21st-century leaders make 19th-century mistake

You’ve heard the adage, “A picture is worth a thousand words.”

Take a close look at this photo. Gnarled, exposed roots cling to a hillside. Any observer can see this pine tree is compromised. A windstorm will take it down. It’s just a matter of time.

This tree tells a cautionary tale for Corporate America.

Here’s the story, and I’ll explain how it relates to you.

Do you want to repeat history?

Starting in the 1860s, gold-seekers used a variety of methods to extract fortunes from rich deposits in Breckenridge, Colorado. As new technology became available, mine owners implemented it with gusto.

This picture comes from Iowa Hill in Breckenridge, where the technique-de-jour was hydraulic placer mining. This involved scouring hillsides with a high-pressure water cannon. In addition to releasing gold, the process washed away vast tons of top soil. Though the practice was discontinued over 100 years ago, the environment has not recovered. Exposed tree roots like these are common in the area, because of inadequate top soil. These weakened trees have created a foothold for the pine beetle infestation that is destroying Colorado forests.

In nearby French Gulch, visitors can view a different type of damage: seemingly endless stretches of 15-foot-tall rock piles. From 1898 to 1942, large dredge boats extracted ore from area streams. According to the Breckenridge Heritage Alliance, the two-story boats “removed all vegetation and buildings in their path. The riverbed was literally turned upside-down,” leaving behind ribbons of rock piles and toxic pollution.

Today, 70 years later, the water in French Gulch is still too polluted to sustain fish. And an expensive water treatment plant keeps French Gulch contaminants out of Denver’s water supply (yes, Denver: over an hour away).

Generating financial returns was the name of the game then. And it still is today. A few people became alarmed about the environmental consequences in Breckenridge, but not enough to stop the mining operations.

Today, companies are alarmed by dwindling employee engagement—but apparently not enough to stop the practices that are contributing to low engagement.

Expanding your analysis

Your corporate culture is your soil. It’s where your employees grow or wither. Are you cultivating it? Or are you washing it away in your quest to maximize this year’s profits?

Nearly every organization imagines its future balance sheet. You say, “If we choose X course of action, here is our best estimate of what our profits and expenses will look like over the next five years.”

But in too many enterprises, the discussion looks only at discrete, line-item expenses—without adequately analyzing the potential fall-out from tinkering with those expenses.

Consider, for example, your employee benefits. If you ask workers to pay more, your balance sheet will look rosier in the short-term. However, you risk unleashing a cascade of new costs and consequences that can wipe away your savings figure and leave you with a net cost.

What if your top talent feels nickel-and-dimed and an employee exodus begins? Suppose your best R&D people join the competition and create your industry’s next big product? Could you still compete? Could you woo braniacs, or will they steer clear of your organization, which now has an entrenched reputation of focusing on profits more than people?

You might argue that low employee engagement isn’t in the same league as a devastated landscape. You might even say it’s a necessary price for progress.

But ask yourself, “Are our gold-mining practices washing away our top soil and compromising the long-term viability of our organization?”

Are you sufficiently analyzing cause-and-effect contingencies in your corporate decision-making? Or are you too lulled by gold’s lure to see the damage you are creating?

Appreciation to Mike McManus of the Breckenridge Heritage Alliance. He’s a retiree from the corporate world, who is guiding historical tours as a second act. Go with him to French Gulch or Iowa Hill (mikem@breckheritage.com or 970-453-9767). You’ll walk away with a new perspective on corporate decision-making.