Common-Sense Business

Principles for Profitable Leadership

Theodore Roosevelt Malloch, Whitney MacMillan

• Publisher: Skyhorse
• Year: 2017
• ISBN:
  9781510729827
• Topic: Business
• Subtopic: Business Ethics
• Index: Business

"Has the potential to transform how all companies are run…Nothing could be more valuable!"—Mark Drewell, CEO, Globally Responsible Leadership Initiative (GRLI) From two of the world's most successful business leaders comes Common-Sense Business —an accessible, actionable guide to better leadership, increased profits, and a more sustainable economic model predicated on prudence and socially conscious business. Common sense and prudence have long been among the guiding tenets of society, but in today's economy they have been completely abandoned in the interest of blindly maximizing profits. Common-Sense Business shows that this current economic model is both detrimental and unsustainable, and that we must transform the global economy along the lines of common sense toward the common good. Ted Malloch, a thought leader and policy influencer in global economic strategy, and Whitney MacMillan, the former chairman and CEO of the world's largest private corporation, draw on recent research, history's greatest minds, and their own successes to explain that ethically driven business is both a moral and financial necessity. Inspired by Thomas Paine's Common Sense, this work explains to readers in all walks of life that ethically driven business will lead to better long-term profits, larger customer bases and more positive customer relations, and a holistically improved business. This book is a must-read for business owners, entrepreneurs, students, and businessmen and women in all sectors of the economy.

PART I:

COMMON-SENSE BUSINESS

CHAPTER 1

WHAT IS COMMON-SENSE BUSINESS?

What it takes to do a job will not be learned from management courses. It is principally a matter of experience, the proper attitude, and common sense—none of which can be taught in a classroom.

—Hyman G. Rickover

Common sense is in spite of, not the result of, education.

—Victor Hugo

Recall from the introduction that we referred to the four Ps of common-sense business. This is our way of simplifying a complex reality. Because of modernism, a lot of the skills, natures, and virtues of common-sense business don’t come as naturally as they used to. This book itself is also a simplification of what might end up being very complicated—possibly even a complete overhaul of your firm once you’ve jumped into common-sense business with both feet.

So we’ve designed the book to be both deeply informative and immediately useful. To these ends, each part serves an important purpose. Part I expounds upon the four Ps of common sense, as we have developed them (see below). Part II is all about common-sense business around the globe. We include case studies from Norway, Canada, Britain, Japan, India, and Germany—with an in-depth look at a major success story out of Germany. Part III houses some practical tools for you to implement now, advises on how common sense can be applied in the not-for-profit sector, and then ends with some examples of more new companies practicing common-sense business.

The Four Ps of Common-Sense Business

The four Ps of common-sense business are traits that describe the business person who is so desperately needed today: prudent, patient, principled, and practical. You’ll see these themes come up a lot in this book, especially in this part I. Chapter 2 is all about prudence, with lessons from an ancient text surprisingly relevant for today. Chapter 3 discusses patience in business through a discussion of patient capital. Chapter 4 is about principled decision making, and chapter 5 gets very practical, with ideas for developing common sense in yourself and others. Chapter 6 introduces what we consider one of the best tools for big-picture planning and decision making: the Virtue Matrix (originally envisioned by Roger L. Martin). Then in chapter 7, we give some real-world examples of common-sense business (or lack of it). We present an example of a major disappointment, a turnaround story, a smart move forward, and a new company addressing an old problem in a brilliant, common-sense way. Chapter 8 goes more in-depth with a classic common-sense company that’s withstood the test of time.

Common sense in business is primed for a comeback. It is high time for more practical wisdom and less irrational behavior. This book shows how, why, and where it is being done, and more importantly, how you can do it, too.

CHAPTER 2

LESSONS IN PRUDENCE FROM ANCIENT WISDOM1

The prudent man always studies seriously and earnestly to understand whatever he professes to understand, and not merely to persuade other people that he understands it.

—Adam Smith

With all the talk today of being future-oriented and trend-forward, taking time for reflection on the wisdom of antiquity may seem like a waste of time. But here we make an appeal to the perspective of ancient wisdom as the original form of common sense.

In today’s modern—or postmodern—world, we can become so jaded that little intrigues us anymore. But those who have enough forethought to look backwards can still actually be amazed at the contemporary relevance of the ancient texts. Whether the common sense is found in the Analects of Confucius, the Analytics of Aristotle, or the epigrams of the biblical book of Proverbs, it expresses a profound sense of humanity’s potential—both good and bad. The words sound old-fashioned, but the truths are timeless; we will always have among us “the sluggard” and “the wicked,” as well as “the upright” and “the beneficent.”

Written before a time when we were tossed around by every tweet, ancient wisdom texts are rooted in thoughtful observation of practical consequences. They speak to everyday living as well as to community (we could say, corporate and business) life. So what does ancient wisdom from the Bible have to say to us who are looking for firm common-sense footing in our ever-shifting business worlds?

Lessons from Proverbs

Reading Proverbs can be disturbing. Like morning sun after a late night, its 930 sayings can be irritatingly bright. It can also be like the mirror we prefer not to look into first thing in the morning! Here is candor, honesty, and criticism that leaves little room for our excuses. Yes, Proverbs can at times state the obvious and seem to some offensive; more often, it speaks with compelling common sense and invites careful consideration.

You don’t have to be a scholar or a person of faith; if you’re open to learning, you will find much useful guidance in Proverbs. You might find yourself shaking your head and chuckling, That is so true. The wisdom of proverbs (“Wisdom” and “Folly” are represented in the book by competing female characters) says out loud the things we only think to ourselves in the workplace. She has never heard of political correctness. And Folly has never heard of being professionally discreet. But this is one of the injections we need into our current state of disillusionment: a good dose of “whether you want to hear it or not.”

Now, Wisdom has no agenda but human flourishing, and she wants the best for you and your business. So let’s look at seven classic, common-sense warnings from Proverbs for business and for leaders:

Enmity

Enmity is conflict—and not the polite kind. It is characterized by grudges, clashes, narrowed eyes, and pursed lips. You could call it hatred. And Proverbs doesn’t always say that hatred is wrong. “Hatred of evil,” for instance, is valued. And even God hates: pride, arrogance, corruption, lying, and those who try to break up families.2 But when it comes to more everyday topics—such as money, power, and personal offenses—Proverbs warns acutely against hatred, because it leads to enmity: “stirring up dissension” and “harsh words” that “stir up anger.” So when anger moves from an emotion to a motivating factor for words and action, you’re in dangerous territory.

Proverbs has practical advice for us today when we get angry: cool your jets if you don’t want to bring down your hangar. By way of contrast, a gentle answer “turns away wrath.” Although a hot-headed retort might feel good in the moment, you’ll be sorry later: “Fools give vent to all their anger; but the wise, biding their time, control it.”3 Proverbs also warns us that anger can be caught; we learn bad habits from having angry friends.

And for goodness’ sake, don’t go into business with perpetually angry people. If you fall short on your end, Proverbs warns, they’ll repossess your bed right out from under you!4

How wise of Proverbs to address enmity in everyday life and business. Anger is a fact of life. Speech is a flammable substance. The challenge is to safeguard a space in which to think clearly and to consider how to counter anger. Common sense suggests we keep a close eye on those motivated by senseless enmity inside or outside any company.

Misperception

Intentions can be misread, and our own filters can cause us to misjudge what’s being said or what’s happening. None of us is above this flaw. Proverbs points out a common occurrence that happens in business offices around the world: “The first to present their case seems right, till another comes forward to question it.” Also, “A person who lacks judgment derides their neighbor, but a person with understanding holds their tongue”—we could say, keeps his opinions to himself, at least until a more commonsensical time to voice them.5

Proverbs is clear that the need to “preserve sound judgment and discernment” is crucial; both must not be allowed “out of your sight.” This means that the wise person (or worker, or supervisor, or investor) is never browbeaten into doing what her conscience rejects nor seduced by the allure of money, sex, and power.6 In the same way, the successful manager neither “provokes” deliberately, nor is easily provoked. As 20:3 states, “It is to a person’s honor to avoid strife; every fool is quick to quarrel.” The wise don’t make snap decisions or misread people or situations. So wisdom warns you that your business is at risk from superficiality and from misperception—whether deliberate or accidental.

Deceit

If “the wisdom of the prudent is to give thought to their ways” in Proverbs 14:8, “the folly of fools is deception.” There is a corrosive “deceit in the hearts of those who plot evil.” In contrast, a wise, righteous person does not bring a case against another without cause, and she doesn’t deliberately lie.

Bringing together the themes of anger, misperception, and deceit, Proverbs 26:24–26 warns us to watch out for the employee or partner who can poison a company—sometimes it’s the person who is actually the most charismatic. The key is to expose their accusations and enmity to the assessment of a group: “Though their speech is charming, do not believe them. … Their malice may be concealed by deception, but their wickedness will be exposed in the assembly.”

Of course, this might sound brutally direct and offensive, since we all tell little white lies from time to time. But we shouldn’t write off the warning. The key is to be savvy when dealing with those who have proven themselves to be less than truthful. It is better to work with someone who will tell you the hard truth than someone who will sugarcoat a situation in order to keep things comfortable for himself.

You can never afford to assume that data from any party is free of bias or even willful distortion. Whether the information presents a favorable outlook or the threat of meltdown, both reports deserve your careful scrutiny. Because financial and economic power is a powerful drug, addiction to it can lead to some very perverted information coming from certain sources. Before you feed on what they serve you—or are tempted to serve up your own brand of false information—heed Proverbs 20:17: “Food gained by deceit tastes sweet to a person, but they end up with a mouth full of gravel.”

Dissent

It sometimes seems similar to straight-talk or telling the hard truth, but dissent is a different animal entirely. Dissent works specifically to divide and conquer. It comes not from a place of honest questioning or challenging but from an attitude of rebellion and superiority.

Proverbs warns about the threat of dissent, because common sense knows that harmony is a priceless treasure. How many companies have we heard about that are torn down from the inside, without a competitor having to raise a finger, because of in-house politics? Disruption of mission, then, must be consciously and carefully avoided. In Proverbs we see this, as the family member who brings “trouble” on his family is warned that he will “inherit only wind.” The young are counseled to keep a good head on their shoulders and “not to join with the rebellious.” The ruler is urged to sift out the wicked so that his throne is “established through righteousness,” and Proverbs 22:10 urges, “Drive out the mocker, and out goes strife; quarrels and insults are ended.”7

Time and again, Proverbs calls out the schemer, the mocker, the quarrelsome. Do you have employees more interested in drama than in development? In making a personal point than in making group progress? All such people jeopardize social harmony, disturb a group’s peace of mind, and threaten to undermine the company mission.

Thankfully, Proverbs also describes ways of making and preserving harmony. A ruler (or boss), we are urged, can be won over by patient kindness, or to put it more colorfully, “a gentle tongue can break a bone.”8 To Proverbs, then, peace is a real possibility, but it is always at risk. Sometimes it requires that we clean house; other times, that we make a kind gesture of acceptance. Finally, common sense suggests that living our own lives free of the folly of dissent will spread peace to those working with us.

Foolishness

Foolishness (“Folly”) is seen in the perverse and deliberately contrary, the brash and bombastic, the overly confident and verbally unrestrained. In Proverbs, the raunchy imagery of a prostitute hawking her trade symbolizes how Folly lures her victims.

The fool in Proverbs is “loud,” “undisciplined,” “hot-headed,” and “reckless.” Such people “hate knowledge” (so don’t try to confuse them with the facts!), “find pleasure in evil conduct,” only “trust in themselves,” and take “delight in airing their own opinions.” The fool’s mouth is particularly dangerous. Though ultimately his undoing, in the interim, it tends to incite conflict.9 To honor this person is likened to “tying a stone in a sling” (it makes no sense and accomplishes nothing). To hire such a person, Proverbs warns, is like an archer “shooting at random” (everyone gets hurt).10

It is the pushy, demanding nature of Folly and her words that Proverbs warns against repeatedly. To some of course, “pushy” behavior might sound acceptable: it expresses personality or enables necessary self-promotion. Certainly no marketing department would be complete without a certain amount of overconfidence; it can be charming, when coupled with an ability to laugh at oneself. But foolishness always takes extraversion to the next level—coercion. Always turns sociable into self-absorbed. The snarky email and the irreverent social-media post are best-beloved pals of these foolish types, who believe that others consciously crave their fine opinions. Contrast this with the discerning who “keep wisdom in view,” are “even tempered,” “use words with restraint,” and are not quick to speak nor easily angered.11

Power Hunger

Private anger and willful deceit, dangerous as they are, are frequently dwarfed in the public realm by the abuse of power and the manipulation of position. States Proverbs 28:15–16, “Like a roaring lion or a charging bear is a wicked man ruling over a helpless people. A tyrannical ruler lacks judgment, but the person who hates ill-gotten gain will enjoy a long life.” Verse 28 of the same chapter emphasizes the reactions of those supposedly fo...

Table of contents

• Cover
• Title Page
• Copyright
• Table of Contents
• Accolades
• Dedication
• Preface
• Obituary for Common Sense
• Introduction
• Part I: Common-Sense Business
• Part II: Common Sense Globally
• Part III: Applying Common Sense
• Epilogue
• Index