Do you remember when Mississippi was home to the Fortune 500 company WorldCom? In 2001, WorldCom was the second largest long-distance telephone and data services company in the U.S. It was headquartered in Clinton, MS, on a large, beautiful campus that could be seen by all motorists on I-20. WorldCom was a point of pride for the state and the city of Clinton. That is, until WorldCom managers responded to sudden and significant revenue declines with fraud. The shocking illegal conduct of WorldCom, Enron, and other companies around the turn of the century motivated the Association to Advance Collegiate Schools of Business International (AACSB), the accrediting body for business schools (including Millsaps), to intensify its efforts to promote ethics education.
Ethics courses in business schools have more than doubled since 2004, the year AACSB began calling for more ethics education. And yet, ethical lapses continue to proliferate in the workplace, providing plenty of source material for news outlets such as Corruption Currents, the Wall Street Journal’s blog describing companies that are involved in financial, bribery, and money-laundering scandals. Admittedly, it is difficult to assess the impact that an increased emphasis on ethics education in business schools has had, but statistics from government agencies such as SEC, OSHA, and the EPA show no reduction in violations over the last decade. Critics have also questioned the ethical judgment of some decision-makers who may not have broken any laws, but seem more interested in economic gains than in the welfare of employees, customers and the community. Examples include drastic price increases for vital medicines, delayed decisions to remove dangerous products from the market, the replacement of current employees with lower paid immigrant labor, and deceptive consumer practices.
In addition to offering ethics courses, the Else School of Management teaches ethical decision-making “across the curriculum.” That is, making ethical choices is a fundamental value that informs all our discussions and cases. Nevertheless, scholars and practitioners know that, when it comes to doing ethical behavior in the workplace, context matters. In the WorldCom case, for example, unethical decisions were made by otherwise good people. Scott Sullivan, WorldCom’s CFO, actually relied on the compassion of his staff to encourage them to continue the fraud. He compared the situation to an aircraft carrier; the accounting modifications were needed so that the “planes” (the company’s investors, employees, and pensioners) could safely “land” without ruining their financial positions. The accountants knew it was wrong, but the emotional appeal worked; they became willing accomplices to fraud and were later arrested.
Business educators give students a strong foundation in ethical decision-making, but that is not enough. Organizational leaders must model ethical behavior and create a culture and reward system that encourages employees to do the right thing. Otherwise, the social and economic pressures of the moment can lead to immoral behavior, and possibly even turn a law-abiding citizen into a convicted felon.
Diane Baker, PhD
Professor of Management
Else School of Management
Sooner or later, business leaders become community leaders. That often means providing leadership for a nonprofit organization. If you have been selected for a leadership role at a nonprofit organization, consider these seven steps to make it one of the best years ever for the organization and for you.
1. Understand Leadership. There is no shortage of books on the leadership at your local bookstore. One wonders how many variations of leadership there can be. Peter Drucker, business management expert and author, wrote The Effective Executive over 40 years ago and it has stood the test of time. In it he said that effective executives do the following:
2. Understand Community. In this case, the community is your organization and its stakeholders. The common interest of your community is whatever the organization aspires to be or do. That should be found in the organization’s mission statement. Make sure that your organization’s members feel that they belong. Engage them. Communicate with them.
3. Set Personal Goals. Think ahead to the end of the year. It’s the annual banquet and you are in front of the group summarizing what has been accomplished during the year. What will you be saying? What are YOUR goals for the organization? What are the barriers to achieving those goals? Are they consistent with the organization’s goals?
4. Survey the Environment. Determine what needs to be done. Review the past five years’ minutes and budget. Meet with past leaders and other influential members to determine the real issues.
5. Plan the Year. One of the best ways to develop a plan is to have a strategic planning retreat. The steps in strategic planning are (a) situational analysis, i.e., where are we now, (b) visioning, i.e., where do we want to go, (c) goal setting, i.e., how we will get there, and (d) implementation. The first three steps are what should be accomplished at the retreat. It may also be a good idea to look ahead three years or so to set the stage for the future on some matters. One of the best things about having a retreat is that it engages members of the organization in the process of setting goals. It creates a sense of ownership of the goals.
6. Implement the Plan. To fully implement the plan, you’ll need to communicate effectively, run efficient meetings, follow up on plans and initiatives, and hold others accountable.
7. Celebrate Success. Celebrating success does two things that are very important—it gives the organization a chance to (1) look back and (2) look forward. Celebrations can range from the standard sit-down dinner and guest speaker to something more creative. In any event, the real heroes of the year both inside and outside of the organization should be recognized. Mention the goals that were set at the retreat, the goals that were accomplished, and the lives who were made better.
Here’s wishing you and your organization the best year ever.
Phil Hardwick, MBA
Director of Business Analysts
Else School of Management
Communicating effectively with family and friends is incredibly difficult as we all know. When it comes to a leader trying to communicate with their team, it seems to become exponentially more difficult!
At one point in my career, I was the chief of staff for a very intelligent CEO. He is one of those people who seems to have an idea a minute and thinks out loud. The problem for his directors was that they often did not know if he was giving them direction, asking them for their opinions, or just expressing an idea. One of my roles as chief of staff was to “interpret” messages sent between the directors and the CEO. Many times I would walk into the CEO’s office and say something along the line of “Chris is beginning to implement XYZ that you discussed the other day in your office—is that really what you want to do?” Often the CEO would look at me a bit confused because he did not even remember what he had said; he had no intention for Chris to do anything at all. At other times, I would have to go to a director’s office and tell them that the CEO really did want them to follow through on what he said and that it wasn’t just an idea. As you can imagine, things got a bit confused at times, which often resulted in wasted effort and unnecessary frustration.
Fortunately, we had a relationship with the company Ambassador Enterprises, LLC, which has a brilliant CEO who also seems to have an idea a minute. The difference is that they have developed a powerful tool to clarify their communications, which has greatly improved their effectiveness. That tool is called “The Five Levels of Communication.”
Level 1—An Idea. Throw an idea into the hopper; no action required.
Level 2—A Suggestion. The leader has thought about an idea and would like you to do so as well.
Level 3—A Recommendation. The leader has thought about the idea a good bit and wants you to consider implementing it unless there is a good reason not to do so. A suggestion may be appealed.
Level 4—A Directive. As it suggests, the leader wants action taken unless there is a compelling reason not to do so. A directive may be appealed.
Level 5—A Mandate. This is the equivalent of the house is on fire and get out. No questions, no appeal—just do it. This is very rarely used.
When we implemented this system, or way of talking, at our organization, the level of misunderstanding was greatly lowered. I use this approach often now and always to a good result.
It is vital that leaders communicate clearly to their teams. Using this framework, this way of talking, will greatly help achieve that needed clarity. The result is more effective teams and a more effective organization.
I had a difficult conversation at work the other day that I wish I had handled better. While it’s not uncommon for me to replay important or controversial conversations in my head after the fact, this one really stuck with me because it didn’t have to be as difficult as it was. The particular subject of this conversation isn’t particularly important. Suffice it to say that we had participated in a written communication that resulted in misunderstanding and hurt on both sides. In attempting to work through the chain of communication and diffuse the situation, both of us kept insisting, “that is not what I meant.”
Our insistence on our good intentions reminded me of a book I recently read, 35 Dumb Things Well-Intended People Say, by Dr. Maura Cullen. The book provides insight into reducing the diversity gap by improving our communication skills. Before exploring the particular dumb things we say, Dr. Cullen introduces several core concepts underlying her recommendations. The first concept she explores is the difference between intent and impact, noting that even well-intended people can cause harm.
When our communications have a negative impact, we tend to want our intentions to relieve us of the need to take responsibility. If we mean no harm but manage to say something we regret, then “I didn’t mean that,” becomes a plea for understanding. But when someone else says something hurtful, we don’t tend to focus on understanding their intent. To illustrate, Dr. Cullen suggests we imagine driving a car and taking our eyes off the road for one minute during which time we hit a pedestrian. Our first reaction is probably going to be that it was an accident; we had no intent to cause harm. Yet, for the pedestrian, our intention provides little comfort—he or she remains broken and bruised. That’s not to suggest that intentions are unimportant—I would far rather that the driver did not mean to run down the poor pedestrian—but at the end of the day, the pedestrian is no less hurt.
Thinking back on the conversation I wish I had handled better, I believe that neither one of us meant to cause harm to the other. But we were careless with our words and so focused on expressing our thoughts and making our points, that neither one of us considered the impact on the other. Could we have spent some time considering the power of our words rather than our intended message? Absolutely. Had we done so, might we have engaged in a meaningful dialogue rather than having to spend our time unravelling our poor communication? Very probably. Is it a mistake I’ll probably make again? Most likely. But being mindful of the difference between intention and impact can certainly improve my odds.
Kim Burke, PhD
Dean of the Else School of Management
Professor of Accounting
Employee retention begins with effective leadership. In an increasingly competitive job market, organizations are facing the critical challenge to retain employees they want to keep. Jobs are rapidly outpacing the number of qualified workers to fill them, increasing the likelihood of top talent being heavily sourced by other organizations. On top of that, new work behaviors from employees are challenging conventional ideas while many managers are using outdated approaches to motivate their workers. Organizations have to change the way they operate to remain competitive.
To paraphrase Abraham Maslow, author of Theory of Human Motivation, what a person can be, they must be. Maslow’s conclusion speaks volumes as to how leaders should approach retaining employees. Learning and understanding why people leave organizations gives a better perspective on why people stay and gives insight about how to influence these decisions. A common misconception is that people leave for pay. Although it’s true that people do leave to take higher paying jobs elsewhere, pay is not the root cause of most turnover. Employees often leave due to too little coaching and feedback, the lack of feeling recognized and valued, and too few growth and advancement opportunities.
It’s incumbent upon managers to shift from the mindset of managing to leading. Managers are going to have to challenge the traditional ideas of management and push back on the many business practices that are outdated and no longer relevant. This is challenging for some managers because so many are stuck focusing on input rather than output. For example, technology has made connecting with others and the world so much easier with tools such as WebEx, Google Hangout/Docs, and SharePoint, to name a few. Yet managers today, at an alarming rate, focus on the amount of time that employees “appear” to spend time doing something and not on what they actually produce. This is just one of many examples of how a fundamental shift in understanding current and future workers can assist in attracting and retaining top talent in organizations.
Organizations now more than ever need their managers to get comfortable with inspiring and engaging employees, challenging assumptions, building trust, providing real-time feedback, understanding and leveraging technology while embracing their own vulnerabilities to develop employees and create a culture conducive to the rapidly and ever-changing business landscape. Any employee has the potential to become a leader, but a manager who is responsible for those employees must be a leader.
“Everyone thinks of changing the world, but no one thinks of changing himself.” —Leo Tolstoy
“When you’re finished changing . . . you’re finished.” —Benjamin Franklin
Sr. Manager, Leader and Team Performance
Allen, D. G., Bryant, P. C., & Vardaman, J. M. (2010). Retaining talent: Replacing misconceptions with evidence-based strategies. Acadamy of Management Perspectives , 24 (2), 48-64.
Maslow, A. (1943). The Theory of Human Motivation (Vol. 50). New York: Psychological Review.
It was the initial meeting for my latest ELSEWorks assignment. After handing a few thick documents to me across a table in the Murrah Hall basement, Mr. Hardwick smiled, leaned back in his chair, and gave me perhaps the most influential piece of business advice I have ever received: “Just tell the story.”
Those words can set a person free. Free to write a project grant, free to make a presentation entirely one’s own, free to create an innovative business brand, free to dream with an entrepreneurial spirit. Storytelling, as a creative pursuit, may seem at odds with typical business objectives and mindsets. In a world driven by revenues, expenses, and the almighty bottom line, there doesn’t seem like there’s room for anything other than the hard facts and figures. But I don’t believe that particular perspective anymore. Business, especially socially responsible business, should touch something a little more human. Everything, and everyone, has a story.
Adjacent to the Millsaps College campus is a neighborhood called Midtown. Once named Factory Heights, Midtown used to be an industrial neighborhood but when its manufacturing days ended, the area fell into severe decline, exacerbated by neglect and limited resources. Today, Midtown reflects the possibilities of “from the ground, up” revitalization, boasting an active creative economy, growing Arts District, dynamic neighborhood association, and continued business development.
The narrative is important. The changes seen in Midtown are the result of the collaborative efforts of Midtown residents and entrepreneurs, aided by Midtown Partners and ELSEWorks. Together, they represent a large group of passionate people who share the same goals and continue to work relentlessly to achieve them. It is our commonalities that make progress possible. It can sometimes be a fine line to walk, especially when proverbial “outsiders” talk of bringing in new people and new businesses to an existing place with its own culture and identity. Without cohesive interests, aligned values, and mutually beneficial business offerings, we threaten to gentrify the neighborhood. That is not the tale we wish to tell.
What ELSEWorks does within Midtown is organic and without agenda, seeking to bring useful economic development into the neighborhood in a way that preserves the identity of the community. Business is more than the sum total of what it does and physically creates. It is about exhibiting a level of humanity that transcends the traditional worship of net profit. It is about knowing and respecting people, whether they are who you work with, who you work for, the people you hope to help, or the people you wish to serve. In the end, it is with people, because of people, and in people that a business finds its true source of power and success. I have seen it in projects as wide ranging as art galleries and beer gardens. That is the narrative I wish to tell, the account I now believe in, the plot I hope to continue to pen.
The story of Midtown is not yet finished.
ELSEWorks Business Analyst
According to Investopedia a bull market is a financial market in which security prices are rising or are expected to rise. The term bull market most often refers to the stock market but can be applied to anything that is traded, such as bonds, currencies and commodities. Bull markets are characterized by optimism, investor confidence and expectations that strong results should continue. It is difficult to predict consistently when the trends in the market might change. Part of the difficulty is that psychological effects and speculation may sometimes play a large role in the markets.
From March of 2009 to today (October 17, 2017), the stock market as measured by the S&P 500 has increased at an annual rate of 18.75 percent. This is particularly excellent performance when compared to an inflation rate of below 2.0% for the same period of time. I think this qualifies as a bull market. When will the inevitable correction come? I don’t know.
This current bull market is a long one by historical standards. In fact, depending on how you measure it, this current run may be the longest bull market in U.S. history.
Going back through time, the bull market just previous to the current one was the 1995 through 1999 Internet Bubble. Remember pre-internet days? Many of you probably don’t. During this five year bull market the S&P 500 posted an average annual return of 28.7% with a low 2.37% inflation rate. This bull market brought the term irrational exuberance into our business lexicon. It was also followed by a three year bear market.
The bull market prior to the Internet bubble ran from 1982 through 1989. The S&P 500 increased at an annual rate of 19.29% for this 8-year period with a 3.75% inflation rate. Remember the go-go 80’s, Reaganomics, falling oil prices, lower taxes, lower inflation, and Gordon Gekko? Many of you don’t. I do.
Prior to the 80’s Bull Market was what I call the Great American Bull Market. It started right after WWII (1947) and ran through 1972. There were a couple of minor bumps along the way, but over this 26 year period the S&P 500 averaged a 13.94% annual rate of return with a 2.68% inflation rate. Along with all the other baby boomers, I grew up during this bull market…happy days, Ike and JFK, muscle cars, and the Beatles.
I like Bull Markets.
Bill Brister, PhD
Assistant Professor of Finance
Else School of Management
In its 2016 Report to the Nations on Occupational Fraud and Abuse the Association of Certified Fraud Examiners reported that in the United States there were over 1,000 cases of discovered fraud with a median loss of $120,000. Unfortunately, fraud is not just a problem with publically traded companies. The 2016 Report to the Nations on Occupational Fraud indicates that 37.7% of fraud occurs within private companies and another 10.1% occurs at not-for-profit or charitable organizations.
There are many internal control resources available for managers and owners of small businesses. Perhaps the most authoritative and well-known is the guidance published by the Committee of Sponsoring Organizations of the Treadway Commission—otherwise known as the COSO Framework. While the COSO Framework has its roots in big, publically traded companies, the COSO Framework has proven to be adaptable to organizations of all sizes. To its credit, COSO does not use a one-size-fits-all approach, but rather approaches risk assessment and controls based on the unique operating characteristics of an individual organization.
To be true, investing in internal controls can be an expensive endeavor so here are three low-cost starting points:
Fraud can emerge as a problem in any organization of any size. It pays to be proactive and take steps now to reduce the likelihood of fraud in your organization.
Guy McClain, PhD
Assistant Professor of Accounting
Else School of Management
"The American workforce has more than 100 million full-time employees. One-third of those employees are what Gallup calls engaged at work. They love their jobs and make their organization and America better every day. At the other end, 16% of employees are actively disengaged—they are miserable in the workplace and destroy what the most engaged employees build. The remaining 51% of employees are not engaged—they’re just there.
"These figures indicate an American leadership philosophy that simply doesn’t work anymore." (Clifton)
"After two decades of working with CEOs and their teams of senior executives, I’ve become absolutely convinced that the seminal difference between successful companies and mediocre or unsuccessful ones has little, if anything, to do with what they know or how smart they are; it has everything to do with how healthy they are." (Lencioni)
"The most important decisions that executives make are people decisions." (Drucker)
We have an organizational health problem in this country that is undermining the effectiveness of our organizations in both the for-profit and nonprofit worlds. The implications are far reaching in that it affects the overall health of this country economically, it affects the communities where organizations operate, and it affects the health of individual employees and their families.
The cause of the problem, and the solution, rests with those leading those organizations at the C-Suite and Board levels.
Many leaders of organizations have come through the business education system and are well schooled in the “hard science” aspects of running organizations. They know how to produce and read financial reports, develop strategic plans, manage supply chains, produce sales forecasts, ensure they are complying with human resources regulations, and all the other aspects of running an organization that are so important.
As important as good systems and processes are to a well-run organization, we have to embrace the fact that the health of the people in our organizations is more important than our strategies and systems. I once worked for an incredibly successful businessman who made the statement that there was no need for customer satisfaction surveys – what was needed was employee satisfaction surveys. His position was that if you have satisfied employees, you have satisfied customers. Put another way - if you take care of your employees, they will take care of your business.
Leaders have to learn to think differently about the people of their organizations realizing they are individuals with fears and hopes. It is up to us to take a deep look at our organizational culture and to start making the needed changes. Often it starts with looking in the mirror. It is up to us to first change our mindset.
It’s not really that complicated, but it is hard work. It begins with truly caring about the people in your organization. Do you see them as obstacles, means to an end, or as persons? Start with how you view others and go from there.
In summary is a quote attributed to Peter Drucker—“Culture eats strategy for breakfast."
Clifton, Jim “State of the American Workplace Report” (p. 2). Gallup (2017)
Lencioni, Patrick M. The Advantage, Enhanced Edition: Why Organizational Health Trumps Everything Else In Business (pp. 8-9). Jossey-Bass. Kindle Edition
Peter Drucker, http://creativefollowership.com/the-most-important-decisions/
As those two great philosophers Lennon and McCartney wrote in the words of a song, “I get by with a little help from my friends.” Life is a team sport. All of us, at one time or another, need a little help from our network of friends, perhaps much more often than we realize. Being a part of an effective network is what is called a “force multiplier” in military speak. A soldier who is a force multiplier is one who makes her or his fellow soldiers more effective; they make those around them a more effective unit.
Building and maintaining a network multiplies our effectiveness and the effectiveness of those who are in our networks; it’s a positive sum game. But like physical networks, our personal relationship networks must be well maintained to keep them in good working order. They can be ethereal things; they can go away if you don’t spend some time working on your network relationships. You keep your network vital by being a good node yourself. That means being a two-way connection; tap into your network when you need a force multiplier but be ready to serve those in your network when they seek your collaboration. Or, as the title of a movie from several years ago suggested, “pay it forward.” Every now and then, do a random act of kindness for some of those folks who occupy important nodes in your network. If you treat the people in your network as only one-way junctions, you will soon find yourself networkless, isolated. Most of us can think of times when our networks have come to the rescue or we’ve been the life line for someone in our network. Robinson Caruso was the only one I know who could get everything done by Friday! But then Friday and Robinson were in each other’s network.
Regardless of which stage of your career you have reached, whether you are a new college graduate, mid-career, or beginning to wind down professionally, you need to part of an effective network. If you are a young, college graduate, those on your network will expect you to be the recipient of most of the benefits of the network. The flow will be mostly toward your node. But, as you move along in your career, those in your network will begin to expect you to reciprocate, and the flow will become two way traffic. Even then, you can’t expect to go to the network only when you are asked or you are doing the asking. You must spend some time just checking in with your network mates, even if it’s just a quick note, lunch, or happy hour adult beverage where the talk is about the family, whose team has done what, or just to say hello. Like any asset, you first have to invest in the asset and then devote some time and effort to maintaining it, even when you aren’t putting it to work.
So what’s the message? Build a good network and keep it tuned up. For those of you who are deeper into your careers, consider getting involved with younger members of your profession by volunteering to speak in classes, hiring them as interns, or just hanging out with them. Who knows, being a network facilitator might be a great late life way to volunteer.
So, to paraphrase the 1998 Kenny Rogers and First Edition song, have you just checked in to see what condition your network is in lately?
Patrick Taylor, PhD
Associate Professor of Economics
Else School of Management
“Success” means an array of different things to each one of us. Some value success in wealth, titles, and degrees while others see success as helping others achieve their goals or raising a family. There’s simply no right answer. I believe the only way to achieve real success is through integrity.
Consider four areas of how integrity can help you achieve your success:
In the boardroom or other situations, people won’t follow you if they don’t trust you. Open communications and transparency in decision making are critical to establishing trust. At our company, we have weekly staff meetings among the management team. For years, the main conference room doors were shut every Tuesday at 9:30. I often noticed that employee hallway traffic doubled during this time. Employees were eager to know what was going on behind those doors. Three years ago, we set out on a mission to change that feeling of exclusion among our team. I made a decision that doors would remain open during staff meetings. This very small gesture proved to have a big impact on morale. We began to receive positive feedback from our employees. Organizational cultures that value openness and transparency may reduce employee turnover and will generally perform at a higher level.
Most businesses now operate in a hyper-competitive, global business environment. Building customer loyalty is a wildly important competitive advantage. In our company, we place major emphasis on getting the customer experience right the first time. While we certainly make mistakes, we make a point to own those mistakes quickly, address the issues, and resolve them. A few years ago, we had an independent firm conduct a customer perception survey of our company. Our customer service department scored extremely well. We built customer loyalty by applying honesty and accountability.
Integrity is a vital part of leadership. As leaders, we inspire and empower engaged people in the pursuit of a common goal. Early in my career, I encountered a boss who wanted to get the deal done at whatever cost. His numbers looked good, but the success was short term. He earned a reputation of talking behind others’ backs, creating conflict, and telling inappropriate jokes. I personally wanted nothing to do with this guy and left a great company as a result. Less than a year later, he was gone – evidence that without integrity, leadership simply isn’t possible.
Companies spend billions of dollars building their brands. You, too, must invest in your personal brand. Integrity is a great brand attribute. It can be transferred inside a company from one position to the next, from one employer to the next, and outside of the office. We may not have hit this quarter’s profit plan, may have missed the deadline for launching the company’s new marketing campaign, or failed to convince the jury in one of the firm’s biggest cases, but if we failed with integrity, there is always a chance to try again. People who have a reputation of integrity will always come out ahead in the end. I see it time and time again. Integrity should be a key aspect of building the “you” brand.
Integrity is a commitment and a process that becomes natural when practiced. Build your success through integrity!
R. Ryan Cole
President and Chief Executive Officer
Trilogy Communications, Inc.
Welcome to the Else School of Management, the internationally recognized and accredited business school of Millsaps College. In this new series, our faculty, staff, alumni, and friends will provide information about business leadership and processes as well as opportunities for executive training and education to support the Else School’s mission of serving both the business community and community-at-large.
The Else School of Management is accredited by AACSB International and offers undergraduate degrees in business, accounting, and economics as well as graduate degrees such as the masters of accountancy, masters of business administration, and Executive MBA. In addition, the Else School has a vibrant Executive Education program that provides custom as well as open enrollment training and support for businesses. Our faculty are experts in their respective fields, with significant practical experience working with businesses and organizations. And, our alumni and friends are successful, dedicated business people with great vision and understanding that they willingly share with all of us!
We hope that this webpage will become a virtual home you visit again and again, finding excellent resources that help you address the issues you encounter at work and in your career. Our articles will cover a wide range of topics, and reflect both the best theories from the academy and best practices of business and leadership.
Again, on behalf of our authors, welcome to the Else School business series! We look forward to providing insightful and meaningful information to improve your business experience. We hope you enjoy it and look forward to hearing from you!
Kim Burke, PhD
Dean of the Else School of Management
Professor of Accounting