The Onion Effect

Recent comments by deposed Enron leader Ken Lay that he didn’t know what his underlings were doing shouldn’t come as a surprise to anyone familiar with the law of attraction. The leaders of Enron, Tyco, WorldCom, and every other company, for that matter, are going to attract others in their organization with values similar to their own. I think you can prove this with what I call the onion effect. Peel back the layers of a company, and at the center is the core . . . the values of the company. More specifically, the core of the company consists of the values of the senior executives.

If the core values are of trust, honesty, kindness, diversity, dignity, and respect, then this group will attract other leaders with those same values. They will transcend those values to the treatment of employees, who will likewise transfer those same values to customers. Similarly, companies whose leaders’ values consist of distrust, dishonesty, hate, prejudice, indignity, and disrespect will attract management with similar values, which will then find their way to customers via the employees they attract. Simple but true.

Ken Lay claims that he didn’t know what Andrew Fastow was doing. I believe him. He didn’t have to. He attracted a certain value-driven behavior of his subordinates by his own behavior. His manager acted like Ken Lay would have acted.

I have observed the onion effect in many companies and find it to be intriguing and unfailing. Basically, every layer of a company is a reflection of the previous layer’s value system. Beginning at the core, the central base of the organization starts to recruit. The law of attraction assures that they will attract similarly valued people to the organization. As the numbers of people grow, support systems are put into place. This is where the onion effect actually begins.

Systems are implemented that again reflect the values of the principals and leaders of the company. The difference in values is reflected in observing details such as personnel benefits, costs spent on acquiring new customers (rather than on serving existing customers), and similar assessments. Basically, tracking where money is spent at the corporate level creates a clear view of the values of the corporation. As the corporation grows, there are more and more layers. The layers become another reflection of the last until the customer contact layer. This can be people, systems, or both. In either instance, they again reflect the values that go all the way back to the center, to the core. In every example of the companies I have studied, I have never found this to be an incorrect barometer of the values of the company.

Notice the actions of other leaders in business and politics. Watch how their “lieutenants” behave. You’ll again see the law of attraction at work. I am not referring to the simple acts of following corporate policy or law. We can all follow something that is clear and spelled out. I am referring to decisions made that involve values, doing the right thing as opposed to the wrong thing.

Want to know how to determine how your company will respond under pressure? What kind of management you will be attracting? What kind of customer will want to do business with you? Easy. Gather your executives right now, and find out what it is that is most important to them. Is it family, honor, or dignity? Or is it personal financial success, ego, or power? Although many of you may be disappointed, this is a snapshot of your company’s values. And just like a snapshot of the family reunion, companies are nothing more than a reflection of the values that the individuals represent. These values are passed down from one to another.

Take a look around, and validate for yourself. From political administrations to the businesses you read about in the local paper, the values are obvious and predictable. The results are as well.