Selling Change – lessons from Brexit

June 30, 2016

Is the reason so many change initiatives fail an excessive focus on the ‘technical benefits’ and future value?  Some of the lessons from the Brexit campaign would suggest ‘YES’!

brexitBefore people will buy into a new opportunity (the ‘change’) it helps if they are unhappy with the status quo.  If this unhappiness can be magnified the willingness to embrace an uncertain future can be increased.  The Brexit ‘leave’ campaign is an extreme example of creating this desire. Most of the focus of ‘Leave’ campaign seems to have been tailored towards raising the level of unhappiness with the status quo. A few key examples:

EU bureaucracy – it exists and it is a significant burden; by simply focusing on the ‘perceived pain’ (most electors have very little contact with the regulations) a desire to leave was generated. The counter points carefully ignored include:

  1. If the UK leaves it will need its own regulations for public health and safety
  2. Firms that want to export to Europe will have more bureaucracy to deal with, complying with both the UK rules and the EU rules (the alternative is to cut off 50% of your export market).

EU bureaucrats – the unelected and unaccountable masses in Brussels!  This ignores the fact UK bureaucrats are unelected and both sets are accountable to their respective parliaments.  However, the perception of lack of control and accountability was significant despite the fact 99% of the UK electors have no control over UK bureaucrats.

Immigration and Islam. ‘Taking control of UK borders’ seemed to be the biggest factor in the debate.  It’s a nice idea that ignores history:

  1. The vast majority of Islamic migrants in the UK arrived before the UK joined the EU (or these days their parents arrived…). Until the 1960s Commonwealth citizens had UK passports and a right of residence in the UK.
  2. The EU is less than 5% Islamic.
  3. Freedom to work in the EU is a two-way process – the right to work and access to workers is important (and has virtually nothing to do with ‘immigration’).

Trade deals. Negotiating ‘trade deals’ to the benefit of the UK…..   Ignoring the fact that any trade deal requires concessions and most take 5 to 10 years to negotiate. The ‘other party’ has to see a significant benefit.

 

Lessons from Brexit!

The positive lesson for change proponents is to spend more time on creating the desire for change. Most people in an organisation can ‘live with’ the status quo (but are aware of the problems and pain points), and are likely to be frightened with the perceived threats and challenges of the proposed change.  Digging into the ‘pain points’ and offering constructive solutions may provide a powerful basis for building the desire for change.  This is a very different approach to starting with an emphasis on the future benefits and opportunities the proposed change will bring.

The processes needed to sell the change to the organisation’s executive decision makers have to focus on benefits and value, but Brexit suggests a different approach may be beneficial when approaching the people within the organisation affected by the change.

Ethics matter!  “You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time[1]”. What has yet to wash out in the Brexit aftermath is the lack of ethics and in some cases blatant dishonesty of the ‘Leave campaign’. I suspect there will be a major backlash against the people responsible for the ‘Leave campaign’ as people become aware of the exaggerations and deceptions.  The current crash in the Pound and the almost inevitable recession it will cause were predicted.  What was missed from the UK debate, and is essential in an organisational change initiative, is recognition of the challenges of the change – offset by the vision of future benefits. Ethics are not negotiable!

Simple language is important.  Creating and emotional commitment to change requires the use of language that is easy to understand. The ‘Leave vision’ was simplistic rather than simple but it worked – ‘make Britain great again’ and ‘regain sovereignty’ sound appealing[2] but lack substance.  The difference between the Brexit ‘con job’ and ‘informed consent’ is understanding what you are committing to, both the vision and the journey. But the language of projects, engineers and technicians used to define and develop a change proposal is frequently inappropriate for effective communication to the rest of the people affected.  This is discussed in my paper: Understanding Design – The challenge of informed consent.

Summary

The Brexit campaign is an extreme example of creating a desire for change based on developing a level of dissatisfaction with the status quo.  This tactic can be a very useful early phase in the communication processes around a proposed organisational change – dissatisfaction with the current state is a powerful driver to accept change.  The flip side, also observable in the Brexit campaign, is that ethics and honesty matter. Democracy requires informed consent!  We have no idea what the consequences in the UK would have been if the ‘Leave campaign’ had been more ethical and spelt out a future; but judging from the reaction of many, large numbers of people now seem to feel conned by the ‘leave’ campaign.

In an organisational context, this loss of trust will be disastrous.  However, the fact the ‘Leave campaign’ could persuade a majority in the UK to vote in favour of an uncertain future that will reduce living standards and increase costs in the short-term (at least) without even bothering to paint a clear vision of their proposed future (or how to get there) shows how powerful the techniques discussed above can be.

The challenge for ethical organisational change is to harness the power without resorting to the deceptions.

 

 

 

[1] Adapted from: “Traité de la Vérité de la Religion Chrétienne” by Jacques Abbadie (1684, Chapter 2)

[2] Britain was ‘Great’ in the period leading up to WW1 based on its Empire (not the Commonwealth); it is and has been a sovereign nation since 1066…… Neither of these concepts was fleshed out possibly allowing 1000s of different self-made visions to fill the space. Potentially a good tactic but fraught with problems going forward.


Ethics and competition

March 26, 2016

EthicsThe report of The Senate Education and Employment References Committee report: A National Disgrace: The Exploitation of Temporary Work Visa Holders; released on the 17th March highlights a major National problem.

The report consolidates and affirms issues raised in some of our earlier posts including:

In a nutshell, the report confirms that large numbers of unethical employers are routinely exploiting 1000s of temporary visa holders to inflate their profits.  The report is worrying reading and hopefully will result in proactive government action to stamp out the worst of the excesses.   It’s in the government’s interest, many of the exploited visa holders in work are preventing an unemployed Australian from obtaining work; this is equally true in the unskilled categories and in skilled categories where skilled, older workers are frequently discriminated against.

What is more worrying, and the focus of this post is the ‘Coalition Senators’ total failure to understand business and competition.  One of the major areas of malfeasance with some of the worst exploitation of temporary workers is the Labour Hire business.  The committee recommendation #32 is that:

9.309 The committee recommends that a licensing regime for labour hire contractors be established with a requirement that a business can only use a licensed labour hire contractor to procure labour. There should be a public register of all labour hire contractors. Labour hire contractors must meet and be able to demonstrate compliance with all workplace, employment, tax, and superannuation laws in order to gain a license. In addition, labour hire contractors that use other labour hire contractors, including those located overseas, should be obliged to ensure that those subcontractors also hold a license.

In an annex to the main report, Coalition Senators state that they do not agree with this recommendation on the basis ‘it would punish those labour hire firms which are already complying with relevant laws’; and that the actions of a ‘minority of labour hire firms which are doing the wrong thing, in most cases, is already illegal’.

No one likes additional ‘red tape’ so superficially the Coalition Senators position is understandable.  What the Coalition Senators ignore is the effect the illegal activity is already having on the honest firms they purport to support!  The owners and operators of the dishonest firms using illegal and exploitative practices do not expect to get caught, and if they are caught expect the profits they make from their activities to significantly outweigh the penalties. Unethical is not synonymous with ‘stupid’ – the people making the decision to act illegally expect to make large profits. However, as a consequence of their illegal actions:

  • Honest labour hire firms cannot compete on price with the dishonest firms exploiting temporary workers and suffer as a consequence. The honest operators either make far less profit or go out of business.
  • The users of ‘hired labour’ from labour hire firms are also in competition and need to minimise input costs. They are incentivised to accept the low-cost offerings from the dishonest firms exploiting temporary workers and not to look too closely at their practices to compete within their market.  The alternative is to pay more for the workers and be at a competitive disadvantage to organisations that ‘turn a blind eye’ to the problem.

A licensing scheme will increase the cost of compliance for all of the businesses in the labour hire market, but if implemented properly, it will have the effect of largely eliminating the unfair competition created by the unethical exploitation of temporary workers.  Which will be hugely beneficial to those ‘honest’ businesses that are acting ethically and already fulfil their legal and moral obligations; both within the labour hire industry and the wider community.

The Coalition Senators do ‘support the prosecution of these illegal operations’ (as does everyone) the problems with implementing a clean up strategy focused on prosecutions alone are:

  1. The damage is done before the prosecution can take place.
  2. No prosecution stops illegal behaviour in the future. In an unlicensed regime the same unethical people can set up other businesses and carry on indefinitely through a series of ‘phoenix companies’.
  3. As suggested above, no criminal expects to get caught – deterrence is highly overrated.

Licences may not be ideal, but they do offer a practical way to support ethical behaviour that ‘prosecutions’ cannot. Good governance at every level is getting the balance between rules and flexibility right – the balance needs to support ethical behaviour without constricting innovation and growth. No one except the criminals benefits from the situation exposed in the Senate report that allows virtually unfettered unethical behaviour.

The art of ‘practical ethics’ is to develop systems that disadvantage unethical behaviour and encourage people to do the right thing. The combination of a beefed up ability to prosecute offenders and a licensing system that will make it difficult for unethical operators to remain in the labour hire business is the best way to drive the culture change needed in this industry, and in the businesses that rely on labour hire firms for their staffing needs.


Practical Ethics 2

March 10, 2016

EthicsA couple of weeks ago I posted Practical Ethics discussing the undue reliance governments and others  place on other people’s ethics, Through naivety, undue optimism, or laziness, they set up situations based on blind trust in the ethical standards of others which have resulted in deaths, injury and the loss of $billions.

In this post I want to look inside an organisation and discuss reason why Determining the ethics of the organisation is at #2 in my Six Functions of Governance and Creating the culture of the organisation is at #3.  #1 in the list is Determining the objectives of the organisation.

The underlying approach I’ve taken, founded in stakeholder theory, is the presumption that the best way to achieve an organisation’s objectives is to work with the organisation’s full spectrum of stakeholders so they contribute to the success of the organisation and everyone benefits. This requires a strong ethical foundation and an outwardly focused culture. The role of the governing body is to set the objectives and create the organisation’s culture and ethics, the role of management is to work within this framework to achieve the objectives. Whilst many aspects of governance can be delegated to a degree, setting the ethical standards of the organisation in particular is non-transferable. It starts and stops at the top – with the governing body.

The ethical standards of an organisation are created in two ways:

  • The way the organisation’s leaders act;
  • The ethical standards the leaders are prepared to tolerate in their subordinates.

This post will look at both of these aspects, using the example of the current scandal surrounding Comminsure (the insurance arm of the CBA bank) to highlight their importance – see more on the scandal.

 

Leaders set the standard.

Generally speaking, the top managers in an organisation create a ceiling on ethical behaviours. Leaders at the next level down tend to be rated lower than their managers on every leadership dimension including their honesty and integrity, many may rate equally but it is very rare to find a subordinate acting more ethically than the organisation’s leaders (for more on this see Ethical Leadership).

The key here is the word ‘act’ – leaders set the ethical standards of the organisation by their actions, not their statements. It more than ‘walking-the-talk’, talking is almost irrelevant.

One glaring examples from the Comminsure scandal will serve to demonstrate the issue.  The CBA’s CEO said that he placed a high value on transparency and open communication; this included both encouraging and protecting ‘whistleblowers’ within the bank. A commendable and highly ethical position; and from a practical perspective essential for the minimisation of wrong doing in a workforce of 55,000.

However, actions speak louder than words! In November 2014 the chief medical officer of Comminsure, Dr Benjamin Koh, disclosed his concerns over “an improper state of affairs” concerning aspects of Comminsure’s business to key independent directors at Comminsure including the chairman Geoff Austin. Two months later Comminsure began to investigate Dr Koh and he was sacked by the managing director of Comminsure, Helen Troup, for ‘misconduct’, in August 2015. He is now suing Comminsure and the CBA for unfair dismissal.

The appearance is that the bank’s management won’t fire you for whistle blowing but they will find some other excuse. The bank virtually admits as much, in this statement which states: “Commonwealth Bank encourages all employees to speak up if they see activities or behaviours that are fraudulent, illegal or inconsistent with our values. We provide a number of different safeguards to ensure that there are no negative consequences for raising concerns. We have thanked Dr Koh for raising concerns that led to the CMLA Board conducting a review. Dr Koh’s employment was not terminated for raising concerns. It was terminated primarily for serious and repeated breaches of customers’ privacy and trust involving highly sensitive personal, medical and financial information over a lengthy period of time.”  What they fail to mention was one of major issues raised by Dr. Koh was the manipulation, alteration and loss of information from the records he is accused of mishandling.

The perception may be incorrect, but to anyone looking on from outside of the organisation it would seem the person running Comminsure preferred to sack a whistleblower rather than deal with the problems he raised.

The CEO and the Directors of CBA can talk until they are blue in the face about the ‘ethical standards’ they purport to uphold, their actions speak louder. The person running Comminsure and responsible for the issues raised by Dr. Koh is still in her role, the ‘whistleblower’ is out of a job. If the board really meant what is says, the whistleblower would have been protected and the manager attacking him disciplined. Everyone else in CBA will clearly understand the message.

It really does not matter what the final outcome of all of this is; the actions of CBA and Comminsure management have made it clear to every one of their 55,000 staff that if you raise concerns within the banks ‘whistleblower’ processes you will be fired!

Given this perception, is it any wonder that the leaders of the CBA seem to be continually in the dark about what’s really going on in their organisation……..  Unfortunately for those in governance role not knowing is not an excuse.

 

Tolerating unethical behaviour.

Ethics2The second plank underpinning an ethical organisation is the degree of unethical behaviour it is prepared to tolerate. If an organisation is prepared to tolerate a person increasing his or her bonus by not paying out an insurance claim to a dying person for 3 or 4 years, everyone else in the organisation will understand the acceptable level of behaviour.

Comminsure has been shown to have withheld legitimate payments to claimants for years to boost profits and bonuses (only rectified after the national broadcast was imminent).  As far as I can tell everyone responsible from the managing director down are still in their jobs.

Previously the CBA was shown, courtesy of a Senate enquiry, to have misrepresented information to clients and falsified documents.  Again, most of the people responsible still work for the CBA and the ethical benchmark has been determined by this fact.

If the behaviours were ethically unacceptable people would be fired or moved into roles where they cannot adversely affect customer’s lives. The fact most people are still in their roles and still have their bonus payments from previous years indicates to everyone the CBA believes these behaviours are ethically acceptable and will continue to reward people for placing profits ahead of customers (see The normalisation of deviant behaviours). Management’s actions speak far louder then PR announcements and so called ‘public apologies’ that only eventuate after adverse national publicity.

 

Culture

Culture is ‘the way we do thing around here’ – one of the key elements of culture is the ethical standards people see as ‘normal’; another is the learned experience of how to behave within the organisation. As outlined above these settings are very different from the rhetoric.

But, ethics and culture are always shades of grey; the CBA’s culture is clearly flawed if the bank claims to be concerned about its customers. However, if the CBA is really only concerned with short-term profits, the culture, ethics and PR spin may be appropriate. In the last 6 months, the CBA achieved a remarkable return on equity of above 17 per cent, and a $4.8 billion half-year profit. And, despite the scandal, its shares have increased in price today. The cost is the damaged lives of some of its customers; the unresolved question is what are the acceptable limits? Maybe a Royal Commission will let everyone know.

Legal implications aside, the challenge facing the CBA is that changing culture and ethical standards is a massively difficult task and the people who created and thrive in the current culture are unlikely to be willing participants in changing it.  There’s no easy answer to this dilemma.

 

Conclusion

The real measure of an organisation’s ethical standards are set by the way people behave when no one is looking on – there will always be mistakes and unethical actions by a few, others within the organisation will correct these deviations and being behaviours back inside the culturally acceptable norms of behaviour of the organisation. This has undoubtedly been occurring within CBA and Comminsure on a daily basis, unacceptable behaviours will have been corrected or sanctioned; desired behaviours rewarded. What’s acceptable and unacceptable is determined by the culture of the organisation and its ethical standards.

The ethical standards of an organisation are set by the actions of its leaders. What they do themselves sets the ceiling and what they tolerate in others the floor. The rest of the people in an organisation will generally find a position between these two limits and the culture of the organisation will adapt to see this level of ethical behaviour as acceptable. The problem the governors and leaders of the CBA face is the simple fact that changing the ethics and culture of an established organisation is extremely difficult.


Practical Ethics

February 26, 2016

EthicsA string of disasters over the last couple of years suggest many business and government leaders simply do not understand ‘practical ethics’.  Through naivety, undue optimism, or laziness, they have set up situations based on blind trust in the ethical standards of others resulting in deaths, injury and the loss of $billions.

Just a few examples:

  • The ‘Home insulation program’ of 2008/9 resulted in 4 deaths, numerous house fires and many well established businesses being destroyed. The naive assumption by the Government seemed to be that with $millions of government funding easily accessed, businesses would still act ethically, train staff and comply with occupational health and welfare standards. The failure by businesses to meet this expectation has resulted in numerous prosecutions after the damage was done.
  • The outsourcing of technical and further education training (TAFE) to the private sector. Private providers under the VET Fee-Help scheme are paid for students signed up to courses, not for students qualified from courses – the naive assumption by the Government seemed to be that with $millions of government funding easily accessed, businesses would still act ethically and only sign up students that could benefit from the courses and would deliver good training outcomes. $hundreds of millions of public funds have been wasted – most of which can never be recovered.
  • Downer EDI’s Board of Directors appear to have blindly trusted their management to run the disastrous $3 billion Waratah train project. Normal governance feedback seemed to have been ignored to the point where the Directors were unable to get information on the project when needed, blowing a $20 million loss into a $200 million loss.

In each of these cases the government and business leaders seemed to have either assumed everyone would act ethically or relied on Adam Smith’s ‘Invisible hand’ (a flawed theory much loved by the rabid right, particularly in the USA). Unfortunately ethics is not that simple!  Writing a code of ethics[i] is a relatively simple process; encouraging people to live up to the code is far more difficult. There are several factors needed:

  • First, the organisations leaders need to lead by example. The ethical standards of the organisation and its supply chain are unlikely to exceed the standards set by the leadership (see: Ethical Leadership).
  • Second, the expected standards need to be clearly and unambiguously articulated. Saying you require one standard of behaviour and then paying people to perform differently will inevitably lead to the organisation getting what it has paid for (see: The normalisation of deviant behaviours).
  • Third, the governance and management systems need ‘real-time’ feedback to both encourage the desired standards of behaviour and to detect any ‘slips’ very early in the process so corrective actions can be implemented before there is a major issue (see: Self Correcting Processes).

Unfortunately governments in particular are reasonably good at enforcing standards years after the breach took place and seem to assume that the ‘deterrent effect’ will suffice to maintain ethical standards – this assumption patently does no work!  I doubt the £2.25m fine imposed on UK consultancy Sweett Group[ii] for bribing a prominent United Arab Emirates (UAE) businessman in return for work will have much effect on other unethical business people contemplating paying a bribe – for a start, no one expects to get caught. The ‘pink batt’ prosecutions occurred years after the scheme was closed, prosecutions under the VET Fee-Help scheme are still to eventuate (and rip-offs are still continuing). The simple fact is the fear of a potential prosecution in a few years time compared to the opportunity to make $millions now has very little effect on unethical people.

Conversely, over policing ‘ethics’ and watching every move can be as destructive as ‘blind trust’. If people feel they are not trusted, there is no incentive for them to act ethically.  Micro management is a major de-motivator and will inevitably lead to suboptimal performance with people doing ‘just enough’ and seeing how much they can get away with[iii]. This approach stifles innovation and creativity.

Practical ethics requires pragmatic trust. You need to trust the people you are working with, governing or managing, but have agreed processes that provide feedback and monitoring, that demonstrates your trust is being honoured.

  • In my ‘Six functions of governance’ management control functions are expected to provide feedback to the governing body that allows it to hold its management accountable and ensure conformance by the organisation being governed. Had these functions been implemented effectively EDI-Downer would be in a much better position today.
  • Demand feedback – even if you do not want to hear bad news! The recent announcement by CSIRO that its climate division will be virtually eliminated may be a pragmatic response to government initiatives and cost cutting but serves no one in the long term. Governments and business rely on climate science to make billion-dollar decisions. Without it, they will be relying on guesswork. Shooting the messenger simply means everyone is ‘flying blind’.
  • Build feedback into management systems. In the various government debacles mentioned above (and others) simple changes in process could have reward desirable outcomes rather than rewarding unethical behaviour. The purpose of any TAFE course is to educate a person and demonstrate learning by success in an exam.  Why not pay most of the money on completion of the course? Then make sure audit processes are in place to validate the exam performance is genuine – these exist and are easily applied.

Pragmatic trust is a graduated process – as people demonstrate their trustworthiness and ethical standards less oversight is needed (but less does not mean no oversight); the challenge is to design systems that reward desirable behaviours and outcomes creating a win-win, people who demonstrate high ethical standards are rewarded.

This approach is the antithesis of the current government approach which seems to rely on blind trust, assumes everyone is ethical, and as a consequence directly benefits unethical behaviours (at least in the short term). Not only have the $millions paid out in VET Fees to unethical providers resulted in minimal return to the government; they have actively encouraged unethical standards and have damaged businesses and organisations that do offer quality courses. A lose-lose outcome in which the only winners are the unethical businesses that have ripped off the system – the Pink Batts Royal Commission found a similar effect on the insulation businesses.

Slippery-slopeEthics are by definition based on the standards of behaviour considered acceptable by a group[iv].  When a significant proportion of the groups members start to let standards slip, they will tend to drag the rest of the group with them down the slippery slope – it is very hard to stand out against the normally accepted behaviours of your group. And as with any slippery mountain slope, it is far easier to slide towards the bottom than to keep your footing and climb towards the top.

The role of ethical leaders is first to set the ethical standards, then live up to the standards themselves, and finally require their followers to conform to the standards using pragmatic trust and encouragement rather than after the event punishment.

 


 

 

 

[i] The PMI Code of Ethics and Professional Conduct is a good example: http://www.mosaicprojects.com.au/PDF/PMICodeofEthics.pdf

[ii] See: http://www.globalconstructionreview.com/news/sweett-group-must-pay-32m-bri7bery-a7bu-dh7abi/

[iii] For more on motivation see: http://www.mosaicprojects.com.au/WhitePapers/WP1048_Motivation.pdf

[iv] For more on ethics and leadership see: http://www.mosaicprojects.com.au/WhitePapers/WP1001_Ethics.pdf

 


Making Ethics Effective

September 14, 2015

EthicsAn organisation can espouse the highest ethical standards but if these are not supported and enforced they are simply nice statements that look appealing. The challenge is to have the right levels of support and just enough enforcement.

Headline news in Australia over the last couple of weeks (with months to run) is the appalling treatment of franchisees and their staff by the 7-Eleven chain.  To survive (and in some cases profit) many 7-Eleven franchisees resorted to underpaying staff by a standard 50%.  The TV expose and press reports indicate multiple breaches of employment legislation, occupational health and safety legislation, corporations law and taxation legislation.  Most of the focus at the moment is on the students who allowed themselves to be trapped into the wages scam.  This post will suggest these people are not the ‘biggest losers’.

The whole 7-Eleven chain was benefitting from the scam.  Head office made more profit, the franchisees reduced their wage bill by up to 50% (their primary cost under the franchise arrangements) and the students received their reduced pay.  Whilst in some cases there may have been elements of coercion used to keep the students employed, everyone got into the deal voluntarily.

The major losers in this scam were people who rely on the workings of the law and run their businesses honestly.  Two major groups are the corner shop-keepers who paid the lawful minimum wage and saw their businesses destroyed because the 7-Eleven ‘model’ undercut costs illegally and the unemployed people who did not get jobs because they had the audacity to expect to be paid their legal entitlements.

People in these groups faced a major ethical dilemma, go out of business (or remain unemployed) or ‘bend the law’ to survive in completion with a chain that was prepared to allow widespread malpractice.  Not an easy decision!

I would suggest the major failing was not the ethics of the 7-Eleven chain: the erosion of ethical standards is usually slow and insidious. The real problem appears to be the government agencies tasked with enforcing the law.  Over several decades government departments have been steadily stripped of resources and these days can only adequately respond to ‘major issues’ –  they are forced to assume ethical behaviour by most people most of the time and even when advised of blatant breaches will generally ignore the issue if it is considered minor.

One example we confront regularly is breaches of the Australian Competition and Consumer Act 2010 – one of the Act’s primary requirements is honesty in advertising, the advertised price of any goods of services should be the minimum price the consumer has to pay.  We routinely see Google advertisements targeted at our training market in Melbourne offering ultra cheap prices.  Click through to the related web page listing the training courses in Melbourne and the price increases, spend 15 minutes filling in registration forms and you eventually see the price you are required to pay (with all of the taxes and changes now added)!   This is a deliberate strategy by unethical organisations – the low price gets people onto their web site, and inertia keeps them there (particularly after spending effort on filling in the forms) so they end up paying far more than is necessary for an equivalent course.  The practice is so widespread, particularly with overseas based training providers, we regularly find people asking us if our prices are ‘real’ and ‘how much will they actually pay’ – the answer is simple, we conform to the law and charge the advertised price.

However, this was not an easy decision to make! We have had to reduce prices and increase advertising to attempt to off-set the illegal practices of others. Complaints to authorities go unheeded because they simply do not have the resources to deal with a relatively minor issue and business suffers.

When ethical standards start to slip several things tend to happen, ethical people move away to somewhere where their standards are not being challenged, less-ethical people move in and further degrade standards and many other people simply learn to ignore the problem (see The normalisation of deviant behaviours). And once unethical or corrupt behaviour becomes normalised, reversing the situation is extremely difficult. Press reports suggest that some 7-Eleven franchisees who have been forced to pay proper wages are now using extortion to demand 50% of the money back from the employee (outside of the premises so the extortion is not recorded), or the worker loses his/her job.

At a national level one hopes the 7-Eleven furore when added to the construction of a refuelling wharf in the Tiwi Islands without environmental approval (the government agency did not have the resources to investigate in a timely way), the blatant abuse of the vocational training scheme by some commercial organisations and numerous other failures will cause a re-think of the way business and government approach regulation.

Certainly the removal of unnecessary bureaucracy, regulations and other forms of red tape is to be encouraged. However, if the government decides a regulation is desirable, proper and comprehensive enforcement should be automatically provided. The failure to enforce regulations penalises the honest, ethical organisations who feel obliged to comply; and advantages the dishonest who chose to breach the regulation and balance the low cost of getting ‘caught’ against the additional profits garnered from ignoring the provision. Prosecuting a few ‘rule breakers’ 5 or 6 years after the event is not an appropriate way to govern – the damage is already done.

What does this mean within organisations and projects?  Effective governance sets the ‘rules and objectives’ for the organisation (see: The Functions of Governance). Management and staff operate within those rules to achieve the objectives. A key element in a well designed governance framework is the feedback loop providing assurance of management accountability and compliance.  This loop needs three elements:

  • A clear articulation of acceptable and unacceptable behaviours at all levels of the organisation, with senior leaders ‘walking the talk’.
  • Proactive surveillance to identify issues and opportunities as early as possible backed up by effective improvement processes (see: Proactive Project Surveillance).
  • Rigorous, but fair, enforcement processes to deal with breaches.

The last point is the most difficult to get right.  The system needs to be open and accountable, apply both natural justice and the ‘presumption of innocence’, deal with the root cause of the breach, avoid scapegoating, and be trusted.  One element is ensuring effective reporting and ‘whistle blowing’ processes are available so that people (both internal and external to the organisation) who believe there is an issue can raise the matter safely – its impossible to enforce rules if people in authority don’t know (or don’t want to know) about the breach.

The good news is that if these types of system are in place, the organisation will develop a self-reinforcing ethical culture.  Unethical people will leave to find somewhere easier for them making way for people who want to work in an ethical environment.  Fairly soon, everyone holds both themselves and other accountable.

However, this situation cannot be taken for granted! The presence of the surveillance and enforcement processes underpin these highly desirable behaviours.  If the organisation makes the same mistake the Australian governments have repeatedly made over the last 10 years of deregulation and simply ‘hope’ everyone will do the right thing it won’t take long for the slide into unethical behaviour to start.  Hope is not a strategy, good governance requires assurance that the organisation’s objectives are being achieved, and effective assurance needs both surveillance and enforcement capabilities.


Ethics, Culture, Rules and Governance

January 7, 2015

RulesFar too many governing bodies spend far too much time focused on rules, conformance and assurance.  While these factors are important they should be an outcome of good governance not the primary focus of the governors.

When an organisation sets high ethical standards and invests in building an executive management culture that supports those standards the need for ‘rules’ is minimised and the organisation as a whole focuses on doing ‘good business’ (see: Corporate Governance).

The order of the functions outlined in The Functions of Governance, places: ‘Determining the objectives of the organisation’, ‘Determining the ethics of the organisation’, and ‘Creating the culture of the organisation’ ahead of both assurance and conformance.  The rational being creating a culture of ‘doing the right thing’ that extends from the very top of the organisation to the very bottom, means most people most of the time will be doing the ‘right thing’ making assurance and conformance a relatively simple adjunct, there to catch the few errors and malpractices that will inevitably occur.

A very strong endorsement of this approach to governance has recently come from one of the world’s most successful business people, Warren Buffet.  His recent memo to the top management of his holding company, Berkshire Hathaway’s subsidiaries (his ‘All Stars’) emphasised that their top priority must be to ‘zealously guard Berkshire’s reputation’ (read act ethically). He also reminded his leadership team that ‘we can afford to lose money–even a lot of money. But we can’t afford to lose reputation–even a shred of reputation’.

His advice to managers also included this good advice ‘There’s plenty of money to be made in the centre of the court. If it’s questionable whether some action is close to the line, just assume its outside and forget it’. This is a simple ethical guideline that avoids the need for pages of precise ‘rules’ designed to map the edge of legality drafted by lawyers and argued over endlessly.  See more on Ethics. (http://www.mosaicprojects.com.au/WhitePapers/WP1001_Ethics.pdf)

Rule#1Reading the memo, its clear Buffet has built a massive organisation based on an ethical culture, employs executives that reinforce the culture, and still makes a very good profit. It’s a long term investment but infinitely preferable to the sort of issues that confronted Salomon Bros., 20 years ago (see: Warren Buffett’s Wild Ride at Salomon), the banks associated with the GFC, and the on-going damage continuing to be suffered by the Australian banks as more ethical failures come to light. I’m sure they all had hundreds of ‘rules’ some of which may even have been sensible.

A copy of Warren Buffet’s memo can be downloaded from:  http://www.mosaicprojects.com.au/pdf/Ethics_Culture_Rules-Buffet_Memo.pdf


The Evolution of Ethics

October 17, 2014

ethicsOur White Paper on Ethics discusses a number of ethical approaches used to determine what is ethical in the modern world. What is not covered in the White Paper is the evolution of ethical thinking. A blog post by Ricardo I. Guido Lavalle outlining a presentation by Prof. Clovis de Barros, who teaches Ethics at Universidade de Sao Paulo (USP), Brazil; fills this gap.

Prof. Clovis suggests Ethics evolved through five main phases outlined below:

  • Greek times, when ethics were about fitting oneself into the great cosmological order. Right actions were those that helped the Cosmos achieve its maximum order. From this standpoint Greek philosophers (mainly Aristotle) assumed rigid, stable social layers where aristocracy had the most part in the game.
  • Consequentialism, holds that the consequences of one’s conduct are the ultimate basis for any judgment about the rightness or wrongness of that conduct. Niccolo Macchiavelli (The Prince, 1513) is the best known proponent of this school of thought; he strove to maximize prince’s power. Right actions were those that had achieved the most power for the prince. Attention here, the right actions were considered right after they proved to be efficient in achieving the desired outcome – ‘the ends justify the means’.
  • Utilitarianism, holds that the proper course of action is the one that maximises utility, usually defined as maximizing total benefit whilst reducing suffering or the negative consequences. Proposed by Bentham (1780) and John Stuart Mills, is a great justification for liberalism and aims for ‘the greatest happiness of the greatest number’. It is a simple and attractive standpoint, and it even fits with common democratic views. However, it presents some issues regarding minorities.
  • With Immanuel Kant (1781) emerges the inner spiritual origin of ethics. Kant contested utilitarianism with his deontology. An action was right if the very inspiration of it was good, regardless of the consequences. The ultimate goal was to form a corpus of universally valid actions, such they were valid in any context, and forever. The puritan ethics of duty and good purpose is an earlier expression of this long-lasting and very successful ethical view.
  • In contrast to all previous views, post-modernist ethics is about relativism. Ethics has become transactional, an agreement between parties, were openness and transparency of purposes are crucial. Post-modern Ethics is the result of a social contract, and agreement. Professional organisations such as PMI develop an agreed code of ethics to guide their members.

However, the transactional basis of post-modern ethics does not eliminate many of the founding concepts developed over millennia. PMI’s Code of Ethics and Professional Conduct balances many of these themes:

  • Overall the spirit of the Code is Kantian; a code developed by a ‘global’ body should seek to be of universal applicability.
  • Some elements of the Code are a quest for the good intentions inherent in Greek virtues (honour and fairness), (2.4 We make commitments and promises, implied or explicit, in good faith)
  • Others tend to utilitarian (2.1 We make decisions and take actions based on the best interests of society, public safety, and the environment).
  • Whilst others are post-modern ethics (3.1 We proactively and fully disclose any real or potential conflicts of interest to the appropriate stakeholders).

What this brief scan of history highlights is the way the long history of ethical thinking affects the modern definitions of ethics. The White Paper looks at their practical application.


The normalisation of deviant behaviours

June 27, 2014

Reputation-managementThe ‘surprise’ recorded in our local paper over the release of a Senate enquiry into the wealth management practices of the CBA (Commonwealth Bank of Australia) is itself rather surprising.  The systems developed by the CBA were effectively (even if unintentionally) designed to generate sub-optimal outcomes for people seeking advice from the CBA financial planning system. And whilst the CBA affair has a way to go, the three clear lessons for all governing bodies and managers should already be obvious; you get the behaviours you encourage (KPIs matter), the normalisation of deviance is a constant threat and focusing on shareholder value over stakeholder value will paradoxically always destroy shareholder value!  For non-Australian readers the executive summary of the Senate report makes chilling reading.

A few weeks back I published an article entitled ‘What you measure is what you get’   the core message in this article was that people will understand precisely what matters to their managers by observing the behaviours those managers incentivise and will adapt their behaviour to succeed in the ways defined by the incentive / KPI system.  The Senate report suggests the incentives paid to CBA financial planners actively encouraged them to sell high risk products. Additionally, the KPIs and bonuses paid to several layers of managers overseeing the planners were directly tied to the profits made by the planners under their control.  In short, the incentive system was designed to encourage the behaviours that occurred, placing the maximisation of bank profits ahead of good outcomes for their clients.  Whilst I’m sure there were countervailing policies within the CBA that talked about customer satisfaction, the strength of the message from the incentive / bonus / KPI system would be much stronger – actions really do speak louder than words.

The transgression from bad policy to bad behaviour, and possibly criminal behaviour, is a classic example of the ‘Normalization of Deviance’. The Normalization of Deviance is a social process that can affect any close knit group.  American sociologist Diane Vaughan describes the social normalization of deviance as meaning that the people within the organisation, or group, become so accustomed to a deviant behaviour that they don’t consider it as deviant, despite the fact that the behaviours far exceed their own ethical standards or ‘rules’.  I touch on this subject in Chapter 1 of my new book ‘Making Projects Work’ that will be published next year. A recent article by Jeffery Pinto highlights the critical linkages between governance, project management and the risk of the ‘Normalization of Deviance’ (see: Project Management, governance and the normalization of deviance). More on this important topic later.

The third lesson is possibly the most important.  The CBA financial planning system was designed to put shareholder value (bank profits) ahead of stakeholder value.  The stupidity of this short term view of the world has been demonstrated time after time with damaging headlines and the trashing of value caused by short term profit focus. A couple of examples include the damage caused to BP by the Deepwater Horizon disaster and the disastrous loss of reputation and the $1.2 billion fine suffered by Toyota caused by the Lexus ‘sticky accelerator’ tragedy.  I suspect the CBA will be added to this list soon.  As the ‘father of stakeholder theory’ Ed Freeman has been saying for more than 20 years, the creation of stakeholder value is the best way to create shareholder value. As I discovered a couple of weeks ago, his message is as compelling today as it ever was.

The reason I find this whole saga of interest is a direct personal experience. Quite a few years ago I took over the management of my mother’s finances. At the time her savings were invested in a product from a major commercial financial services organisation.  The structure of the package was very well crafted but we noticed over a couple of years how little savings had grown compared to my own. We transferred my mother’s funds into a different structure where we pay fees monthly up-front. The difference in the rate of growth of the funds was dramatic.  Whilst we see all of the fees being paid each month to our financial advisers (and they are much higher then the fees we could ‘see’ in the commercial package), the hidden fees must have been enormous and definitely included trailing commissions paid to the adviser that set up the scheme for my mother in the first place. There was no malpractice involved in my mother’s case but the net results were probably sub-optimal and certainly influenced by commissions paid to the adviser.

Which brings me to final thought focussed on how the Australian Government will deal with the recommendations arising from the Senate report over the coming months. Are they going to continue to look after their ‘shareholders’, the major banks and other contributors to the Liberal Party coffers or are they going to look after their stakeholder community?  The big difference between politics and business is it’s the shareholders who ultimately decide on the management of the business, it’s the stakeholders who decide on the next government.  It will be interesting to see if stakeholder management has made its way onto the government’s agenda.


Tired workers lose their ethics

January 24, 2014

Having recently suffered a week of extreme temperatures and sleepless nights in Melbourne, with more to come, everyone is aware of some of the effects of sleep deprivation including short tempers, the loss of concentration and the reduction in some fine motor skills. In short, tired people are more grumpy, absent minded and clumsy than normal and new research suggests that they are more likely to cheat!

The underlying cause is the same; the lack of sleep reduces the amount of glucose in the prefrontal cortex and only adequate amounts of sleep can restore it. Physiologically, self-control occurs largely in the pre-frontal cortex region of the human brain, and uses glucose as a fuel. The act of implementing self-control draws upon this fuel, and can eventually exhaust the fuel causing one’s ability to exert self-control to reduce. And when self-control is depleted, people are more likely to cave in to temptations to behave badly or unethically. Start with the fuel in short supply due to lack of sleep and self-control dissipates sooner.

This has important business and team management implications. Ethics are central to the ‘good governance’  of an organisation and an important management concern; ethical behaviour will boost the reputation and performance of the organisation, whereas unethical behaviours can damage it significantly. And lack of sleep affects everyone, not just ‘bad’ people. Whilst it is common view that good people do good things and bad people do bad things, the behavioural ethics literature indicates that this is simply not the case; everyone has the capacity for both ethical and unethical behaviour and the balance is affected by how tired they are.

restless2In both laboratory and field contexts, Christopher M. Barnes and his team found that a lack of sleep led to higher levels of unethical behaviour. Moreover, they found that it was small amounts of lost sleep that produced noticeable effects on unethical behaviour. In one of their laboratory studies there was a difference of only about 22 minutes of sleep between those who cheated and those who did not. In their field studies, they found naturally occurring variation in sleep (with most nights ranging from 6.5-8.5 hours of sleep) was sufficient to predict unethical behaviour at work the next day.

Executives and managers should keep this in mind – the more they push employees to work late, come to the office early, and use their smartphones to answer emails and calls at all hours, the more they invite unethical behaviour to creep in. Ethics is defined as ‘doing the right thing even when no-one is looking!’ Particularly the small things needed to ensure a job is done properly and necessary procedures followed, and it only needs one check or test to be omitted or short-cut at the wrong time to open the potential for a crisis.

Smartphones are as bad as a heatwave!! They are almost perfectly designed to disrupt sleep by keeping us mentally engaged with work late into the evening. The problems caused by using these phones late at night include:

  • they make it harder to psychologically detach from the most pressing cares of the day so that we can relax and fall asleep;
  • they encourage poor sleep hygiene, a set of behaviours that make it harder to both fall asleep and stay asleep; and
  • perhaps the most difficult aspect to avoid is that they expose us to light, including blue light. Even small amounts of blue light inhibit the sleep-promoting chemical melatonin, and the displays of smartphones are capable of producing this effect.

One solution suggested by Harvard Professor Leslie Perlow, is improved ‘sleep hygiene’. Sleep hygiene refers to the pattern of behaviours associated with sleep. There are patterns of behaviour that are conducive to sleep, and other patterns that make it much more difficult. With some relatively simple steps, you can improve your own sleep hygiene, making it easier to fall asleep and stay asleep:

  1. Create agreed predictable time off. The best way to start is for management and the team to agree that evenings and normal sleeping hours are the most important times for people to be predictably off. This will allow employees to psychologically disengage from work and minimize exposure to the blue light produced by electronic display screens.
  2. Consistent bedtimes. Your body has a circadian system that functions as a 24-hour clock, regulating processes such as body temperature and heart rate. An important part of that circadian system is the production of melatonin. Melatonin is a chemical that your body uses internally to promote the process of falling asleep. But changing your bedtimes is disruptive to this process. You should enable your circadian system to work smoothly by going to bed at the same time every night (preferably an early enough bedtime to get a sufficient amount of sleep).
  3. No television, laptops, tablets, or smartphones in bed. You may think that watching television in bed is a good way to relax. But physiologically, the light exposure associated with these activities inhibits melatonin production. This is true for any light, but especially blue wavelength light that is common in these devices, and especially when the source of light is so close to you. It’s good policy to stop using any of these devices a few hours before bedtime. But at the very least, do not use them in bed.
  4. No activity in bed other than sleep and sex. Think of Pavlov’s dogs. By pairing one stimulus with another, he created an association between meat powder and a bell that was so strong that the dogs began to salivate when they heard a bell even if meat powder was not present. You want to take a similar approach to your bed and sleep. Strengthen that association as much as you can by pairing your bed with sleep, but not with other activities.
  5. No stimulants within a few hours of bedtime. Physiological arousal and sympathetic nervous system activation oppose the process of falling asleep. Any substance that has stimulant properties should be avoided before bedtime. Nicotine and caffeine are two common such substances. Everyone knows that caffeine makes it difficult to fall asleep. But not everyone knows that caffeine has a metabolic half-life of several hours (typically at least five hours, and sometimes more). So if you plan to go to bed at 10:30, coffee with or after dinner is generally a bad idea. Nicotine persists in the body for a shorter period of time than caffeine, but still has a half-life of a few hours.
  6. Exercise, but not within a few hours of bedtime. Exercise has many beneficial effects on human health. Regular exercise can be helpful in regulating sleep. However, research indicates that it depends on the amount of time between exercise and sleep. One study in particular shows that because exercise is physiologically arousing, it makes you less likely to fall asleep in the very near term, but more likely to fall asleep later. So develop a pattern of exercising, but not late at night.

By following these steps, you can improve your sleep hygiene which will make it easier to fall asleep and stay asleep, Good sleep hygiene is not a fix-all panacea, but the research data indicates that is will certainly help.

And because leaders help to set norms by modelling behaviours, my recommendation is to prioritise sleep in your own life, while encouraging your team to do the same. Do what you can to support employees’ sleep health rather than disrupt it. The better rested we all are, the more effective we will be at work supported by more ethical and considerate behaviours.

These ideas can help with office induced disruptions to sleep. Now all we need is a way to avoid the next heatwave.


ISO 26000, CSR and Stakeholders

January 22, 2013

Numerous studies have consistently shown that organisations that support overt corporate social responsibility (CSR) activities, either by allowing staff to participate in voluntary work or by donating to charities, or 100s of similar options for giving back to the wider community do better than organisations that do not. It is an established fact that organisations that embrace CSR have a better bottom line and more sustained growth, however, what has not been clear from the various studies is why!

Two options regularly canvassed are:

  • Because the organisation is doing well for other reasons it has the capacity to donate some of the surplus it is generating to the wider community whereas organisations that are not doing so well need to conserve all of their resources. Factor in the effect of taxation and great PR is generated at a relatively low net cost.
  • Because the organisation does ‘CSR’ it enhances its reputation and as a consequence becomes a more desirable place to work and therefore attracts better staff at lower costs and is also seen as a better organisation to ‘do business with’ and therefore attracts better long term partners and customers again at a lower cost than other forms of ‘public relations’ and advertising.

Both of these factors have a degree of truth about them and frankly, if an organisation does not seek to maximise any competitive advantage its management are failing in their duties. However, this post is going to suggest these are welcome collateral benefits and the reason CSR is associated with high performance organisations lays much deeper.

We suggest that observable CSR is a measurable symptom of ‘good governance’. The Chartered Institute of Internal Auditors define governance in the following terms:
Governance is about direction, structure, process and control, it also is about the behaviour of the people who own and represent the organisation and the relationship that the organisation has with society. Key elements of good corporate governance therefore include honesty and integrity, transparency and openness, responsibility and accountability.

Consequently, a well governed organisation will generally have a good reputation in the wider community; this is the result of the organisation’s stakeholders giving that organisation credibility and loyalty, trusting that the organisation makes decisions with the good of all stakeholders in mind. It can be summarised as the existence of a: a general attitude towards the organisation reflecting people’s opinions as to whether it is substantially ‘good’ or ‘bad’. And this attitude is connected to and impacts on the behaviour of stakeholders towards the organisation which affects the cost of doing business and ultimately the organisation’s financial performance.

Therefore, if one accepts the concept that the primary purpose of an organisation of any type is to create sustainable value for its stakeholders and that a favourable reputation is a key contributor to the organisation’s ability to create sustainable value. The importance of having a ‘favourable reputation’ becomes apparent, the reputation affects stakeholder perceptions which influence the way they interact with the business – and a favourable reputation reduces the cost of ‘doing business’.

However, whilst a well governed organisation needs, and should seek to nurture this favourable reputation, it is not possible to generate a reputation directly. The organisation’s reputation is created and exists solely within the minds of its stakeholders.

As the diagram below suggests, what is needed and how it is created work in opposite directions!

Governance-Stakeholder-Reputation1

What the organisation needs is a ‘favourable reputation’ because this influences stakeholder perceptions which in turn improve the stakeholder’s interaction with the organisation, particularly as customers or suppliers which has a demonstrated benefit on the cost of doing business. But an organisation cannot arbitrarily decide what its reputation will be.

An organisation’s ‘real reputation’ is not a function of advertising, it is a function of the opinions held by thousands, if not millions of individual stakeholders fed by all of the diverse interactions, communications, social media comments and other exchanges stakeholders have with other stakeholders. Through this process of communication and reflection the perception of a reputation is developed and stored in each individual’s mind. No two perceptions are likely to be exactly the same, but a valuable ‘weight of opinion’ will emerge for any organisation over time. The relevant group of stakeholders important to the business will determine for themselves if the organisation is substantially ‘good’ or ‘bad’. And because the sheer number of stakeholder-to-stakeholder interactions once an opinion is generally ‘held’, it is very difficult to change.

The art of governance is firstly to determine the reputation the organisation is seeking to establish, and then to create the framework within which management decisions and actions will facilitate the organisation’s interaction with its wider stakeholder community, consistent with the organisations communicated objectives.

Authenticity is critical and ‘actions speak louder than words’ – it does not matter how elegant the company policy is regarding its intention to be the organisation of choice, for people to work at, sacking 500 people to protect profits tells everyone:

  1. The organisation places short term profits ahead of people.
  2. The organisations communications are not to be trusted.

The way a valuable reputation is created is through the various actions of the organisation and the way the organisation engages with its wider stakeholder community. Experiencing these interactions create perceptions in the minds of the affected stakeholders about the organisation. These perceptions are reinforced by stakeholder-to-stakeholder communication (consistency helps), and the aggregate ‘weight’ of these perceptions generates the reputation.

The role of CSR within this overall framework is probably less important that the surveys suggest. Most telecommunication companies spend significant amounts on CSR but also have highly complex contracts that frequently end up costing their users substantial sums. Most people if they feel ‘ripped off’ are going to weight their personal pain well ahead of any positives from an observed CSR contribution and tell their friends about their ‘bad’ perception.

However, as already demonstrated, actions really do speak louder than words – most of an organisation’s reputation will be based on the actual experiences of a wide range of stakeholders and what they tell other stakeholders about their experiences and interactions. Starting at Board level with governance policies that focus on all of the key stakeholder constituencies including suppliers, customers, employees and the wider community is a start. Then backing up the policy with effective employment, surveillance and assurance systems to ensure the organisation generally ‘does good’ and treats all of its stakeholders well and you are well on the way. Then from within this base, CSR will tend to emerge naturally and if managed properly becomes the ‘icing on the cake’.

In short, genuine and sustained CSR is a symptom of good governance and a caring organisation that is simply ‘good to do business with’.

Unfortunately, the current focus on CSR will undoubtedly tempt organisations to treat CSR as just another form of advertising expenditure and if enough money is invested it may have a short term effect on the organisation’s reputation – but if it’s not genuine it won’t last.

One resource to help organisations start on the road to a sustainable culture of CSR is ISO 26000: 2010 – Social responsibility.  The Standard helps clarify what social responsibility is, helps businesses and organisations translate principles into effective actions and shares best practices relating to social responsibility. This is achieved by providing guidance on how businesses and organisations can operate in a socially responsible way which is defined as acting in an ethical and transparent way that contributes to the health and welfare of society. Figure 1 provides an overview of ISO 26000.

 

Interestingly, my view that understanding who the organisation’s stakeholders really are and engaging with them effectively is the key to success, is also seen as crucial by the standard developers! For more on stakeholder mapping see: http://www.stakeholdermapping.com

Conclusion

This has grown into a rather long post! But the message is simple: Effective CSR is a welcome symptom of an organisation that understands, and cares about its stakeholders and this type of organisation tends to be more successful than those that don’t!