GEO Principle Blog

Dignity, always dignity

Things are bad in the newspapers business these days, what with circulation at most major dailies on the decline, but I didn't know they were this bad. This story about three Baltimore Sun reporters being fired in the middle of a ballgame they were covering may signal a new low in HR practices at media companies.

In business, the key to living the GEO Principle is treating everyone like the dignified human beings that they are. This means your colleagues in the office, and if you are a manager, this includes subordinates. Share information with employees as much as possible so that should the company end up in a position where it has to consider layoffs, it doesn't come as a surprise to those who might be affected. And if you do actually have to lay some one off, do it in person, face to face. Never treat someone like yesterday's news, dismissable when no longer useful.

Sad about retiring at 80

In The GEO Principle, I write about the possibility of working beyond the traditional retirement age of 65. Although most people think about retiring as soon as possible, there are a lot of people who work well into old age. Consider this dear fellow, featured in my local newspaper.

The U.S. Department of Labor reports that 6.4 percent of Americans 75 or older (that's slightly more than one million people) were working in 2006. More than 300,000 people 80 or older are in the workforce.

For many people, a sudden end of work at a pre-determined age is not the way to go. Lots of people have a lot to offer the world in their late 60s and even 70s and 80s. Most of us don't need a calendar to tell us when to stop working. Our health and physical condition will naturally dictate our pace of work, which most likely will be slower in our 60s than in was in our 40s, but it won't likely necessitate the cessation of work until much later than standard retirement ages of 65, 62 or even 55.

If you read all the way to the end of the linked story, 80-year-old Bob Knops said he is a little sad about retiring after 59 years on the job. Perhaps he'll miss the social interaction with work colleagues and customers.

Work is the best path that many of us have for developing our relationship with God. The article doesn't say anything about Knops' faith, but we know that he is in for a big change in his life. Whatever stage of life you find yourself in, think about what it means in terms of your relationship with God. If you are contemplating a change, be sure to think about what the change will mean for your faith life.

Servant leadership and the development of capitalism

Servant leadership is a concept that is often talked about in the context of living your faith at work. Robert Greenleaf wrote about this in the 1970s, and today The Greenleaf Center for Servant Leadership helps people put Greenleaf's ideas into practice.

I write about servant leadership in the third chapter of The GEO Principle. At Luke 22:32, Jesus tells Peter to strengthen his brothers. Peter's job is to help the others succeed. Although Jesus clearly sets Peter apart as a leader, he doesn't say the other apostles should serve him, but that he should serve them. This serves as a powerful model for us today. Leadership, or you might say management, is more about serving others than it is about others serving you.

Dinesh D'Souza offers a very interesting analysis of servant leadership in his book "What's So Great About Christianity." D'Souza doesn't let us forget the extent to which Christianity has shaped our Western culture. Consider this excerpt from chapter 6:

Christianity enhanced the notion of political and social accountability by providing a new model: that of servant leadership. In ancient Greece and Rome no one would have dreamed of considering political leaders anyone's servants. The job of the leader was to lead. But Christ invented the notion that the way to lead is by serving the needs of others, especially those who are the most needy. Mark 10:43 quotes Christ: "Whoever wants to become great among you must be your servant...for even the Son of Man did not come to be served but to serve." And in Luke 22:27 we hear Jesus say, "Who is greater, the one who is at the table or the one who serves? Is it not the one who is at the table? But I am among you as one who serves." In the new Christian framework, leaders are judged by how well they respond to the concerns and welfare of the people. Over time, people once known as "followers" or "subjects" become "customers" and "constituents." As a consequence of the new ideal, the job of the political leader, the merchant, and the priest becomes serving the people by attending to their political, material, and spiritual needs.

The system of modern capitalism arose in the West. To some it is surprising that capitalism developed so easily in conjunction with a Christian ethic. But capitalism satisfied the Christian demand for an institution that channels selfish human desire toward the betterment of society. Some critics accuse capitalism of being a selfish system, but the selfishness is not in capitalism -- it is in human nature. As Adam Smith put it in The Wealth of Nations, the desire to better our condition "comes with us from the womb, and never leaves us till we go into the grave." Selfishness, like lust, is part of the human condition. It is hopeless to try to root it out, although some zealous utopians have certainly tried. Over the centuries, Christianity came up with a much better solution. The Bible is often quoted to say that money is the root of all evil, but the relevant passage actually says that "love of money is the root of all evil." This is a condemnation of a certain human attitude to wealth, not a condemnation of either wealth or commerce.

The effect of capitalism is to steer human selfishness so that, through the invisible hand of competition, the energies of the capitalist produce the abundance from which the whole society benefits. Moreover, capitalism encourages entrepreneurs to act with consideration for others even when their ultimate motive is to benefit themselves. So while profit remains the final goal, entrepreneurs spend the better part of each day figuring out how better to serve the needs of their actual and potential customers. They are operationally, in not intentionally, altruistic...One may say that capitalism civilizes greed in much the same way that marriage civilizes lust. Both institutions seek to domesticate wayward or fallen human impulses in socially beneficial ways.

And when it came to capitalism, Christian civilization created the basic rules of modern economics. In the Middle Ages, Rodney Stark shows, people first realized that prices should be determined through supply and demand. In the past, prices had been set by law or custom. But Albertus Magnus, a thirteenth-century Dominican friar, explained that prices reflect "what goods are worth according to the estimate of the market at the time of sale." And this of course is what we believe now.

Love your colleague? Where to start...

The GEO Principle encourages you to love those around you, including those at work. While most of us might know what it means to love a girl friend, boy friend or spouse, what does it mean to love a co-worker? What does it mean to love a customer, or your boss?

Scripture tells us to love your neighbor as you love yourself (Mark 12:31), so in order to figure out how to love others, a good place to start is to consider how you love yourself.  In the GEO Principle, I sumarize by explaining that loving someone at work means wanting what's best for the other person even it if means a little less for you. And it means acting to make that "want" reality.

Before anyone gets to the point of being willing to give up a little of their own for the good of someone else, they have to be in the habit of honoring the dignity of those around them. If you treat those around you as simpletons, or robots, you miss their  human dignity. You will never get to the point of being able to love them.

There is an interesting article over at CareerBuilders that may put a little meat on the bones here. Respecting someone's dignity simply means respecting them, giving them their due. This article helps to explain how to do that by pointing out the many things people do to show rudeness. By pointing out faults, this article offers guidance on how to treat those around you properly, and that would be the first step to loving them.

Honesty: Following the rules isn't always enough

It is interesting what an issue accounting can be with respect to honesty. Publicly held companies need to report their financial situation honestly so investors can make intelligent decisions about what shares to buy or sell.

If you have any experience in accounting, you know that it is important that companies follow a set of common rules; otherwise, it is impossible to compare the financial condition of one company to another. For example, do you record income at the time you complete a sale, at the time an invoice is sent out, or at the time payment is received? Any of the three options is perfectly fine, but for the purposes of evaluating multiple companies, everyone has to be playing by the same rules.

The Financial Accounting Standards Board makes the rules and it is constantly evaluating accounting issues in an effort to perfect a standard that most accurately represents the financial condition of a company. One issue that has been in the news quite a bit lately is something called "mark-to-market" accounting, which FASB has required since the 1990s. The idea is to determine the value of an asset if it had to be sold today.

It is funny how an effort to standardize something in the name of fairness can cause so much trouble. Back in the early 1990s, Enron started using mark-to-market accounting as a way to boost earnings. Enron would buy a company, and then credit all the future projected earnings from that acquired company to the quarter in which Enron closed the transaction. Without even getting into the issue of whether the projections about future earnings were reasonable, this gave Enron the opportunity to report incredible earnings that were completely unrealized.

Now, mark-to-market accounting is in the news for the opposite reason. Not because it allows a company to record unrealized earnings, but because it forces companies to record unrealized losses. A bank that lends a company $1 million to purchase a building can record that loan as a million dollar asset on its books. If the company fails to repay the loan, the bank takes possession of the building. Regulation requires the bank to get an appraisal of the building. The rules say the bank must book the asset at the lesser value of either the remaining loan amount or the appraisal value. This works fine when real estate markets are functioning, but today most real estate is not selling. The recession has stalled everything. So, if you were forced to sell something today, the only way you could do it would be at a substantial discount. A $1 million building, for example, might go for $400,000. So the bank records the asset on its books at the $400,000. This accounting treatment makes it seem as if the bank has lost $600,000, when in fact, it hasn't lost anything. In most cases, the bank will hold onto the property until the market returns to normal functioning and it can get a fair price for the asset.

My point in explaining all of this is to demonstrate just one small way in which it can be difficult to conduct your affairs in a manner that everyone would agree is honest. "Be honest." It sounds simple. But sometimes it requires more than just following the rules. With respect to reporting financials, the real story often is in the footnotes. FASB tells you how to set up the balance sheet and income statement but a company can clarify and expound all it wants in the notes. If you can't communicate the complete picture in a format you are given, then take the time to clarify through other avenues which may be open to you.

Are employees and execs equally culpable in company deception?

A reader asked a great question on the last post regarding the fake trading floor set up at Enron. She wanted to know whether the employees are equally as culpable in the deceit as the executives. The answer is no.

The employees are culpable, but the executives are more culpable. They are not equally culpable because the employees and the managers are not on an even playing field. While the executives are charged with making a profit, they have great latitude as to how they go about it. They enter the deceit entirely of their own volition; their constituents (shareholders, customers and employees) are not asking them to be deceitful. The employees, on the other hand, do not have such latitude. They jeopardize their employment if they decline to do what their bosses ask them to do.

Be clear, however, that the bosses are out of line here. While a boss has authority to direct employees, s/he can only legitimately ask employees to do legitimate things. Their professional authority does not give them the right to demand anything they like of employees. They can only demand things within the confines of a legal commercial employment engagement. Legally and morally, an employee has no obligation to do something deceitful at the direction of a boss.

Given our world, that doesn't mean the employee won't get fired if s/he ignores the boss's request. One might be able to go to court over such a thing, but ultimately such scenarios typically prove no-win. It ends up being a lot of hassle and headache over a "he said/she said" argument that may or may not prove compelling enough for a court of law to rule justly.

Everyone in the workplace has an obligation to act honestly, even if they are asked to do otherwise by their boss. That is why there is culpability on the employee's part, even if it is less than the managers'. If you find that you are being asked to do something deceitful, you need to address the situation right away. Under the best of circumstances, you could point out the deceit and the manager would back off that particular course of action. In the worst case scenario, management adheres to the deception, and you are repeatedly requested to participate. In these situations, it seems to me you would need to change jobs if you really want your work to be a means of growing closer to God.

Lessons from Enron, part 3

Here's another story from Enron, this one almost too incredible to believe:

Enron executives were touting Enron Energy Services (EES), then still relatively new, to Wall Street analysts. Leading the analysts through a tour of Enron's headquarters, the company pulled 75 EES workers -- including sales reps and secretaries -- from their actual jobs and had them pose in the fake trading center on the building's sixth floor. The goal was to show the analysts that EES was a real and busy business. The company moved phones, computers (some not working), and family pictures to the desks of the fake trading floor. Lay and Skilling reportedly helped orchestrate the ruse, and even led a rehearsal the day before the analysts tour. When Lay and Skilling led the analysts through the area, the EES team "at work" gave the impression of a busy, dynamic operation. It was one more example of Enron's emphasis on appearances and spin. "Enron: The Rise and Fall" by Loren Fox, page 238

What an audacious example of deceit. Of course, if your faith is going to mean anything to you at work, you need to be honest. You shouldn't present yourself to the world as one thing, when you are really something else.

It is clear to see that the managers who orchestrated this charade were off base, but how about those 75 sales reps and secretaries? They participated only because they were told to. This wasn't their idea. Yet, you get the sense that employees should be sufficiently engaged in their work that they understand what they are doing. As employees, we have an obligation to understand our work, and if we don't, then we are obligated to find out about it. If we discover that we are being asked to participate in a ruse, then we have a serious situation to deal with. It would be wrong to knowingly deceive others, and it would be wrong to stand by and let colleagues do so, even if you don't directly participate.  

We know the troubles brought to our economy by the massive fraud that took place in the mortgage industry a few years ago. Lot's of people were pushing unsuitable mortgages on borrowers. Some borrowers were encouraged to make up income figures and other facts in order to qualify for particular mortgages. Now, mortgage-backed securities are referred to as "toxic." It seems like deceit always catches up with you, even if it seems to pay off in the early going. It certainly caught up to the folks at Enron.

The meaning of 'is'

In 1998, President Clinton attracted a lot of attention when he answered a question about his relationship with Monica Lewinski by saying "It depends on what the meaning of the word 'is' is..." Slate magazine said the answer goes "way beyond slick." The answer was certainly seen as a contortion by many. But I want to suggest that President Clinton had it exactly right.

Grammarians know that "is" is the third person singular form of the verb "to be." (I am, You are, S/He is...) In the Book of Exodus, when God talked to Moses in the burning bush, God identified Himself as "I am" Exodus 3:14 says: God replied, "I am who am." Then he added, "This is what you shall tell the Israelites: I AM send me to you."

So President Clinton, who was answering a question about his own character, was saying that one's character depends upon who his God is. And that is absolutely correct. If God is calling you to replace your weaknesses with virtue, and you are trying to live by the will of God, that is one thing. But it is quite another thing if you see God as someone who doesn't care how you act, as someone who doesn't expect you to change.

The New Testament explains that Jesus calls on us to repent. That means He calls on us to change. He is calling us to leave behind our weaknesses, to leave behind our old, selfish ways. Once we repent -- that is, resolve to change -- we can begin to replace weakness with virtue, build personal character and grow closer to God. It all depends you your understanding of "is."