Can Leaders Demand Decency--and Profits?

Is the office an appropriate place to express your emotions? Should you be managing your employees to encourage communication of these emotions? As I mentioned in my last post, Anne Kreamer's new book, It's Always Personal, raised these provocative questions without answering them.

So I got some inspiration from another good book I've been reading: From Values to Action, The Four Principles of Values-Based Leadership, by Harry M. Jansen Kraemer, Jr. (Jossey Bass, 2011). In Kraemer's book, drawn from his experience as a CEO at Baxter International, and his current posts as a management teacher at Kellogg School of Management and private equity firm partner, he makes a convincing case that leadership can deliver spectacular business results and instill values such as mutual respect, humility, and self-knowledge. Some may say Kraemer's approach is common sense--but as Kraemer said in an interview, quoting Mark Twain: "everything is common sense. The problem is that common sense is not all that common."

Perhaps a leadership culture grounded in the need for fairness, transparency, and fair play, will minimize toxic emotions and personal conflict. If Anne Kreamer teaches sophisticated skills to manage difficult emotions individually at work, Harry Kraemer shows us that senior management can instill organizational values into business decisions and processes.

Kraemer did just that during his tenure at Baxter as chairman and CEO, when in 2001 he faced a difficult crisis involving filters manufactured at a Baxter facility linked to the deaths of 53 dialysis patients. He didn't bring in crisis management experts and lawyers. Kraemer tore up the playbook. Emphasizing the need to do the right thing for all parties, Kraemer made himself and the company accountable. While that case made for a Fast Company cover story, Kraemer also defied CEO convention in many other ways--leaving work on time to have dinner with his family and encouraging employees to do the same--all while driving double digit growth and earnings.

Kraemer's first principle is to practice self-reflection, one of four values he teaches as the foundation of leadership:

• Self-reflection is the virtue that drives all of Kraemer's practices. By taking the time to understand your motives, drives, and biases, you become more aware of the decisions you make, and their outcomes. You can set priorities more effectively and understand every decision is about a priority. Self-reflection also helps you see patterns and look at things holistically. "I refer to this as making your decisions explicitly, rather than implicitly," Kraemer writes. "With an explicit decision, you understand that you are not making one decision by itself in a vacuum. An explicit decision takes into account all the factors that are affected by or have an influence on the decision." To do this, managers must filter out noise and distractions and make time to be alone.
• Balance and perspective: Kraemer emphasizes allowing for different points of view and multiple perspectives in considering a decision. Too often, leaders are in a hurry to prove they're right, rather than waiting to uncover the right decision. Leaders and companies benefit from aggressively seeking out a range of ideas and insights into a problem. Team members will support decisions, even if they disagree, if they've been provided the chance to present their ideas. "As a leader," Kraemer notes, "I have found that as long as team members are able to present their views, challenge the opinions of others (including mine), and receive a good explanation of what a particular decision was made, they are satisfied."
• True self-confidence allows you to see and accept yourself exactly as you are, ruthlessly acknowledging your strengths as well as your weaknesses. Kraemer made a big impression early in his career by persisting and getting permission to skip a few levels and talk the CEO out of making an excessive bid on an acquisition target. "Developing true self-confidence is not just about learning to speak up," he writes. "It's also about developing greater competency in areas in which you lack ability or confidence, the places in which you are out of your comfort zone and feel very vulnerable."
• Genuine humility is about never forgetting who you are, appreciating the value of each person in the organization, and treating everyone respectfully whether they are senior managers or summer interns. Raw ambition turns people off, and often raw ambition thwarts a leader's goals.