Do Your Values Change When Your Stock Goes Up?
Rumors coming out of DaimlerChrysler's two-day board meeting have the carmaker eliminating more than 8,000 jobs from its Mercedes-Benz division. What would seem to be bad news has investors positively giddy. In fact, DaimlerChrysler AG shares rose nearly 4 percent just on the expectations of the announcement.
"The job cuts are the main reason the shares are up and we're hearing they could be more than expected," one analyst said. I can almost picture him licking his lips as he speaks. Analysts had expected DaimlerChrysler to eliminate a mere 5,000 jobs.
News of job reductions is not unusual, and DaimlerChrysler's leadership should not endure criticism for efforts to restore profitability to a beleaguered division. But what I find troubling is the typical stock market reaction. It seems whenever companies announce layoffs, their stock prices rise. The oh-boy-lower-costs-mean-more-money-for-me investor response is unsettling, especially in an era when more and more companies are basing business decisions on their impact on the next quarterly profit announcement. A skeptic might wonder if some layoffs are management's short-term solution to a declining stock price.
Guess what. Employees can be skeptical, even those spared from job cuts. And many will wonder if their bosses are living by the values they profess when they say things like, "We bear responsibility for the people involved in or affected by the business activities of our company," like DaimlerChrysler proclaims in its Vision of Sustainability, and then eliminate thousands of those people's jobs.
In these situations, it's critical that leaders talk frankly with the employees who are staying behind. Explain the true purpose of the layoffs--after all, without profit, there won't be any jobs. But most importantly, explain that the action does not reflect a change in the company's core values. We still care about people, and--as DaimlerChrysler's Vision of Sustainability also declares--"We bear responsibility for the economic performance and the long-term business success of the company."
Hey, no one said living by the values you profess would be easy.
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"The job cuts are the main reason the shares are up and we're hearing they could be more than expected," one analyst said. I can almost picture him licking his lips as he speaks. Analysts had expected DaimlerChrysler to eliminate a mere 5,000 jobs.
News of job reductions is not unusual, and DaimlerChrysler's leadership should not endure criticism for efforts to restore profitability to a beleaguered division. But what I find troubling is the typical stock market reaction. It seems whenever companies announce layoffs, their stock prices rise. The oh-boy-lower-costs-mean-more-money-for-me investor response is unsettling, especially in an era when more and more companies are basing business decisions on their impact on the next quarterly profit announcement. A skeptic might wonder if some layoffs are management's short-term solution to a declining stock price.
Guess what. Employees can be skeptical, even those spared from job cuts. And many will wonder if their bosses are living by the values they profess when they say things like, "We bear responsibility for the people involved in or affected by the business activities of our company," like DaimlerChrysler proclaims in its Vision of Sustainability, and then eliminate thousands of those people's jobs.
In these situations, it's critical that leaders talk frankly with the employees who are staying behind. Explain the true purpose of the layoffs--after all, without profit, there won't be any jobs. But most importantly, explain that the action does not reflect a change in the company's core values. We still care about people, and--as DaimlerChrysler's Vision of Sustainability also declares--"We bear responsibility for the economic performance and the long-term business success of the company."
Hey, no one said living by the values you profess would be easy.
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Nonprofit Resource Center Slides
How do the prison sentences of Dennis Kozlowski and Bernie Ebbers affect the working lives of nonprofit leaders? Well, thanks to Dennis, Bernie, and the rest of the gang of corporate scoundrels, new regulations are requiring leaders of all organizations to enforce the same governance standards as major companies. That was the subject of my presentation this week at the Nonprofit Resource Center. You can download the slides here. You will need PowerPoint to view the slides.
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Why Retention Matters
If your organization bases its employee retention strategy on the age-old, "everyone is replaceable" theory, it's time to find a new model. Why? Because the percentage of existing workers nearing retirement age is booming (or baby booming, to be specific), and many new entrants to the labor pool lack basic employment skills. In other words, you'll soon be losing some of your most seasoned workers and replacing them with some of the greenest.
According to the U.S. Bureau of Labor Statistics, over the 2002-2012 period, the numbers of workers aged fifty-five or older will grow by half, a growth rate four times that of the general workforce. By 2012, one out of five workers will be fifty-five years old or older. As these workers cut back, or retire altogether, they'll take the wisdom of their job experience with them and leave a large hole in your knowledge base.
About half of the HR professionals who responded to a recent Society for Human Resource Managerment survey said they are seeing new workers entering the workforce lacking overall professionalism, written communication skills, analytical abilities, or business knowledge. Many of these workers come straight from earning their college degree, yet they lack the general social skills required to succeed in the workplace. So before you can teach them about your business, you'll need to teach them such behaviors as calling when they're going to be late or absent.
Susan Meisinger of SHRM says, "We know there will be millions of baby boomers retiring and that some workers now entering the workforce lack core competencies. These are serious HR and workforce issues that could undermine the nation's global competitiveness." Indeed, your organization's economic survival will depend on its ability to retain all the good employees it can.
Fact is, it's getting harder and harder to find quality workers, so retaining the good ones is becoming more critical than ever before. Leaders who believe their employees "have nowhere else to go," will soon find themselves wondering where everyone went. Understanding which values inspire your workers is the key to retention, and the foundation of values-based leadership.
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According to the U.S. Bureau of Labor Statistics, over the 2002-2012 period, the numbers of workers aged fifty-five or older will grow by half, a growth rate four times that of the general workforce. By 2012, one out of five workers will be fifty-five years old or older. As these workers cut back, or retire altogether, they'll take the wisdom of their job experience with them and leave a large hole in your knowledge base.
About half of the HR professionals who responded to a recent Society for Human Resource Managerment survey said they are seeing new workers entering the workforce lacking overall professionalism, written communication skills, analytical abilities, or business knowledge. Many of these workers come straight from earning their college degree, yet they lack the general social skills required to succeed in the workplace. So before you can teach them about your business, you'll need to teach them such behaviors as calling when they're going to be late or absent.
Susan Meisinger of SHRM says, "We know there will be millions of baby boomers retiring and that some workers now entering the workforce lack core competencies. These are serious HR and workforce issues that could undermine the nation's global competitiveness." Indeed, your organization's economic survival will depend on its ability to retain all the good employees it can.
Fact is, it's getting harder and harder to find quality workers, so retaining the good ones is becoming more critical than ever before. Leaders who believe their employees "have nowhere else to go," will soon find themselves wondering where everyone went. Understanding which values inspire your workers is the key to retention, and the foundation of values-based leadership.
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What in their World is Sony Thinking?
How important is having a vision in business today? Perhaps the leaders of Sony can answer that question. The company recently announced its first quarter results for fiscal 2005: a net loss of $66 million. Add that to the $528 million Sony lost in its fourth quarter ending March 31 and the sum is a once-dominate company spinning into obsolescence.
Experts blame Sony's troubles on business line diversification. In the late 1980s and early 1990s, the manufacturer of consumer electronics acquired its way into the record-producing and movie-making industries. Those moves gave Sony ownership in the production of audio and video tapes and cassettes, while the rest of the world was going digital. Reluctant to abandon its dying content, Sony sat holding its Walkmans while Apple's iPods changed the industry.
So what should Sony's new CEO Howard Stringer do to navigate a turnaround? Quoted in a Knowledge@Wharton article, management consultant John Kao, whose San Francisco-based company advises organizations on being more innovative, says that Stringer needs to frame a vision for his company. "Right now I feel like Sony is trying to do everything," say Kao. "Sony's number one challenge is to return to the startling clarity of vision." Adds Kao, Sony's "original goal was to become a global brand, innovate, and succeed where U.S. companies failed. It has to return to fundamentals, harness its resources, and then sell [a new vision and products] to the marketplace."
When organizations lose site of their original mission, leadership vision is of utmost importance. Visionary leaders hold pictures of what the future can be in their minds. Values-based leaders use those mental portraits to navigate their lives. Guided by their visions, values-based leaders are so intent on reaching their goals that others are simply compelled to follow.
Of course, some people confuse the idea of visionary leaders with the image of prophets, futurists, or renegades attempting to attract followers with radical or extreme ideas. Just the opposite is true. Values-based leaders enlist employees by identifying common interests, and showing them how that shared vision will satisfy mutual needs.
So have a vision and convince others to share it.
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Experts blame Sony's troubles on business line diversification. In the late 1980s and early 1990s, the manufacturer of consumer electronics acquired its way into the record-producing and movie-making industries. Those moves gave Sony ownership in the production of audio and video tapes and cassettes, while the rest of the world was going digital. Reluctant to abandon its dying content, Sony sat holding its Walkmans while Apple's iPods changed the industry.
So what should Sony's new CEO Howard Stringer do to navigate a turnaround? Quoted in a Knowledge@Wharton article, management consultant John Kao, whose San Francisco-based company advises organizations on being more innovative, says that Stringer needs to frame a vision for his company. "Right now I feel like Sony is trying to do everything," say Kao. "Sony's number one challenge is to return to the startling clarity of vision." Adds Kao, Sony's "original goal was to become a global brand, innovate, and succeed where U.S. companies failed. It has to return to fundamentals, harness its resources, and then sell [a new vision and products] to the marketplace."
When organizations lose site of their original mission, leadership vision is of utmost importance. Visionary leaders hold pictures of what the future can be in their minds. Values-based leaders use those mental portraits to navigate their lives. Guided by their visions, values-based leaders are so intent on reaching their goals that others are simply compelled to follow.
Of course, some people confuse the idea of visionary leaders with the image of prophets, futurists, or renegades attempting to attract followers with radical or extreme ideas. Just the opposite is true. Values-based leaders enlist employees by identifying common interests, and showing them how that shared vision will satisfy mutual needs.
So have a vision and convince others to share it.
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Author George Brymer's comments about the leaders who get it, and those who never will.
