Business Balance

The right answer is, "It all depends!"

One of the articles in Living Business (IC#11)
Originally published in Autumn 1985 on page 24
Copyright (c)1985, 1997 by Context Institute

Jeffrey LeVine is director of CommonWealth Business Associates, a consulting and training firm. He can be reached at 248 Hollow Road, N. Ferrisburg, VT 05473. © 1985 Jeffrey LeVine.

IT ALWAYS INTRIGUES ME how so many open- minded, non-judgmental people proselytize the one and only right way to do something – including this author. Business consultants from the "old school" advocate a hardline approach, tight supervision of the workers, and hierarchical power structures shaped like pyramids. The "new age" consultants in organizational development (or organizational transformation as some like to refer to their work) advocate more humanism, participation of the workers, individual creativity, and shared power structures that round the old pyramid into a circle.

Both of these approaches have merit; so do the several, maybe even hundreds, of other approaches. What too many of them lack though is balance. A balanced approach to business acknowledges one business is different from another business, therefore different approaches are necessary. In addition, each business, just like a person, goes through a developmental process. At various stages in the process different management philosophies and styles are appropriate. One business may go through a start-up phase requiring strong leadership in the form of a benevolent dictator. Early on, if the leader is the only person aware of the direction the business is pursuing this might be appropriate. Later, as the business matures and workers become more involved and knowledgeable, it might require a participative management style. This would enable the business owner to rely more fully on the workers at a stage when typically a business might be understaffed. Possibly the business can’t afford supervisors and middle managers. With more participative management each worker could be involved enough with the business to be self-managing. Then, the business begins to really blossom, it doubles or triples in size and the many new people are looking for direction and supervision while they work to get up to speed. Is this the time for a "management by objective" model where goals and objectives are specified for everyone in great detail? Or, maybe it’s time for a more hierarchical order where newer people will be proteges under supervisors who report to middle managers?

We don’t know the appropriate style for each phase until we fully understand the people involved, their objectives, and many other factors. It is safe, however, to pursue a balanced approach at all times, in all phases, within any management style.

To explore these ideas further I have developed the "values balance sheet" to reflect areas that require balancing:

 VALUES BALANCE SHEET

 Profits

with

 Conscience

 Growth

with

 Purpose

 Decisiveness

with

 Consideration

 Autonomy

with

 Social Responsibility

 Hard Work

with

 Wellness

Profits/Conscience The balance required here is between weighing the real need for profits with your conscience as it relates to the results of your actions. In other words, evaluating the impact of your decisions both in terms of the bottom line and the long range consequences for all people involved. For example, a few years ago I consulted with a small construction company specializing in a tradition of true craftsmanship and concerned with the rampant development in their community. They had to decide if it was appropriate for them to get involved in a profitable job constructing inexpensive homes in a tract development. What long-range impact would this have on the public perception of the company and how would this affect the attitudes the workers have about themselves? How would accepting or rejecting this job affect the on-going development in the community? These are the questions that needed to be weighed keeping in mind the need for profits with the reality of living with your own conscience.

Growth/Purpose The balance required here is maintaining an awareness of the business’s tendency to grow, while remembering your original purpose for creating the business. If your founding purpose was to create a business to employ family members and support strong family bonds, it might not be appropriate to open a second location in a ripe market 500 miles away. Or, if your purpose is to be your own boss, it might not be appropriate to accept an acquisition offer that would increase your business, yet remove you as your own boss. Stay in touch with your original purpose.

Decisiveness/Consideration The balance required here is to reconcile the need for action and responsiveness, with the need for contemplation and consideration. Many situations arise in business that do require prompt action; yet it is also necessary to consider how any action will impact the lives of people involved. I owned a health club years ago and always encouraged the women who worked there to believe that good performance on their part could result in a manager’s position. After 2 years, the manager who was there decided to move on so I started the process of deciding who to promote from within. At that same time a woman who had been managing another top health club came along seeking a manager’s position, because she was relocating to our area. She had been offered a job by another club in town and needed an answer that very day. I had to struggle with my desire to hire this very talented, proven manager with my expressed commitment to promote from within. Due to the time pressure I didn’t have a chance to solicit input from my staff. The "right" and prompt decision might have been to hire this woman. I considered the implications and decided not to.

Autonomy/Social Responsibility The balance required here is to recognize the independent spirit and individual creativity in people and at the same time to respect the social responsibility we have to our community and our workers. I have witnessed the entrepreneurial spirit carry a businessperson to build a new 3 wheel automobile – one that gets 90 miles per gallon. It doesn’t meet auto safety standards, but can get federal approval as a motorcycle. Knowing this vehicle would be on the road without meeting minimum safety standards for a car, would it be socially responsible to pioneer its development and sale?

Hard Work/Wellness The balance required here is between rewarding the dedication of people who work 50-70 hours a week, and recognizing people’s need to have a balanced and healthy life. This is an especially large concern in undercapitalized, start-up businesses that demand so much from the people involved. In itself there’s nothing wrong with an intense commitment to something that takes almost all your time and energy. The danger comes when such hard working habits become the norm and are not truly the exception, then such demands are abusive of people’s well-being. People pushed past a certain point will eventually burn out and either develop poor attitudes or leave their jobs.

In all the examples above, the responsibility to create a balanced situation is shared by all who are involved. Even if we don’t make the rules, if we accept them we become equally responsible for the consequences. We are all empowered with our own conscience and a voice to express it. Ideally, the leader of a business willingly accepts an ultimate responsibility and therefore needs to model and articulate behavior that he/she is advocating. For example, when the owner of a business drives to work in a defective car, polluting the air, he/she models for workers an attitude of lack of care for the environment. This has an impact which contributes to the worker who later litters the grounds and displays a general lack of care and concern. I once consulted with a business in a rural setting in New England. The firm had 35 employees; they all drove to work. The business was sold to my client who after buying the company rode her bicycle to work on good weather days. After one year, 15 of the 35 employees rode bikes to work, weather permitting. Recognize your responsibility to model good behavior.

The idea of balance is something that can work for any business, regardless of management style. It requires an awareness of the values listed on the values balance sheet. Further, it requires a commitment to try and weigh the potentially conflicting values, one versus the other. You need to continually adjust the weight of each value due to unique circumstances. At one point in time the necessity for "profits" may be so critical that you reduce the weight of "conscience." At another time the physical condition of a worker, their lack of "well-being," may require you to reduce the weight of "hard work." There is no set or predetermined weight that one value carries; they vary as the circumstances change.

The July [1985] issue of Inc. Magazine (p.49) quotes Reid Gearhart, editor of Dun & Bradstreet Looks at Business, on business failures:

Our rule of thumb is that a new business basically has a 50/50 chance of surviving past its fifth year. It’s the simple things. Is the business managed properly? Do they have a business plan? I’ve been to many small businesses, and some of them are run the way I run my closet! No wonder they’re going out of business. We used to break out the causes of failure: 0.3% attributed to fraud; 0.6% to neglect; 1.3% to disaster; 9.8%, lack of managerial experience; 9.9% lack of experience in the line; 23.8%, unbalanced experience; 54.3%, incompetence.

When I read this quote I calculated that ruling out fraud, neglect and disaster, a business has a 97.8% likelihood of success. The lack of experience and incompetence can largely be compensated for by a balanced approach. Here’s how:

1) Develop with the appropriate persons (maybe alone) a statement of purpose for your business. It needs to be clear, succinct, and meaningful. This statement will reflect your deepest reason for being in business.

2) Develop with the appropriate persons a list of standards (a code) by which you agree to act for a set period of time, not longer than one year, at the end of which you will review these. Keep in mind the phase of development of the business and the people involved in the business when you are creating these standards.

3) Develop with the appropriate persons a list of the areas that require balancing within the business. Use the list above as a starter or create your own list. Discuss the weight and value of each area to be balanced. The list should be no longer than eight areas.

4) Every time a decision or action is required, hold the decision up next to your "values balance list" and consider all the factors that apply. Go through the decision, testing it against each area to be balanced.

5) Take some time – even just a few minutes to contemplate in quiet; don’t try hard, just be quiet. Then, choose a course of action that is balanced, considered and respectful of all those involved given the context of your situation.

In summary, there is no right way or wrong way to conduct a business. It is necessary to be aware of where the business is in its development, just like you would treat a child differently than you would an adult in many situations. Conduct your business with whatever style seems most effective and authentic. And then whatever the style, balance all decisions, carefully weighing the differing values that you have outlined in your values balance list. If you practice this process you will find the path of business can be very meaningful and rewarding. You will find yourself talking about how a certain decision or interaction "felt," not simply talking about the end result. It is at this point that you may very well find that elusive notion of "success."

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