Legitimate Leadership is, first and foremost, an ethical leadership framework. It requires leaders to not only stay legal but to live up to the highest moral code. That means to consistently choose to do the right rather than the expedient thing; to be values- rather than needs-driven. Which takes courage. As Simon Sinek says, this needs to hold true not only in the relationship between leaders and their people, but also in dealings between leaders and their customers, suppliers, shareholders and the community. At the end of the day this is a choice on how to live one’s life.
OUR SUMMARY OF THIS VIDEO: It is extremely hard to make decisions with a Just Cause (Sinek’s first of 5 practices of leadership) in mind when so many of the pressures on us are pushing us to make finite short-term decisions (if you work for a public company).
The pressure is overwhelming from the outside to focus on the finite at the expense of the infinite (see note at end of this summary for definitions of finite and infinite). Sometimes we put pressure on ourselves to focus on the finite. We become so obsessed with the arbitrary goals we set for the end of the year that sometimes we abandon our own values in order to make the sale, gain the client, move the numbers. If we do that too many times over the years, it’s to the detriment of our own organisations and our own people.
It is unbelievably hard to keep a Just Cause in mind as the guiding principle – especially if you have to make decisions that hurt in the short term. It is unbelievably hard to commit yourself to this practice of good leadership in which you obsess about the trusting teams like a family. It’s never perfect, it’s about human relationships.
And yet for us to acknowledge that our responsibility as leaders is not to drive the results but to create an environment in which our people can work at their natural best is unbelievably difficult. It is so much easier just to hire and fire people willy-nilly and drive the numbers and create all kinds of incentive structures based solely on people’s performance (except for the fact that it drains the energy of people. it drains their trust, inhibits cooperation and innovation and eventually runs out of steam).
It’s much easier to direct all of the discomfort and anxiety we have about competition and our weaknesses at others. The problem is if we become so obsessed at winning, sometimes we do things that are quite unethical.
It’s like running in a race where I’m obsessed with beating the other runner. I may resort to tripping him. I may win the race, but I’m still a slow runner and in this game there is no end to the race, it keeps going and going and going. And to change our mindset away from having competitors to having worthy rivals and being honest with ourselves about our weaknesses is unbelievably hard.
The capacity for existential flexibility – most people in this room will never have to do it even once. However are you building your organization so that the organization and future leaders are prepared to be able to do it?
Do the people know the Just Cause? Is it a culture of trusting teams so that future leaders can make the flex if they need to – even if you’ve never had to? That’s the responsibility of leadership (to prepare the organization for the next leaders).
If you are perfectly satisfied with the fact that when you quit your company it will go belly up I have no no beef with that – you’re playing a finite game and it’s just for fun and you’re going to see how much you can accumulate in your time there and then you’re done.
But some people have an ambition that the company should outlast them and even grow greater than when they ran it – like the same ambition we have for our children.
It is hard to maintain an infinite mindset, it takes unbelievable work and unbelievable courage.
The US chemists company CBS had a vision statement/Just Cause to protect the health of their employees and their customers. They kept finding themselves in very uncomfortable meetings with hospitals and doctors where everything went well but at the end of the meeting somebody would say, ‘Don’t you sell cigarettes?’
Eventually they decided that they were going to remove all the cigarettes from all of their shops, a move that would cost them billions of dollars of revenue.
Wall Street lashed out against the announcement, analysts said those cigarette sales would go to other places. CBS stuck to its guns. Yet when all the cigarettes were removed from their stores, sales either stayed the same or went up. Turns out that cigarette sales didn’t go somewhere else – more people stopped smoking. Or people were so enamored by the fact that they made such a courageous decision based on cause and not money that they spent more money at CBS or travelled out of their way to do business with CBS. And employees spoke with remarkable pride about how much they loved working at this company that was so courageous that it was willing to do the right thing over the expedient thing.
The CEOs of their competitors – Rite Aid and Boots – were asked whether they were going to remove cigarettes from their stores. Those organizations also had vision statements – you guessed it – to protect the health of customers.
Rite Aid said, “We’re continuing to examine the situation and we continue to sell smoking secession products”. A nicotine patch next to a pack of cigarettes is like selling a doughnut next to a diet book. One is an impulse decision the other one requires a little work and even somebody who wants to go on a diet will still buy a doughnut if you offer them the opportunity.
Boots was even funnier. They said, “We are selling cigarettes in compliance with all local state and federal laws.” That’s not courage – the law has a much lower standard than ethics.
This is one of the problems we have today. The standard of business is too low, it is predominantly driven by a theory proposed by economist Milton Friedman. He said the responsibility of business is to maximize profit within the bounds of the law. That is a very low standard.
When the Titanic was built it was considerably larger than all the other ships that existed. It was four times larger than the largest ships then, which were ferries. The regulations that governed lifeboats in the day were for ferries. And expressly to save money, the Titanic’s builders put empty berths for lifeboats on the decks of the Titanic – they only put enough lifeboats as required by ferry regulations, namely for one quarter of the number of passengers. The regulation didn’t require more. They knew that the regulations would eventually catch up so they also put the empty berths.
The Titanic struck an iceberg and sank and – you guessed it – 75% of people died and 25% survived.
The Titanic broke no laws. In other words the law is a very low standard. And unfortunately thanks to Milton Friedman and supporters of the concept of shareholder supremacy, we prioritize the wants needs and desires of shareholders over the wants, needs and desires of customers or even employees
This is like an owner of a football team trying to build a great team by asking the fans what to do rather than asking the players what they need. It doesn’t work so well. But because of the 1980s and 1990s boom years the concept of shareholder supremacy became normalized. The idea of using redundancies on an annualized basis in order to balance the books – think about that. We use someone’s livelihood so that we can meet our arbitrary projections at the end of an arbitrary time period. Companies use redundancies and layoffs even when they’re profitable – they just weren’t as profitable as they predicted.
Think about the ethics of that. Forget about the people who lose their jobs; think about the unbelievable stress it causes to the people who keep their jobs. What they basically have been told is this is not a meritocracy and no one here is safe. Do you think they will give you their all the next year? No they’re hiding from you and they’re lying to you and they’re faking every single day because that’s our business model.
The idea to promote the top 10% performers and fire the bottom 10% performers became normalized in the 1980s and 1990s.
The evisceration of regulations which protected us from speculative investing in the 1980s and 1990s in the name of profit meant that we’ve had three stock market crashes in the past 30 years – yet from the Great Depression up until the 1980s we had zero
In other words we have an outdated business model.
In GE, Jack Welch was hailed as a hero of business for everything that he proposed. He was a Milton Friedman acolyte, he became the poster child of what leadership looks like in the 1980s and 1990s.
GE needed a three hundred billion dollar bailout in 2008 and who knows if it’s even going to survive for the next five years. It was not a company built to last, it was a company built with finite mindset for finite success.
We need to completely reimagine business. We need to reject the finite mindedness of the 1980s and 1990s and we need to embrace the infinite mindedness for the next millennium.
And the irony is, it’s good for businesses. The organizations that are led with an infinite mindset tend to outperform their competitors over the long term. They tend to have much higher levels of innovation and much stronger teams where the people don’t quit at the slightest shudder. They rather hunker down and say, “How can I help?”
And for those of us who have to work there, those are the jobs we love.
All of this raises an interesting question: what does it mean to live an infinite life? Clearly our lives are finite but life is infinite: we’re born, we die, but life continues with us or without us. Which means though we don’t get to choose the rules of the game we do get to choose how we want to play in this infinite game. We can choose to live our lives with a finite mindset or an infinite mindset. To live our lives with a finite mindset means we wake up every single morning trying to make more money than anyone that we know, to maximize the amount of power that we have, to gain power, and to control the world. And when we die, we leave it all behind. It’s only fun while we’re living, you can’t take it with you.
Look at a lot of these finite-minded entrepreneurs who’ve done really well in life and go look in their medicine cabinets, look at the qualities of their marriages and their relationships with their children it paints a different story.
To live our lives with an infinite mindset means we wake up every single morning and think to ourselves, “How can we have a positive impact on the people around us?” That one day I can meet a remarkable entrepreneur and ask how he became who he was and he will mention your name, he will talk about the lessons he learned from you, how he learned to be a better version of himself, to take care of the people around him. And then everything that he had learned came from you – you have literally lived on beyond your own years.
I asked Sir Richard Branson, “How should we judge you after you die? What did you build at Virgin, what about Virgin are you most proud of that you will want to be remembered after you die?” He got very annoyed with me and said, “Do not judge me by anything that I have ever done at Virgin. If you want to judge the quality of my life, judge the quality of my children.” That’s an infinite mindset.
Every one of us has a choice whether we want to live our lives with a finite mindset or an infinite mindset.
NOTE: Sinek defines a finite game as having known players, fixed rules and agreed-upon objectives. By contrast, rules are changeable in the infinite game, with unknown players who are in it to keep playing. Problems arise when finite players are up against infinite players. Often the former end up mired in lost trust and declining innovation.