Nuts and Bolts
The practical challenge of making good business practices endure is usefully addressed by Edward E. Lawler III and Christopher G. Worley in Management Reset: Organizing for Sustainable Effectiveness. Unlike most “eco-groovy” books published this year, Reset is research based, is realistic, and deals with the nuts and bolts of organizational management. And unlike other sustainability texts, this one doesn’t argue why companies should be economically, socially, and environmentally responsible; instead, it deals with how a company should be managed to achieve those ends. In effect, the authors’ starting point is where Schultz leaves off: They are seeking to overcome the tendency of good companies to fail because they are not as strategically and organizationally agile as they are socially responsible.
The authors group evidence for the sustainable management practices they advocate into four core business components: the way value is created (the formulation of strategy and competitive advantage), the way work is organized (the design of structure and systems), the way people are treated (how employees are recruited, developed, and rewarded), and the way behavior is guided (the role of leadership and corporate culture). They then disaggregate those categories by examining what social scientists have discovered about such practical tasks as strategy creation, board governance, organizational design, and management systems and rewards.
I am no fan of how-to books, but this one overcomes the main weaknesses of the genre by offering a balance of rigorous intellectual theory along with concrete examples (from companies including Procter & Gamble, W.L. Gore, Patagonia, Southwest, UPS, and DaVita) to illustrate the practicality of the authors’ ideas. Nonetheless, there is much to be said about this subject that Lawler and Worley (incidentally, my former university faculty colleagues) omit or overlook, and more than a few points they make are debatable. For instance, to my mind, they define high-involvement management so narrowly that they miss the potential contribution employees can make to the ends they advocate, and they ignore the value of employee stock ownership in creating company sustainability. So although Management Reset should not be seen as the final word on this important subject, it is an essential starting point for further thought, research, experimentation, and discussion.
The Leader’s Role
Curiously, there no longer seems to be much discussion about whether or not business should play a social, as well as an economic, role. Indeed, leaders of major global companies today feel compelled to at least lay claim to a “socially conscious” mantle. That’s probably why esteemed Harvard Business School professor Michael Beer (along with no fewer than four coauthors) skips the “why” foreplay and jumps directly into descriptions of the leadership practices of 36 current and past CEOs in Higher Ambition: How Great Leaders Create Economic and Social Value.
The authors offer breezy reports of their interviews with this “sample” of executives from a mixed bag of companies, including a few widely recognized for their social contributions (Tata, Cummins, Herman Miller); many better known for their managerial excellence than their social practices (Southwest, Medtronic, Asda); and one or two, like Nestlé, with records of questionable social performance. The book is significant, I suggest, because it accurately reflects the way that many leaders of large multinationals demonstrate their social consciousness: They assert it. Neither the executives interviewed nor Beer and his colleagues make direct reference to specific social programs, practices, or policies at their 36 exemplar companies (with the notable exception of Tata’s well-documented attempts to alleviate poverty in India). (See “Too Good to Fail,” by Ann Graham, s+b, Spring 2010.) Instead, what they document is that leaders of these companies create great places to work and engage in most of the familiar progressive management practices described in detail elsewhere by the likes of Tom Peters, Jim Collins, and Beer himself.