Patrick Lencioni is co-founder and President of The Table Group and is the pioneer of the organizational health movement. He is the author of 13 books, which have sold over 8 million copies and been translated into more than 30 languages. As President of the Table Group, Pat spends his time speaking and writing about leadership, teamwork, and organizational health and consulting with executives and their teams. Prior to founding the firm in 1997, Pat worked at Bain & Company, Oracle Corporation and Sybase.
In his second appearance on the Elevate Podcast, Patrick returned to the show to discuss the role company leaders should play in sociopolitical issues, how to set proper expectations with employees and customers about where a company stands on social issues, and why leaning on values is as crucial as ever in leadership today.
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Patrick Lencioni On Leaders’ Role In Social Issues
The vast majority of employees in the world would prefer to work at a company that doesn’t require them to believe things that have nothing to do with what the business is about. That’s diversity and inclusion. Our quote for this episode is from Brian Chesky, “Culture is a thousand things a thousand times. It’s living the core values when you hire and when you write an email, when you’re working on a project and when you’re walking in the hall.” My guest on this episode, who I’m thrilled to host for a second time on this show, is Patrick Lencioni.
Pat is the Cofounder and President of The Table Group and a pioneer in the organizational health movement. He’s the author of 13 books, which have sold over 8 million copies and been translated into more than 30 languages. As President of The Table Group, he spends his time speaking and writing about leadership, teamwork and organizational health and consulting with executives and their teams. Before founding the firm in 1997, Pat worked with Bain & Company, Oracle and Sybase. Pat, welcome back to the Elevate Podcast.
It’s great to be here, Robert. I can’t wait to have this talk. This will be fun.
Cultural Fit
We talked about your life, your work, your leadership and your first appearance on the show, which I would encourage readers to go back and read. It’s episode 261. You’re returning for this episode with a specific purpose this time and that’s to talk about an article you wrote, How to Sew Unity in a Time of Division. This article gets into the question of how and if companies should be involved outside of their core values and purpose.
It’s a topic I’ve been interested in, and I’ve been talking about it for a while in Parallel. Your article was a good prompt for a discussion around this and I’m hoping that’s what we can do. I think there are a lot of leaders and boards grappling with this issue. Who needs to decide on a way forward and they’re not sure what to do. Not enough people want to have that open and honest dialogue. To start us off, tell me about the premise for this article and what prompted you to write it in the first place.
The premise of the article is that it’s almost a social contract. When you hire an employee, as you said in the opening, you hire them because they fit your core values and they can add value to your company. Fitting the core values is important because that’s what says you belong here. Any company that has a culture isn’t for everyone by definition.
They interview people and they say, “You might have the requisite skills, but first and foremost, you need to fit the culture.” When you hire somebody, you accept them and welcome them because they’re a cultural fit. If you change that culture, you have to tell them. If they’re no longer fit, it’s cruel to change the culture and not tell them and let them walk around and wonder why they’re no longer welcome or feel welcome. That’s what a lot of people have done.
I want to preempt something that’s in a lot of people’s heads. We may have talked about this last time, but this term cultural fit, I think a lot of people see this as a pretense for hiring carbon copies of each other or precluding diversity. I know you and I agree that’s not the case at all, but that any organization needs to have some common values that it encompasses. You talk about why cultural fit does not go against the concepts of diversity and inclusion.
It’s the very thing that makes diversity and inclusion real because, unless you decide there is nothing about us that we have in common and I don’t think that’s what we mean by diversity, what makes a company, a country, any organization or families great is when they know what they believe and what they’re about.
What makes a company, a country, or an organization great is knowing what they truly believe in and how they can be diverse around everything else.
Then they can be diverse around everything else, but it would take any company that you know of, to think of Nordstrom and say, “Are they welcoming diversity for people who don’t like customer service?” No, that doesn’t mean they hate them. They say, “Listen, you wouldn’t it here because that’s one of the things we’re all about.”
Every company worth anything should have a culture such that somebody might apply there and say, “You’re a wonderful person, but you wouldn’t it here because the things you value and the things we value are different and you should find a company where you would go to work every day and your values would be congruent with theirs.”
That’s an act of love and service. Usually, a company can only have two or three clear core values and everything else outside of that, so they can say, “Diversity outside of that is good. We have to figure out a way to welcome people and include people, but not around the two or three things that make us who we are by definition.”
My analogy has always been a university. There’s a large public university in a city maybe and then there’s a small rural liberal arts school and they have different value propositions. They’re trying to appeal to the people who want those value propositions and they might be great schools and win all kinds of awards, but probably the kid at one wouldn’t see the value proposition at another.
That’s good. See that because a university is not a university is not a university. A company is not a company is not a company. Everybody should find that one. That’s natural.
Sociopolitical Issues
Plenty of university leaders are struggling right now to do exactly what you’re saying. This is who we are and what we do and we’re not changing it because a few people want to change. I think we’re seeing the danger of that. The core tenet of the article is that, as you said, “The healthy culture comes down to alignment.”
“You need to establish these values of mission and higher reward and manage people based on that. You got to respect and support people who fit the culture.” Then, you specifically argue that when companies try to take stances on socio-political issues, unrelated to the business, it impacts the culture. Explain your viewpoint where that may not be intuitive because if we all share the same values, how come we don’t agree on all these issues?
It doesn’t mean we share all the same values, which is a few values that we share. When a company decides that we’ve hired these people on verse on X, Y and Z values, everybody is X, Y and Z. It doesn’t mean they agree about everything. It doesn’t mean they have everything in common, but let’s say we have those three things in common. Suddenly, a socioeconomic or sociopolitical issue comes around and they say that we’re going to take a hard stand on that.
Do they ask themselves, “Are there a meaningful number of employees here?” As many as half on many times, sometimes even more who don’t necessarily agree with that. They fit our culture, but now we essentially decided we’re going to take on a new core value. I don’t even want to use an example because as soon as you use an example, people will say, “On that one, I agree.” Yes, but that’s not the point, especially if you’re a large company.
If any company has the right to do this, to support those sociopolitical issues, as long as they say, “We know there’s a lot of people here who don’t agree with this. We want you to know you’re no longer welcome here. You’re not going to feel welcome here and you should probably move on.” In other words, if they’re willing to take the hit of alienating many of their employees to speak nothing of customers, then that’s courage.
It’s not virtue signaling because you’re saying we believe in it and we’re willing to take all of the associated risks, benefits and rewards of it.
Right, but the problem is most companies don’t want to take the risks. They’re saying we believe in this and they gaslight everybody in the organization and say, “Obviously, you believe in it too.” What you do is then you have large groups of employees in these big companies walking around saying, “I have to pretend I believe in something that I don’t because they’re assuming I do.” They know that if they have any common sense, that many of us aren’t aligned with that, but they’re going to allow us to walk around and pretend and feel excluded if people find out who we are.
Here’s a great example. Gen Z is driving a lot of this and they come into the workforce and I get it. The younger generation, noble, wants to change the world and make it better, but some of us have been in companies and have been through some of these cycles around what this looks like. One quote in an article that I wrote about what I think Gen Z wants at work is because I thought a lot of the things were frankly very misguided.
One of the things I noted was that 41% of them said they want their company to be engaged in social causes that the employee supports. Great. What about the causes that the company, that they don’t support? That fundamentally seems antithetical to inclusion to me and the whole concept of inclusion in that I’m on board with the things that the company does that I like, but what about the ideas that you don’t agree with? I’ll go back to something you said before when you said, “We.” Who is, “We” in the company? This is tricky whether you’re talking about a big company or a little company.
The, “We” refers to the leaders of the company whose job it is to make that organization successful, which means to engage their employees and let them feel they know why they’re there and how to be successful. What I find the hypocrisy of the inclusion thing is, “I want to include the people who agree with me and then exclude the people who don’t or I’m willing to include them as long as they don’t say anything about that they disagree with me.”
You can understand where that comes from because you can see what’s going on on campuses right now and clearly, that is what has been taught because that’s the mindset that’s coming in the workplace. This is pretty obvious to see right now, for those of us who want to pay attention, which is, again, as long as you agree with me, it’s fine. We have Greg Lukianoff coming to talk about free speech. Free speech is great as long as it’s ideas that I agree with. This fails the basic principles test.
Yes. The funny thing is, though, even in those college cases, I blame the administrators and the faculty more than anybody because most of the college students, I have a kid in college, 2 that graduated, and 1 going. I spend a lot of time on college campuses. The kids don’t necessarily agree with all the crap that’s going on, but they’re not allowed to speak up.
They go to class and pretend they agree with the professor. When they walk around campus, they have to make sure that the people who are supporting whatever cause it is don’t know that they don’t agree because they’re going to get shouted down and excluded by them, too. It’s a fundamental hypocrisy around what real diversity and inclusion is.
The funny thing is that these companies that are doing it are listening to a very loud group of people and they’re doing it at the expense of others who say, “I’m not that person, but I don’t agree.” Most of those people think that if I could get out of here, I would. I think those companies have to have the courage to either let those people go and say, you’re right.
We’ll get to this later. You’re advocating. Pick one strategy or the other, not that either is not okay.
What the article says is that if you’re the leader of an organization that’s fallen into this, and many have done so, I would say the vast majority of public companies and many large, even private companies have. What you need to do now is say, “Wait a second. We have to pull back and acknowledge that we did something inadvertently that is alienating large groups of our employees or confirm that you’re glad that you did that and let those groups of employees find a place to work where they’re truly included and welcomed.” Either one, you can’t have your cake and eat it too, because that leaves people.
You don’t go to work at Patagonia and trumpet fossil fuel benefits, right?
That’s part of their business and people knew that when they went there.
I guess the equivalent back to the university would be you accepting me into the large state university, and then I found out you shipped me off to the small liberal arts campus, which is not what I thought I agreed to when I accepted to come here.
Correct, as somebody who went to a liberal arts campus, liberal arts is the pursuit of the art and the passion for learning. However, we’ve tended to make it seem more about sociopolitical causes that aren’t necessarily even connected to liberal arts.
As you said, the two, there’s a lot of virtue signaling here and trying to have your cake and eat it too. I won’t get into the nuances of this, but I saw a very interesting perspective when Target was going through some of the problems last year around the displays they had during Pride Month. Their answer was to take them off of all of the stores in the conservative states where the problem was.
It is clear, “Want your people to eat it too.”
Right and some of them think that’s virtuous. Either you believe in this enough to take the pain and the loss of customers and stuff that comes with it or you’re putting different messages to different audiences and it’s a marketing scam in some way.
What I believe it is, people who have let themselves believe that all reasonable people agree with us. Since we don’t want unreasonable people working here or shopping here and what they don’t realize is there are plenty of reasonable people who don’t agree with them.
There are plenty of issues.
On most issues outside of the core. It would be like In-N-Out Burger is a big burger place. If you don’t like meat, you go eat somewhere else. I asked them that. I did some work with them once and I was once not eating much beef. I asked, “Are you going to have a turkey burger?” “We’re a beef company. That’s what we do.”
Now, you do that knowing that certain customers and certain employees are not going to want to work there because they’ll say, “I don’t like that. I’m a vegan.” They’re okay with that and that’s what that means. They hire people who are okay with beef and have a few core values and say, “Now, as long as you’re okay with those things, you can be almost anything and work here. I’m not saying that a company shouldn’t adopt very powerful values around something as long as they realize they’re going to lose it.
Values have to cost you something.
Yes.
In the same way, I think companies have historically stayed out of religion. Unfortunately, I think politics is the new religion, which is maybe why this is becoming uncomfortable, but companies used to stay out of sociopolitical issues. I think some people understand the social changes that put pressure on company leaders to take action. Can you talk about where that pressure comes from?
I think it comes from a culture that shames certain people for what they believe and not others. In other words, people now know no source of news is trying to tell you what’s happening and let you figure it out. It used to be that most colleges you went to and professors were, “I want to teach you how to think and I want to teach you about these issues and I’m going to present them and let you figure them out. My job is not to be biased. My job is actually to help.”
People now know no source of news is actually trying to tell them what is happening and let them figure it out.
I’m going to make you debate the position you don’t agree with.
Correct and the university means the pursuit of truth, whatever we all have to try, but they’ve decided that, no, our definition is X. That would be okay. If a college were to say, “This is the truth in which we believe and we don’t want you to pursue anything else. If you believe in that, come work here or come study here.”
Here’s the deal. There are some companies and universities that do that, and they have every right in the world to do so. There are Christian companies, there are other Jewish companies and there are atheist leaders. They could say, “If that’s uncomfortable for you, this probably isn’t a great place for you.” That’s honest and kind.
Years ago, at the end of 2020, a couple of leaders and there was a big push after George Floyd opened up a lot of discussions and a lot of this stuff started becoming front and center in an organization. I thought it was interesting because two companies in particular, Coinbase and 37Signals, which have been known for a while, founders David Heinemeier-Hansson and Jason Fried, have both been on the show and are known for doing the opposite of what everyone else does.
They’ve been building this profitable SaaS company that was an oxymoron for years. They eschewed venture capital. They weren’t big. They were remote before everyone was remote. They have great lives and make a ton of money. They both came out and said, “We’re not going to have politics at work.” Brian wrote a whole piece and there was an uproar.
What they said to your point was, if you don’t want this, you can leave and we’ll pay a severance. If this wasn’t what you thought you signed up for but don’t want this at work. In the case of 37Signals, Jason talked about people jumping all over them and friends told them they’d be on the wrong side of history. No one would work for them.
Do you know what? People left, but plenty of other people lined up to come in and said, “I don’t want politics at work.” Jason was saying in the last couple of months that a lot of these people who told him he was going to be on the wrong side of history reached out to apologize as it looks like they are on the right side of history and their companies are doing great things and having great performance and not getting distracted with things that they don’t control.
Exactly. The problem here, the suffering that’s going on because of this and the reason why I’m passionate about this is not intellectual. It’s not because they are on the right side. Some employees are suffering and are being told that they work here and their livelihood is here. We invited you to come here. Now, if you believe differently than this, you should shut up and realize that your livelihood is on the line if we find out. This is what happens in a totalitarian country.
I think that honesty and transparency around this would be much better if those people could opt in or out, but they’re not doing that when I think about what you said about Coinbase and the other companies. I remember what the crap they took for that. Think about the fact that we’ve made it politically incorrect to declare yourself non-political.
Diversity And Inclusion
To say, “We can talk about this later. I was with a coach of ours we’ve worked with for years. He works with a bunch of high-growth companies. A lot of these teams are talking about succession and the next generation, but no one’s raising their hands to lead. No one wants to be the CEO. They see these increasing number of, “I have to be good at the people stuff, the operations stuff, the product stuff. Now I have to worry about all these other things that are not part of the organization.”
It looks exhausting and it’s also making it hard for people to want to lead. It used to be an amazing enough thing, maybe ten years ago, if you had this little tomato canning company and you said, “I’m going to treat people well and have a great product.” That could have been enough, but for a lot of employees, “No, no, no, we need to get into all these other things.” Every piece of data that you have or every coach I have or we have around the organization that loses focus or tries to tackle too many things is that their performance suffers.
Exactly. The performance ultimately suffers, but what I don’t like is when they change their view because of that. The real value is if you believe in inclusion, then tell people what they need to believe to belong there and don’t start adding things and excluding people. To me, it’s fundamentally dishonest and cruel. It is. There’s cruelty going on in many of the largest companies in America these days because it’s saying, “Whatever values you thought you had, starting now. Those are no longer acceptable and you should be quiet about it.”
Think about it again. What Brian, David and Jason did was say, “We understand if this wasn’t what you wanted or you want something different, we’ll help you leave and we’ll pay your severance.” They were not mean about it. They said, “We’ve made a decision.” They probably helped the people. I think in the reverse situation, people think, “Get out. That’s not what they said.” They owned it. A lot of people focused on 25% of people that left Basecamp that year also under the Great Resignation timeframe anyway. I’m not sure about the alpha and beta. What they don’t focus is on the 20,000 applications they got, I think, within the next six months.
That should be the proof that there is a market for companies that don’t do this. I would say that the vast majority of employees in the world would prefer to work at a company that doesn’t require them to believe things that have nothing to do with what the business is about. That’s diversity and inclusion. The crazy thing is that the majority of people in the world would like to work at a company where they’re respected, regardless of what they believe, as long as they believe in the core values and want to add to the company’s value. Somehow, all these companies got hijacked into doing things that the majority of their employees didn’t want.
There are things that they can do that align with their values. I think I’m bad at a lot of things. The one thing that I’m good at is seeing around corners. When a lot of this started in 2020 and after. I said to our team, “Someone’s going to get hurt.” There are too many issues and too many things going on. Once you start in this, each one of these, you could say we should do this, but someone’s going to get hurt.
In my last year as CEO, I tried to put a stake in the ground on this and looked at a lot of the things that people had written. Let me read this. I’d like to get your reflection because I wrote this. It took me a while, but I was trying to make some of these points. Here’s a piece of what I wrote. It said, “We’ve always believed that what we do is as important as what we don’t.”
“While there’s a sense of obligation to respond to all new developments happening today in real time, doing so tends to overlook nuance and complicated issues and favors expediency over thoughtful reflection, commitment, and, most importantly, action. News and social media cycles should not be the barometer of morality, gravity or prioritization.”
“While outrage is a powerful emotional tool and it can be the spark that lights the fire, it’s not the same as action. Ultimately, we believe social change requires sustained focus, action and prioritization. This means not putting the urgent ahead of the important or prioritizing the latest headline ahead of existing work that’s already being done.”
“We need to acknowledge that it’s very difficult for a company to represent the full range of viewpoints that employees hold. Even in cases where people agree that there is a problem, they may not agree on the solution. Additionally, choosing to speak out on some issues but not others has the unintended consequence of alienating employees who may be upset that an issue or cause did not receive an official company response.”
“Because the sad reality is, there are too many important issues happening around the world for us to take a company position on all of the ones that our employees, clients and partners care about. As an organization, we may not and cannot respond to every headline. We will advocate for our employees and give them a platform and voice. To facilitate this, we give our employees the time, support, and resources they need to advocate for the causes they are passionate about, guided by our company’s purpose, values, and platform.”
“We offer paid time off for employees to do volunteer work. We match personable, charitable donations to nonprofit organizations that matter to our employees and we provide internal support for affinity groups, learning sessions and employee-organized activities around specific issues. The result is a balanced, employee-driven approach to social action that’s not about AP the company, but about AP’s people.”
That is beautiful. I think that most employees at your company and in the world would say, “That’s great.” If it doesn’t piss off a few people, then you’re not understanding it.
Someone said to me, “If someone doesn’t hate your speech, they won’t love your speech.” If it’s a warm cup of tea, it doesn’t mean anything to anyone.
Some people are going to say, “No, that’s not good. You should take a stand.” These are unreasonable people. The stand you want us to take is the opposite, and they think that they’re the only reasonable people in the world.
I struggle, again, as someone who was the leader of the organization in a power dynamic, why my voice should be the company’s voice and how a company could speak for anyone. I think I used a line similar to Brian’s. What’s also interesting is a lot of us agree on the problem, but we don’t agree on the solution. Go ahead and speak up. There are some issues I’m speaking up about very strongly now, but I’m not pulling the company name into it. There are things that I’m personally passionate about and someone should have an equal opportunity to do the same about things that they’re passionate about.
That’s fine, as the leader, but you have to be aware. Some people will take your passion around something and try to institutionalize it. You have to say, “No, we cannot do that because if we do that, we are sending a message to people who don’t agree with me that they’re probably not welcome.”
Some people will take your passion and try to institutionalize it.
Taking Action
There’s also this pressure in a lot of organizations. There are a lot of phrases that I don’t like. One of my top is, “Someone should do something.” If you have a group that wants to comment, post or take the page and represent their opinion on something for the day, great, give it to them. When the next person says, “Someone should do something.” We could say, “The company didn’t do something. Sarah and Jim were passionate about this issue, so they wrote a blog post about it, and we gave them a platform. If you’re passionate about this issue, you can do that.”
That way, you don’t have to answer the question, “Why are we jumping into this one? “Why are we sitting out this one?” It is because there’s not a we, there’s a people who want to do that. You can have the time, you can have the resources, you can have the co-match and go ahead. As long as it’s not offensive, go do the things you’re passionate about, but it solves this problem. Someone should do something, which drives me insane.
There’s a great saying that somebody said about surgeons. There’s a saying that they have, “Don’t do something, stand there.” There’s a time to think about what you’re doing. Don’t do something, stand there. There’s a time to stand in it and contemplate. I pray about it and say, “What is the right thing to do here?” Sometimes it’s nothing.
What I find interesting, Robert, is that there are companies out there today, for example, there’s an airline, I can’t remember which one it was, where they surveyed an employee about how they felt about something. One of the people in the employee said, “I wasn’t comfortable with the socio-political stance that you took.” They got rid of her.
That’s not safe. That’s not inclusive.
No, but this was a company that would have preached inclusion. “We’re the most inclusive and diverse company. You don’t agree with that one thing over there? Then you don’t belong here anymore.”
I was going to say that what you could have said was, to your point, this is our belief and we’re going to go with it. If it makes you uncomfortable, then maybe this isn’t the right organization, correct?
Yes, the thing about it is, if you were to ask the leaders of that company, outside of HR, maybe, “Are you comfortable with 40% of our employees looking to work someplace that says that we’re not going to make you believe anything that you don’t believe other than this about how we do business?” They would say no.
Ask any of the Silicon Valley companies that are the worst at this, by the way, “Do you want to lose 30% of your engineers who don’t sociopolitically align with the things you’re doing?” They would say, “No, we’d be screwed, but as long as we’re paying them a lot, we think we can get them to be quiet and still work here.” That, to me, is cruelty. Truly cruelty.
I think people also notice the double standards. I give Google a lot of credit recently when they were pretty swift with the response when people started taking over offices and doing things that were clearly against their policies related to some of the stuff that’s going on. They fired all the employees and they said, “We are not going to stop upholding our policies and if you think we aren’t, you’re fooling yourself.”
They are stepping in the right direction.
Now, what’s interesting is Google’s a fairly progressive company and I think a lot of the people and maybe the leadership team even supported some of what the cause that the people were doing, but what leadership was supposed to do and say, “These are the rules irrespective of anything else. You broke them and we’re not going to start taking over offices here and so you’re out. That, to me, is when you’re willing to uphold something, but when it probably goes against something you believe, it is when you have integrity as a leader.
That is a great step in the right direction. The question is, “Ask yourself, what’s the opposite of that?” What’s interesting is that you call them a progressive company. Now, I know progressive means more liberal than what we used to consider liberal, but we call it progressive. I hate that word because it sounds like if you’re not progressive, are you regressive? What’s the opposite of progressive?
Very conservative, I would say.
Which ones are the big public and very conservative companies?
They’re probably privately held companies, more so in the South. They’re probably not as much the public, but not the Silicon Valley company.
That’s the funny thing about this. It’s a telling sign that there are not big public and conservative companies. In a world of real openness, you would have big progressive ones and big conservative ones.
Yes, like the universities with the different value props.
Exactly. Where’s the big conservative university? That’s what I think is interesting about it. It should be fine for a company to say, “We are progressive.” What they should be saying is, “And if you’re not, this is not a good place for you to work,” but they’re not doing that.
Making A Choice
That would alienate people that they need. This is the core of your argument in this article. Let’s double-click on this. You’re saying that leaders need to make a choice. They can either recommit to their original values and mission. Mea culpa and be honest with employees that they’re not going to focus on sociopolitical issues anymore and that this was the wrong thing to do. This is what I like because you’re the other or they can go all in on changing the world in these sociopolitical areas. I would argue they should probably pick one or two, not all and focus. Trying to straddle the two will be untenable.
Yes, if you’re a public company, because you have shareholders too. When companies go public, I always say, “My condolences,” because suddenly it’s a different animal.
Right, trying to appease everyone.
Yes, and by definition, that’s the structure. People invest in your company and if you play with that investment to do things that aren’t advancing the company but are advancing some political issue you have, to me, that would be unethical because I invested in your company. I thought the market for widgets was going to go up.
Now you’re taking the money people are giving you for widgets and spending it over here on these other things, which are alienating some of your customers. What does that have to do with why I invested in your company? Now, if even the investors were told, “If you’re investing in our company, we’re going to use some of that money for this. Even if that hurts our bottom line, it’s worth it.” The investors would have their eyes wide open and say, “Yes, I did that knowing.” It’s fundamentally dishonest.
If you are a public company, you should have an ethical commitment to say, “We are not going to alienate our customers, employees or investors because we have a contract with them to help them achieve a return on investment. That is as long as we’re legal and ethical in how we do that.” Now, a private company is a very different thing, but it’s the same thing that would apply if you’re going to take a stand, let everybody know it, and be willing to accept it. Treat the people who don’t belong anymore with dignity and love them in a place where they belong.
Public companies should have an ethical commitment not to alienate their customers, employees, and investors when helping them achieve a return on investment.
This is interesting. Let’s go to the bucket that you’re going to take a stand and let’s go to this premise of focus. You probably want to pick a domain tied to the business that you want to take a stand in. If you’re Tom’s Shoes and you’re trying to end whatever it is. Shoes and walking it out. You probably shouldn’t weigh in on vaccines. Likewise, if you’re a company that’s trying to cure blindness and you’re focused on that. It’s interesting. Even if you want to go that route if you try to boil the ocean, I’m not sure that that’s going to work either, right?
Yes, and the companies that take a stand productively are the ones whose business is tied to it. Even if they’re progressive, even if it’s a Patagonia, REI or something, they like the environment. People are buying camping equipment. They’re going out in the environment. Maybe my view on environmental stuff is not the same, but I expect that and I get it.
You would understand why they would be vocal about the issues of fossil fuels. Whether you agree with it or not, it’s consistent with what they’re doing.
Exactly and then if you don’t, what would be interesting is if an employee had a different perspective. Let’s take a look at electric cars right now. We’re realizing that the environmental and human cost of electric cars is great. There are kids in Africa being forced to mine cobalt in what looks like a blood diamond factory.
That’s how they get cobalt. Go to China and all these smelting factories are making these batteries that are horrible for the environment and then they don’t know how to do it. There’s an argument that maybe there’s another way to look at this. I would think a company would be able to entertain that conversation.
By the way, if a company with great values were presented with something that shows them that their values are inconsistent, they should look at that. Then they should adopt their own.
Very few of these companies nowadays are doing that. They’re saying to disagree is tantamount to not wanting to work here. You and I agree that there are companies that it makes sense for them to take on that value or they were founded upon that value. I met the founder of Tom’s shoes. He said, “Yes, I did this because I wanted to give back shoes to kids in Africa. That’s why I did it.” It was not a company for shoes. It was a cause. People bought into that. They went to work there and they bought their shoes for that. If somebody doesn’t like that, they know. I can’t imagine somebody not liking that.
Investors who might want them to push the profit dial more at the expense of cost should know that that’s probably not going to be the priority.
What this is about is having the courage of your conviction and accepting the consequences of that. Do you know what I find interesting, Robert? People don’t want to talk about this. I will take this article. We’ve got no feedback about this article.
What’s interesting is I think they’re struggling with it. I’m curious why they don’t want to talk about it. I wanted to talk about it.
I think they know that the, “Cake and eat it too,” line is ending and they have to choose their poison. They don’t want to choose either poison, which means it’s going to continue to descend. The culture of their company, productivity and morale suffer. For them to choose 1 of these 2 ways means they would have to step up and say, “Yes, we will take the hit for that. Yes, we will take the hit for saying we went too far.”
There are going to be some small group of very angry and loud employees, many of whom work in HR, who will be pissed off at them. They have to say, “We’re okay with that because it’s not the right thing to do,” or they’re going to take a stand and say, “We’re going to support all these things.” There are going to be a bunch of employees and customers who say, “Now that you’re clear about that and you’re telling us that you don’t want us around, we’ll have to find another place.” One of those two things has to happen. Most people will say, “I don’t want either one.”
Let me give you an analogy that won’t be controversial but has the same dynamic to see this at work. After COVID, I wrote a book on how virtual teams work. I did a lot of speaking and talking to companies to figure out what was next. One of the things in my speech was, “You have some options. You have, we’re all coming back to the office and that’s how it is. We have, we’re all going remote and that’s how it is or we’re doing some hybrid.”
What I was saying at the time when talking to the employees was that the stress from these employees of not knowing that the companies were all hedging. They were afraid to tell the people which model they wanted. I respected some of the financial services ones. Again, they may be on the wrong side of history or whatever, but they said, “It’s back to work and if that doesn’t work for you, go somewhere else.”
The other says, “We’re getting rid of the office and if you need an office, go somewhere else or here’s our hybrid, but the ones who were hedging because they didn’t want to lose anyone, I think they were going to lose more people than losing the people that weren’t going to be part of their go-forward model, which they would have done if they said, “This is what we’re doing and we’ll help you. If this isn’t what you thought it was, you moved or otherwise.” The hedging made a mess for everyone.
Clarity is kind. Think about how markets work. If people were honest, then the market for people who want to work at a progressive company, those who want to work at a conservative company and those who want to work with a neutral company sort itself out. That would be okay. People will say, “I’m going to work at a progressive company and I get to be progressive.” “I’m going to work at a conservative company and I get to be conservative.”
I don’t want either of these at work and I’m an independent and I’ll take my politics outside of work, thank you.
There’s probably a bell curve, but what’s interesting today is that it’s not a bell curve. It’s slanted in one direction. It doesn’t matter which direction it’s slanted in; that means there are a lot of people working in places that feel like I have to hide who I am and what I believe to be considered acceptable.
Not to get into the political thing, but we’re about to have an election that’s going to be 51-49. One way or the other. It is not going to be a 70-30 landslide where everyone can say that this viewpoint is in the majority. It’s going to be close. By the way, I think the fastest growing component of that and obviously, people have to pick, unfortunately, the way we have it set up with one or the other, but are there probably middle? That doesn’t see themselves affiliated with either side, but they have to choose there. If you made them to their group, they might be the largest.
Those are the ones that usually turn it. The common sense is in the middle and that’s an interesting one because now, if you want to talk about that and think of the country as a company, are there any core values left in America? That’s different. I’m not sure there are.
I will put equal blame across all sides. I think that it’s only a value if you’re willing to stick with it when it doesn’t go in your direction. What I have seen equally from both sides is the ability to embrace double standards and change the rules to get the outcome that is desired in the short term and yes, it does beg the question. You can’t say that these things are values. Free speech is an easy one to look at.
No, but free speech is not agreed on anymore.
No, I know, but I’m saying when I hear someone say, I believe in free speech and let me tell you where I defended the person I completely disagree with and think is morally reprehensible, but I thought they had a right to say it, then you believe in that value.
Let’s go back to the core of when they started the country in terms of what they think of free speech, freedom of religion and freedom of expression. Do we believe those things anymore? I say this as an observer. I’m not sure there’s even anything close to a majority of people who have anything that the majority of people agree on anymore. That’s changed much in the last twenty years.
As you said, I think this is the organization that being right or winning the argument of the day becomes more than the principles to be true. Once a leader normalizes double standards and I think this is why many university leaders openly normalize double standards. If anyone wants to argue about that, I’ll sit down and it doesn’t matter which side you’re on, but they have different applications of the rule book and different scenarios. When you do that, you lose your legitimacy as a leader.
The whole point of these rules, whether it’s the company rules or values or the constitution, is during peacetime. If you try to rewrite the rules during very difficult situations, it’s hard. One of my favorite business stories of the whole, whoever was when Johnson & Johnson, when he was dealing with the Tylenol recall and put the company out of business, the CEO went back to the founding credo of the company and used that in the press release decision about why they decided to conduct the recall, even though it was only ten bottles or something like that.
That’s what we do as Organizational Health. That’s why you have core values and the fundamental reason why we exist as a company. You go back to those again and again to say, “What is the right thing to do?” If you stop using those, you’ve essentially ended the company and started a new one. The one thing I’ll weigh in on, like things that are going on right now with the Middle East, that amazes me more than anything is, I can’t believe the things that are being said about a race and a religion right now that are accepted.
It wouldn’t be accepted two years ago.
Exactly. We’re shocked. My wife and I watch movies about World War II and about the Holocaust and we asked, “Is this even popular anymore? That people think this was horrible?” I can’t believe that in my lifetime, this is going on here, that people are saying the most vile things about a people. Regardless of how you feel about the sociopolitical realities of what’s going on, you could do that. Then it comes back down to, “Is that free speech?” If it is, then it has to be applied to everyone.
To your point, some apologies are needed from the last few years, if that’s the case.
Exactly, we can’t pick and choose. When it comes down to look at this as a very liberal artsy, it’s integrity. It means that the whole is complete and it makes sense. Integrity means that if we’re going to tolerate free speech, then we have to tolerate it around all of these things or if we’re going to not tolerate this speech, then we can’t pick and choose when we’re going to not. That’s what’s happening in our society today. “What does free speech mean? I don’t know, get the latest publication about who you’re allowed to offend and who you’re not.”
Leadership Approach
Let’s bring it back to the leader who’s reading this. We must go far and wide because I think these same issues are impacting all sorts of leadership now. There’s a group leader, there’s a CEO, and there’s a board chair who is reading this, and they realize that they need to start somewhere. The directional shift.
In terms of a CEO bringing it to their leadership team, how do you recommend even framing or starting this conversation? Let’s say that they don’t even know what is the outcome that they want it to be, but after the last couple of years, we need a revisit on this and we need a reset. How does that conversation start?
It has to do with suffering and it is going to be involved in any difficult decision. Are we willing to choose it or do we want to let it keep happening and it’s going to become more difficult to do? In other words, do we realize that when things get astray, pain is involved in bringing it back? Are we okay with the fact that we’re going to choose the pain that we think is better aligned with who we are and that’s going to make us stronger in the future? Are we going to choose a way that’s going to create more pain that’s going to make it harder to correct in the future? In other words, if you go in and say, “What’s a solution that’s not going to involve pain?” You’ll do what you’re doing now.
Suffering is involved in any difficult situation.
There’s an adjunct to that, I would say, which is, “Who do we want to make happy?” We are not going to make everyone happy. You can’t. It’s hard to make anyone happy. We’re not going to make it. Who is it most important that we make happy?
Right and the way I look at it, if you’re a board member, you need to have this difficult conversation.
Do you think boards should be bringing this to their CEOs or should CEOs be bringing this to their boards? Which is the chicken and which is the egg?
Absolutely. The board is supposed to be saying, “Are you doing what’s best in the best interest of this company, truly?” Are you trying to please the 10% of employees that are going to go protest? Are you trying to please the 70%, regardless of their political views, that think it is stupid that we’re even doing this? Right now, they’re pleasing the temper. They’re pleasing the noise. The noise in our society is getting an overwhelming amount of attention.
Fast forward to 5 or 10 years. What does it look like if the status quo continues for organizations and employees in those organizations?
It looks like people with certain values are going to have fewer choices about where to work and there’s going to be these ghettos of companies and markets where people feel comfortable. The majority of people, our kids, my kids getting out of college, are going to be told the same thing they’re told going into college now.
That is, you have to parrot whatever they tell you, whether you want a job or you want to get a good grade. This is what you tell your kids in college. This is the reality in most colleges. If you want to get a good grade, tell the professor you believe what they believe. If you want to keep your job, tell the head of whatever program is doing it that you’re on board with that.
Then there’s a personal cost to that. I think there’s living your life, feeling inauthentic and congruent. We’re missing what’s personal. We go to work every day and instead of being excited, you talk about bringing your whole self to work, you are going to feel inauthentic. You need to do this job and get out of there as fast as you can.
That’s going to happen more and more. We hired a guy from Cuba here and essentially they are the living manifestation of that. He got out of college and he studied nuclear physics and they said, “You can have this job and it’ll pay you, okay? It’s a prestigious job, but you’re going to have to rat on your friends if they’re not adhering to what we believe.”
They were very explicit there and he said, “What am I going to do?” They snuck out because he realized that’s what the rest of his life was going to be there. That’s why they don’t let people leave that country. Wouldn’t it be great if they said, “This is how we live. Anybody that wants to move to Cuba, move to Cuba and anybody who doesn’t, you can leave.”
There are plenty of people who enjoy that stuff. I’ve worked with them before.
Yes, but they don’t want to live in Cuba because they want their cake and eat it too. There’s not a lot of cake there. I would admire people who said, “I want to live there and I’m willing to live with the ramifications of that, but the problem we have now is that people want their cake and eat it too. I think that’s the thing. I want to take a stand on these issues, but I also want to be considered inclusive. I also want the benefits of all this.
I don’t want to work with people who don’t agree with me, but I want people to work here and get things done. You can’t have it all. A board member or a CEO must say, “We have got to stop participating in these hypocritical, non-inclusive, no integrity policies because otherwise, we are ushering our society down a place where it’s painful.
I once heard someone say, “You can have anything you want. You can’t have everything all at once.”
Pick something and I love that. Choose your poison. Choose what you want. People reading this might say, “I can’t believe they’re not talking about issues.” It’s because it’s not about an individual issue. It’s not about the right or the left. It’s about true transparency, inclusivity and integrity. I refuse to say that’s only on one side or the other. It has to be about the principle of openness and true tolerance. It’s okay to pick something and say, “That’s a core value.” One of the things I didn’t say at the beginning here, Robert and I love saying this, “A core value is the limit of tolerance.” The limit of tolerance.
I always say to CEOs, “You should be brutally intolerant of your core values being violated.” People will say, “Brutally.” If you believe in customer service and people don’t like that, don’t tolerate it. If somebody says, “I want to work there. You have a cool company.” “Okay, great, but we believe in humility.” They say, “No, I want to be arrogant.”
“There are other places to work. We are brutally intolerant of arrogance.” Some companies aren’t brutally intolerant of arrogance. Arrogant people thrive there. I’ve worked in some and I thought, “My gosh, this is acceptable here.” Once you pick what those are, you’ve got to be tolerant of things beyond that, and that’s it.
Stop worrying about everyone liking you. Again, make sure that the people who like you or love you are the people that matter most, because, yes, it can’t be everything to everyone.
It’s funny. It’s like if you had a group of ten friends and two were prone to vocalizing their displeasure in you and two were the sweetest, kindest people, but they would never get up in your face and the other six were, “We want to keep the peace.” Right now, we’re listening to the two angry ones that get in your face. The others are not happy, but they don’t want to say anything because they’re going to get the wrath of those two. I think that CEOs have to have the courage to say, “No more.”
Episode Wrap-up
Pat, thank you for joining us. I think this is going to be an important issue in business leadership in the upcoming years. I respect that you’ve started the conversation and are taking a strong position on it. By the way, it is a line to your work as someone who focuses on organizational health.
Yes, because there’s a lot of strife in companies today caused by it. What’s funny is I’m taking a strong position for inclusivity. To clarity and inclusivity. It’s weird. That’s a bold stance. Can you believe that?
Yes, strange times and different bedfellows, but I think we’ve had plenty of examples of poor leadership over the last couple of years. One of the lines I’ve been using, I said, “Coming to you at a business school near you in five years are case studies of 2024 leadership in universities.” I think they’ll probably be taught for the next few decades.
If the schools are courageous enough to let them be taught.
Yes, or some schools will have them.
There will be plenty of schools out there that will not hold them up as negative.
Pat, we look forward to the third time.
Me, too. I will, Robert. Thank you very much. God bless you.
To our readers, thanks for reading. If you enjoyed this episode, I’d appreciate it if you could leave us a review, as it helps new users discover the show. Thank you again for your support. Until next time, keep elevating.
Important Links:
- Patrick Lencioni
- Episode 261 – Past Episode
- David Heinemeier-Hansson’s Radical Approach to Entrepreneurship – Past Episode
- JElevate Classics: Basecamp CEO Jason Fried’s Unique Approach to Entrepreneurship – Past Episode
