Why leaders need to shift focus to their Just Cause.
Collectively we can have the biggest impact on the health of Americans by shifting our mindset and implementing policies that support all stakeholders – not just shareholders.
Infinite Mindset
I’ve been reading a new book called the Infinite Mindset that frames the ideas that I’ve shared in earlier articles and posts about ethics, values and trust in relation to capitalism.
Infinite Mindset emphasizes the need for leaders to focus on their Just Cause [aka: vision] and to adopt the policies that promote the trust needed to support collaboration and innovation.
The most courageous brands that you can think of attract and retain talent because they have a compelling vision for the future. Courageous brands pay employees well, offer meaningful work and training needed for continuous development and promote trust so that employees have the tenacity needed to overcome challenges.
You don’t need Apple’s profit margins to be a courageous brand. Paying your employees a living wage, reduces the cost and negative impact of turnover and enables your company to move forward. The ability to continuously improve and move forward [toward the vision] is how leading edge companies win the long game.
Ethical Fading
I’ve been using the expression “misguided understanding of capitalism” to describe the short sighted business practices that I’ve encountered over the years. Interestingly, there is term for it – ethical fading.
A few years ago, I was asked to interview for a CEO position of a company purchased by a Venture Capitalist [VC]. The company was running a strategy the was legal but ethically questionable. I was already familiar with the company and thought that I got the call because they needed my help in transforming the business. I couldn’t have been more wrong.
The VC was doubling down on the strategy so that they could milk it to the very end. That’s referred to as a Finite Mindset. The meeting didn’t go well because I challenged the ethics of it all. It was so jarring that I needed to debrief with another VC to get his thoughts on the strategy. He agreed with me.
The timeline often reveals the mindset. Activist Investor Starboard Value just took a position in CVS to “unlock shareholder value”. The first telling question is will they make CVS sell tobacco products again to recover the $2 Billion in annual sales or will they support the company’s Just Cause?
Ethical fading happens when investors and leaders are able to normalize questionable conduct because it’s not illegal. Some experts believe it’s a function of excessive pressure rather than a lapse of individual values and ethics.
Normalizing unethical practices
Unfortunately when the law is unclear, many leaders implement practices that serve their own interests regardless of the broader impact. That’s when questionable business practices get normalized.
There are three [3] ways unethical practices get normalized
1/ Leaders disassociate from it. They use language to mask the harmful impact.
2/ Leaders blame the system for their transgressions rather than getting out in front of the issues and working to fix the system. A recent example is the Mylan EpiPen Scandal. The company’s management inflated EpiPen prices and then blamed the system for a lack of pricing regulation.
3/ Leaders blame the consumer for not understanding the risks of their products and services.
Just Cause
Leaders who take responsibility for the broader impact of their business practices consider the ethics of their decisions. They don’t try to hide behind the law, use confusing language or blame the customer.
Leading edge companies are in business for the long term and care more about fulfilling their Just Cause than short term financial gains. That’s the Infinite Mindset.
2020
There is a good article written about prominent economist, Mariana Mazzucato, about fixing capitalism. The article also frames the 2020 Presidential Election issues well.
On a personal note, RUSH is turning 20 next year. I’ll also be taking time to revisit my Just Cause while away. So you likely won’t see another post from me until next year. I look forward to connecting with you then.
