Big in Japan
Loss Leader Issue #4: Big waves, big tents and companies wiping things up
Sometimes you look for leadership, and find none
Apparently I’m not the only one who is struggling to find examples of great leadership in these [insert cliche here] times.
According to a new report from Leadership IQ, which surveyed 21,008 US employees in June to assess their leaders’ effectiveness during Covid, many workers are feeling the same void.
The State Of Leadership Development In 2020 found only 29% of employees felt their leader's vision for the future was always aligned with the organization's.
”As you can see from the data, when most employees look at their leaders, they see a cadre of folks unprepared for the current environment,” said founder Mark Murphy. “The fate of most organizations is heavily determined by whether or not they've developed their leaders sufficiently to steer the organization through one of the most challenging economies in modern history.”
Leadership that’s misaligned with the times doesn't just result in bad press or diminished consumer trust, the study concluded, it directly impacts employee engagement. Because the more you believe in your leader, the harder you’re going to work.
People first
But this is supposed to be an inspiring newsletter, so where do we look to find places where employees have been motivated by their leadership, and success has followed?
Forbes recently published an article called “Why Japanese Companies Are So Good at Surviving Crises” which examined corporate performance after the devastating 2011 tsunami, and found that the companies that rebounded effectively responded to the needs of employees and the community first, rather than prioritizing layoffs and other cost-cutting measures in the face of a crippled economy.
CEO Takeshi Niinami, for example, sent an email order to the employees of his convenience store chain, Lawson, before the tsunami had even reached shore: “Deliver food to disaster victims within seven days. And disregard cost.”
Crazy, right? Some people think so. “Many Japanese companies are not that popular with Wall Street types because they are not as focused on gaining superior profitability and maximizing shareholder value,” said Harvard professor Hirotaka Takeuchi, who has studied these responses. “They talk consistently instead about creating lasting changes in society.”
One lasting change they have created? Profitability and durability. Japan is home to 40 per cent of global companies that have existed for 300+ years.
Within four days of the tsunami, Lawson restored 80 per cent of its business, benefitting from a networked managerial structure put in place after a previous natural disaster that empowered employees to make decisions and coordinate locally.
Their operating profit increased, breaking records in 2011 despite increased spending to distribute tablets to stores so they could order merchandise, delivering supplies by drone to mountain regions and those impacted by the nuclear fallout of the earthquake, increasing hourly wages for part-time workers, and paying utility bills for franchise owners.
As of last year, Lawson had 14,000 stores, all of which had been outfitted with solar panels, and had launched a chain specifically for Japan’s growing population of elderly consumers.
First, the people
So that makes me feel better. So, too, does the fact that much profound leadership seems now to be emerging from the bottom up. The NBA players, of course, went on strike to demand action from their owners and others, with other leagues and players like tennis champ Naomi Osaka following suit.
But this trend is also apparent in the market, with The New York Times reporting that impact investments are outperforming traditional bets during the coronavirus pandemic.
Over all, 64 percent of actively managed E.S.G. funds beat their benchmarks in early August versus 49 percent of traditional funds, according to RBC Capital Markets.
Some doubters theorized that this is caused by the poor performance of oil, rather than superior management of social enterprises, but the results suggest that companies promoting a social good or at least working to prevent a social ill are drawing support and dollars from consumers. And maybe, I don’t know, if the people go, others will follow. The Times notes that these returns are enticing other investors to rethink their portfolios.
Getting Schooled
Return to school plans across North America seem plagued (get it?) by a lack of leadership, manifested in the clear deficit of strategic investment, operational ability and communications strength.
But again, there are those demonstrating leadership in the face of great obstacles and while I don’t want to lionize leadership vigilantism - where individuals take on the onus and cost of doing the right thing - I hope their actions compel the creation of real systems.
Dereliction of Duty
This is really just the Facebook section. A militia group posted an event listing on the social media site encouraging people to arm themselves and “defend the streets” of Kenosha, Wis. The listing was flagged 455 times, 66 per cent of all event reports that day from people who were trying to prevent harm. The listing stayed up and two people were murdered. CEO Mark Zuckerberg apologized in a video post, saying the post should have been removed and blaming an “operational mistake.”
Quick Leads
A profile of Democratic Presidential Candidate Joe Biden’s economic advisor, Heather Boushey, who has the crazy idea that equality is actually good for economic growth.
An equally wacky idea from new head of the Bank of Canada, Tiff Macklem, who told a meeting of central bankers that they shouldn’t speak like "oracles delivering messages from an ivory tower" but be clear about what they are doing, and why, to salvage public trust and the chances for a economic rebound.
Ahmad Thomas, the first Black CEO of the Silicon Valley Leadership Group, says in an interview that the tech sector has to help lead through the US’s “moment of moral reckoning.”
Who Gives A Crap, an Australian eco-friendly toilet paper company that donates 50% of its profits to charity every year, announced a record $5.85 million AUD donation this year, up 730% from the year before and propelled by record sales. The donation will fund six charities around the world working to improve access to hygiene, clean water and basic sanitation in developing countries.
Sign of the times:
Hats off to @Powells for this billboard, one day after announcing they were leaving Amazon's marketplace.
so good, S!! Also meant to comment that i thought the exact same thing about Sanders' Nero line!