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Viewpoint: What's Really Wrong with Corporate America?

July 9, 2012
Most companies have lost their soul -- their vision or bigger reason for being a company -- and have become too focused on maximizing profits.
A common refrain is that the purpose of a business is to maximize profits.  It’s obvious that a company has to make a profit to stay in business, grow, and prosper, but I don’t think this should be the main purpose of a company.  Most entrepreneurs have some kind of  "vision" or bigger reason for starting a company -- whether it's to produce a new product that will benefit others or to provide a service they feel they can provide better than others.   What’s wrong with companies today, especially publicly traded corporations, is that they have lost their "soul" -- their vision or bigger reason for being a company.  They have become too focused on the "bottom line" of maximizing profits and forgotten the real reason the company was founded.  Our history as a country is filled with men and women of vision who changed the world by the products or services they invented or provided -- Thomas Edison, Henry Ford, George Westinghouse, and Aaron Montgomery Ward.     Today, you need to be able to provide or add value to have a place in the global supply chain of goods and services.  If you don’t provide or add value, you won’t be able to stay in business in the long run.  Providing or adding the maximum value possible is the goal behind all of the steps and tools used to become a "Lean Six Sigma" company whether you are a manufacturer or a service provider.  You focus on the customer by removing wasted and non-value added steps to become "lean" and reduce variation and improve quality to achieve the "Six Sigma" level.
However, this renewed focus on the customer by becoming a "Lean Six Sigma" enterprise won’t restore the soul of a company.  To do this, you need to create or revive the concept of  "for the sake of others" that is, serving others by what you do or make.  This is the main concept presented in Dr. Tony Baron’s book, "The Art of Servant Leadership." This book shows you how to design or redesign your organization for the sake of others and is "a guidebook on how a private or public company can achieve its true purpose in the world."  The book has a lofty purpose: "To equip, inspire, and encourage those we influence in order to make a profound positive difference in the world." In a 1970 Times magazine article, the economist Milton Friedman argued that businesses' sole purpose is to generate profit for shareholders, as long as it is doing so legally and ethically. In contrast, Dr. Baron believes that the "sole goal of a business is to exist for the sake of others." The book provides a case study of the principles and practices Art Barter used as a servant leader to reform Datron and transform lives inside and outside the company. Datron World Communications, Inc.  is a privately owned company located in Vista, California. For over 40 years, Datron has provided tactical military and public safety radio equipment to a diverse worldwide customer base doing business in over 80 countries through an international sales representative network and regional support centers. In part 1 of Baron's book, "The Need for a New Kind of Leader," he discusses leadership and the common misguided use of  "applied power" vs. "true power" in the first chapter.  Chapter 2 examines a leader's epiphany or defining moments that transforms him/her into a "servant leader."  In Art Barter's life, his father's example, his work at Disney Co. as a young man, and the teachings of Ken Blanchard and John Maxwell led to his being ready to become a "servant leader" with the guidance of Dr. Baron. In chapter 3, we learn that a leader often is best revealed by adversity and what was the adversity that contributed to the transformation of Art Barter and Datron.  Mr. Barter had started at Datron in 1997 as Chief Financial Officer, assumed the position of General Manager after Titan Corp. bought Datron in 2001, and purchased Datron in 2004 during the depths of adversity. Chapter 4 considers the fact that most corruption and disruption in corporations results from leaders' failure to lead themselves and what are the seven essential elements of leading yourself before leading others.   At the end of each chapter, there are Table Talk questions you can ask yourself and others to use the book as a guide to help you transform yourself or your company.  For example, after Chapter 1, some of the questions are: "What is your organization’s story?  Who are your leadership role models?   How did they shape your beliefs about leadership?" Part 2 provides "The Formula for Success:  Living for the Sake of Others," beginning with how to create a servant leadership culture in a company or organization in chapter 5.  Dr. Baron’s definition of corporate culture "is a way of life cultivated over time through shared experiences, values, and behaviors."  He states that every corporation must share the following at a minimum in order to sustain a healthy environment:  shared beliefs, shared experience, and shared expressions; that is, "a verbal commitment to do what they know they can do."   In chapter 6, "Cultivating a Servant Leadership Culture," Dr. Baron writes that the four components necessary for transformation within an organization are:  
  •  Cultural Architect – a person with the highest level of positional, power within the corporate circle of influence
  •  Commitment level – a personal commitment of belief, behavior, values and vocational activities that align with servant leadership by the cultural architect
  •  Climate control – creating an atmosphere of balance with the right people, opportunities and resources
  •  Culture formation – based on new experiences repeated and reinforced through modeling, teaching, affirming, and rewarding to transform people and the business

Dr. Baron writes, "Because most corporations have taught that profitability is the sole purpose of the organization, the workforce has lost its faith in business and in people.  They have lost the confidence that leaders have their best interests in mind when considering corporate decisions that affect the bottom line.  They have lost trust.  I don't blame them. Over the last twenty years in various boardrooms around the country, I have seen executives choose to receive their year-end bonuses over keeping employees on the payroll."

Teaching servant leadership progresses through four stages:  

  • 1. Instruct-  solid instruction on the principles of servant leadership
  • 2. Invest – use some of the principles with varying degrees of success
  • 3. Influence – high discussion and consensus building
  • 4. Incarnate – the servant leader is building other servant leaders

Chapter 7 considers "Vision, Values and Virtues.  Dr. Baron writes, "In corporate language, vision describes the vivid mental image created by a leader so that people will have the experience of truly seeing into the future."  The vision statement of Datron states the company's purpose "a self-sustaining, profitable communications company which positively impacts the lives of others today and in the future."

Dr. Baron laments that so many Fortune 500 companies don’t consider that "their primary mission is to exist for the sake of others" outside of their shareholder family.  He believes that "the stakeholders for every company are our local, national, and global community."

The book concludes with the chapter on "Extending the Servant Leadership Culture to the Community" describing how Art Barter, his wife, and the employees at Datron have worked "for the sake of others.   Shortly after acquiring Datron, Art Barter and his wife set up a charitable fund with a donation of $600,000.  Datron employees can submit a request for donations to a charity of their choice.  From 2004 – 2010, over $2.5 million was contributed to causes as diverse as the Boys and Girls Club, an orphanage in Kenya, the Special Olympics, Breast Cancer Research, AIDS research, and women’s shelters.  Datron also founded the Servant Leadership Institute, headed by Dr. Tony Baron, whose mission is to create servant leaders who will transform organizations.

Datron has been able to make these contributions because of its financial success, increasing revenue from $10 million in 2004 to $200 million in 2010, while being organically funded internally and debt free.  New products introduced include the Scout Air Reconnaissance System unmanned vehicle designed to capture and transmit high quality video and images in the field and the PRC7700H variant of its high frequency software-defined radio.

Datron has been my customer for over 25 years, and a long-time employee, Mark Satttel, said, "although the transformation was difficult at times, servant leadership is gaining at Datron."  A new employee recently told me that working at Datron is different than working at any other company-- "it works as if the pyramid is upside down, with the president at the bottom.  Everyone keeps asking me 'what can I do to help you.'"

Every American has the choice of using your talent and experience for the sake of others by becoming a servant leader. Doing this would make American great again and make the world a better place.  What's your choice?

Michele Nash-Hoff is president of ElectroFab Sales. She is the author of "Can American Manufacturing Be Saved?"

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