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The question was recently asked, “Why are so many great business leaders found guilty of corruption?”
 

I believe the premise of the question is factually flawed.  There are not “so many” corporate officers (a.k.a. leaders) found guilty in a court of law if you look at the statistics – the number convicted is a very small fractional percent of the total who are in those positions. I don’t agree with the modifier of “great”, or better I don’t understand how great is defined and measured.  A leader who takes their company to disgrace and ruin is not “great” by any number of different definitions of greatness.  “Corruption” is a broad term whose meanings range from immorality and perversion to unintentional alteration of data.  I prefer the definition of “corruption” in this context as “using a position of trust for personal gain”; and “guilt” not restricted to a court of law.
 

So the question might better be “Why do business people put in positions of trust use their authority for dishonest gain?”   This expands the scope of leadership beyond corporate officers to anyone with authority given to them by the company they work for.  Corruption would then include anyone fudging a timecard or expense report to a decision maker accepting a “gratuity”, to a CEO manipulating a quarterly report data to make the “numbers” for a bonus to kick in. 
 

Corporate culture is the culmination of the habitual behavior of its people.  If fudging an expense report is an accepted “wink-wink” habit, and the list of “wink-winks” grows from there, the cumulative effect of these habits as people move up an organization to positions of more authority and trust to committing more serious and egregious dishonesty is easy to see – there is never a big step, just the next step in a long series of steps. 
 

So when we see a corporate officer convicted and we say “How stupid was that” or “What were they thinking” – I think the answer to the question is that this outcome is a result and indicator of a systemic corporate culture of dishonesty.  In crime they say follow the money trail – in the instance of corruption, follow the trail of dishonesty up through the company to the top. 
 

And who is really “guilty”?  Isn’t it the corporate Board of Directors for allowing a culture of dishonesty to grow and persist?  The directors are the stewards and guardians.  They have a fiduciary duty of care and a duty of loyalty. “Loyalty” equates to “No self-dealing” and “Care” equates to “Business Judgment”.  And if the directors are guilty, who is it that puts them there? – the stockholders.  Maybe the old saying that if you point a finger at someone, there are three pointing back at you is true.  Maybe the indictment of “corruption” is one of our societal culture as well. 

If it were only that simple. Or is it?
 

If you look at any organizational outcome and ask why enough times, the leadership will ultimately surface as a root cause or very close to it.  If you find yourself scoffing right now, you’re in denial.  After all, if the outcomes are good, who gets the credit?
 

Organizations mirror their leader.  That’s as close to an absolute in business as you can get. 
 

In large organizations strapped with archaic leadership processes, the leadership turnover rate at the top is often multiples of the speed of the leadership communication through the organization (N.B. communication).  These organizations are easy to spot.  Indecision, uncertainty, and organizational schizophrenia are the primary indicators – turnover of national pool employees is a good metric. The leadership mirror in these cases is generating a strobe effect.  The good news is that the converse is true.
 

In small organizations, the mirror is so close that the organization takes on the persona of the leader’s mood that day.  “If Mama isn’t happy, ain’t nobody going to be happy!”  What’s true at home is true away from home.
 

So if you accept that leadership is the root of organizational outcomes, and you accept that organizations mirror their leader, than what an organization is and is able to accomplish is a direct outcome of the expansiveness (or lack of it) of its leadership.  As leadership thinking and functioning capability is stifled or stagnant around the five strategic aspects of any organization, so goes the business. As that same thinking and functioning capability expands and grows, so goes the business.
 

It’s that simple. Or is it?

Every organization’s got one. It’s either the hero or the villain, but seldom an in-between.
 

Organizations that are confronted with increasingly competitive environments sooner or later find themselves facing a “culture change.” But before an organization’s culture can be changed, what exactly it is, and how it got to be must be understood.
 

An organization’s culture, simply put, is the norm of behavior that describes the organizational responses toward its stakeholders.  The responses are bell shaped, normally distributed by nature.  The sharper the curve the more pronounced the behavior and the result.
 

A simpler way to look at organizational culture is by observing its habits and its rituals.  Moving from organization to organization you’ll find an inordinately rich palette of habits and rituals that give each organization its unique character and identity.  For the most part every organization is after the same thing.  But their cultures, their rituals and habits, are substantively different and ultimately define the results.
 

Habits are hard to break.  Culture change, no matter how badly needed is no walk in the park.  Habits are in one instance an organization’s strength.  In others they are an organization’s nemesis.   Breaking the habit of “. . . the way we’ve always done it” is as difficult as breaking the addictive habit of smoking. 
 

Culture is a continual evolution and in turnarounds a revolution.  Culture change can only be lead.  The mediating skill of “leading” has become a prerequisite for business success and will be so for the foreseeable future. Finding and/or grooming it is the challenge that all corporate boards and business ownership face.

An Oak Leaf Consulting Executive Associate went into have a chat with a CEO of a large company.  The meeting had been set up by the CEO’s Administrative Assistant. The company was having more than its fair share of problems in an intensely competitive market, and things weren’t getting any better.
 

When our associate entered the office, the CEO blustered “What the *!!# . . .” did our associate think they were going to tell the CEO that the CEO didn’t already know?  As this was a gratis two hour consult, without sitting, the associate pulled out the signed nondisclosure agreement, handed it to the CEO, looked the CEO in the eye and said “You’re stuck on STUPID!”  That said, the OLC Executive Associate turned and left the office.  The rest of the story is downright belly laugh funny, but that isn’t the point. 
 

The point is finding yourself and your organization seemingly frozen in the headlights of an ever increasing powerful reality that is pulling the pins out of your competitiveness and threatening your on-going existence. 
 

Leaders will point to their business plans, their vision, mission, and strategies.  But these aren’t worth anything unless they have set up intimately linked metrics by which the organization can audit the correctness of a strategy and the plans and actions to accomplish it.  Without credible and innovative measuring systems that audit in real time, the outcome is inevitable – “Stuck on Stupid”.  Learning organizations increase their odds of winning; clueless organizations drift to wherever the floodwaters take them.
 

Know a business / organization leader, a business owner, or an entire company “Stuck on Stupid”? 

A “value proposition” is simply the answer to the question – “Why should I choose you?” 
Every business / company / organization has four fundamental value propositions it needs to develop and protect to be sustainable.  “Why should customers choose them?”  “Why should people choose to hire in and choose to stay?”  “Why should their local community support their continued presence?” And, “Why should investors and banks choose to entrust their money with them?”
The answers to these four questions (the company’s actions as it interacts with customers, associates, community, and investors) are in most instances cynically perceived in the eye of the beholder as flailing against one another.  Without strong “rudders”, businesses morph into a reality that more often than not nobody wants.  At best, the collective “they” enter into a state of benign tolerance until something better comes along.
Is it possible anymore to have a business that dominates customer satisfaction in its market; that is a great place to work; that produces outstanding financial results; and is a credit and an icon of business in their community? 
Is it possible anymore to simultaneously satisfy all four of a company’s strategic value propositions in all of its “actions”? 
Can a startup company ever dream of achieving it – or is “almost good” the new norm?

Analogy is a powerful way of getting out of a mental logjam and seeing and understanding things more clearly. I use a number of analogies to help business leaders and owners come to grips with the issues they face.
 

Many leaders and owners struggle understanding the difference between working “in a business” and working “on a business.”  Working in a business is tactical in nature.  It deals with the ongoing issues of what is.  Working on a business deals with the issues of what could be or better yet what should be.
 

If you think of the business you are in as a clothes washing machine it might be clearer.  Every day you get up at 0-dark-thirty, do your thing and get into work.  Working in the business is imagining yourself every day opening the washing machine lid, hitting the on button, hopping in and closing the lid after you.  During the day getting through a normal cycle is oxymoronic.  Someone is always opening the lid and throwing in more dirty wash, just when you should be ready for the rinse cycle.
 

At some point, way later in the day than what you planned, someone comes along, opens the lid and extracts you (usually a call from home about a promise you made).  And out you climb, still  wet and grimy with all the things you just left behind, you go home, do your thing until the alarm clock signals it is 0-dark-thirty, and you get up and do it all over again.
 

If you feel like your business life is stuck on the spin cycle, you are working in the business. 
 

Working on the business is staying outside of the washing machine – actually operating it rather than it operating on you.  It is looking to the future, deciding what your clothes washer will be and do and working on things that will make that happen so that what you imagine will become a reality some time down the road. 
 

What causes owners and leaders to stay in the washing machine?  Even though it’s seemingly crazy, it is comfortable.  When you are in the “machine” you are dealing with the known, stuff you are good at.  It is easier to stay in the “machine” than deal with the future, the uncertainties, and the risks of the unknown. 
 

If you are living in the washing machine – get out!  Make getting out a habit.  How?  Schedule it on your calendar, PDA, or tell your support staff to fish you out at a predetermined hour!
 

Just do it!