Recently, in a variety of settings I am observing the issue of trust impacting business relationships.

Obviously, trust is at the foundation for business transactions – that the vendor will provide the goods or services purchased, that the goods or services will be at the quality level described initially, and that the customer will pay for the goods or services in the time frame agreed upon.

Another area of business where trust is impactful is in the employer / employee relationship – where the employer follows through on commitments communicated to the employee and the integrity level of employees to be trusted to access to information and resources.

This past week I was talking to a business owner who described a situation where he had hired a sales manager (in early 2008, prior to the financial crisis hitting) who in turn started hiring a fairly high cost sales staff. Whenever the current owners or management team raised issues or asked questions of the sales manager, he reported replied, “Do I have to earn your trust or earn your mistrust?” (implying they should trust him until he proved untrustworthy.)

I replied that this was the wrong question. And, in fact, I find much communication around the issue of “trust” is not laid out properly. I do not believe that the question is: “Do I trust you?” (or “Do you trust me?”). This is too broad.

Trust is situation specific. The more appropriate question, I think, is: “For what do I trust you?” Or, “What am I willing to entrust to you?” (responsibility, privileges, resources). I may trust you to hire staff within a budget amount but I may not trust you to have total access to all of the company’s financial data. Or, I may trust you to pay bills with appropriate procedural checks and balances but I don’t trust you to have total access to the company’s financial resources without monitoring.

Think back to common family situations. Teenagers often complain to their parents, “You don’t trust me!” But again, the real issue is “trust you to do what?” I do trust you to choose good friends and to tell me the truth about where you are going, but no I don’t trust you to drive three hours late at night in a car with four of your friends on a snowy night.

Generally speaking, trust is earned — either from prior behavior with other individuals (that is why we trust professionals who have gone through training and certification in their profession, but we often also check references of people with whom they have worked) or in their behavior with us. We trust others (in the defined areas of responsibility) based on previously demonstrated responsibility in similar areas.

[I do admit that in many daily interactions we confer trust to others when we have no specific basis to do so, other than assuming most people are trustworthy in daily life transactions. However, this level of trust varies greatly across individuals’ own personal history and life experiences.]

I find that people (both business owners and parents) tend to get “burned” when they give more trust and responsibility to others when the person hasn’t demonstrated a basis for that trust.

A second area where I find business owners and managers tend to get taken advantage of by others in the business world is when they ignore early warning signs of mistrust. Partly due to the self-reinforcing tendency that we don’t want to admit that something may be wrong (and that we made a mistake in hiring this person), and sometimes partly due to people’s propensity to want to believe the best of others - we wind up overlooking early warning signs of a person not being trustworthy. As a result, we continue to entrust responsibilities and resources to the individual and find out later they weren’t trustworthy in how they handled the responsibilities - digging a deeper hole and creating more problems for the business.

So, where do we go with all of this?

First, I would suggest to accurately define the parameters of trust in relationships. Using a framework such as, “I am willing to trust you to…” Sometimes, it may be appropriate to say, “I am willing to trust you with… because you have shown yourself responsible by… ” Additionally, sometimes you may need to add, “…but I don’t feel comfortable yet in giving you the responsibility to …” Finally, it is helpful to clarify what responsibilities need to be demonstrated in order for you to trust the individual with more areas (this is really helpful in dealing with teens - versus the arbitrary “when I feel comfortable”.)

Secondly, I would strongly encourage each of us to pay attention to early warning signs of problem behaviors. This can take many different forms, including:

*the facts just don’t add up

*you are getting reports from clients and customers and other trusted team members, about some problems in a team member’s behavior

*the team member responds to questions and challenges with a “don’t you trust me?” type of response

*the team member is quite adept at making excuses, blaming others or circumstances versus admitting they made a mistake or error in judgement.

How should you respond to early warning signs?

a) talk to the individual about your concerns; often your concerns may be due to misperceptions or miscommunication;

b) obtain verifying information by an independent third party;

c) set up processes and procedures to monitor transactions

d) document the issues and behaviors which are creating concerns for you. Often the weight of evidence over time becomes significant, while no one specific incident is that large.

I think it would be wise for each one of us to consider the following old saying,

“Wise individuals see danger ahead and avoid it, but fools keep going and get into trouble.”

There is an increasing emphasis on the inter-relatedness between the process of making money (whether through active business activities or through investments) and also having a positive impact on one’s community (either at the local, national or global level). The focus, along with developing opportunities, applies to individuals and families, small businesses, corporations, and family foundations.

Let me share with you some recent developments from a variety of social arenas, and also resources available, if you are interested in finding out more.

At the corporate and business level. This past week Indra Nooyi, the CEO of PepsiCo, shared her thoughts about the need for corporations to redefine what true profit is. She suggested that a company’s “real profit” is revenue, less costs of goods sold, less the costs to society. Ms. Nooyi stated, “companies can do well, long term, only if the socieities in which they operate also do well.”

Additionally, others like Dov Seidman [author of How: Why How We Do Anything Means Everything…in Business (and in Life)], propose that companies who behave ethically will also eventually outperform their competitors financially. For an introduction to his thoughts, see the February 8, 2010 article in Forbes entitled “Why Doing Good is Good for Business.”

At the individual and family level. Given the disappointment with the banking industry, their struggles with ethical behavior and seeming lack of interest in anything except pure financial return, individual investors are looking for alternatives. Recently, I was exposed to the concept of community development banks — whose mission is to not only provide a financial return for their investors but also to invest in their communities. They do this at multiple levels — providing small business loans to help businesses grow, being involved in microfinance lending for start-up entrepreneurs, investing in community projects such as Boys & Girls clubs, providing education and training for small business owners, giving loans for education, investing in the local educational systems; the list goes on. An excellent example and leader in this area is Southern Bancorp, who is having a dramatic impact in the Mississippi delta areas in Arkansas and Mississippi. [Note: you don’t have to live in the area to bank there. For example, we are moving our personal money market account from a national financial institution to Southern Bancorp — where we will earn market-rate (or better) interest while Southern will use the money in community development projects.]

From the family foundation and philanthropic perspective. For decades, family foundations and private foundations have emphasized aligning their financial investments with their values. This led to the development of “socially responsible investing” — not investing in companies whose business was not consistent with the family’s or institution’s values (for example, who made products related to military weapons, whose processes seriously damaged the environment, or were related to alcohol, tobacco or gambling).

Further developments have included mission-related and program-related investments — where the foundations proactively invest in companies who are aligned with the foundation’s mission (e.g. companies who are creating technologies applicable for developing countries, or companies developing charter schools). For an excellent introduction, see the publication “Mission Related Investing” published by Rockefeller Philanthropy Advisors.

A third wave has been the focus on social entrepreneurs — helping individuals who are both entrepreneurial (in the business sense) but who are also impacting their communities at the social level — through job creation, education and training, creating products using local renewable resources. I have had the prvilege of working with Charly and Lisa Kleissner and their family over the past nine years, as their family coach. Charly and Lisa have become leaders in the area of social entrepreneurship — and I have gotten to see, hear and learn from them in their work in this area. Go to www.socialimpact.com for great resources and to gain an understanding of social entrepreneurs. [I can’t give a sufficient introduction here — it is too big of a topic.]

Finally, a new area of “doing good” while making money is the arena of “Impact Investing”. Historically, foundations viewed socially-responsible investments in their investment portfolio, as an area where they would be willing to earn less (say 2% versus 5%) on their investments. However, there is a new movement among philanthropic investors who are demonstrating that socially-responsible investments (e.g. in long-term sustainable timber production) that not only have a positive social return but also can meet or exceed the financial returns compared to their investment allocation benchmarks.

Again, Rockefeller Philanthropy Advisors, along with Lisa and Charly Kleissner, Raul Pomares and others, have produced a thorough introduction to the topic, entitled, “Solutions for Impact Investors“. Also, the Kleissner’s foundation website provides a great introduction to the topic. Go to www.klfelicitasfoundation.org and hit the button regarding their investment strategy.

I know I have thrown a lot of information and topics out there in this entry — but they are all inter-related and I wanted to give people starting points for investigating, exploring and learning about the new resources that are becoming available. (It feels sort of like doing the abridged version of all Shakespeare’s works in 30 minutes.)

Hopefully, I will be able to “circle back” and give a more in depth discussion of some of the areas. In the meantime, enjoy exploring!

This week I had the opportunity to attend a conference where both John Townsend (author of Boundaries) and Henry Cloud (author of Integrity) spoke on leadership.  Here are some notes of thoughts that I felt were interested and helpful.

John Townsend

Research is verifying the relationship between character, interpersonal skills and performance outcomes.  That is, if you work on the “inside” issues you will see improvement in performance outcomes. (See below for why this is the case.)

Life is more than making right choices – doing cost/benefit analyses.  There are two sets of information that leaders need to listen to – external (verifiable objective facts) + internal (listening to your ‘gut’).  True reality is a combination of objective information plus subjective intuition.

Values  — values are those things that you believe in to the point that they dictate your decisions.

Leaders need to focus less on what the mission statement says their core values are, and get an objective observer to share the values they observe in how the organization actually functions (i.e. focus on what their values are versus what they should be.)

The pendulum is swinging in leadership development from a pure focus on strategic planning, setting goals, managing by objectives, and the variety of technical processes to improve performance to also paying attention to the emotional side of life (and business).  Not focusing on feelings for feelings’ sake, but understanding that feelings play a role in both decision-making and in working as a team.

In decision-making, feelings play the role of relaying signals to the leader – signals that need to be paid attention to and investigated.  Anxiety (or concern or fear) is signaling that there may be a potential danger to heed.  Investigating the reality of the risk and taking steps to manage the risk (if it is real) is wise.  Ignoring the signal could be reckless.

Interestingly, Townsend indicates that the positive function of anger (irritation or frustration at lower levels) is an indication that you have a problem to solve – something is going on that you don’t like.  Now the problem may be internal – that you have unrealistic expectations that aren’t being met.  Or the problem may be external – that someone’s performance is not acceptable and needs to change.

A third emotion he cites that is critical to the business world is passion.  I personally have never considered passion as an emotion previously.  But it makes sense.  Townsend describes passion as “focused desire”.   And most successful leaders have or have experienced passion – that burning desire to do what they are called to.   A challenge for some leaders is that they lose the intensity of their passion / desire over time (which is a whole additional topic of discussion), while others struggle in maintaining the focus of their passion.

[Out of deference to Dr. Townsend and his intellectual capital, I am not going to list all of the positive and negative emotions he addressed in his book Leadership Beyond Reason:  How Great Leaders Succeed by Harnessing the Power of Their Values, Feelings, and Intuition.  Get the book – it is a good, solid leadership book with a unique perspective on the role of feelings in leadership.)

Townsend also believes that emotions play an important role in working effectively together with team members  — negative emotions among team members impede effective functioning, while positive feelings between colleagues facilitate better performance, both individually and as a unit.

He also describes the power of emotions in bringing to mind past relationships (what he and other psychologists call “internal relationships”) – those people who influenced us significantly in the past (parents, teachers, mentors, coaches) and still influence us “in our head”.  Dr. Townsend gives excellent examples of how leaders become stuck in their personal and leadership development because they can’t get past old messages from internalized relationships (“You’ll never amount to anything.”  “In the end, you’ll always screw it up.”)

A key application for me is that both Dr. Townsend and his colleague, Dr. Henry Cloud (whom I also heard) are seeing the need for coaching in the “middle space” for leaders.  There is plenty of coaching and leadership development in the strategic planning, becoming a change agent, etc. space.  And many leaders don’t need (or won’t get) heavy duty “counseling” focusing on personal problems.  But Dr. Cloud argues that there is the “middle space” that needs to be addressed – where a leader’s personal development has not kept pace with the growth of his organization and his or hers resulting responsibilities.  So there is a gap between the weight of their professional responsibilities and the development of personal skills and abilities to effective manage the demands.  Issues in this middle space include recurrent patterns of interpersonal difficulties (types of people you don’t work well with),  anxieties and fears that are making you hesitant to make decisions, personal and family  issues that are interfering with your performance by sapping your emotional energy, etc.  Business leaders need help working though these issues so that they can continue to become more productive leaders (which is the goal of the process).

One last interesting point Dr. Townsend  made about leaders.  Leaders are essential persuaders – they persuade others to follow them.  Initially, they do this by casting vision, identifying goals that will lead to the vision, communicating out a plan to reach the goals and then inspiring his team to share the vision and implement the plan.

But there is a difference between initially persuading followers and keeping them engaged.  For team members to continue to stay engaged with the vision and task, they need a sense of being listened to , understood and cared for by the leader.  This is a different skill set than the initial persuasive skills and many leaders either haven’t developed, don’t value or don’t practice the empathic listening to their team – and this ultimately leads to loss of enthusiasm, discouragement and conflict – for the unheard team member will find someone who will listen to them (other colleagues, other leaders) and this can lead to discontent and division within the team.

I’ll stop there.  “He who has ears to hear, let him listen (and act!)”

I am not an economist (thankfully).  But economists, meteorologists (those who try to predict the weather), and psychologists are somewhat in the same situation — our ’sciences’ are not very “hard” — that is, they often are not solidly grounded in data and they lack power to predict.  For example, last night there was no prediction at all of any precipitation and we had a major rain and hailstorm in our area (up to baseball sized hail!).  Part of the problem for all three of these sciences is that there are numerous inter-related factors (many of which are still unknown) that need to be accounted for in trying to predict what will happen.

The point is — no one really has a good handle on the future of the U.S. (and global) economy.  Just turn on the TV or radio and you will hear numerous opinions on what is happening, and what needs to happen to make our economic situation improve.

But let’s take a look at the basics and this will give us some clues.  Economic activity, at its core, is the exchange of goods, services or information for monetary value.  Going back to some basic cause and effect relationships we can follow the following line of thought:

• People work and receive money for their services.
• When people don’t have jobs, they don’t make (as much) money.
• When people don’t have as much money and don’t see the opportunity for more money come in, they either don’t spend as much, or spend on credit.
• At some point, most people, when their income is reduced over a period of time, reach a limit of what they can buy on credit or realize it is not a wise pattern to continue.
• Eventually, people begin to “cut back” on non-essential spending (eating out, recreational activities) and also tend to slow down the process of replacing existing belongings (new technology, new clothes, furniture, cars).
• The lack of spending means businesses are selling less goods and services, receiving less income, and have to cut back expenses in their business, which includes labor.  Hence, they reduce employees’ hours or lay off employees.
• These people now have less money to spend.
• And thus, the negative spiral of an economic downturn continues.

The key question becomes: how does this negative cycle turn around?  This is where economics becomes largely theoretical, and an individual’s answer is related to their beliefs about economic activity and individuals’ behavior.  President Obama and others believe governmental intervention is necessary. Others believe letting the free market forces drive the process.  And obviously, there are combined approaches.

I believe that this is where understanding the psychology of our culture is important.  In actuality, as in economics, there are actually two fairly diverse sets of beliefs that exist is our culture.  And these belief systems drive different expectations and behaviors.

Cultural Belief System #1:

• I deserve “x”.  I have had “x” before, and I still want it. [Note: “x” can be a lot of things — money, a job, health care, free time, retirement benefits, a nice home, etc.]
• If you have “x” and I don’t, you should share at least some of your “x” with me.
• If I don’t have “x”, somebody should do something so that I can have it.
• The problem (of whatever causes me not to have “x”) lies in a greater system of rules, organizations, factors that I don’t have much control over.

Cultural Belief System #2:

• Life is what it is, including bad (or unfair) circumstances.
• Some of my life’s circumstances are directly related to my choices; some circumstances come from factors outside of my control.
• If I want the circumstances in my life to be different, it is largely up to me to figure out how to make that happen. There may be some larger system issues that may need to be changed, but I can’t depend on that happening.
• Making my life’s circumstances better may require me doing things I would prefer not to — work long hours, do work that I don’t enjoy; relocate; be away from my family for a while; live a simpler lifestyle than I am used to.
• I will do what I can to improve my circumstances, knowing there are no guarantees, and hope for the best.

And here we come to a critical factor that can impact a person’s future:  hope.  Psychologists believe that the loss of hope is a key component of depression.  A person can go through a lot of negative circumstances — and become discouraged, worn out or sad.  But when they lose hope that “things will get better”, that is when more serious depression develops.  They give up.

So here is what I predict, as a psychologist.

1. The economic recovery is going to take longer than what most Americans want.  This is due to the economic reality that the ultimate recovery is related to job creation and the resulting economic activity that occurs, and this appears to be a long-term issue.  And secondly, our culture is very present-oriented with little patience.  We want things “now”, and this is unlikely to occur.
2. There will be two groups of people that experience the economic downturn differently:

a)  There will be people who expect life to be “like it used to be”, and expect someone else to make that happen (largely, the government or maybe ‘big business’ or the wealthy.)  These people will become increasingly impatient, angry, and demanding of others.  Their focus will be on economic relief programs and governmental bailouts.

b) There will be a group of individuals who take steps in their lives to make the best of a bad situation, and who will ultimately (some, not all) find opportunities economically — to provide goods, services or information that others need and are willing to pay for.  Their life circumstances will probably be difficult for a period of time but they will “deal with it” and continue on.   There will be a portion of this group who will find significant economic success as a result of their efforts (there are always people who find ways to make money in difficult economic times.)

I think it may be a good time for each of us to ask ourselves:

• What do I believe about what is happening?
• Which group do I want to be a member of?

Recently, the reality of people losing their jobs has been hitting quite close to home.  Living in the city where most aircraft are built in the U.S., and the struggles aircraft manufacturers are experiencing have made knowing individuals who have been laid off from work a personal experience.  And the secondary job losses are significant as well — suppliers to the aircraft manufacturers, graphic designers, retail sales, professionals in the real estate arena — all are experiencing the effects.

I am reticent to personally give advice to individuals who are walking on paths I have not had to walk yet.  However, I did find the following ideas in some recent articles, and thought they might be of some help.

Given the current financial crisis, Psychology Today decided to interview a number of successful professionals and find out the role that “failure” played in their personal and professional development.  Here are a few of the comments and findings:

• There is a difference between failures and Failure, just like the difference that exists between financial diminshment and bankruptcy, and marital strife / divorce.
• Failure hurts but can pay off in the form of learning, growth, and wisdom.  Some psychologists … go even further, arguing that adversity, setbacks, and even trauma actually may be necessary for people to be happy, successful and fulfilled.
• J.K. Rowling, author of the Harry Potter series of books experienced a series of failures including a broken marriage, and poverty that bordered on homelessness.  She states:  “Failure stripped away everything inessential.  It taught me things about myself I could have learned no other way.”
• Paul MacCready, Jr., a famous aeronautical engineer who won the Kremer Prize for the world’s first human-powered airplane, depended on failure to help him succeed.  He designed his airplane to crash well, so that it would protect the pilot and the plane could be quickly repaired, so he could learn quickly from his failures.
• The difference between people who come out of failure successfully and those who do not seems to be related to the degree of ‘rumination’ that is allowed to continue.  “Failing better” is related to three aspects: controlling our emotions, adjusting our thinking, and recalibrating our beliefs about ourselves and what we can do in the world.
• Many argue that failure is necessary for growth.  So protecting ourselves (or our children) from failure limits our exposure to growth opportunities.  Conversely, too much failure can discourage and lead to one’s spirit being crushed — to the point of giving up.  How much failure is too much?  Two really helpful answers (being sarcastic):  “It depends” (on the stage of life and unique characteristics of the individual; and “We don’t really know.”

From a companion article, here are “Nine ways to fail better” by Bruce Grierson.

1. Lighten up — have a sense of humor.
2. Join the club — commiserate with others in similar situations.
3. Feel guilt, not shame — learn from your mistakes,but don’t accept the belief that “I am a failure”.
4. Cultivate optimism — put yor negative thoughts on trial and rebut them; they often are not based in reality.
5. Ask not what the world can do for you . . .  –  you now have the opportunity to do something different with your life.
6. Scale down your expectations for yourself — repeatedly failing to meet your expectations for yourself may indicate you need to re-evaluate realistic expectations for yourself.
7. Keep a journal, learn from what you are thinking and feeling, and use those lessons to take action.
8. Don’t blame yourself — blaming yourself for the bad things that happen to you (i.e. attributing all cause to yourself) is an error in thinking that causes people to become stuck, rather than to become stuck, rather than moving forward.
9. Act! — failure provides an opportunity to do something different, but only if you act on the opportunity.

I hope some of these thoughts may be helpful to you — or forward them to a friend or family member you know who finds themselves in this difficult situation.

An entry I wrote in April about the challenges owners and managers of businesses face in today’s economic environment was published in today’s business section of the Wichita Eagle.  If you missed it previously, you can read the article on the Wichita Eagle website.

I live outside of town (for those who grew up in a rural setting, it would be a stretch to say we live in the “country” — although for those who live in an urban setting, they would think so — lots of trees and animals, and we live on a dirt road).  And I love to take walks in the woods.  This morning I hiked around in the early morning sun, through some surprisingly thick woods and undergrowth.  And it “got me to thinking”.

For many of us, our daily lives are quite segregated from nature.  Hence, we tend to miss many of the foundational lessons we can learn by making some basic observations (and observations that would seem self-evident to most of our ancestors).

• Growth occurs naturally when necessary conditions are met.  In nature this includes light, nutrients, and water.  In business, core conditions include customers who have the ability to pay, the goods or services you are providing to others, getting the word out about your product (marketing), and collecting payment for your product (there are probably more I am missing).  Interestingly, in both nature and business, the lack or absence of one core ingredient means eventual death.
• Controlled growth produces more fruit.  When all of the necessary conditions are present, and especially in times of abundance, there actually can be too much growth.  Pruning, cutting out unwanted growth, planning and planting desired plants, taking out weeds, thinning out plants to provide more room, light and nutrients for selected plants — all are mechanisms for controlling growth.  In business, too many products or services offered, or not being able to manage large surges in demand can actually hinder the company’s ability to maximize their profits.
• Unrestrained growth leads to chaos and little beneficial results.   Have you ever seen a tree or plant that has grown for years without any management of its growth?  They are typically unattractive, not well organized, and don’t produce as much fruit as a tree which has been systematically pruned and thinned.  Similarly, businesses that just grow everywhere and in every direction possible become difficult to manage, and the resources needed to be productive (time, energy, human capital, financial capital) are squandered in helter-skelter fashion rather than in a focused direction.
• Healthy production comes from a combination of planning, preparation, hard work (at the right time), monitoring, maintenance, and long-term effort.  Contrary to some business books (usually in the sales & marketing field), there is no one solution that will make a company successful.  Rather, healthy businesses — like healthy gardens — require a combination of planning & preparation, long hours (at times), monitoring what is actually happening and taking corrective action.  Generally speaking, both in nature and in business, there is no quick pathway to success.  Rather, a series of actions over a long time period lead to healthy production.
• For good results to occur, challenges, lack of resources and destructive elements must be dealt with successfully.  To make plants and trees grow, it is not just a matter of providing what they need (focusing on the positive).  Healthy plants come from dealing with the threat of destructive elements as well — insects & pests, being eaten by animals, fungus or mold or blight, and a harsh environment (drought, extreme heat or cold).  In the same way, focusing on one’s “business plan” without taking into consideration the risks that may be encountered can lead to failure.  Unforeseen competitors, changes in tax law or governmental rules & regulations, or a harsh economic environment — the lack of available financial capital, the lack of adequate human capital and expertise — can tank an otherwise healthy business.

I am sure there are other lessons and metaphors from nature that apply to business-life.  Take a minute and reflect (or better yet, go on a walk, observe and ponder).  I’d love to hear your thoughts.

Recently, the American Psychological Association recognized 14 companies as leaders in creating healthy workplace environments.  Besides just helping their employees “feel good” (the ubiquitous reply to anything psychologists do), there are some practical economic benefits for the companies as well:

• One company has reduced absenteeism by 34 percent
• The average employee turnover for the top five award winners was 11 percent, in comparison to the national average of 39 percent
• At these companies, 85 percent of employees reported being satisfied with their jobs, in comparison to only 61 percent nationally
• And only 5 percent of the employees indicated they intend to seek employment elsewhere within the next year, compared with 32 percent nationally.

What are these companies doing that is making such a difference with their employees?  Here are some of the resources, policies and action steps they have taken (this is not an exhaustive list):

1. Having an on-site nurse to see sick employees
2. Offering health screenings to employees
3. Parental leave for parents to attend school functions (plays, luncheons)
4. Discounts on private gym memberships
5. Financial incentives to employees who reach health-related goals
6. Tuition-assistance programs
7. On-site child care
8. Workshops on money management and debt reduction
9. Cash rewards for recruiting new hires
10. A wellness day once a month with access to chiropractic, massage and nutritional services
11. Smoking cessation help
12. A mentoring program between junior and senior management
13. Executive coaching for senior managers
14. Nutrition classes

One final note:  87% of the employees at these 14 top companies would recommend their place of employment as a good place to work (while the national average is only 44%).  How would your company fare in such a survey?

If you are an owner, manager or supervisor, take a minute and revisit the list — see what small steps you could possibly take to make your workplace more employee-rewarding.  Often there are community resources (e.g. for nutrition classes, for money management courses) available for no cost.

And if you are an employee, take a look at the list and see if there is a characteristic that is especially inviting to you.  Talk to your colleagues, and maybe your supervisor, and see how you might work together to get this resource at your workplace. You never know — a little initiative and communication can create positive results.

Today’s economic environment is taking a huge emotional toll on business owners and managers.  Given the shrinking economy, with orders for manufacturing being canceled or put on hold, with little happening in the construction industry, and with the general public spending less at the retail level — many businesses are having to either cut back employees hours or let them go altogether.

The “hidden” story behind this pattern is the huge emotional strain business owners and managers are experiencing.  And I am hearing from more and more of them each week.

One manufacturing executive told me he volunteered to take a 50% pay cut (his company is owned by a larger private corporation), even though his superiors suggested a 4% reduction for management.  He told me he couldn’t, in good faith, see his employees take a 20% reduction (by means of going to 32 hours per week from 40 hours), and not take at least the same level of reduction.

Other business owners are sharing with me the pain of having to let good team members go, because they don’t have the work needed to cover the overhead.  Some owners are losing sleep and experiencing a level of anxiety they state they never have had previously.

I grew up in a family-owned business.  My father, mother, grandfather and uncle worked together in a manufacturing firm.  And I vividly remember during the economic struggles of the 1970’s conversations during mealtimes about my dad’s concerns.  As a teenager, I was struck by the level of responsibility he felt for providing work (and thus, income) for his employees.  He frequently would share he felt terrible whenever he would have to let someone go, because of the impact it would have on the family — especially the children.  So he tried everything he could to keep them employed, even if it meant having them do tasks that were not directly revenue producing.  The stress of the situation wore him down emotionally, and physically.

Today, business owners struggling with the same issues.  Here are some of the burdens I see them carrying:

• A sense of responsibility in providing for others.  Often, in our culture, business owners are viewed enviously of “having it all” — financial success, time freedom, prestige … Those who own businesses know the other side of the coin — the financial stress of making payroll and paying creditors, and the knowledge that other individuals and families are counting on you to provide for their income.
• Balancing competing needs and demands.  Yes, your employees need work and income.  But the owner must also “keep the ship afloat” — you can’t keep people employed and risk losing the whole business.   Similarly, a business’s vendors and suppliers need to be paid (they have employees, too), but if you pay them, you may not be able to have sufficient funds for your own payroll.
• Guilt.  “I should have …”  or “I shouldn’t have …”  Business owners are experts at second-guessing themselves and expecting themselves to have perfect judgment.  Business owners feel guilty for having to let employees go.  They feel guilty to the remaining team members for not letting other employees go sooner.  And they especially feel guilty for “not having seen this coming.”
• Lack of knowledge about the future.  As the saying goes, no one knows what the future holds.  This is also true for business owners.  But, ironically, they are often asked by others (colleagues, employees, customers, family members, friends) to divine the future:  “When do you think this will turn around?”  And the lack of predictability in our current economic environment wears heavily on business leaders — it is very difficult to make decisions about the future when even the short term (3 to 6 months) is highly unpredictable.
• Pressure from numerous fronts.  Business owners have numerous parties who place pressure on them — their customers, their vendors, their employees, the community, their family, their church and charitable organizations.  And most of these groups are generally unaware of the other parties involved in the business leader’s life — and they are primarily focused on their needs.
• Need for wisdom and discernment.  Most successful business owners (that is, those who have endured difficult times previously) are humble individuals.  They know that they don’t know everything, and that, almost more than anything, they need wisdom and discernment in how to manage during these tumultuous times.   The goal often becomes survival, and they are willing to do what is necessary to accomplish this goal — even if it means not “looking” successful, or taking on responsibilities that are beneath their title and position.  And they are almost always willing to accept counsel from others.

So, the next time you are interacting with someone who owns or manages a business, take some time to listen to them.  Ask them how they are doing.  Give them a word of encouragement or appreciation for all they do for their employees and the community.  And try not to ask them to do something for you — they have enough demands in their life as it is now.

This week I have had the privilege of participating in a summit meeting of advisors who work with some of the most successful individuals and families in our country (and even the world).  Approximately twenty-five professionals from a variety of disciplines gathered to learn from one another and discuss how they can best work together to serve their clients.  Clients of the advisors present include royalty of countries around the world, former Presidents of the United States, top entertainers and sports figures in the U.S., leaders and innovators in the field of technology, “household names” of financially successful families, and generally very successful business families from various industries.

It was a fascinating two days of listening to presentations from the professional participants — who shared the latest advances in their field of service, and then to hear the team members discuss together the implications of the advances and how they can be utilized to help the families we serve.  The areas of expertise included:

*investment advisory professionals (one of the leading theorists in the field whose firm has outperformed the S&P 500 every year for the past 10 years)

*open architecture financial reporting (being able to report all of a family’s assets in one report — from multiple investment firms to including non-traditional asset classes)

*risk management  (an independent consultant who advises clients in assessing the various types of risks associated with their holdings and businesses and helps clients find the best provider for each type of risk)

*security of family members (a former intelligence agent whose firm provided security at the last World Cup games and who has successfully returned every kidnap victim safely)

*life insurance professionals (the ex-chief underwriter of one of the top five life insurance companies in the world)

*estate and tax planning attorneys (a team of attorneys who together train estate planning attorneys across the country and some of whom are involved in framing state laws in the area)

*business valuation and business succession experts (individuals who have been involved in helping transfer billions of dollars of business value from one generation to the next)

and more.

What was fascinating to me was to observe the following characteristics of these individuals:

• Humble.  Although each person was a leader in the own field, to a person they were not proud, arrogant nor self-promoting.
• A learner.  Each person was there to learn from others and people repeatedly commented on the privilege to learn from one another.
• Service-orientation.  These professionals saw their role as to serve their clients to the best of their ability.  Although everyone is also professionally successful, they were not focused on image or making a lot of money — they knew that if they served their clients well they would be fairly compensated.
• Collegial.  Although there were professionals from the same fields (e.g. accounting, tax law) as well as a variety of areas, there was no sense of “turf wars” or trying to take over areas. Rather, these professionals see and know the value of working together with others who are also competent.
• Integrity.  Repeatedly the issue came up that “we are not willing to do [x, y, or z] just to make money. We will only do what is best for our client.”
• Enjoyable to be around.  We laughed a lot.  The group was positive, caring for one another, and respectful.  I did not hear one cutting or sarcastic remark during the whole event.  And people genuinely expressed their appreciation to one another in numerous ways.

The group reminded me of an old proverb I have tried to pursue in my life:

“Do you see people skilled in their work?  They will work for kings, not for ordinary people.”

The lesson for all of us is this — do whatever you do well, learn and keep learning from others, and take the initiative to do what you can to be around those who are the best in their field.

A practical example: one of the participants who was younger (early 40s), but already extremely successful in his own field [he serves royal families in the Middle East], sought out one of the older participants and asked to be mentored by him stating “I’ll do whatever you need — carry your bags, sit in the corner and be quiet — I just want to be there, observe and learn from you.”

Share that perspective with your kids and junior managers.