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Senior Correspondent

The following article is from Jeanne Gladden's fellow The Quality Coach! team member, Coach Hank. Enjoy!

Over the holidays I indulged in a three hour breakfast with a dear friend and valued client. He told me a story about his company that I had heard before but it took on profound new meaning for me because of an inquiry in which I am currently engaged around the topic: What is a business?

There are several ways to view any business and, depending upon your view, your approach to managing that business and leading the employees will be strikingly different. The two extremes I've observed are "business as a money generating machine" and "business as a living ecosystem".

Many of our clients, including my friend, operate businesses that are owned by or pass through the hands of capital management holding companies. Some of these organizations buy businesses at depressed prices and focus on improving their balance sheets and income statements so they can re-sell them at a profit. They make their money on the turnover in much the same way that real estate investors make their money by flipping properties. They are not so interested in building a brand, or a reputation for industry-leading quality, or in creating a stable, sustainable profit center that provides secure jobs and a dependable tax base for the local community. Their focus is making the most money possible for their shareholders or themselves as owners.

This mindset is what triggered the phenomenon known as downsizing (a very quick way to impact financial scorecards) that began in the 80's and was the harbinger of the kinds of problems our economy currently faces. It is also symptomatic of the thinking that led to the creation of the incomprehensible financial products and regulatory abuses that produced the global economic meltdown in 2008.

The fallacy of this kind of thinking is that it ignores a fundamental cause-effect relationship. People produce the outcomes that generate the money that is so single-mindedly being sought by these management companies. People are alive. They have needs and feelings and points of view that determine their willingness to align themselves with causes that are greater than their own self-interests. It is people who discover new, more cost-effective ways of doing things. It is people who invent new products that fulfill their customer's needs more effectively and efficiently. It is people, and the power of their human spirits, that transform disaster into triumph. The story my friend told me exemplifies the possibilities that managing and leading companies as living ecosystems can allow us to realize.

In 2000, our region experienced a disastrous flood. My friend's factory was under 52 inches of water. Inventory and raw materials were totally destroyed, machinery was rendered inoperable, and the factory itself sustained damage that would require many hours of time to repair and restore it to a condition where operations could safely be resumed. As you might guess, the holding company owners were in favor of simply shutting the business down and taking the insurance proceeds.

My friend, however, had other ideas. He made an impassioned plea to keep the business operational for the sake of the people involved, their families, and the community at large which needed the jobs and the tax revenue the business contributed.

His initial plea fell on deaf ears but he continued pressing his boss, Harvey, on the point. Finally Harvey was won over but Harvey's bosses remained adamant that the business should be shut down. They only relented when Harvey put his own career on the line and accepted sole accountability for the decision to rebuild, thus protecting corporate management from the ire of the Board of Directors should the decision negatively impact the financial fortunes of the holding company.

My friend promised Harvey that the business would be returned to profitability in 9 to 12 months. Every employee put their heart and guts into the mission of saving their plant. And, in fact, the story has a happy ending on many different fronts.

The business was returned to profitability in 4 months. It contributed more than 2 times the cash to the holding company than would have been returned from the insurance claims alone. Extreme teamwork at the plant level helped pull it all off, saving jobs and sustaining the business. But perhaps the most interesting outcome of this magnificent tale of the indomitability of the human spirit is the impact that all of this had on Harvey, the quintessential "money man".

The huge success of the recovery justified construction of a new factory in a location at a higher elevation so that flooding would never again be a problem. When the building was complete and operations were re-started, a photograph was taken of the new building and each of the 130 employees signed the back of the framed picture with a note that said: "We love you Harvey!" At the commissioning of the building, the photograph was presented to Harvey. Tears were seen welling up in his eyes as he received the gift.

If you had visited Harvey's office at headquarters you would have seen the picture in the most prominent place on the wall along with several original paintings by famous artists. Harvey was promoted, in no small measure because of the great success "he had achieved" by trusting my friend and the folks in the plant. When it came time to move his office to a higher floor in the executive building, his secretary reported that Harvey chose to hand carry the picture to his new digs and hang it himself to assure safe handling. 

Moral of this true story: Never underestimate the people power under your roof. Enduro Binders did not underestimate their team power, and it was a game changer.

Your coaching challenge should you choose to accept it:

Think about the company you run OR department you head OR the group you supervise. Assume it is a living thing… you don't really have to believe it is. Then ask yourself this question: "What can I do as a leader to nurture and vitalize the organism that I have the honor and responsibility of leading?"

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