Chief Leadership Officer®

CEO-to-CLO: Business Reformed

Daring to Ask: Why Are People NOT a CEO’s Greatest Asset?

The underlying premise of the Chief Leadership Officer book is the CEO system of business management is increasingly obsolete and toxic to people and society. Unfortunately, the deficient CEO mindset and methods dominate the business landscape with a corrupting impact on the purity of capitalism to improve the world. Worse, the societal response is to turn to the government to regulate private sector activities with an eroding effect on all our freedoms. Can you say socialism?

How did it come to this? If you’ve read The On-Purpose Business Person (1988), you may recall “The Old Man” is Fred Taylor and he dies. I chose this name because of Frederick Winslow Taylor, author of The Principles of Scientific Management (1911),akaTaylorism. Taylor is best known for doing time-motion studies of factory workers at Middle Steel Works.

He, however, achieved far more than that in business and life. He is the father of industrial engineering, management consulting, and training. Taylor was an accomplished golfer and champion tennis player. To his credit, his ways sped up the Industrial Age and ensuing growth and prosperity of the United States.

For all the good Taylor did, he also sowed foul seeds of what we are reaping today in Corporate America and society. Namely, the dehumanization of people in the pursuit of productivity in the holy name of shareholder profits and C-suite compensation.

In his time, Taylor’s “scientific method” and relationship were central to the founding of the first three U.S. graduate business schools: Tuck School of Business at Dartmouth, Wharton at the University of Pennsylvania, and The Harvard Business School. Taylor’s planning and patterns are baked into the curriculum DNA of our business schools and MBA programs. He set the stage for the 1950s’ emergence of the role of a Chief Executive Officer to myopically preside over business results out of context from societal impact.

Despite his management genius, in his book he openly debases personally and vocationally certain classes of people. Because Taylor equates people to units of production — not unlike assets to be bought and sold like iron or coal or slaves (slavery was abolished when Taylor was nine years old) — companies today still use the pejorative term “Human Resources.”

Sadly, we business people have lost our way. Since the 1950s, generations have grown up only in the CEO system. When writing The On-Purpose Business Person, I foresaw the need to kill off Fred Taylor’s twisted view of people as assets and to replace it with the moral imperative of human dignity codified in the U.S. Constitution.

Assets such as machines, equipment, livestock, and raw materials have a physical purpose. People, however, have a spiritual purpose. Taylor erroneously equated the two as equal and set in motion over a century of human objectification resulting in management-labor unrest and workaholism tied to an identity crisis as adults mistakenly see their work as their source of meaning. When “I owe my soul to the company store,” is it any wonder an epidemic of anxiety persists?

Taylorism is alive and well today. When you hear a CEO say, “People are our greatest asset,” or you hear team members referred to as “human capital” or an entire department called “Human Resources,” the management team and company by design or by default are invested in a systematic sacrifice of souls at the altar of the corporation.

Doubt me? Ask John Henry. Why do you think that song of the working man was so popular?

Chief Leadership Officers (CLOs) treat people as people, period.They are stewardship-leaders who integrate the best business and operational practices with human dignity to be increasing wealth so everyone profits. In the coming weeks, you’ll learn more about making the CEO-to-CLO transition. I dare you to keep reading.

Let the Business Reformation Begin!

Kevin

CLO Podcast with Greg Voisen of Insider Personal Growth, March 2024

Below is a screenshot of this interview and link to the video. Click here or on the image below to hear or watch. Scroll further down to see an excerpt from the interview about why CLOs instead of CEOs.

Greg and I first met in the mid-1990s when he was certified to facilitate The On-Purpose Program, a one-day program taking participants through the steps in The On-Purpose Person. We’ve been colleagues ever since.

Greg was podcasting before podcasting was popular. All the proceeds from his podcast go to his non-profit Compassionate Communications Foundation that works with the homeless and Ukrainian refugees. If you appreciate his efforts, please consider a donation.

Excerpt from the interview (lightly edited)
Greg Voisen: What inspired you are challenged, you challenged you to challenge the traditional CEO role, and propose the concept of what you’re referring to as the chief leadership officer? And how do you really define that? What do you define is the differences for somebody who’s a chief leadership officer versus a chief executive officer, where you crossed it out on the book?

Kevin W. McCarthy: What’s the difference? Most people, if you ask people that work in a company, would they sooner be executed or sooner be led because executives execute, and chief leadership officers lead. There’s a long sort of arc, if you will, in terms of some things that are going on that brought about this message. Part of this is because I’ve been such a pioneer in the purpose area, I recognize that, you know, if you go back 100 million that way, let’s say 1000 years ago, when people were more than that, actually what you get back 10s of 1000s of years, when people were hunter gatherers, the work of their hands was what they did, then they got a little smarter, and they learned how to, you know, corral some animals and plants and things and they become emerged from hunter gatherers to sort of an agrarian society. But still, it was the work of their hands. And then they got as a their minds began to free their hands up a little bit, we move into sort of fast forward into the Industrial Revolution, where we are now working with our hands today, most of us our hand activity is this. You were sitting in a keyboard. And so our minds the knowledge age, if you will.

So the logical thing is that the age beyond the knowledge age or the digital age, even the AI age is the heart. So we’ve gone from our hands to our heads to our hearts. And what’s happening is we’re in an era where meaning and purpose are today. I mean, when I started this work 34 years ago, nobody was talking about purposes, particularly as a heart issue. And so what’s happened is the idea of a CEO is the Industrial Revolution inventions there prior to 1950. There were no CEOs there were only presidents and CEOs were the idea of a group of companies coming together, led by each company is led by a president and the CEO was the person who was over these presidents or these divisions.

Of course, today, you have a guy driving around with an F 150 pickup truck and a bag of tools in his card says CEO. It’s kind of lost its meaning in that regard. But the fact is, is it’s a it’s a leftover from an industrial revolutionary mindset. As are words like human resources, which is a pejorative term that looks at people as resources rather than human beings. And so what’s happened is the CEO system of management has gradually dehumanized. And again, I’m not, I’m a pro business, love business, entrepreneur.

So I’m not bashing business. But what happens is the system of management has so dehumanized people that corporations are hard, having trouble hiring good people, retaining people, the sort of the chewing up and spitting up people is really a it’s a high price that people are paying. And so as a result, the idea is the difference between a CEO and a clo, is that CEOs are doing business, what I call incompletely right? Words, they’re looking at the numbers, they’re looking into profits, and I’m a profit guy. But profit is a byproduct of a system that is designed to produce the profits. However, that system relies upon purpose plan, its people, processes, performance measures, and all of these things that go in.

And as a result, if you take the people component, and you which is so vital to what’s going on, and you diminish them, you are diminishing your profits, you’re diminishing the effect of what you’re doing. So a clo does everything a CEO does, but understands where and understands the importance of the people component that we’ve got to take care of, we’ve got to do right by the people not take care of you got to do right by the people.

Fast Company Article: “Purpose is suddenly a superpower!”

And you already knew that!

on-purpose super power
You Already Have Your Super Power

In the wake of the pandemic and the protests, purpose is suddenly a superpower. This article in Fast Company magazine caught my eye. Let me amplify and clarify a few of the author’s statements.

The idea that “… companies that have purpose built into their bottom line are the most likely to remain standing,” is true. Current events have highlighted and, perhaps, hastened what is a long arc of CEO-run companies being out-of-sync with the times.

“Just think about how hard it is to know how to do the right thing when your organization isn’t designed to do the right thing.” Yes, I love this statement. Chapter 13 in Chief Leadership Officer, “The On-Purpose Statements (Deep Strategy),” makes this case — plus it shows you how to do it and the larger context of it on the CLO Integrity Map.

“And while everyone is paying more attention to purpose, we are seeing a very clear separation between the purposeful and the pretenders, between those that only offer lip service and those that serve their community well.” Amen! Because I’ve been pioneering purpose since the late 1980s, I’ve seen the spectrum of “the purposeful” and “the pretenders.” Purpose has become a hot buzzword so business leaders, authors, and speakers mindlessly pitch it for marketing and not for its meaning. That kind of behavior inspires me to work harder to get the On-Purpose® message into the lives of people and their organizations.

The author is writing about Amazon: “When the pandemic pumped the company full of demand, the already noticeable issues with its employee relations struggles became unavoidable. Why? Because it had to choose between pursuing maximum profits or standing on purpose and caring for its employees.” Ah, CLOs, this is so rich for us to look at our CEO colleagues and see why they’re so challenged.

First, they see people as “employees” and “human resources.” It’s a dispassionate view of people that objectifies in the name of profits and “doing business.”

Second, “pursuing maximum profit” is not a wealth creation strategy. It is a wealth destruction tactic used by short-term profiteers. In its wake lie the bodies of those folded, spindled, and mutilated at the altar of profit maximizer. CLOs know about the triple bottom line (page 98). It isn’t a choice between profit and people. It’s a decision to have the checks and balances of three bottom-line measures. Profit is the effect. Purpose is the cause. And people are the connector for the two.

Kudos to Heath Shackleford, the founder of Good.Must.Grow. Hopefully, he’ll realize soon that being “purpose-driven” is really no different from being profit-driven — you’re still being driven! People aren’t cattle to be driven. Rather they’re humans to be called to belong and contribute — to give high and noble expression to their purpose. People will answer this call that I simply call being on-purpose.

O. C. Tanner Global Culture Report 2020

Graphic per O.C. Tanner Global Culture Report 2020

This is a fascinating report that’s addressing the “southern” branch of the Chief Leadership Officer Integrity Map: the internal audience of culture and operations. I highly recommend you visit their site and read the free report.

In their 2019 report, they said, “Last year’s Global Culture Report identified six core elements of workplace culture that are crucial to an employee’s decision to join, engage with, and remain at any place of work. We call them Talent Magnets, because of their power to attract and connect people to their teams and organizations. They are shown here with their corresponding improvement over last year’s study.”

What struck me immediately and continues to be a source of frustration for me is the first magnet “Employee Sense of Purpose.” Thanks to ONPURPOSE.me, we no longer have to settle for a mere whiff or sense of purpose. We can actually know it, own it, build our lives on it, and improve upon it — all from finding a 2-word purpose.

Later in the report, the point is made that improving purpose and meaning in the organization can have very positive impact on two to three of the other magnets.

“Our previous research found that the Talent Magnets are statistically
interconnected. Improve one magnet, and there will be improvements
in the others. This makes logical sense. A meaningful purpose, for
example, creates a feeling of opportunity, which increases the chance
for success. It also positively impacts employees’ perceptions of
leadership, and helps them feel an elevated sense of appreciation
and well-being. So improvement in purpose alone can strengthen your
entire culture across the board. The same is true for every magnet.”

Preach it!

And to think, that’s just an update on the 2019 Global Culture Report!

A highlight of the O. C. Tanner current report is the concept that team members (they call them employees) define their “employee experience” as “micro-experiences” that have peaks and valleys. Fortunately, the peaks sustain four weeks while the valleys maintain for only two weeks. In short, people offer a certain degree of grace.

However, consider my take on this aspect of the report. If a team member experiences five valleys for every one peak, then the power and impact of the peak never rises to its potential. The difference between a great workplace and an average or bad one may very well come down to a concept as simple as the leaders understanding and appreciating the “peaks and valleys” model in their daily conversations and interactions.

CLOs, as great as this report is, it is still a report of existing companies. As a CLO you’ll read between the lines of the report and see that even the companies most progressive at rewards and recognition for creating culture are still doing business incompletely right. For all the contemporary concepts and terms used, the old Industrial Age management theories are still alive and well in large corporations.

As a mid-market CEO making the shift to a CLO, you can gain an advantage in the battle for the best and brightest minds because your culture can be that much more nimble and better than your corporate counterparts.

O. C. Tanner, like On-Purpose Partners, is a business reformer that’s bringing the emphasis back to the core purpose of business and its relationship to people and society as a profitable proposition. Their report, for all its good news and progress, is still subject to the state of the organizations being surveyed. I acknowledge O.C. Tanner as a thought leader in this people and cultural space. Hidden between the lines of the report is that these large companies are striving for progress but hamstrung by their Industrial Age–based management model.

Much as it is difficult to turn an aircraft carrier at sea, the momentum of their past keeps large corporations mired in the maze of incremental improvement and change management. CLO is disruptive and risky to the big dogs. Yet the CEO who decides to make the transition to CLO by embracing the three charges of a CLO will finally get the full effects of innovation over incrementalism.

What a wonderful discovery to know that a complementary company like O.C. Tanner exists in the marketplace of ideas. I feel like I’ve gone on some DNA company website and found a branch of the family I didn’t know existed.

Here’s the PDF of the O. C. Tanner report. Do yourself a favor and download it plus visit their site. As a CLO, you’ll learn a lot and will pick up three to five ideas you can readily implement to improve your corporate culture.

The Business Roundtable Is Coming Around to CLO

Source article: US Corporations: Not Just for Shareholders Any More

Here’s yet another leading indicator that the Chief Leadership Officer movement is needed more than ever. This decree by The Business Roundtable is noble in spirit but short on details for execution — nor is this the place for it.

From the article: “Alex Gorsky, chair and CEO of Johnson & Johnson and chair of the group’s corporate governance committee, summarized it: ‘This new statement better reflects the way corporations can and should operate today. It affirms the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders.'”

Chapter 8 of Chief Leadership Officer is titled “Stakeholder Engagement.” To quote from that chapter, “‘Social capitalists’ aren’t new. Business is returning to its sacred roots,” informed the CLO. “Chris, business was always intended to improve society. We business people perverted it from increasing wealth to enriching ourselves too often at the expense of others. That’s bad business.”

The more you look around, the more you’ll see the signs that Chief Leadership Officers are the future top-ranking officers in companies. The Business Reformation is upon us. Will you innovate and be ahead of the curve? Now’s the time!