Leaders to Leader

Lessons from the Great American Leaders & How They Apply Now

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Four Questions That Challenge Your Ethical Decisions

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problems

Many people are faced with a dilemma in that they want to practice conscientious and moral behavior, but are challenged to do so when difficult ethical problems and issues arise. In order to effectively deal with them, managers and their people need superior decision making tools that assist them in making the right choices.

Too many people are under the impression that they need to be deceptive and unethical in order to get ahead. They consider this line of thinking to be shrewd and “streetwise.” In business as in all other arenas, this perception isn’t shrewd: it’s foolish. Poor ethical decisions and judgments in the work environment, especially when considered cumulatively, have dramatic personal, professional and organizational ramifications.

The benefits of dealing with superiors, associates, subordinates and customers in a straight and forthright manner are obvious. Not only is it the right thing to do, it also positively impacts motivation, productivity and profitability. It is simply good business.

A profound business philosophy is to be found in a simple four-step decision making aid. While it does not direct people in what specifically to do or think, it does give them a tool to guide them in all of their business and personal decisions.

Well known to anyone ever associated with Rotary International and translated into more than 100 languages, The Four-Way Test is highly recommended as an easy decision making tool that makes a clear difference in the practice of ethical behavior.

Managers and employees must display the highest standards of honesty and integrity in their conduct to establish and sustain credibility. The Four-Way Test is a handy and simple litmus test for all personal actions and decisions.

Herbert J. Taylor developed the test during the depths of the depression in the 1930s. A young sales manager for Jewel Tea Company, Taylor was asked by Continental Bank in Chicago to take over the management of Club Aluminum Products, a manufacturer of pots and pans. The company was fraught with unethical business practices and bankruptcy. The banks had assumed control of it.

To bring the company out of bankruptcy, Taylor knew he had to change the way it did business. Ultimately, he developed the Four-Way Test business philosophy and instructed all employees to follow it in each of their dealings with customers, suppliers and associates. The philosophy turned the business around and ultimately brought it out of bankruptcy.

Is it the TRUTH? 



All decision-making must start with an objective base of facts—in other words, the truth. This is the basis for all decisions, negotiations and problem solving.

When resolving a conflict, all parties must agree on what constitutes the truth. All viewpoints and insights into the problem must be considered when defining the truth. The same process applies when making a decision. All sides of an issue or problem must be fully and objectively weighed before determining the truth of the matter.

The benefit of such an approach is that it effectively removes bias, emotion and personal agendas from the decision making process. When truth is objectively defined, viable solutions become obvious to a reasonable person.

Is it FAIR to all concerned?

Any problem or decision comes with a variety of options and solutions that are available when making a decision, solving a problem or negotiating a settlement or sale. The key is arriving at the best solution. When options, alternatives and solutions are weighed as to their impact on all parties, it becomes easier to narrow the options. When the final choices are filtered according to their fairness to all parties, the optimal decision will become obvious.

Will it build GOODWILL and BETTER FRIENDSHIPS?

It is important that decisions leave all involved parties satisfied, knowing the decision is fair to them.

Most people want to get on well with others and treat them in the same fashion that they would wish to be treated. Managers and employees must make ethical choices that build consensus and long-term goodwill. This increases employee retention and profitability of the organization.

Decisions made involving individual employees must focus on the same factors. This establishes trust and credibility, which has a direct impact on personal motivation and productivity.

Will it be BENEFICIAL to all concerned?

The final point addresses the question, “What’s in it for me?” Individuals want to know how a decision benefits them. The final question assures all involved parties that an equitable and beneficial decision has been reached.

The questions asked in The Four-Way Test are interrelated, with the answer to one question effectively creating the possible answers to the next. The answers and solutions are obvious and logical to all involved.

In the practice of ethical behavior there is an increased need for effective decision making skills and tools to guide and direct managers and employees. Only when specific individuals wish to pursue a personal agenda or achieve a decision will any interference come into play. The Four-Way Test effectively exposes such personal goals and agendas without the need for the manager or employee to directly bring attention to them.

Related:

Ethics: Actions Do Have Consequences

Seven Practical Applications of Ethics

Leaders Are Judged By The Actions They Take

Trust is Based on Truth

Excerpt: Ethics and Integrity: Pinpoint Management Skill Development Training Series (Majorium Business Press, Stevens Point, WI 2011) $ 17.95 USD

Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreword Reviews‘ Book of the Year)
Linkedin | Facebook | Twitter | Web| Blog | Catalog |800.654.4935 | 715.342.1018

Copyright © 2013 Timothy F. Bednarz, All Rights Reserved

Communication Has to Start With Telling the Truth

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Warren Buffett (L), chairman and CEO of Berkshire Hathaway Inc. and David Rubenstein (R), president of the Economic Club of Washington, participate in a discussion during the 25th anniversary celebration dinner of the Economic Club of Washington June 5, 2012 in Washington, DC.  (Photo by Alex Wong/Getty Images)

Warren Buffett (L), chairman and CEO of Berkshire Hathaway Inc. and David Rubenstein (R), president of the Economic Club of Washington, participate in a discussion during the 25th anniversary celebration dinner of the Economic Club of Washington June 5, 2012 in Washington, DC. (Photo by Alex Wong/Getty Images)

Warren Buffett (Berkshire Hathaway) remarked, “‘It’s vital to be able to communicate well… Just being able to communicate with others on the job adds at least 50% to your value.” Open and effective communications at all levels solves many problems and reduces conflict before it even occurs. Lee Iacocca (Chrysler) declared, “A leader has to communicate. I’m not talking about running off at the mouth or spouting sound bites. I’m talking about facing reality and telling the truth…

Communication has to start with telling the truth, even when it’s painful.” Iacocca notes the importance of intellectual honesty as part of the communication process. “Iacocca says he’s not talking about verbosity or sound bites. He means facing reality and telling the truth, even when it’s painful. If you apply spin, people will know—they’re not stupid—and they’ll stop listening.”

“Peter Drucker [felt] the most valuable asset in a firm is the collective knowledge of its employees. But to realize that value, the people in an organization have to be able to share that knowledge. That means ‘them that’s got it’ have to be able to give it to ‘them that don’t.’ And that transaction requires two-way communication between inspired transmitters and welcome receivers.” The great leaders understood this. In fact, most spent a great deal of their time on the “factory floor” meeting with managers, supervisors and employees to see firsthand what is happening and to understand the problems and issues facing their companies.

At Hewlett-Packard it was discovered that “‘Management by Walking Around’ improves communication, improves quality, improves teamwork, and improves profits. Hewlett and Packard’s visible presence and easy availability (they insisted on a company-wide open-door policy, believing that interruptions were a small price to pay for the advantages of open and frank communication with the talented people they hired) earned them deep credibility with their co-workers. A drill press operator on the outskirts of the factory knew that the CEO and President understood what he did and appreciated his contribution.”

As was previously pointed out, John Patterson (National Cash Register) actually moved his office into the middle of his factory floor. While other leaders, such as Henry Heinz (H.J. Heinz), Harvey Firestone (Firestone Tire), William Proctor (Proctor & Gamble), and George Westinghouse (Westinghouse) did not go to that extreme, they still remained highly visible, and openly and frequently communicated with their employees. In recognition of his frequent presence on the factory floor, Harvey Firestone’s casket was walked through his factory one last time, at the time of his death.

The great leaders spent the majority of their time traveling and communicating with employees and key constituencies. This allowed them to become personally acquainted and to influence employees on all levels. It also provided them with the opportunity to elicit feedback to make more accurate and fact-based decisions.

Fredrick Crawford (TRW) spent “much of his time speaking to employees and projecting the force of his ideas and his personality. One observer called him ‘a natural leader of tremendous vitality, self-assurance and singleness of purpose.’ But there was more to the Thompson program than Crawford. At all levels of the organization, managers tried to convince workers that the company had their best interests at heart…

Thompson managers referred employees as ‘members of the Thompson family’ and tried to minimize status distinctions between managers and workers… the firm’s policies were guided by an effort ‘to eliminate class lines and have our relationships on a first name basis.’”

While this may appear commonplace, some influential leaders like Cary Fiorina (Hewlett-Packard), Richard Fuld (Lehman Brothers) and Roger Smith (General Motors) avoided meeting with their employees. Not only that, they strictly limited their accessibility to them. These leaders, among others who exhibited this characteristic, experienced substantial problems on multiple levels.

Related:

The Need to Test Opinions Against the Facts

The Capacity to Face Reality

Don’t Push Out Figures When Facts Are Going in the Opposite Direction

References:

  1. Stein Ben, Ben Stein: More from My Dinner with Warren (Fortune Magazine, January 7, 2010)
  2. Iacocca Lee, Where Have All the Leaders Gone? (Scribner, 2007)
  3. Iacocca on the Need for Leadership Now (Business Management Daily, March 31, 2010)
  4. Willax Paul A., To Communicate Better, Improve Your Listening Skills (New Hampshire Business Review, September 28, 2007)
  5. Orfalea Paul, Helfert Lance, Lowe Atticus and Zatkowsky Dean, Inspirational Figures David Packard (West Coast Asset Management)
  6. Jacoby Sanford M., Reckoning With Company Unions: The Case of Thompson Products, 1934-1964 (Industrial and Labor Relations Review, October 1, 1989)

Excerpt: Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Majorium Business Press, Stevens Point, WI 2011) Read a Free Chapter

Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreword Reviews‘ Book of the Year)
Linkedin | Facebook | Twitter | Web| Blog | Catalog |800.654.4935 | 715.342.1018

Copyright © 2013 Timothy F. Bednarz, All Rights Reserved

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