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 / Winter 2011 / Issue 65(originally published by Booz & Company)


Best Business Books 2011: Ethics and Aspirations

The authors take the 36 leaders at their word when they say they engage diligently in developing the leadership capacities of their organizations, use values as the glue in their corporate cultures, hold subordinates accountable for their actions, focus on execution and implementation, spend inordinate amounts of time in two-way communication with associates, and exercise team leadership. The executives also claim to listen to their associates, show them respect, and involve them in managerial decisions. And readers are assured that these leaders share the admirable character traits of humility and ethical integrity, all while being “uncompromising” (differentiating them, of course, from “rigid and inflexible” executives). Most important, the leaders confess to having well-developed stakeholder orientations and deep dedication to some higher social purpose that serves to motivate their troops and generate institutional loyalty (creating, in the words of Nokia’s Jorma Ollila, “a feeling that, gee, we can do something really good”).

I doubt none of this, and would have been surprised only had the authors found otherwise. Indeed, it is useful to reinforce the importance of such familiar practices because, as Beer and his colleagues aptly note, these are devilishly hard behaviors to engage in consistently. Yet the book misses golden opportunities to offer meaningful analysis of what these leaders actually do to create social value, and to provide an objective evaluation of the extent to which they actually add that value.

Since most of these leaders, in fact, have truly impressive records, we could have learned a lot from a critical analysis and assessment of their behaviors. For example, one of them, Allan Leighton, has been widely acclaimed for his brilliant transformation of Britain’s Asda in the 1990s, and tried to accomplish the same as head of the U.K.’s Royal Mail. Hence, the curious reader might want to learn the extent to which his successful practices at the discount retailer worked at the nonprofit postal service, and how creating social value fit with his tasks at the post. Alas, we are told none of that and, instead, are treated to recitations of the leaders’ management-speak aphorisms: “Keep it simple,” “Commit, yet adapt,” “Stay the course.” All good advice, but as Yogi Berra said, it’s déjà vu all over again, and it’s unclear how it all relates to creating social value.

It must be said that Higher Ambition makes a deeper analytical contribution than most other recent books purporting to show that corporations can do well by doing good. The message of most others of that genre boils down to a hyperventilated exhortation to “save the world while getting rich!” Higher Ambition’s authors at least make an attempt to distill the wisdom gleaned from their interviews, basically concluding that good companies share such general characteristics as a stakeholder orientation, a dedication to some higher purpose, a commitment to continuous learning that leads to flexibility, and the pursuit of excellence across the board.

It is worth noting that these are roughly the same characteristics of the good companies that I studied in the 1980s — and significantly, only two of those make the grade on Higher Ambition’s contemporary roster. How to explain that manifest lack of sustainability in corporate virtue? From reading Higher Ambition, my guess is that organizational traits may not be the most relevant factor in determining why or how some profitable companies do good things while others don’t (instead, such traits may be a result of doing good, what social scientists call dependent variables). Instead, I am now inclined to believe that having a dedicated, courageous leader is the key factor in determining the extent to which a company has a social conscience. And, since leaders come and go, the questions to address then become: (1) what motivates executives to create ethical, socially responsible corporate cultures; and (2) how can such behavior be encouraged among greater numbers of leaders? Beer and his colleagues eventually come around to addressing those questions in their penultimate chapter, but they don’t really develop the answers, which remain rather sketchy. Seems a shame that they didn’t focus their book on those ripe subjects.

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