Keep an Eye on Your Reputational Risk Radar

Child Labor

No More “Made by Kids!”

When my friend Sarah embarked on taking her 13-year-old son Pascal to H&M to do some shopping last week, she got a concise answer:

“I don’t buy clothes made by kids‘” Pascal said. “We’ll have to go somewhere else.”

Despite her budget-woes as a single mom, she felt proud and took him to Coop, a cooperative retail group with a strong commitment to boost social values.

Leading With Your Wallet

More and more customers like Sarah and Pascal become aware about their purchasing power to change the world to the better. It is a movement that can no longer be limited to an escapist elite of Western countries, but one that is spreading at a quick pace.

According to a recent study the vast majority of surveyed urban Chinese consumers (94 percent), for example, are prepared to pay a considerable premium (45 percent on average) to get their hands on products and services that are clearly certified as green. Yet, the research also shows that the majority (61 percent on average) of Chinese companies are not able to respond to the wishes of their urban consumers.

They miss to satisfy their customers’ demands resulting in the loss of many strategic opportunities to increase the value of their company.

Legal Does Not Mean Legitimate

Here are some questions to contemplate:

  • So, what have you done as a company to leverage your customers’ ideas of being a better brand?
  • In how far do you deal with environmental and social risks in your supply chain?
  • Are these topic of discussion at your firm?

I hear your complaints: cost-pressure is immense, short-term revenue decrease not acceptable, people don’t care about these issues when they have to worry on how to pay the next mortgage rate, and, for sure, you will tell me, that you always stick to the legal frameworks.

And, above all, you have a corporate code of conduct. So why would you have to change anything? Bear in mind, though, that legal does not always mean legitimate in the sensitive environment of reputational risk. Reputational risk is not confined to infamous Wall Street banks, oil companies or global retailers who support child labor.

It can hit you as well, not by means of a huge media scandal, but by a slow erosion of your customer base.

Consumers are asking for more transparency. How can you make sure you satisfy them?

Know Your Data

On top of managing your classic enterprise risks, you can quickly start to implement a strategy to monitor the data of environmental, social and governance risks implied in your supply chain. I assume you don’t want to hear from the press about 16-hour-workdays at your supplier’s company site.

Solid frameworks are in place meaning that you don’t have to re-invent the wheel. If you follow the ten principles of the UN Global Compact you will cover the full scope of reputational risks. The following statement summarizes the mission of the program:

“The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption. By doing so, business, as a primary driver of globalization, can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere.“

This is not meant to be political window-dressing. It is the mindful expression of a growing number of consumers (and potential investors). The initiative pursues nothing less than turning the ten principles into the guidelines of mainstream business.

What’s In For You?

This may sound like yet another costly ‘big data’ project to you in the first place; but in today’s world you can link your systems with web-based research tools that free you from the need of data replication and processing.

One of them is the Swiss start-up RepRisk AG, another one is the San Francisco-based CSRware that help you to identify and assess the environmental, social and ethical issues which may harm your reputation.

You will be updated and alerted on any upcoming risk associated with the businesses you deal with, regardless if your business partner has waste issues, poor employment conditions or media trouble because of executive compensation.

I acknowledge that integration of key figures for consolidation purposes is still something that you are responsible for in-house. If you keep the neurotic data hunger of your analysts under control, I am sure you can manage it at a reasonable effort. Your customers will eventually reward you for your attitude and actions to deliver products “made better.”

Building Courage and Trust

Consumer’s trust in companies and their management bodies is significantly diminished. If you don’t convince yourself or your boss to implement a valuable supply chain strategy, your customers will do so by turning to your competitors who have been more aware of the situation.

It’s only a question of time and it’s up to you.

If you are looking for encouragement before presenting the topic internally, I’d suggest you read “The New Capitalist Manifesto” by HBR blogger Umair Haque, a fast-paced and eye-opening blueprint for doing a profitable AND better business. There is no business without social context and responsibility.

Further Links: Cotton CampaignGreen CampaignsReputation Manager (registration required to read)

——————–
Dr. Bärbel Bohr owns “Bärbel Bohr – Projekte mit System”
Lecturer at HSR Hochschule für Technik / Rapperswil (Switzerland)
She inspires success in leaders & students on communication patterns & culture awareness

Email | Web |@nachrichtenlos

Image Sources: gallery.clubsnap.com

I am not associated with any of the companies or institutions mentioned in the post.

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How to Lead Opportunity in a Downhill Market

Opportunity Knocking

Lessons From a Start-Up in the Music Industry

Leadership starts with first leading one’s self. This is a compelling story in leading one’s self toward a grand vision and doing what it takes to succeed.

While established artists like Jon Bon Jovi curse the new distribution schemes of the music business, others take a reverse look and use the change of the markets as an opportunity to enter the game.

Is this idealistic or simply crazy?

Honestly, what would you say if your friend told you that he was going to found a record label in the middle of a continued decrease of record sales?

Start Me Up

Michael Tolle, of Tucson, Arizona, did just that. He started Mello Music Group in 2008 as a boutique label, doing 2,000-4,000 units per title and has since then moved up to sell 5,000-10,000 of most releases. Sales are generally split 45% physical CDs, 45% digital mp3s and 10% vinyls.

A couple of weeks ago, I had the opportunity to talk to Mike Tolle about how he set up the company, what helped him establish the brand that is now a serious player in the indie hip-hop scene. Every leader, every entrepreneur in a saturated market can take a few lessons from the story he can tell.

Seize the Opportunity

When Tolle, a graduate in literature and linguistics, started to work he missed the music that had marked his life as a student. He had worked as a DJ and had assisted friends who were making music. He, hence, decided to put some money into this area instead of putting it into housing.

“I have always been a kind of believer. It’s not that you have to go out and find a job that you are supposed to do. It’s more to find out if there is a need of what you can do for people.”

However, he has to acknowledge that music production alone does not automatically generate sales. He relied on friends and partners who coached him to understand distribution and get a grip on the marketing and sales activities.

It was “a lot of trial & error” at the beginning, he now concedes. While a huge part of the traditional music industry continued to whine about the customers’ unwillingness to pay for the music, Tolle, however, took the crisis as an opportunity.

“We took a kind of reverse look at that. It’s opportunity. If you’re a major label and you have a giant warehouse and an office, an A&R flying through all these things and then giving things away for free, you sure will go bankrupt. We don’t have this overhead.”

He also loves that hip-hop comes from a position of strength, having established new business models with their own means because the established market did not accept them first. He was also free to use innovative storage and distribution schemes, like the cloud technology of SoundCloud, which is being used  by the major record labels for their digital distribution in the meantime as well.

Equalizer

Pay the Dues

He recognizes the Internet as the big equalizer that allows everybody to get heard “without having to put the big money first”. According to Tolle, it was more important to establish a team that was committed to the art and to the work. All work is done on a contract basis, which allows him to sometimes bring in new people to bring in fresh stuff.

He admits that at the beginning he tried to be big too quick.

To date, the company is completely self-financed. All money that comes from the music goes back to the music. Tolle has continued teaching English full time at his own academy, which allows him that all profits from Mello Music Group can be re-invested. He does not plan to touch any profits before the company will do 1 million dollars in sales – which should be reached sometime in 2012 according to their business plan.

This, of course, also means that he has a working week of 80-100 hours with very little sleep some days.

Working with a globally distributed team does not only mean that you get fresh ideas from all over the world, but that you have to attend to their requests, be them from Berlin or from Los Angeles. Still, he aims to get some rest on Sundays.

Be Grateful to Friends & Family

Enthusiasm and passion have certainly helped Tolle to get through the rough times; but it becomes clear that he would not have made it without the support net of people that have guided him – both implicitly and explicitly. He first mentions two brothers. His much older stepbrother, video director Sam Bayer, winner of three VMA awards and director of Eminem’s recent superbowl commercial for Chrysler, has always been a role model for him.

Tolle’s brother Josh, a painter, has always motivated him in dealing with the cover art of his music. Besides, the close and longtime collaboration with Oddisee, a talented rap producer from DC, has been a source of inspiration for him, too.

Oddisee’s “101” project was Mello Music Group’s first project that started as a free download and was only converted into a sales edition later on – with a return at 100% of their original investment. According to Tolle, Oddisee is also a kind of model for the other artists because

“…he does not live the fantasy of being a rapper, but accepts the business of being a rapper.”

Besides continuing his work as producer, Oddisee has recently taken over responsibilities as East-coast director of Operations for Mello Music Group. Together, the two seem to strive for an attitude where they do not only make music, but also business with a soul.

It seems, even in a doomed marketplace, it is the small bets, smart moves and a soulful passion for what you love doing that eventually pay off and turn you into a game changer.

What sort of dreams are you working toward that challenges you to reach beyond what you are doing? What is holding you back from stretching yourself to be a better leader of your dreams? What small creative steps can you take to make that vision come to reality? I would love to hear your thoughts!

——————–
Dr. Bärbel Bohr owns “Bärbel Bohr – Projekte mit System”
Lecturer at HSR Hochschule für Technik / Rapperswil (Switzerland)
She inspires success in leaders & students on communication & culture awareness

Email | Web |

Image Sources: sellitwithbob.files.wordpress.com, kaystudios.com

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Leadership Procrastinationitis

Head in the Sand

Is there a prescription treatment for procrastinationitis? This is the “disease” that seemingly permeates people so that every action needs to be delayed until…. well, ….. uh,…. later, I guess?

Some Things Never Change…

I knew it would happen this way. When I sat together with my colleague Linda to prepare the quality feedback survey for our courses, I handed her over questions #1-5 to cross-check on them.

Backgrounder: [Linda was supposed to have prepared questions #6-10.]

Looking at me innocently, Linda shrugged her shoulders and showed me her most charmful smile and said:

Well, you know,” she answered while her eyes avoided to look at me: “My daughter got sick and I had to run so many chores yesterday that I couldn’t prepare the questions.”

I suggested a break and decided to get some tea from the cafeteria to cool down.

Yesterday!” she had said.

We got the assignment one week before Christmas and were at the beginning of February now! I couldn’t believe it. She could have prepared everything well in advance. Instead, we would have to do everything together now in order to keep our deadline. I felt cheated.

On my way to the cafeteria, I remembered that last year she had put up a big post-it on her desk visible to all of her colleagues and her boss:

The way to get started is to quit talking and begin doing. (Walt Disney)

When we saw the post-it, we all looked at each other sighing and thinking:

Well, she is giving it another try.”

Linda, a charming, witty and very creative colleague who we all cherish, is a chronic procrastinator: our cinderella of “last-minute”-stands. Two months into the new year the post-it disappeared without any further mentioning it.

“Procrastinators Anonymous”

I assume most of us, including myself, have some procrastination attacks from time to time, yet around 20% of the population suffer from the chronic form of procrastination.

My students call it “procrastinationitis.”

There is tons of material out there in form of books, blogs, self-help courses that try to help and don’t need to be repeated here. On Wikibooks you can find a comprehensive overview of available resources on procrastination.

It is a wide-spread disease, no doubt.

What Linda tried in 2010, some of us may have taken as their New Year’s resolution for 2011; overcoming procrastination.

  • What would you say?
  • Have you made progress?
  • Or have you already reached the slump so that you feel like giving up?
  • Is it that you, um, perhaps, are reading this blog article in order to avoid doing something else that you should do right now?
  • And now feel tempted to switch to your email because you start to feel guilty?
  • Or do you perhaps happen to know some employee of yours who has taken this resolution?

According to studies on the subject, many therapies fail because the patients are supposed to change in a way that does not suit their personality. Authors of self-help books on the topic tend to be well-structured and organized. It must be very frustrating for procrastinators to see all the plans, control patterns they are supposed to learn.

Joseph Ferrari, associate professor of psychology at De Paul University in Chicago, sums this up nicely:

Telling someone who procrastinates to buy a weekly planner is like telling someone with chronic depression to just cheer up.

Procrastination and Corporate Culture

Even though it is always one’s own decision to stop procrastination, I started to think on my way back from the cafeteria in how far we as leaders and colleagues in companies and corporations can foster the tedious process of behavioral change and make it easier for the individual to adapt to it.

After all, procrastination may cause loss of productivity because most people are not happy that they delay their activities.

I came across some suggestions for team leaders and managers in Kevin Burns’ blog that I would like to share with you.

His Top 3 list of advice contains the following items:

  1. Break down projects into digestable pieces: The shorter the deadline, the less possibility for the procrastinator to delay the work
  2. Always ask the procrastinator for the status when you see him or her and do it in public. This will help to develop reliability.
  3. If a procrastinator does not deliver on time, show consequences and pass on work to a good worker

These pieces of advice sound convincing, but I am sure they would not work in all types of corporate culture. “Forced control” mechanisms like these might lead to more sophisticated ways to achieve procrastination in the long-term and might even develop mistrust between leader and employees.

I would, hence, rather favor measures, which help the employee remain accountable for putting off the work, and avoid patterns, which require permanent interventions by the manager. Measures that I prefer see the manager or leader in the role of a temporary coach so that the employee can really find out the reasons why the work is getting delayed so very often.

A coaching relationship would be the first step to a real cure, not just fighting the symptoms. This, of course, would only work if the manager is not a messy procrastinator him- or herself. As we all know, overworked managers have a tendency to procrastinate, too.

What do you think about these suggestions? Which ones would work for you? How can you as a leader help your employees heal procrastination?

Need Help? Some more useful online resources: http://procrastinators-anonymous.org/ iProcrastinate Podcasts

——————–
Dr. Bärbel Bohr owns “Bärbel Bohr – Projekte mit System”
Lecturer at HSR Hochschule für Technik / Rapperswil (Switzerland)
She inspires success in leaders & students on communication & culture awareness

Email | Web |

Image Sources: magnetmagazine.com

“I’m Not a Businessman; I’m a Business, Man!”

Jay-Z

Business leader Jay-Z continues his way from success to significance

When I finished reading Jay-Z’s recent book Decoded, one of the verses of Coolio’s classic “Gangsta’s Paradise” popped into my mind:

I am an educated fool with money on my mind.

Purposeful Leadership

This is exactly the self-image that Shawn Corey Carter aka Jay-Z creates in his new book. Yes, he proudly confirms that money is important to him, but he also uses his autobiographical notes and demonstration of aesthetic tastes to educate his readers about the true artistry of him and hip-hop culture as such.

Then, artistry does not only mean rhyming bars, but includes his particular way to lead with the end to earn money.

Jay-Z Signing "Decoded"The book was released with an extraordinary marketing campaign in November 2010 and has been discussed at length in all major national newspapers and magazines. I assume that due to the unique artistic composition of the book, little attention has been payed to the depiction of Jay-Z’s leadership model.

However, his understanding of running a business is everywhere in the book as it is ubiquitous in his rhymes. Even if you cannot connect to Jay-Z as a rapper, I would like to show you some of his cross-over ways to lead that may be beneficial for every other business leader.

Street Savvy Leadership

As everybody knows, Jay-Z did not study his strategies at a renowned business school, but learned them on the street, dealing with drugs.

1. Independence

The first prerequisite for a true leader and entrepreneur is the strive for independence. Putting it into his own words:

“One of the ways the streets kept ahold on me was that I lived the independence of that life…I didn’t want to give that up to become someone’s contracted employee.” (Jay-Z, Decoded, p246, hardcover edition).

The lessons from the streets made him aware of the dependencies the traditional record industry would confront him with, which led him to found his own label, Roc-A-Fella Records, with his partners in 1994.

2. Discipline

Independence does not suffice to guarantee success unless it comes along with a good package of discipline including the ability to self-reflect.

Again, all his business experience relies on his former work as a hustler – a life experience he shares with many other rappers. According to him, hustling as a work process was able to compensate for the missed classes of a good business school and taught the lessons of street-smartness to organize, structure and manage diligently.

Like a good business student, he summarizes the foundation phase of his record label:

“Coming up with a business plan was the first thing the three of us did. We made short and long-term projections, we kept it realistic, but the key thing is that we wrote it down, which is as important as visualization in realizing success.” (p. 247)

These two basics of both leadership and management skills are very traditional and well-rooted in the classic American way of business life. Yet, Jay-Z presents two more ways in which he more clearly “crosses over” from a traditional notion of leadership to a more diverse understanding that has its roots in hip-hop culture itself, outside the “mainstream’s rules” (p. 82).

3. Competition

Traditional cooperations and leadership models often deal with competition in euphemistic terms, such as “strive for excellence” or “meritocracy”. Not hip-hop, which embraces open and naked competition. Battling is at the very origins of rap culture:

Hip-hop is a perfect mix between poetry and boxing. Of course, most artists are competitive, but hip-hop is the only art that I know that’s built on direct confrontation.” (p. 70)

Of course, open competition is healthy to bring out the best of you and opens up for collaboration at the same time. The whole book is a single proof that Jay-Z has also won through smart artistic collaborations.

At some points, I wish Jay-Z would have been more critical about this pattern, and not simply accept it as a “primal type of competition” (p. 71). In the past, the extreme competitiveness of rival rappers led to too many unruly fights that did not stop at battling over verses.

4. Caring for People

Lastly, Jay-Z portrays himself as somebody caring for the people he works with and the culture he is part of.

When he talks about his work he does so with a lot of kindness and a great sense of responsibility, doing the thing he loves. His language in these moments is far away from the emptiness of the average speak of many corporate managers.

His heart-beat is with his people and his poetry, no profanity needed.

It’s perhaps in these soft passages where a reader suspicious of Jay-Z as a leader may reverse his or her initial mindset that the book is sheer egotism.

Organic Chickens

All in all, Jay-Z portrays himself  in the grand tradition of an old-fashioned Horatio-Alger-story. He’s made it. He explains how. In times of an increasing gap between haves and have-nots in the U.S.  it seems legitimate to me to listen again to these kinds of stories – without parody and irony.

And the saga does not stop here: Jay-Z has just invested into an organic chicken wing restaurant in Brooklyn. Furthermore, it has just been released that Decoded has been nominated for the 42nd NAACP Image awards.

So how are you are looking at leadership through the eyes of a rapper? Do you engage with your teams with a spirit of independence, discipline, competition, and care? Are you taking the time to widen your thoughts, mind share, and practices to think  and act like Jay-Z? And where is your passion for success in your leadership journey? I would love to hear your thoughts!

——————–
Dr. Bärbel Bohr owns “Bärbel Bohr – Projekte mit System”
Lecture at HSR Hochschule für Technik / Rapperswil (Switzerland)
She inspires success in leaders & students on their communication & culture awareness

Email | Web |

Image Sources: killerhiphop.com, broadwayworld.com

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