I had a very interesting lunch this past week with Garry Tabor, a fellow board member who is the President of a distribution company, Heico Distribution Group, LLC. In the course of our discussion he made a statement that really resonated with me regarding the “conscience” of a company. We were discussing the hard decisions leaders of a company have to make along with how the company and its leaders are held accountable. The statement Garry made was, “Business has no conscience, leaders have a conscience.” He then elaborated that ‘business’ is strictly about the numbers, metrics, and results. The ‘leaders’ of a business are about integrity and doing the right thing for employees and shareholders.
There are several ways to measure the health of a business, but the bottom line is the business needs to meet its ‘numbers’. In very simple terms, if the company does not gain enough revenue to pay its employees and expense obligations, it will eventually go out of business. While you may see some companies temporarily rally by asking their employees to make sacrifices; however, in the end the bills have to be paid. It is a very analytical discussion on the viability of the company – did you make payroll? Can you pay on your contractual obligations? These are outcomes of how the business of the company is performing. It does not discriminate, it simply reports on the state of affairs. Difficult decisions need to be made when the numbers are showing that the business is going in the wrong direction.
On the other side of the coin, the leader holds the conscience of the company. Their actions and character are the essence of the company or business at hand of an organization. They need to own the state of the business and the decisions that need to be made to ensure the viability of the company. This is an important distinction in the big picture of running a business. When the performance of the business is not going well as indicated by the key metrics, it is up to the leaders to analyze what is going on and what to do to get it moving in the right direction. In essence, the leaders are the brains and the conscience of the company as they steer to the desired destination. When the leader acts ethically and responsibly they are acting with good conscience for the success of their business.
You may be thinking, so what? To me it boils down to understanding that the business is about numbers and the leaders are about ethics and responsibility to manage the business to success. Of course we all know that leaders can be unethical and drive a successful business, but usually in the end it catches up with them. I’ll address that issue in a future blog.
What type of conscience do you want to have as you run your business? How will your conscience as a leader effect the outcome of what you are striving to achieve? Each of us has to answer that question. But in the end the ‘business’ will tell you in no uncertain terms the performance. And the leader will need to evaluate and take action to keep the viability of the business going in the right direction.