Lessons in creative capitalism from the people at Google.

Recently Google announced it is setting aside one percent of its profit and equity -- up to $175 million over the next three years -- to “make the world a better place.” At about the same time, Bill Gates gave a highly publicized speech to the World Economic Forum that called for a “creative capitalism” that uses market forces to fight global poverty. These are but two of the most visible examples of a new business strategy called social entrepreneurialism. It is a strategy that every business needs to consider to be relevant to today's complex world.

Social entrepreneurs use cutting-edge, innovative business methods to promote positive social change. While profit is still the primary yardstick for assessing business, social entrepreneurs also measure the extent to which business makes a positive impact on society. Traditional nonprofits and citizen groups have been mainly distinguished by their benevolent intent. In contrast, social entrepreneurs stand out by their pragmatic emphasis on getting results. Perhaps once it was enough to want to do good. Now it is necessary to do good in the most effective ways possible. Social entrepreneurs make a difference by applying original business strategies to doing good.

Continue reading "The Challenge of Social Entrepreneurs"

Self-confidence is the fundamental basis from which leadership grows. Do you have it?

If you've read my column for any length of time, you know that I've covered many varied aspects of leadership -- and hopefully I've helped you get a bigger picture of what it means to be an effective manager. But I've made an egregious omission. There is one particular component of leadership that is so important, so necessary, that without it, leadership cannot exist. That component is confidence.

Self-confidence is the fundamental basis from which leadership grows. Trying to teach leadership without first building confidence is like building a house on a foundation of sand. It may have a nice coat of paint, but it is ultimately shaky at best. While the leadership community has focused on passion, communication, and empowerment, they've ignored this most basic element and in the process they have planted these other components of leadership in a bed of quicksand.

At the end of the day, leadership is about having the confidence to make decisions. If someone is afraid to make and commit to decisions, all of the communication and empowerment in the world won't make a squat of difference. For example, one former client of mine was so averse to making commitments that she would not give a straight answer without a qualifier. Every attempt to hold her to her word was met with, "well, maybe but I'm not really sure." It wasn't lack of passion or communication that held her back. It was her lack of confidence to commit to her decisions and goals.

Continue reading "Without Confidence, There is No Leadership"

To deal effectively and responsibly with both ongoing and emerging ethics issues, business needs to shift its perspective from reactive compliance to proactive moral imagination.

Recent business ethics scandals have created a moral minefield of shifting expectations and growing uncertainty about the responsibilities of business. These scandals have triggered a backlash of stringent laws and standards, most notably the Sarbanes Oxley Act. While we should not minimize the importance of a fair and consistent regulatory framework, the solution to our most important, emerging ethics issues in 2008 will not come from laws alone. What we need from business is a renewed moral imagination that helps us frame the issues in innovative, more helpful ways.

What critical issues lie ahead? In 2008 we will continue to see the unfolding of major concerns such as the subprime mortgage financial crisis. Business will step up its response to global warming. Issues of globalization will become even more pressing than before. These issues are as obvious as they are important. And yet, it could well be that the most important issue facing us in 2008 has not yet been anticipated by even the most thoughtful forecasters. When the rate of change is accelerating, it is not surprising that some of the most serious challenges to business ethics seem to come from nowhere.

Continue reading "The Moral Imagination of Entrepreneurs"

When you've lost your credibility, sometimes the only way to get it back is to admit you were wrong.

Many leaders believe resolve is an indicator of strength, and so vehemently resist change that they will accuse those who suggest considering alternatives as weak-willed wafflers. In most cases they're right -- leaders do need to show commitment and consistency. Employees value a leader who can stick to his guns. But self-justification and blind faith in the face of mounting evidence to the contrary can quickly push those leaders over the line into arrogance. As much as leaders worry about appearing strong and resolute, it is much more likely that they will err in the direction of looking delusional in their consistency. If you've crossed this line then you are at serious risk of losing all credibility and there is only one way to get it back: Admit you were wrong.

While admitting our mistakes may sound simple, our psychological wiring works against us. Cognitive dissonance explains that our minds actively seek out confirming evidence to support our decisions and self-image. For most people, this confirmation bias is so strong that we often end up convincing ourselves of things that sound preposterous to more objective observers. What this means from a practical standpoint is that since you were the one who made the decision, your employees never reach your level of commitment. Therefore if the decision was wrong, your employees will almost always see the folly of your ways before you will. If the gap between when they see it and when you see it is too long, you will lose their faith and confidence.

Continue reading "Can You Admit You Were Wrong?"

Take time out to learn from every experience and apply that learning in the future -- and in your business.

The practice of reflection, like many skills that make a leader more effective, doesn't always come naturally. Some people never stop doing long enough to reflect while others spend so much time reflecting, they never start doing. The key is to find balance between these two extremes and put reflection to work for you.

While it may sound like some New Age practice, reflection is basically just structuring time to stop what you're doing long enough to assess what's working, what's not and why so that you can adjust future actions in order to achieve a better outcome. In other words, reflection is taking time out to learn from every experience so that you can apply that learning in the future.

Look before you leap

Human beings are natural problem solvers. We start looking for things to change as soon as we identify a problem. Often labeled as “drive” or “initiative,” this tendency is applauded in many cultures. It's exactly this tendency that makes taking time to reflect so necessary.

Without taking this time out, we often find ourselves elbow-deep in solutions before we realize we're working on the wrong problem. Taking time out to reflect first can help to ensure that time, effort and money aren't wasted in the long run.

Continue reading "When Doing Nothing Is the Right Thing"

Instill a natural passion in your sales team to see your profits rise.

Can better leadership contribute as much to the bottom line as good sales training? One of the biggest challenges of teaching leadership is how to directly and immediately increase sales and profits. I'm often told, "These leadership ideas sound great in a perfect world, but changing culture seems like a long, tough process. What can I do right now to improve my business?" Since increasing sales is the first and most obvious thing that most business owners look at when they want to grow the bottom line, I looked into what sales trainers were doing and found a gaping hole in conventional teachings. A hole that a good leader can immediately fill that will grow a company's sales and build infinitely more trust with customers.

In my work with companies and individuals, the one consistent trait in top- performing salespeople is a strong belief in the product or service that they are selling. If you want to increase your sales without resorting to high-pressure tactics or high stress incentives, simply ask your sales team if they believe they are selling the best product in your industry. If they don't believe that they are selling the best, it is extremely unlikely that they are performing at their highest potential. People naturally sell what they believe in, and while a slick salesman might be able to sell a product that he dislikes, it is extremely difficult to fake enthusiasm for extended periods of time without appearing transparent to clients. Think about it. Could you sell a product that you thought was inferior? Could you sell it well? Or perhaps more importantly, would you want to sell it at all? Many people assume salespeople are motivated by money, and while this is largely true, it's absurd to think they are motivated only by money. Salespeople are still human and while commission bonuses and sales spiffs will probably remain an important part of most sales compensation plans, studies consistently show that financial incentives never have the same lasting impact as an employee who is passionate about his work and it is a simply not possible to be passionate about something that you think is inferior.

Continue reading "Growing Sales Through Leadership"

Organizations benefit more from leaders who take responsibility for what they don't know than from leaders who pretend to know it all.

Although it is probably one of the least discussed leadership competencies, self-awareness is possibly one of the most valuable. Self-awareness is being conscious of what you're good at while acknowledging what you still have yet to learn. This includes admitting when you don't have the answer and owning up to mistakes.

In our highly competitive culture, this can seem counterintuitive. In fact, many of us operate on the belief that we must appear as though we know everything all the time or else people will question our abilities, diminishing our effectiveness as leaders.

If you're honest with yourself, you'll admit that really the opposite is true. Because whether you acknowledge your weaknesses or not, everyone still sees them. So rather than conceal them, the person who tries to hide weaknesses actually highlights them, creating the perception of a lack of integrity and self-awareness.

Continue reading "Self Awareness and the Effective Leader"