, town hall meetings, etc., to communicate expectations, ensure two-way communication, and track our progress with respect to Best Boss behavior and impact?
11. Leadership Development: To what extent do we train people leaders in critical Best Boss skills such as questioning and listening, strategic thinking, emotional intelligence, etc.?
12. Career Development and Succession Planning: To what extent do we explicitly define job mobility requirements and processes, and ensure supervisors are actively supporting employee career development?
13. Technology: To what extent do we have in place a technology-enabled competency structure and career development structure and process, along with technology-enabled online training programs to support employee performance and career development?
14. Measures, Metrics, and Milestones: To what extent does our organization assess progress in leadership development and the impact of improved leadership on organizational performance?
Becoming a Best Boss organization will not happen overnight. We will need to deploy or achieve a critical mass of these determinants to move forward. Your assessments not only provide important benchmarks of our “current state” of readiness; in addition, these replies provide an element-by-element gap analysis between our current state and the “desired future state” of being a Best Boss organization.
Can we count on your leadership and support to amplify the processes that will help bridge the gap between current and desired states, and move us forward to being recognized internally and externally as a Best Boss organization? You can count on my [our] efforts to support yours.