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"Shame on you."
We can expect to hear that inspirational phrase more often now that we've entered what I call the Era of Behavior—a time when what we do and how we do it is under greater scrutiny and is essential to our ability to succeed in business and in life. And, yes, I do believe shaming can be inspirational.
The notion that we are in the Era of Behavior strikes me as ever more important as we continue to grapple with our economic and climate crises—both of which, in the simplest of terms, are caused by the way we have been behaving. It's no surprise that this year's World Economic Forum (WEF) in Davos addressed these crises by making behavior—or more specifically, values-based behavior—a prominent aspect of its agenda, framed by the theme of how we "rethink, redesign, and rebuild" so we can better realize the mission of "Improving the State of the World." In fact, a global opinion poll conducted by WEF before this year's event finds that more than two-thirds of 130,000 respondents believe that the current economic crisis also qualifies as a crisis of ethics and values.
The worldwide global demand for all things sustainable—consumption, relationships, business, financial returns, light bulbs, etc.—boils down to sustainable values. In contrast to situational values, which are about the "here and now," sustainable values are about "here and forever." Sustainable values will inspire behaviors that are aligned with consistently living the principles that create long-term success. Situational values will create behaviors that are about pragmatically exploiting short-term opportunities.
Our ability to survive and thrive depends on individuals, organizations, communities, and countries behaving in a way that embodies sustainable values rather than in a way that reflects situational values.
Offering mortgage loans of appropriately size to first-time home buyers with sound credit histories at fair yet profitable rates represents a behavior arising from a sustainable value: We will thrive over the long-term by providing the right products at the right profit point to the right customers.
When President Obama recently admonished banking leaders for considering record bonuses following the financial crisis they helped create (and which of course required a taxpayer bailout), he referred to them as "fat cats." This shaming represents an example of inspirational leadership. The President was telling banking leaders that their behavior was beneath how a responsible banker—and a responsible human being—would behave. And he was seeking to reconnect them with sustainable values by telling them they should know better.
Examples of inspirational shaming exist outside the realm of the financial services industry as well. National Public Radio recently ran a story on companies being "named and shamed" for their bad behavior. One of the companies NPR highlighted was the Rockmore Co., a Massachusetts ferry company. Following pleading guilty in a criminal case, the company ran an advertisement in The Boston Herald that read: "Our company has discharged human waste directly into coastal Massachusetts waters. We sincerely apologize for contaminating the coastal waterways of Massachusetts. … For these actions we have we have paid a steep fine and have pleaded guilty to criminal charges. We are sorry."
The advertisement, along with a hefty fine, represents the court-ordered punishment the Rockmore Co. received after its plea. In levying this punishment, the court forced the company to take responsibility for "here and now" values.
If it sounds counterintuitive that shaming is inspirational, consider: The behavior of shaming is actually rooted in values. When a mother shames a child by saying, "Don't eat like a pig," what she is really saying is, "Don't behave less than a human being should behave."
Interestingly enough, leaders in the financial services industry tried to shame their own customers—homeowners who have the ability to make payments on outsize and ill-conceived mortgages, but who choose not to—into changing their behavior. The Mortgage Bankers Assn. warned homeowners who default on their mortgages that it will send the wrong message to their children, other family members, and friends.
The effectiveness of shaming depends, of course, on the moral authority of the person(s) doing the shaming—on whether they have exemplified sustainable values in how they have conducted their lives and business. In this case, since few banks in recent years are believed by many to have demonstrated the sustainable values that the industry association CEOs urged customers to demonstrate, the President's attempt at shaming will likely ring hollow. This is not to suggest that more homeowners should adopt the situational values our financial institutions demonstrated to such ill effect in recent years and voluntarily walk away from their loan payments.
Still, I believe this attempt at shaming serves as a wake-up call.
If banks are going to hold customers to high moral standards (good people pay off their debts), why shouldn't customers hold banks, and other corporate entities, to the same moral standards? Why shouldn't we judge a corporation's success based not only on its bottom line but also on its behavior?
Leaders seeking new ways to connect with their people should ask themselves what values they are communicating (both explicitly and through action) to their people and what values are their people guided by? Values that sustain or values that are situational?
Inspirational leaders understand the values needed to be sustainable if their organizations are to succeed in the 21st century. Just ask Whole Foods (WFMI) CEO John Mackey. Last August, Mackey made a startlingly revelation in The Wall Street Journal when he, the leader of a grocery chain that prides itself on high-quality, healthy fare, acknowledged, "we sell a bunch of junk." The comment immediately spread to other media outlets and blogs all over the world.
Mackey was admitting that his company's behavior—which includes selling chocolate, candy, and other delicious but unhealthy food—was not consistently honoring the company's mission to promote healthy eating. In making this statement, Mackey helped reconnect his employees with Whole Foods' mission and guide them on the next phase of their journey and inspired them to develop new ways to help customers choose healthier food. With sustainable values in mind, employees then came up with innovations in how they relate to customers and created new programs, such as in-store demonstrations, cooking classes, and other educational efforts that enable them to connect with customers in new and more meaningful ways.
Innovating when inspired by sustainable values and shaming those who are guided by situational values—this is what our leaders need to do in the Era of Behavior.