You may not agree with the Fortune editors’ selections on The Greatest Business Decisions of All Time (Title of their 2012 book ) but you will certainly find the proverbial food for thought. What struck me, as I read the stories, were the values that drove the greatest business decisions.
Valuing Customers Zappos – Decision to offer free shipping and free returns was not based on running the numbers. At the time of the decision, Zappos had not made any profit. The brainstorming executives concentrated on what really would please the online shoe-shopping customers. From that single, from-the-gut decision grew Zappos’ customer service is everyone’s business. The results were a customer smash hit and growth for Zappos.
Valuing Ethics Johnson and Johnson – Decision for a total recall of Tylenol after capsule-tampering had poisoned and killed 7 people in Chicago. At the time of the decision there had never been a total product recall; even the US government was against the decision. James Burke, CEO then, believed in the founding ethics: “We believe our first responsibility is to the doctors, nurses, and patients, to mothers and fathers and all others who use our products and services.” In other words, do no harm. Cost was not a factor; loss of reputation did not enter into the discussion. It was simply the right thing to do. The result surprised everyone – innovations in safety and packaging, establishment of customer trust and renewed confidence in the product.
Valuing Leadership General Electric – Decision to establish center for leadership training and innovation and remake management education in Crotonville. At the time of decision GE was in the throes of re-making itself by shedding its old businesses. Jack Welch, the new CEO, needed strong, creative leadership at all levels to remake the monolith that GE had become. The result was the transformation of GE managers into innovative leaders and the transformation of GE itself.
And, the GE story hit home for me – as I grew up in Pittsfield, MA – that GE town where Jack Welch got his start in Plastics. For those who grew up in GE towns – there was always a GE aura that hovered over the town – in our case, it hovered over the whole county. (Old GE strategy: build plants in locations with no manufacturing competition and own the towns/counties/people as top employer. GE generally paid managers 3 times the going rate!) Originally, GE’s Crotonville produced the old line manufacturing management you expected from US companies. The new Crotonville recreated GE ideas about managers and leadership.
As a brand new manager at Berkshire Life Insurance company, I was inoculated with those ideas – our executives were influenced by changes occurring within GE and challenged us. Berkshire Life sent us to conferences where Noel Tichy, guru to Crotonville, spoke. I worked with GE executives on the Board of Directors at the YMCA where I could hear the excitement from managers now on Jack’s team. They bought into the need for innovation – for re-creation.
Today, it seems to me that we are very much in the business world where success is not about the numbers. Success lies in the values where customers are served according to what they need and what they value. Success follows when you guide your business and your people with ethics that profits cannot negate. Success requires that you continually invite ideas for innovation and transformation.
Leading by example is not a motto, it’s hard work. Leadership decisions require both risk and faith.