Corporate responsibility

Time to get a little serious, so let’s talk about corporate responsibility. Now I do not mean the social stuff we get inundated with so our elected representatives can spend more on gardening, or films. No I mean personal responsibility in the work place.

We all need to drive our businesses forward. In the public sector they take care of this through shared responsibility, so nobody can be held accountable. It does not protect you in the extremes like the Baby P case, but in most cases you can run for cover. If the decision goes high up, go for consultation, waste a bit of money and then blame the result on the public.

In the business world we see the bonus culture and I am big fan of sharing the spoils of success. We also see the big drawbacks where our heros of banking, hedging, Enron, Worldcom and even General Motors fame have performed in exemplary fashion.

If neither of these processes encourages corporate responsibility, what does? Well maybe we should just give people some responsibility and I mean real responsibility. This can be difficult in Enterprise Britain, but if we want to grow and develop it is very important, so bear with me.

In Enterprise Britain (and Enterprise USA and Enterprise Netherlands – I have had the pleasure of working in all three) I have seen a lot of soloist behaviour. The entrepreneur, inevitably a person of great drive and ambition, who makes all decisions. This ensures nobody takes responsibility – its nice and safe as they cannot be shot down but the company fails to progress.

This soloist behaviour also leads to an environment which lacks planning so we get to that dreadful saying ‘fail to plan, plan to fail’. Unfortunately it is so very true. Decisions are made on instinct or worse, emotion. Input from others is essential. The big advantage of having a board is not so much that you get all kinds of good advice, but that it forces you to think through a decision and defending it before putting it into action. It allows for adjustment, better focus and a much greater chance of success.

No, with corporate responsibility I mean giving people real responsibility for their function in the company. It means allowing them to make mistakes, to stumble and recover. As entrepreneurs we need to monitor them, manage them and encourage them to look forward and develop their expertise at any level. This will benefit them as well as the company. And now comes the hard part – we have to let them fix their own mistakes to allow them and our companies to develop. The hard part is to not take over, fix the problem quickly and thereby take back the responsibility.

The key is encouragement and not bonus. Of course a financial incentive helps, but when it becomes the norm, the expected, as we see in banking the bonus culture fails. Jack Welch recognized this a long time ago as you can read in his book ‘Jack: Straight from the Gut’ in the section on Kidder Peabody – too bad nobody else seemed to understand how wise he was.

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