What I wish I knew when I was 20..

In hindsight I realize what University never taught me. There is one major flaw in the educational system of today - student's do not learn about how most of the corporate worlds work, and what most students have to fight with for the rest of their lives if they do not leave the toxic companies they are about to experience. As you read this article, there will be a few links to videos that will help your understanding.

Shareholder Supremacy

In the late 1970's a new concept was proposed to businesses in order to balance the books. Mass layoffs became a tool for balancing the books and boy did it change the world ahead. The concept did not exist prior to the 1980's. The concept of rank and yank, a concept where a company ranks its' employees against each other, and terminates the employment of the people at the lowest end of the ranking. Performance was measured on how much money they brought to the company in plain sight- all value had to be monetized and if it couldn't easily be monetized it wouldn't count at all.

Short term focus only, equals short comings in the long term

Balancing the books by utilizing the rank and yank concept in order to satisfy one principle: Shareholder Supremacy. The creation of a culture and a very Finite Game where employees would start to compete against each other inside the company. When that happens, employees work for their own personal agenda and goals, which are not necessarily aligned with the goals of the company as a whole. Shareholder value as a prioritized concept was then taught and lectured at business schools all around the world. It is still being lectured massively at business schools in what they call 'Business Management'. When a company's leadership team only thinks short-term, they act within the mindset of playing the finite game, and with a fixed mindset:

"My employees do not know what I know, and therefore I need to micro manage, I don't have time and energy to develop them and make them more independent in their work, I don't trust they will finish their tasks if I don't pace them, they don't really enjoy what they are doing but they only work for the money, they are not creative and they can't think outside the box, I don't want them to see the full picture as they might just get scared of the reality e.g.) = basic McGregor Theory X stuff "Authoritarian Management Style".

Trust-Based Controlling and Control-Based Trust

Fun fact is, that if we look at the term 'Business Management' it is often misinterpreted with Leadership. Management should be, but is not the same as what is lectured and taught in Leadership courses. Management is basically operations and general business administration. Leadership is way more complex and cannot be put into a one size fits all concept. For several years I studied the never ending fight between "Trust-Based Management" vs. "Control-Based Management". I ended up writing a detailed paper on it as I was enrolled on my masters in Copenhagen, Denmark. I came to the conclusion that it's not about choosing one or the other, but more importantly it's about finding the silver-lining between the two and being able to doze each principle in adequate amounts.

We can still "control/monitor" our employees in ways that fosters trust and makes them feel comfortable participating in performance reviews. And additionally we can also make sure they understand how trust is delivered/controlled. Trust is not gained in environments where people are out of control, where managers can't even manage or control their own behavior. Trust is gained and created when people are in control of the environment and where shared values constitutes the organisational culture. Control-Based trust is the ability to uphold the common third and the shared value proposition of an organisation (The WHY of a company). In other words, an environment where trust is given completely randomly, the whole management and leadership ability will eventually fall apart, because it become a complete circus where the tyrants are promoted and where the bright and smart leadership talents leave the organisation.

The unpredictable made predictable

Disruptive macro environmental forces will show up every single decade to some degree, that's a fact. The very specifics of such future events are unpredictable, but it is very certain that an organization will face macro environmental challenges along the way as they operate. So how can something unpredictable become predictable?

The predictable element is that disruptions and challenges like Covid19 and the financial crisis of late 2008 will occur. So by knowing that as a fact, the only way to deal with it is to prepare the business for it by making sure enough free capital is stored and saved, that the company keeps investing in its' people and that the best leaders are hired. In addition the way to overcome that fact is also to foster pro activity and foresight deliberately practiced through leadership and the development of employees and the culture they are working for and within. Whether an organization will be able to look back in hindsight and say they have done enough, is uncertain, but there is only one way ahead = build a great culture, with bright, smart and reliable people. Lead them with authentic and trustworthy leaders, that are able to foster inclusiveness and personal development.

'The best leaders are expensive yes, because if you are good at something you won't do it for free. And if you know what you are doing, you won't put up with an environment that does not value your expertise. In the end, giving great leaders what they want based on what they are worth will only benefit the company long term' - Bob Iger

Shareholder Value Trumps All Other Values

The majority of companies today aim for 'increased shareholder value' period. In order to make a company survive when the tide is high, capital is needed and therefore shareholders or investors are needed. But there are different ways of working with this fact. We all need to earn money, and we all need to further the cause of the company we work for, which I completely agree with. But there are certainly different ways of keeping shareholders happy, and that relates to the way we work, the way we generate revenue and they way we treat the world around us.

Secondary aims (if they even exist for such company) are values like: customer value, value proposition/just cause, social responsibility, environmental responsibility, work environment, low attrition rates, employee satisfactory, business integrity and transparency. Hold up, wait a minute you might think: Are you implying that most companies don't value these things? Yes, I am. And in the following I'll explain why and when this occur.

MiStakeholders

Stakeholders are in essence people or entities 'with something at stake in regard to the company and its’ performance'. There are both internal and external stakeholders. The performance and development of a company on a daily basis is carried out and nurtured by the internal stakeholders (Managers and subordinates). The expertise of internal stakeholders is the ability to know firsthand what actually goes on daily within the various departments and divisions of an organization. They lead, support and interact with what really makes the organisation run – the human capital available interacting within the company (micro processes).

The Just Cause / The Common Third / The Mutual Value Proposition

Leaders are the people working for the people. They work with a mission that encourages the people to work on advancing the just cause of a company. So what is a just cause you may think:

Ask your colleague: 'Why do you work for this company and not our competitor?". If they give you a vague and unclear answer, the just cause of the company is not very clear either. Why do people work for Apple, SpaceX, RedCross, IKEA, Neuralink, Tesla, Emirates, Four Seasons Hotels? Because their just cause is so just, that it can't be misunderstood or taken for granted within the company. It's what constitutes the cultural value frame within the company, and the mutual understanding of what is common and what is taken for granted in the way we think. If companies only operate above the waterline in Edgar Schein's cultural model, they will never achieve a just cause like the companies operating below the line.

Leaders are really good at protecting and nurturing the survival of a just cause. Shared assumptions, unconscious beliefs, intersubjective values, ideal prototypes of behaviour (the do's and don's are very clear). They foster an environment where increased performance a derivative of working better together. Where working better together means where 2+2 = 5. Not by the rank and yank concept, but by the development of people capabilities and the ability to operate in synergy together (Team Spirit).

Most Managers out there will say this scenario is utopia and that it is very rare. Yes, it is very rare but it is definitely not impossible. They will say it's only 10% of companies cultures that are like that, and they are probably right - but as far as I am concerned, 10% beats the hell out of 0%. It just requires the right organisational culture and a team of great leaders with appropriate mindsets and attitudes and hard work on a consistent basis with stable momentum.

Managers (people unable to lead) on the other hand are very often good at generating a lot of sales and revenue over a short period of time (1-2 years). That's why we often see these tyrants and these men of finance completely destroy the organisational culture within a company. In addition, they often add to the attrition, and the necessity to constantly recruit new people (which is very costly). So if we measure the increase in revenue and the increased costs in recruitment as a result of their rigid management style and subordinates burning out - we very often end up with a very different picture. That picture looks like this:

If we look at the mean of the line above it would be close to zero. In other words, sometimes we win and sometimes we lose. There's no consistency, no genuine momentum and no learning. A new manager enters the arena, he uses sticks and no carrots for a year or two, and then he leaves. He leaves behind a division or department in complete agony, with no confidence and no trust. The traits of such managers are the same as the micro-manager. No trust, and in the end they only work for their paycheck and for their survival in the game of thrones. They know what their superiors like (increased revenue, no matter how it happened) and that's it. Their superiors do not care about the mental state of the team members after such managers has left the building. Because the demise is "everyone is replaceable".

Promoting Toxic Management and not Leadership

So the situation too often ends up with businesses promoting managers and toxicity (rank and yank concepts and attitudes) and not leadership (momentum and consistency). So the managers stay for approximately 2 years and then they leave the battlefield and move on to their next battlefield, and they replicate their short-term focused management style for revenue/wherevernue.

When we create performance-based bonuses, there are two outcomes. One is that we sometimes promote the right people- because their results are trustworthy i terms of how to lead people and how to develop them for the long game (the infinite game). On the other hand though, the majority of bonuses goes to the toxic managers with low trustworthiness but generated increased revenue due to their stick mentality and micromanaging concept (rank and yank attitude).

We have loads of different metrics on how to measure performance in terms of increased revenue and sales. But we have zero metrics measuring trustworthiness, reliability, integrity, consistency and momentum. So the question remains, do we prefer steady and consistent growth over a ten year period, or do we prefer a bumpy ride where revenue goes up and down aggressively, and where it is earned by whipping employees towards burnout and increased attrition?

If the culture code of a company is vague and the majority of the managers are not leaders but managers, we end up with a very toxic and unsustainable environment. An environment where people come and go, where talent attraction second to none, where everybody competes against each other, and where the lack of integrity is justified by sentences such as:

'But we earned our revenue within the boundaries of the law (loopholes and tax havens)'

Only the toxic or irrelevant people in terms of long term growth and business development sustainability are staying with the company. The leaders and the innovators eventually leave the company because they leave the culture, which is controlled and guided by the managers and the CEO of the company. In other words, a 'lying, hiding and faking' culture. The leaders leave, because it goes against their integrity to work for an unethical and toxic environment that has no just cause and a management culture where toxic managers are promoted and remunerated before anyone else.

CEO - Chief 'Excuse' Officer

Often times an owner of a company is the CEO and also a shareholder, so in basic terms - he is both the king of the hill and a shareholder. This is where things get a little bit tricky, because most owners in the position as a CEO would perceive their businesses as their child. And no one should ever tell them how they should raise their child, nor ever say something is wrong with their child's behavior. It's completely alright and understandable that an owner feels very connected to his/her business as an owner and CEO. But there is a fine line between being overly protective and 'demanding+supportive'. Wise parenting in terms of business is to be demanding AND very supportive, in order to build up grit and stamina for a business. The same goes for parenting kids, in order to better prepare them for the world ahead; be demanding as a parent as long as you combine your demanding attitude with a very supportive attitude as well.

'This logic leads to the speculative conclusion that not all children with psychologically wise parents will grow up to be gritty, because not all psychologically wise parents model grittiness. Though they may be both supportive and demanding, these parents may or may not show passion and perseverance for long-term goals.'

(Duckworth, 2016)

As Dr. Angela Duckworth mention above, some parents may not show passion for perseverance (momentum+consistency) for long term goals. In a corporate context some managers may not have passion for the advancement of a just cause of a company, and therefore the organizational culture becomes non-gritty (Grit = Passion + Perseverance). Is that fortunate for a company that is in it for the long haul? No it is definitely not.

So how do we ensure passion and perseverance? Passion can be linked to intrinsic motivation, and in order to keep that alive within individuals they have to be listened to and their opinions needs to be valued by their superior. If the manager is incapable of getting people to follow him/her without using a stick, motivation will not exist, only some sort of survival mode or 'I will leave as soon as I find another job attitude'. Perseverance on the other hand can only exist, when passion is kept alive and is being nurtured (Leadership is required). Perseverance is not sustainable when passion has left the building, and the people able to persevere under such circumstances (toxic organisational culture) are the crazy people advancing the game of thrones within the company. Game of thrones as all senior managers will do whatever they can to keep their position, even if they have to kick out some of the best talents in the organisation in order to secure their own position.

Only the toxic people can withstand the hysteria and the lying hiding and faking environment as their level of integrity was already flawed to begin with (as in - from birth). So when toxic managers read this article and go: How do we keep the great people then? The answer to that would be, well, you don't. And if you really want to keep them, do the exact opposite of what your are currently doing.

The Chief Excuse Officer is often the one to blame, because he/she is the only one with enough authority in order to make the complete change from toxic management to leadership happen. He is the one who can re-distribute authority to HR and Business Unit Managers to recruit for attitude and train for skill. But very often the CEO becomes the person in charge of all the lying, hiding and faking. The person who goes: "Everything is fine, don't worry - we are doing great", while the Covid19 impact quickly burn all free capital in the company, all while the credit lines are maxed out. Yet, he/she still manages to buy a new yacht or a new sports car while the people in the bottom are made redundant.

A CEO and shareholders without the compassion and gratitude for the people earning them the money will not succeed in the long run. It can go on for probably 15-20 years, and then the Kingdom will fall. Main reason = greed. They become too greedy and they completely lose track of what is the right thing to do, both on short term and on long term. They don't understand that in order to survive, they need to realize they are in the infinite game but only with short term focused cards on their hand. Eventually they get caught up in limbo, with a company with zero integrity, zero trust, zero leadership and zero talent.

The ship is sinking and music continues

Once the ship starts to sink they go out and tell the world everything is fine and they justify the company's lack of growth by pointing fingers at competitors who are also battling the tide. Well, all companies are basically battling the tide these days because of Covid19, so that's not really an excuse nor a justification that makes any sense at all. They keep hiding the truth in plain sight while the employees act like they haven't figured it all out yet. It's the same game - who can maintain the poker face for the longest. It all reminds us about what happened that night back in April in 1912 (Titanic).

The ship breaks on the middle and that is exactly the point of which it is all too late. Revealing the truth at that point is too late - people already realized that the ship never had enough life boats to begin with. So people start to talk with each other because they are panicking and start to feel unsafe within the company. They ask about the situation to their superiors, but they get the same answer: All good, don't worry - we are fine.

And I guess most of you out there knows the rest of the story.. - it did not end well.

Recruit the talents wanting to change things

Recruit the talents that wants to change things for the better. By better I mean: Hire the staff that truly works for the people, people being co-workers and customers. Talent working for co-workers relates to the creation of a great organisational environment and culture. Where feedback is given without hesitation and where trust is present to the extent where people will automatically raise their hand when they've made a mistake and when they need help.

Talent working for customers in the sense of generating more added value to the services and products that we sell. Not talking about employees who will try to trick and cheat customers through hidden fees and a devil in the details just to generate more revenue. But instead, employees that will generate both revenue (short term) and customer loyalty (long term).

Hire the talent and leaders who stand up against the toxic managers through argumentation and clear justification. Let them eradicate the toxic managers within the organisation. Toxic managers should never ever be able to justify toxicity over leadership, period. Toxicity and negative opportunistic behavior should never be the prevailing forces within a company. And if that happens anyway - well, then you know what time it is.

-Kaspar Sang Jorgensen