As Thomas Friedman articulated as early as 2005 in his book, The World is Flat”, we live in a hyperconnected, hypertransparent world that has fundamentally changed the nature of communications and commerce. Information now flows freely…without boundaries…in real time with direct implications for how businesses are structured and how the people within those companies work. The 20th century command and control structures that once served many businesses well are increasingly anachronistic, and people driven by rules and motivated by self interest and financial rewards are giving way to new models that unleash the power of people.
Businesses that are thriving today are embracing these new realities. People are no longer assets to be treated as chattel or interchangeable parts. They are individuals who are increasingly motivated by values and principles, and are seeking journeys of significance before financial rewards. Gone are the days when WHAT a business provides serves as its source of sustainable differentiation, as today’s innovations are quickly copied and improved upon with lightning speed across the globe.
In a hypertransparent, hyperconnected world, principled behavior based on a common vision and shared values has taken center stage. Customers expect companies to treat them as people, with service at a premium and a new source of competitive differentiation. Service is about people treating people as people. It demands that employees and their partners inherently want to do the right thing in the best interests of their customers, and are encouraged to make fast decisions often in gray areas where personally held principles rather than rules serve as their source of guidance.
Vertically integrated companies that dictate terms to a limited set of suppliers have given way to horizontally aligned ecosystems of individuals and companies. Teams are becoming more project and task oriented given the need for diverse skills and rapid execution. Such teams are quickly formed and disbanded, and under such conditions, productivity and goal achievement depends on behavior driven by a new moral and ethical code.
It begins with trust and a willingness to grant trust to others one barely knows…a situation fraught with risk and uncertainty at the outset. Such trust lays the foundation for taking risks, and risk taking is a precursor to attaining that evry company seeks to achieve today…continuous innovation. When there is trust and the encouragement of risk taking in business, people are able to innovate through inspiration and the pursuit of significance at both the individual and team level, and in such fashion, genuine progress can be realized.
Principled behavior in business now demands that we focus on HOW we do WHAT we do. When we are driven by our values rather than rules, we are free to do the right thing. We trust each other based on a shared mission and shared values. We do what we inherently know should be done in any situation, because we are motivated by our ethics over blind obedience to systems and rules that are not our own. Our principles define who we are, as individuals and as teams, and guide us as pursue journeys of significance benefit businesses and inspire its people.
When the people within companies exhibit principled behavior, their values serve as a basis for self governance and a driver of leadership behavior based on contributions rather than hierarchy. This ultimately benefits customers who vote with not only their wallets but with voices that can escalate and reach around the world with lightning speed. We have all had to personally endure calls into customer service centers where we are confronted by an endless set of automated voice prompts, only to finally get a representative on the line who works off a script and follows a set of prescribed rules that invariably fail to meet our personal needs. How many times have you had to ask for a supervisor to “be heard”, and how terrific do you feel when that supervisor voluntarily does the right thing to meet your needs.
The principled company focused on HOW customers are served. Its people listen. They are genuinely concerned about others. They take a personal interest in solving problems in a principled way. They operate on the basis of doing the right thing. And they eliminate the need to escalate up to a supervisor…improving productivity, reducing costs, and earning customer loyalty and advocacy.
Examples abound today of companies who have clung to outdated business models, trusting that WHAT thy provide is enough to command and defend a market leadership position. By focusing single-mindedly on WHAT they provide, they fail to encourage the principled behavior that defines HOW they compete and suffer the consequences. Examples abound of the importance of working openly and collaboratively in an environment of trust and respect. In the world of technology, the advent of open source systems based on crowdsourcing and collective efforts fueled by the pursuit of significance have unleashed a torrent of creativity and innovation that has threatened or toppled closed, proprietary systems. Businesses that were able to compete based on asserting power and killing off rivals are giving way to those who value teamwork, partnership, enlisting the support of customers and partners, and operating on the principle of what one should do in any situation. Principles and ethics matter, and strong arm tactics do not serve a business well.
When issues arise that can have a bearing on a company’s reputation, principled behavior means acting with integrity, owning and correcting problems because it is the right thing to do even when seemingly unprofitable. The nature of PR has been fundamentally changed from corporate spin and attempts to paper over problems to the enlistment to customer support through honesty and corrective actions. Today, authenticity is the new currency of business, and when a business fails to do the right thing in efforts to protect profits, our new world of transparency reveals any and all transgressions with swift and lasting punishment to those who try to deceive
The bar has been reset for companies across the world in HOW its people behave, and the need to exhibit the highest level of ethics and moral responsibility has cascaded into a genuine concern for the environment. Sustainability and the green movement have put the spotlight on the need for principled behavior. As consumers have embraced recycling and energy conservation to protect the environment for generations to come, they have also translated these values into their shopping habits. Start up companies such as Method used only recycled packaging for its US household products and won a huge instant following that has helped change the game in packaging. Concerns about carbon emissions changed similarly changed the game in global logistics and supply chains, and ecosystems of companies that work together to produce and distribute products are operating based on principles held dearly by both their employees and their customers. Cisco has been an early champion and pioneer in developing a green supply chain, and many others have followed suit driven by a set of shared values rather than rules-based cap and trade restrictions.
In summary, being principled in today’s flat, hyperconnected, and hypertransparent world is no longer optional. While the pursuit of profit remains a core driver for businesses, HOW that profit is earned is taking center stage as the source of competitive differentiation. Acting on the basis of a common vision and shared values as an ethical member of a larger ecosystem is increasingly becoming the standard for companies worldwide. And creating environments where people work together as inspired teams on a mission of significance is determining which business will thrive today and tomorrow.