Traps in How We Think About Leading: The Case of Focusing Too Much on Budget

Thinking About Decision-Making and Choosing Filters: Overdependence on Budget

If we don’t think about how we want to make leadership decisions, then the crisis of the moment becomes our filter for making decisions.

When the economy is unpredictable and profits are lower, the budget is often the crisis that becomes the thinking filter.

It’s dangerous to make important strategic decisions based only on money and short-term crisis. In the case below, see how different the outcome is when using strategic long-term thinking versus crisis-response short-term thinking.

Cutting the Budget - Using Short Term Thinking

We get the mandate from senior management: We have to cut the budget by 15%. If we have not strategically selected our budget items based on the top goals of the company and principles of responsible business, then by cutting, we are hitting blind. In our confusion, we may choose to cut:

  • Big Line Items (which may be the most important)
  • New Projects (which may be critical innovations)
  • Highly Visible Projects (which would impact our reputation in the company)
  • Staffing (which would obviously impact our ability to get our work done)

When we cut these areas, we literally cut off our ability to help the organization succeed. We forget why we’re here in the first place. We show our lack of thinking ahead. We prove ourselves disconnected from the company’s strategic future.  The outcome is very different if we have been thinking long term.

Cutting the Budget  - Using Long Term Thinking

We get the mandate from senior management: We have to cut the budget by 15%. We have only budgeted for items that directly support the organization’s mission, and directly support the organization’s top business goals and directly support our ability to meet those needs with high quality services.  Here are some good options for how to cut the budget and still have the capacity to accomplish our mission and goals:

  • Since we have used long-term thinking, we have built a high level of trust within our team. They are disappointed by the budget cuts, but don’t see them getting the way. We schedule an innovation meeting, bring in our best discussion facilitator and get to work. By the end of the meeting, the team has come up with 5 ways to cut the budget 15% without reducing the quality of our services!
  • Since we have given back unused budget money twice in the last 5 years when we used innovative and resourceful thinking to meet business goals, we can ask if we may skip the cuts this time. When we have proven our responsibility and diligence, and built a high level of trust with company leaders, this may work.
  • Because there is no fluff in the budget and we have always managed it honestly and strategically in the past, we can ask senior management which of the top business goals they recommend pulling back resources from.  There may be a corporate answer to this question. This could help if the team is not able to come up with creative ideas on its own.

Did You Say to Give Back Unused Budget Money?

“Why would I ever give back unused budget money?” you ask. Here are some very good reasons why you should:

  • It’s honest
  • It builds trust with senior leaders
  • It shows long-term thinking
  • It is in the best interests of the company
  • It’s not your money
  • It may allow you to negotiate keeping money later when you really need it, or keeping valuable employees the next time money is tight

 

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For more, see Linda’s book 7 Lenses and the 21 Question Assessment: How Current is My Message About Ethics?

7 Lenses is a Bronze Axiom Business Book Award Winner in Business Ethics41cEVx-Tu4L._SY344_BO1,204,203,200_
2014  Bronze Axiom Business Book Award Winner 
About 7 Lenses
 
 
Info@LeadinginContext.com  @leadingincontxt  @7Lenses

© 2011 Leading in Context LLC 

Case Study: Think Before You Blame (the Culture May be the Cause)

ethical leadership case business problem solving
Why is it so Important That Every Problem be Somebody’s Fault?

 When we are faced with a business problem that involves ethics, the easy way out is blame someone. That appears to remove the pressure of actually solving the problem. While we are busy finding someone to blame for ethical lapses we usually forget that organizational problems are complicated and rarely have one simple cause (or causer). Since organizations are systems, it would be wise to look for systemic causes when ethical problems happen. That way, we can improve the organization’s leadership in ways that will help to prevent problems in the future.

Let’s use a business leadership example to illustrate how culture impacts ethical behavior in organizational systems:

The Case of the Customer Service Manager Tampering With Data

Why did the Manager of Customer Service (a leader that people like and who has a good track record) tamper with report data? Why, indeed? Why would a manager tamper with data to make his department appear to be more responsive?

Consider these important facts:

  • The Customer Service Manager’s boss told him to do whatever it took to make sure that his department was responsive to customers.
  • The boss cut his Customer Service staff 15% this year and took away part of his budget without involving him in the process.
  • The boss was too busy to see him when he stopped by talk about “a problem.”
  • The boss fired someone last year without any discussion when her department’s numbers weren’t what he had asked for.

We need to ask ourselves:

What is it about the culture of this company that would lead an otherwise honest person to make an unethical decision?

Processing the Ethical Consequences

The Customer Service Manager had been told that he had to meet expectations. He wanted to find a way to do it that his boss would accept. He didn’t want to be blamed or fired, and he knew that he would be (given the boss’s history) if he didn’t make the numbers. He tried to reach out to the boss for help, but was ignored.  He felt so cornered that he made the decision that altering the data would be better than an angry unwarranted firing.

The Link to Innovation and Open Communication

If leaders in your organization have done even some of the things listed above, then they may have created a need for their employees to seek a shortcut to give them the performance that they asked for.

If your culture doesn’t value open communication and employee support, employees have to come up with creative solutions on their own. If your culture doesn’t value innovation, though, those same employees would be punished for innovating their way through the problem. That type of culture leaves employees feeling like they have no other choices but to make decisions that bend ethics.

Questions to Consider

1. Do you think that the data tampering in this case has multiple causes that go beyond what the Customer Service Manager did wrong?

2. What are some signs that ineffective leadership in our culture may be encouraging unethical behavior?

3. How can we create a culture that encourages ethical leadership?


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For more, see Linda Fisher Thornton’s book 7 Lenses and the 21 Question Assessment: How Current is My Message About Ethics?

7 Lenses is a Bronze Axiom Business Book Award Winner in Business Ethics41cEVx-Tu4L._SY344_BO1,204,203,200_
2014  Bronze Axiom Business Book Award Winner 
About 7 Lenses
 
 
Info@LeadinginContext.com  @leadingincontxt  @7Lenses

© 2010 Leading in Context LLC 

Case Study: Is Withholding Information From Other Leaders Unethical?

Is it unethical to withhold information?  Let’s use a case study to explore the question.

“Company in the Process of Releasing a New Product”

We are in the process of fine-tuning the product and getting ready to train employees on how it  works and what it can do for our customers. Connecting key information about the product and incorporating it into the final design and training will be critical to our success.

Will the Product Manager willingly give the training manager a draft of all of the information that front-line employees will need to explain the product to customers?

Will the Training Manager readily share a draft of the training for the product manager’s review?

Will the IT Manager share the specs needed to build a demo version of the product setup screen to use in training?

Seeing the organization as a system:  If the Product Manager, IT Manager and Training Manager have a systems view, then they can see that their success is interdependent. The know that they are working toward the same organizational goals, and that there are benefits to working together to get the bugs out of the product, the technology  and the training before they are rolled out to employees and customers.

Seeing the organization as a collection of disconnected parts: If those same leaders do not have a systems view, and are protecting the performance of their turf zones and operating as if they are separate unconnected entities, they may withhold information from one another (generally making each other look bad). They may do this without considering how that behavior could harm the company, its employees and customers. Because they are not seeing the organization as a system, they may more easily justify any turf-defending behaviors as being part of protecting their own “successful performance.”

In this case, is withholding information needed for the success of a project unethical?  Yes, it is. This behavior is not just annoying and counter-productive, it’s also unethical. By withholding information needed for the success of a project, a leader is working against the goals of the organization, against the goals of the project, against the success of employees, against the success of colleagues and against a successful customer experience.

“behaviours that are not necessarily unlawful but which are generally considered to be unethical to Western society would now typically include: dishonesty, withholding information, distortion of facts….”

Examples of Unethical Behaviors, Activities, Policies, etc. businessballs.com

Paula D. Gordon, Ph.D. in her article “The Ethics Map: A Map of the Range of Concerns Encompassed by “Ethics and the Public Service” remarks that leaders using values-based ethics will be “maintaining honesty and openness in the communication of information and withholding information only when legally or ethically necessary. “

For New Blog Posts, visit LeadinginContext.com/Blog

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For more, see Linda Fisher Thornton’s book 7 Lenses and the 21 Question Assessment: How Current is My Message About Ethics?

7 Lenses is a Bronze Axiom Business Book Award Winner in Business Ethics41cEVx-Tu4L._SY344_BO1,204,203,200_
2014  Bronze Axiom Business Book Award Winner 
About 7 Lenses
 
 
Info@LeadinginContext.com  @leadingincontxt  @7Lenses

© 2010 Leading in Context LLC 

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