Become a Value Creator
Managers
who adopt a mindset to create value hold the key to becoming truly
successful leaders, says Brian Hall.
As
a young teacher at Harvard Business School, Brian
J. Hall called
on longtime professor James Cash for a favor: Hall wanted to study
the inner workings of General Electric, and he needed Cash's help to
get in touch with top-level executives who could provide insights for
his research.
Later,
Hall asked how he could pay back the favor. Cash put his arm around
his colleague's shoulder and said, "You don't owe me anything,
Brian. This is the way we do things here. Just pay it forward."
“SHAREHOLDER VALUE OR PROFITS ARE MEASURES, NOT GOALS IN AND OF THEMSELVES”
"I
will never forget that," says Hall, now the Albert H. Gordon
Professor of Business Administration. "That had such a huge
influence on me."
It's
an example of what Hall calls "value-creating"
behavior—doing a favor for the good of the organization without
expecting anything in return.
Hall
argues that managers who adopt a value-creating mindset hold the key
to becoming truly successful leaders.
"Business
is a team sport. It's soccer, not golf. Nobody plays by themselves
and wins in business," Hall said during a seminar on value
creation versus "value claiming" held at Alghanim
Industries, one of the largest multibusiness companies in the Middle
East. Hall previously served as EVP and then interim CEO of the
company, and is now an adviser.
"You
will never succeed until you become a good team player, somebody who
thinks about other people and checks their motivations at the door."
MORE PIE FOR EVERYONE
In
general, value creators work cooperatively with others to make the
corporate pie bigger for all, whereas value claimers focus on taking
more of the pie for themselves—like a thief steals for personal
gain.
The
business world is filled with value claimers, and this all-for-me
attitude becomes apparent in a variety of ways.
For
example, during internal corporate budget disputes, some executives
focus only on their own needs without considering the requirements of
other departments or individuals.
And
then there are workers who hoard information like gold, believing
that guarding certain company know-how gives them more power. Rather
than sharing customer lists that might give another department a hand
in making sales, for instance, they squirrel those names away. Some
find more subtle ways to keep others out of the loop, like failing to
copy certain colleagues on pertinent emails.
"People
want to increase their power by keeping that information
confidential," Hall says. "But you have to make sure you cc
the right people. It's important to keep in mind which people need
the information in order [for them] to do their job better."
A BAD HABIT
Most
people don't look to become value claimers, but rather just fall into
it as a way of protecting their own corporate turf, Hall contends.
Eventually, it ends up becoming a habit that sticks. The instinct to
claim is strong, so everybody will naturally be a little bit both a
value claimer and a value creator.
But
an executive can actively choose to be a value creator, someone who
always looks for the "win-win," leaving enough room for
both sides to benefit from a deal without feeling the need to swipe
every last penny.
"Sometimes
you have to give up something you want. It's a very hard thing to do,
and no one is ever going to be perfect at it," Hall says. "But
if you make it your goal to be a value creator, then it becomes an
instinct, it becomes the lens you have on things, and it becomes
easier. It's clarifying, and if you can focus on that, it is the way
to win."
One
way to be a good value creator: give coworkers credit where credit is
due. The need to appear smart can lead managers to cast blame on
others for missteps or to claim an employee's idea as their own when
speaking before their bosses or boards—the kind of thing that can
be terribly demotivating to the person who had the idea.
"It's
a tragedy when that happens," Hall said. "Somebody is
trying to claim value, but in doing so, the person has destroyed
value for the company by demotivating an employee. Everybody loses."
Having a staff member receive credit for good ideas not only makes
the employee feel valued and motivates him or her to come up with
better ideas in the future, but also makes the leader look good.
The
purpose of business is simple and well-defined, Hall says: It's to
make the world a better place, to create value. After all, companies
that make their purpose just about profit often do poorly because
both their customers and their employees sense this quest for the
almighty dollar, which makes them feel as if they are being squeezed
rather than served.
"Shareholder
value or profits are measures, not goals in and of themselves,"
Hall says. "It's hard to wake up in the morning and get excited
about creating shareholder value. The way to be a successful company
is to think, How do we produce this at better costs, or how do we
make this more valuable for our customers? The profits follow from
that."
THE ROOT OF ALL SCANDALS
In
2008, greedy bankers became high-profile value claimers and nearly
took the entire world into a depression, Hall says. They were slapped
with tighter financial regulations as a result.
"Every
scandal is the result of someone trying to claim value at the expense
of others. You have the license to be a bank because you're supposed
to make the world a better place. Instead, when a group of banks
makes very poor decisions, all because individuals were doing
something that was better for them,
bad things happen and society changes the rules on them. They lose in
the long run."
During
the seminar, Hall outlined three reasons executives should give great
consideration to becoming value creators:
What
goes around comes around. Executives
shouldn't look to create value only because they hope to receive a
favor or other reward in return.
"That's
a very transactional, short-run approach," he said. "That
doesn't work well in companies, and it doesn't work well in
marriages. Imagine if you and your spouse wanted something in return
for every little thing you did, and you had to make sure every single
thing was even."
But
when you extend yourself in a way that creates value for a coworker
and for the company as a whole, many times a good portion of the pie
will come back to you. Rewards, in the form of greater compensation,
promotions, or other benefits, are often dealt to those who create
value in their companies.
It's
the safest route. It
may feel risky to give others credit—particularly when you may be
worried that no one will do the same for you—but you will actually
feel safer and less anxious by doing the right thing.
"I've
never been a bank robber, but I can imagine it's an anxious way to
live. You know what you're doing isn't right and you might get
caught," Hall said. "There are lesser versions of that in
companies. People know the reason they get by is that they're very
good at protecting their turf and getting their piece of the pie,
rather than someone knowing they are very good at what they do and
are creating value. This creates very different levels of anxiety.
It's much safer to be a team player."
Others
will like you, and ultimately you'll be happier. People
who are bad sports in the business world stand out.
When
Hall gives his talk to managers and executives and asks them to think
about people in their organizations on the two ends of the
spectrum—value claimers versus value creators—they generally have
no trouble visualizing them right away.
"What
does that tell you? What we all know is that people develop
reputations," Hall said. "When you're a non-team player and
it's all about you, it becomes obvious. People are not very
self-aware about how transparent it is. But if you think you're
getting away with it, you're not. People know."
And
if you're not well liked and respected, quite simply it's hard to be
happy, Hall believes. During the seminar, Hall gave the example of a
coworker who was a big value claimer, starting every sentence with
"I" and always making everything about him. He was a lonely
guy. Nobody liked him, and when he left the company, nobody shed a
tear.
"It's
not a fun life," Hall said, noting that the biggest predictor of
happiness in life is good relationships. "If you have really
good relationships, you have really good friends. You have people who
have your back, who believe in you, who really respect you, and you
feel the same way about others. If you have that in your life, it's
very hard not to be happy.
"If
you don't have that, it's impossible to be happy."
Dina
Gerdeman is
a writer based in Mansfield, Massachusetts.
http://hbswk.hbs.edu/item/7523.html
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