If you knew a replacement part would add an extra 90¢ in costs and yield only a dime in warranty savings, would you authorize use of the more expensive part?
Probably not. Managers would crunch the business case and find the spending increase unjustified.
But suppose you knew the additional cost would prevent costly accidents and even save lives.
Would your decision be different?
I’m sure a character-based leader would decide to go with the more expensive part. Why?
Because a character-based leader knows the business of business is business and practices that by watching the bottom line AND doing the right thing.
What’s happening with GM’s ignition switch issue fills me with horror and fascination. GM folks crunched the numbers in 2005 and made the business decision not to fix the problem because it “would take too long and cost too much money.” GM is but the latest in a long string of companies making economic-driven decisions that ignore societal impacts. Think Toyota, Lehman Brothers, Halliburton, Exxon.
There are those who passionately say the sole responsibility of business is making money. If this is so, must it mean that there’s no room for ethics, honor, and compassion? That the size of annual earnings or stock price increase is the only measure of success? That if the focus is on the numbers then values must get lost in the shuffle?
Why must it be one or the other?
Why can’t be it both? Both numbers and values, earnings and integrity, profits and principles.
Institutional logic holds that companies are more than instruments for generating money; they are also vehicles for accomplishing societal purposes and for providing meaningful livelihoods for those who work in them. ~Rosabeth Moss Kanter
There’s no doubt managing these dueling, tension-filled dualities is challenging work, but isn’t that what character-based leaders do? What say you?