An Imperative for Organizations
Article in Work & Spirit:
A Reader in New Spiritual Paradigms for Organizations
Edited by Jerry Biberman and Michael D. Whitty
University of Scranton Press, 2000
Director of Graduate Programs in
Human Resource Development
We are entering uncharted waters, a new world. The old rules and structures don’t work as well as they used to. We are in the midst of a change of consciousness of what organizations are all about. Twenty-five years ago when I began my career, I would suggest to my MBA students and attendees in management training programs that if they treated people with care and respect, they would likely end up with a more motivated workforce. The word that describes their reaction to me is: ridicule. "Treat them nice?" they would ask incredulously. "Why, we pay them! It’s their job to work hard."
Nowadays I don’t hear that much from managers anymore. There is a general awareness, unfortunately not often put in to practice, that treating employees decently makes better workers. So why aren’t we using this knowledge more? Why don’t we implement these ideas everywhere? The reason was given by a Pratt & Whitney manager, who described the problem as: "Our structure has not caught up with our consciousness."
We instead fall back on the traditional way of management--top-down, hierarchical, more vertical than horizontal, and characterized by control. It is the best of what we might call a rational system and might be characterized by the magazine Fortune (Richard Daft, personal communication, 1998). In times of relative stability and predictability, as it used to be 40-50 years ago, this structure worked well. Twenty years ago (and still today), this is what we taught in business schools. Finance, accounting and strategy were more-or-less predictable fields of study. Long-range planning was 10-25 years. But in current times of cut-throat international competition, globalization, transformation of whole industries from the information age, and the reduced product cycle-time (as one Wall Street manager noted, long-range planning for him is four hours), a more organic, fluid and horizontally-oriented structure works best. This is typified by the newer magazine, Fast Company.
Hundreds of books have been published in recent years describing all the new changes in management and how to implement them. We know the words well, but we don’t always know how to achieve what they represent: vision, empowerment, accountability, commitment, and customer orientation. This article presents the perhaps-radical notion that these goals are achieved through love and spirituality.
Most of the moves from the old management to the new involve changing to a more spiritual foundation. For many managers and management theorists, this is a new way of looking at things. Yet once we open our minds to the perspective of spirituality, it becomes very clear: all the new management concepts that fall under the umbrella of "new management" are, at their core, outward manifestations of managers acting with love and spirit. They are a set of behaviors, attitudes, decisions, and policies that reflect the organization’s spiritual essence. They are the workplace versions of spiritual virtues.
What is happening, then, is a sweeping change towards a new model, though we can as yet see it dimly. These changes have been predicted by religious prophets throughout the ages. The Holy Bible speaks of the days when wars and contention will cease, arguably meaning an age of collaboration.
More recently, radical changes in the world were predicted more than a century ago by Baha'u'llah (1817-1892), founder of the Bahá'í Faith. He wrote:
The world's equilibrium hath been upset through the vibrating influence of this most great, this new World Order ... the like of which mortal eyes have never witnessed (Baha'u'llah, 1976. p. 136)
Some Bahá'í writings early in the 20th century described what was to come. Shoghi Effendi, a central figure of the Bahá'í Faith, wrote in 1938 that we "would see .. an organic change in the structure of present day society, a change such as the world has not yet experienced ... [and] no less than the reconstruction and demilitarization of the whole civilized world ... to remold its institutions in a manner consonant with the needs of an ever-changing world (pp. 41, 43).
The changes may be coming, but we still have far to go. Rather than values- or spiritually-based organizations, too many firms today are toxic to the human spirit (Pfeffer, 1995 and Webber, 1998), causing demotivation, lack of loyalty and alienation. Instead, why not create organizations hospitable to the human spirit?
The "cover your asset" based management style
Until very recently, most organizations used asset-based management (Rosenfeld, 1998, personal communication). The real value was in tangible, often immovable, commodities. In agricultural times assets were land, jewels, and precious metals. From the industrial revolution until the very-late 20th century, assets were money, which was often invested in factories and means of production. Under the above conditions, employees were incidental to the wealth of a company or a person. Certainly, they were needed, but it was more for brute force work or domestic servant chores, neither requiring high levels of education or complicated training. Therefore, workers were more-or-less replaceable and not seen as having any real value to the enterprise. In those times, managers had some real control over the firm’s assets.
Enter the information age. Capital for investing in ventures is no longer a scarce commodity. When internet giants Yahoo! And Amazon can be started with almost no capital financing and become some of the largest U.S. corporations, you know that capital has lost its edge as the major force for creating successful enterprises.
Today we have a growing segment of employees called knowledge workers. More and more organizations are dependent on the skills, intelligence and wisdom of these people. Robots and assembly lines have replaced the need for manual labor, but what is needed are smart, hardworking employees. They are the real assets of modern companies. And unlike in past ages, those assets can walk out the door if they don’t like how they are being treated.
The trend today is towards a more respectful, consultative, encouraging and ethical system of management system whose goal is to maximize customer satisfaction. Although widely accepted, this notion is not yet widely practiced. We remain stuck in the obsolete if more familiar "material world" and "rational view" models. As a result, many organizations espouse the values of this new management, but have yet to put them into effective practice. Often, when they try, they fail because they are still operating according to old ways of thinking, seeing organizations within a merely material framework. All too often, the changes undertaken prove to be superficial. They fail to deal with the deeper issues of spirit and love, the essential ingredients to achieve true customer satisfaction. Without embracing these, reforms deliver little. The "new" organizational scheme becomes constrictive, made to yield, like a rubber band, only by force. Sometimes efforts to change derive from motivations that are less than genuine. No amount of rhetoric can tune out hypocrisy or double standards. To be real and lasting, change must be real and fundamental.
Dimensions of organization
If, instead, we could view companies from a broader perspective, we would see that spiritual values inspire a new way of doing business, that from the basic spiritual virtues of unity, justice, integrity, respect and service. In order to achieve this, all five of an organization’s dimensions must be addressed. These are: material, intellectual, emotional, volitional and spiritual. The material dimension concerns such issues of physical life as buildings, equipment, comfort, safety, adequate pay and financial viability.
The intellectual includes the collective intelligence of employees, plus their continuing drive for development and learning, as well as the ability to use available resources effectively and plan productively to stay abreast of the latest developments -- to be on the "cutting edge" of technology in their fields.
The emotional dimension embraces the work environment and how well people get along with one another, and how effectively they can work as a team. Effective teams require members who are concerned with maintaining the needed skills, who can foster mutual, listen well and get and give positive feedback, along with an absence of defensiveness in their dealings. In short, effective teams have members possessing mature emotional development.
The volitional dimension refers to the desire or will to improve. We may know that some other behavior is healthier, for example, but lack the will to adopt it. The ability to change, after all, demands the willingness to do things differently.
Finally, there is the spiritual dimension. It concerns such moral issues as justice and respect, involves empathy and accepts each colleague as unique, to be treated with dignity. However, most organizational change focuses on just the material and intellectual dimensions. Some attention is given to volitional change, but the emotional and spiritual tend to be ignored. The resulting lack of balance almost guarantees only limited success at best, and often failure.
But most organizations today are concerned primarily with financial well-being and increasing shareholder wealth. These may be necessary goals, of course, but they are insufficient to provide long-term viability and success. To achieve that, we must look at all aspects of organizational life and improve each of them, and not merely the financial and material. In fact, of the 200 CEO’s studied by Toney and Oster (1998), those who used religious principles in their daily decision-making had more successful companies than those who did not. This was because while some CEO’s might be motivated by personal reward or greed, those who reflected back to their Holy Books often chose "service" as the principle they would apply, and that, paradoxically, led them to greater corporate and personal wealth.
"A better life for our customers"
There are organizations which deem all the dimensions important. Consider a retail chain located in small towns and poor urban areas. Stores are relatively small, plain and simple, with tile floors and bright fluorescent lights, giving the feeling more of a 50’s Woolworth’s or Ben Franklin than their competitor Wal-Mart. Most customers have family incomes below $25,000 (Berner, 1998). Average sale is $8.00, and they like it that way, not wanting poor folks to spend too much in their stores.
Though this might not seem a recipe for success, Dollar General has defied conventional wisdom to become the most successful publicly-held retail chain in the US for five years running. (Wiegold, 1998). And it’s growing by a billion dollars a year (Milana, personal communication, 1999). During the decades Cal Turner, Jr. has run Dollar General (which was founded by Cal Turner, Sr.), the retail industry went through a traumatic shakedown unlike any other. The secret of his success is his solid business sense coupled with a deep and abiding belief in God and trust in good people.
"Our strategy is to hire ordinary folks, those with moral integrity, give them a sense of mission and then get out of their way. Good people in pursuit of mission need the least amount of policies and controls," he explained with the exuberance of a young boy hitting his first home run. "Values and mission are the greatest control factor for getting everyone to work towards common goals. It’s the values that control them, not rules." (Turner, personal communication, 1998)
As comfortable in a navy suit as he is in plaid shirts and jeans, Turner also feels strongly about serving those less fortunate. Most five-and-dime stores charge odd-numbered amounts such as $.99, $1.99, or $2.49, but not Dollar General, where prices are in even amounts if $1.00, $1.50 or $2.00. Wouldn’t the previous prices induce people to buy more, since it is easy to lose track of how much you are spending?
"My daddy and I talked about that," says Cal, Jr., in his relaxed, down-home style. "We thought poor and uneducated people might have problems adding up what they bought, making overall money management more difficult for them. So we decided to make it easier for them." Compare this to Wal-Mart, which aired a live Garth Brooks concert at Christmastime, in order to extend the customers time in the stores. Or, as the National Association of Recording Merchandisers says, "The longer [retailers] keep you in the store, the greater the chance you’ll leave with more items." (Nelson, 1998, p. B1) Cal, on the other hand, really believes in the first sentence of the Dollar General’s mission statement: "A better life for our customers."
His compassion is not limited to customers. Employees are special, too. Prospective employees see a short video of Cal, Jr. describing just how Dollar General considers its workers "an honored and valued asset" of the organization. Each year the company pays out millions of dollars in employee bonuses tied to corporate performance. Recently I had lunch with one of the newer Dollar General executives, HR VP Susan Milana and I asked her if Cal’s message and values are taken seriously in the company, or whether it was, as in so many other companies, just so much corporate hype (personal communication, 1999). As a rising start in companies such as PepsiCo and T.J.Maxx, Milana has two decades of HR experience to draw on. When she started in Dollar General, she wondered if it would live up to its people-oriented promise. She has not been disappointed. In many meetings, she reported, managers are moved to tears—not out of frustration or pain, but rather from the empathy and positive connection there is between the company and its customers.
Many companies nowadays have value statements and those are hung proudly on the wall for all to see. But here is where Dollar General stands out. In another setting, the values might be espoused, but what happens when a promotion decision has to be made, when there are two candidates? (Milana, personal communication, 1999) One of them has strong interpersonal skills, good ethics, shows promise as a leader, but has not been the "star" in terms of sales or other perforamance measures. Candidate B is not so great with people, maybe even is self-centered, but recently made a momentous sale. If, as happens in many companies, the winner is candidate B, then they might as well rip the value list off the wall, because those espoused ideals have just been violated.
Dollar General maintains its values base by constantly challenging itself with policies and behaviors to see if they fit in with the values. Yet this is done in a supportive, collaborative mode. Milana told me they never "criticize" one another’s ideas. They listen and try to build on them. Each of the 28 senior managers writes a development plan once a year and meets for an entire day with Turner, Milana and sometimes another executive. Managers are evaluated on their vision, their ability to work in teams to achieve their goals, and how well they know and work with their employees, all the way down the line. If store supervisor Mary Schmidt’s mother was in the hospital three months ago, the executive is expected to know the mother’s name and condition.
Recruitment is important to the success of this, for it is easier to maintain the company culture if people are hired who share common values and aspirations. Visibly moved, Milana told me of how humbled she is after reading the development plans of co-workers, who are actively involved with family, church and community, trying their hardest to make the world a better place.
I regularly visit a number of Dollar General stores and ask the clerks if they like their jobs. This is a question I often ask hotel maids, waitresses, and workers at car rental agencies. Rarely do I get the kind of positive response I uniformly get from Dollar General employees. It is proof to me that the policies from above to permeate to the lowest level of the organization. The difference between Dollar General and other companies who hang their values on the wall, is that Dollar General started living out its values from day one and only recently wrote them down on paper.
Because the right people are hired, values are so intentionally operationalized and scrutinized, and rewards match the mission, the values Dollar General started with have been fully integrated in to the company. And despite the $1 billion growth per year, the values and culture are being maintained and replicated in about 700 new locations a year (for a total of 4700 locations in 2000). Will the culture outlast Cal Turner, Jr, the keeper of the flame? Milana believes it will, because the values are such an fundamental part of the culture and are better integrated than any other organization she has seen.
In order to succeed at Dollar General, Milana had to forget everything she learned in her previous executive positions, for she is evaluated in a totally different standard, as show in the chart below:
|Other major corporations||Dollar General|
|Individual contribution||Team contribution|
|Ability to make independent decisions||Ability to take partners to resolve problems|
|Conviction in expressing ideas, and strength of persuasive skills||Collaboration in expressing and listening to others’ ideas|
Managerial Evaluation Criteria Dollar General
Compared to Other Large Corporations (Milana, 1999)
Turner is a self-proclaimed strategist and penny-pincher, trying simultaneously to be Scrooge and Santa Claus (Kennedy and Fulmer, 1998). In order to give better value to customers, he holds down costs on amenities in stores. "In Scottsville," he noted, referring to his home town and the company’s headquarters until it moved to Nashville in 1987, "we think ambience is something you ride to the hospital in." (p. 9) Turner is more of a people-based rather than asset-based manager, as discussed in chapter one. More like Gandhi than Genghis Khan, he realizes satisfied workers are pivotal to success. In order to hire the kind of employees who can get excited about Dollar General’s mission and serve their customers, the HR department has devised an unusual interview process, which includes candidates writing their own personal mission statement (Milana, personal communication, 1999).
Cal Turner, Jr., runs one of the US’s most successful retail operations. He lives his life according to principles learned long ago at his place of worship. Love of God is integral to his life and his work. Following the straight and "right" path has become natural to him. Earlier in the century, or hundreds of years ago, he might have been a priest or social reformer, working for abolition of slavery, temperance, or civil rights.
Our modern religious activist, though, is a CEO. As a young person, Turner felt the "calling" to go into business (personal communication, 1998). Having a burning desire to enter the ministry, he went through much soul searching and a crucial talk with his own pastor, finally laying aside a life of "sequestered goodness" in favor of taking over the family business. Rather than have only a few hours of impact on several hundred in a congregation, he now has forty hours a week of influence over 40,000 employees and has made life richer for 40 million low-income customers, most of whom live in crime-ridden inner cities or poor rural areas.
Make no mistake, though, Cal is a tough-minded businessman, but one who realizes the centrality of people to what he does and proclaims, "Our two most important assets are people and merchandise, in that order." (p. 10). For Cal, however, the big profits do not seem to be the most important draw. He uses work to develop people—and lets everyone enjoy the process. "Work is the venue and fun is the catalyst."(Turner, personal communication, 1998).
Spirituality in organizations
Spiritual principles relate to our inner part, our soul or core, the part of us that transcends "material man." Our spiritual nature craves a purpose in life. It is the part of us that deals with love, kindness, generosity, understanding, forgiveness, peace and harmony.
There seems today to be a spiritual reawakening of organizations around the world. We are experiencing the marketplace adjustments and awareness of what Harman and Hormann (1990) discuss as the fundamental fact -- that we are spiritual beings inhabiting a spiritual universe, and that denying this is an error condemning any social structure to failure (p. 141). If so, we are in a world based on spiritual principles and laws, as well as the more familiar physical principles and laws. These we ignore at our peril. For example, I put my hand in a fire and it burns. If I test gravity by walking off a roof, I fall.
The consequences of violating physical laws is swift and clear. But spiritual laws are different. They are easier to ignore (at least in the short term), for the consequence is not always as quick, and it may also be less obvious. But, clearly, if I lie and cheat, people sooner or later will stop trusting me and I shall suffer the unpleasant consequences of being regarded with suspicion. If I am unkind or unjust, people will eventually react in ways that I may regret. So even though the result of breaking spiritual laws may not be immediately obvious, eventually it will come. Breaking a spiritual law has outcomes as predictable as breaking a physical law.
Figure 2. A Sample of Spiritual Laws from the World's Religions.
|Be trustworthy|| Thou shalt not bear false witness against thy neighbor. Holy Bible, Exodus 20:16
The gift of truth excels all gifts. Buddhist, Dhammapada 354
But in torment the soul of the liar shall surely be. Zoroastrian, Gathas: Yasna 45-72
|Be detached, remove ego||...give up pride. Buddhist, Dhammapada 221|
|Do not live in anger||Absence of anger,... indignation[and]of enmity;.[this is] approved conduct for men in all stations of life. Hindu, Apastamba Dharma Sutra, 8:1|
|Live rightly|| Right views, Right aspirations, Right speech, Right conduct...Right effort, Right mindfulness. Buddhist, Buddha’s First Sermon.
Led by...Thy Love, led on by thoughts and words and deeds of Truth....Zoroastrianism, Gathas: Yasna 47-1.
|Live in service||For the sake of the welfare of all, carry on thy task in life. Hindu, Bhagavad Gita, 3:20
Again, is there any deed in the world that would be nobler than service to the common good? This is worship: to serve mankind. Bahá'í, Paris Talks, p. 177
|Love others||Hate is not conquered by hate. Hate is conquered by love. This is an eternal law. Buddhist, Dhammapada, 177
...love your enemies, bless them that curse you...love thy neighbor as thyself. Christian, Matthew 5:44, 19:19
The company that violates spiritual laws may suffer in the long run through the alienation of its workers, the dissatisfaction of its customers and the loss of community respect. Companies that follow spiritual principles and are competent, on the other hand, will be long-term winners. Companies adopt codes of conduct and statements of values for similar reasons -- to increase the firm's prosperity.
The new management results not from some mass awakening, but from success. The infusion of spiritual principles in organizations occurs because it has made companies more productive and more profitable. We are talking about what we have called the strengthening of an organization's spiritual dimension, putting the business on a firm foundation of ethics, integrity and honor. Despite positive material results, however, the quest for profitability is an insufficient motivation. Spiritually oriented companies, as we have described them, adopt that orientation because it is the right thing to do.
Indeed, when the overarching goal of an organization is profit and shareholder wealth, it is difficult to create a spiritual framework because, if the bottom line becomes threatened, love goes out the window. For love and spirituality to work, material goals must embrace the spiritual -- such as service to customers and suppliers, contributions to the community, development of employees, creating a sense of community within the organization and, overall, convergence of the material and spiritual.
The motto of Thomas Masaryk, the first president of Czechoslovakia (1918-1935), was that "truth will prevail." Many people compare the moral courage of Masaryk with that of Vaclav Havel, the current president of what is now the Czech Republic. Havel has updated Masaryk's motto by saying that "truth and love will prevail over lies and hatred." Despite a lack of overall morality in the present short term, the Czech Republic possesses a heritage of moral courage reflected in these two democratic presidents. This is one of many reasons why the Czech Republic is today, and at this stage in its adjustment to democracy and market economics, the most successful of all the former Soviet bloc countries.
I would venture about business, as Masaryk might say today of his country, truth will yet prevail.
Berner, Robert. (1998) Penny pinchers propel a retail star. Wall Street Journal, March 20, p. B6.
Effendi, Shoghi. (1938). The world order of Baha'u'llah. Wilmette, IL: Baha'i Publishing Trust.
Harman, Willis and John Horman. (1990) Creative work. Indianapolis: Knowledge Systems, Inc.
Kennedy, Jim and William E. Fulmer. (1998) Dollar General Corporation (A) Abridged, University of Virginia Darden Graduate School of Business, UVA-BP-0388.
Nelson, Emily. (1998) Retailing: Wal-Mart's Garth-Quake may spur sales, Wall Street Journal, Nov. 2, p. B1.
Pfeffer, Jeffrey. (1995) Producing sustainable competitive advantage through the effective management of people. Academy of Management Executive, 9 (1), 55-69.
Toney, Frank and Merrill Oster, (1998) "The leader and religious faith," Journal of Leadership Studies, 5 (1), 135-47.
Webber, Alan M. (1998) Danger: Toxic company, Fast Company, 19, November, 152-155.
Wiegold, C. Frederic. (1998) "Sharehold scorecard: The quest for shareholder value." Wall Street Journal, Feb. 26, pp, R1-R17.
2 Most of the quotations from Zoroastrianism are taken from either Sacred Books of the East, vol. 31, The Zendavesta, or Farhang Mehr's The Zoroastrian Tradition