If you’ve been following the US news, you’ve most likely heard of a big scandal involving American football coach Joe Paterno and his assistant coach.

There is a VITAL business lesson in all of this that I’ll share with you in a moment.

As the scandal unfolds, it seems one of Paterno’s assistant coaches had abused several 8 year old boys in the Penn State locker rooms over the span of a decade or more.

Several people witnesses these cases over the years, and to make a long story short — nobody did anything about it.

When it was brought to his attention years ago, Paterno “passed the buck”, notified University officials and then promptly looked the other way when nothing happened.

Keep in mind these previous incidents involved the assistant coach admitting he did it to on campus police (which apparently is different than the “real” police)

As the scandal unfolds, the question keeps coming up… How could this have happened?

To understand HOW something like this happened, it’s useful to explain WHAT actually happened — and to do so in a way that be extrapolated to other situations… like running a business.

(As a parent of young children, I can’t figure who I’m more mad at… the abuser… or the people who looked the other way over the span of a decade)

So what REALLY happened here?

In short, the root cause here was in a word CULTURE.

Huh?

One of my mentors, an individual who grew a 30 person company to 30,000 employees in 10 years creating a Fortune 50 company in the process once told me, there are only 3 things you need to worry about as CEO.

1) Strategy – What’s important enough to be worth doing
2) People – Who is going to do it
3) Culture – How people should behave in the absence of explicit instructions

The real problem at Penn State is a culture problem. And ALL culture problems are ALWAYS due to the person at the top. In a business, that’s the CEO/founder. In a University, that’s the University President and/or Head Football Coach.

Here’s why.

As my mentor explained to me, the ONLY person in an organization who can set the tone for the organization’s culture is the #1 person… the person in charge.

You can’t delegate culture.

It doesn’t work.

You can’t have Human Resources come up with the official culture for an organization… because if the CEO doesn’t follow it, everyone else will know it’s meaningless.

More specifically, when you pinpoint the specifics cultural issue, it’s actually quite simple.

Every organization has (or should have) it’s mission. A mission is the organization’s purpose for existence.

In the case of Penn State, the organization’s mission was:

WIN Football Games & Championships… PERIOD.

It is VERY clear this was the mission. Whether this mission was every written down as a statement is irrelevant. By examining the behavior of everyone involved from University leaders to the janitors, to Paterno.

ALL of their behavior is can be explained as being “on mission”… in alignment with their mission.

Now you can debate whether that should have been the mission… but it’s hard to argue that their behaviors were inconsistent with this mission.

BUT, all missions should be constrained by an organization’s VALUES. It’s an organization’s values that defines its culture.

Yes, here’s where we get into MBA jargon words that I normally like to make fun of… concepts like a mission statement or a values statement. (More on this in a second).

A mission might last decades, but one’s values should last for an eternity. It is a sense of what is important… things that you will do or never do despite the mission. It defines WHO you are.. before you decide WHAT to do.

The problem with the culture at Penn State is that the MISSION was clear, but it was unconstrained by any REASONABLE sense of VALUES.

When a Mission isn’t constrained by Values, what you end up with are Enron’s, Bear Sterns, the Catholic Church Scandal (the last one is quite ironic if you ask me).

I suppose you could logically argue that the values at Penn State were = Win at Any Cost. And I suppose if you look at Enron & Bear Sterns’ values…. maximize profit at any cost…. or the Catholic Church… protect your reputation at any cost…

Either the values were to weak to constrain the mission or the values were the wrong ones to begin with.

So how does this relate to you and business?

YOU need to decide both your values and your mission.

Forget the “statement” part of values statement and mission statement… which I think ultimately complicates things. But truly think about what you and your company’s values really are.

Sure thing kind of stuff seems “soft”… it feels optional… unlike focusing on EBITDA margin, or making quota. But, if you don’t define your values and mission, than it becomes surprisingly easily to have an organization drift of course as the months and years go by.

I know this from experience. I had a phase early in my business career where every metric I aimed for I achieved, but I was miserable. I was selling a product I was embarrassed by, to a customer segment that I didn’t respect, and making good margins and sales too boot.

I remember thinking to myself… “How in the world could this have happened?” (Not to dissimilar to the comments being made about Penn State right now…) Though my situation certainly doesn’t compare to Penn State, the underlying causes were the same.

I had NOT defined my values and I didn’t really have a mission. And just in case you’re wondering, X% sales growth and Y% EBITDA margin growth is NOT a mission.

Today after much soul searching, the help of a wonderful executive coach and friend, my values and mission are crystal clear.

When your values and mission are clear, decision making becomes ridiculously easy. It because extremely easy to say NO to every opportunity (of which there are countless) that conflicts with my values or mission.

Here’s my mission and it will quite likely be the one mission I’ll end up devoting my entire life to (yes, you should feel that strongly about a mission):

Helping more people live better lives through better businesses and better business skills

It’s not the most concise of statements (probably a few grammar mistakes too boot) but it very much is THE common thread between all of my decisions — short term, long term, for profit, pro-bono.

Here are a few of my values in no particular order:

  1. Always be improving your self, your skills, your business
  2. Be the best in the world at what you do at every price point you do it at (including the price point “free”)
  3. Only participate in businesses where I have a personal competitive advantage, an exceptional talent, or asset that’s relevant to the business’s success (otherwise it’s too hard to accomplish #2 above)
  4. Treat others MORE than fairly
  5. Life is short, it’s too easy to drop dead suddenly, if it ain’t fun, I ain’t doing it (or at least not for very long)
  6. Always be learning… Always be teaching.
  7. Don’t be afraid to charge what you’re worth, but make darn sure customers get at least 10 times what they paid for (directly linked to #2 and #3 above)
  8. Be proud of what you do (and if you can’t, you should stop doing it)
  9. Leave the world a better place than you entered it…don’t just consume… produce something useful.
  10. Maximum profit is NOT the goal. Maximum profit is the BY-PRODUCT of doing the above… a measuring stick of how useful one is to everyone else.

When your mission is clear and your values even clearer, it becomes very easy to make good decisions. I suspect Joe Paterno and Penn State lost their way somehow in the process. Don’t make the same error for yourself and your business.

What are YOUR values?

What is YOUR company’s mission?

If the answers to those two questions are not CRYSTAL CLEAR, do not be surprised if one day you find yourself asking, “How in the world could I let this happen?”

That’s my thought for the day.

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There is more news today about the U.S. FAA (Federal Aviation Administration).

Today the FAA suspended yet another air traffic controller. This time for watching a movie instead of paying attention to air traffic.  This controller got fired as he/she should.

Clearly these are embarrassing times for the FAA.

This latest incident aside, the on-going controversy is about air traffic controllers falling asleep.

The head of the FAA is going around the country, visiting his staff, telling them that unprofessional behavior such as falling asleep is unacceptable.

Rather than insisting that controllers do not sleep on the job, it might be useful to understand why controllers are falling asleep in the first place.

Are they doing it intentionally (in which case they should be fired) or are they doing it unintentionally?

It is useful to isolate the “root cause” of the problem — because you solve each problem differently.

If controllers are deliberately breaking the rules, there is a personnel selection, performance monitoring or culture problem.

If falling asleep is unintentional, it is worth questioning why this is happening.  Creating stiffer penalties will not help when the behavior is not a deliberate one. (Though it does look good in the news.)

It reminds me of the old saying that “the flogging shall continue until morale improves.”

If the falling asleep behavior is not intentional, then it is useful to focus on this more specific definition of the problem.  To solve this issue, there are multiple solutions.

1) Compare air traffic controllers to other professions involving overnight shifts to see what other professions do.

When was the last time you heard of an airplane pilot falling asleep unintentionally on a flight?  What about 911 operators? Firemen? Combat soldiers?

Surely this problem has already been solved by someone else. Learn from the experience (and mistakes) of other industries, or risk re-inventing the mistake in yours.

This is not just true for the FAA, but for your own business and industry as well.

It’s a big world out there. The problems you face in your business are hardly unique to you. Someone, somewhere in a world with 6 billion people has faced and solved this problem before.

One of my secrets to providing clients with breakthrough strategies is to “borrow” what is boring standard practice in one industry, and to transplant it to another.

This is my #1 source of innovative breakthrough ideas for my clients.

2) If unintentionally falling asleep is the problem, then why not have a backup system or process in place? This is not exactly rocket science.

The idea of a backup system is not some new invention.

For example, I back up my hard drive in multiple locations.

I have one network attached storage array that is on site. The backup array contains four hard drives in it. If any one drive fails, the other three still have all the data.

That hard drive array sits on a battery backup power supply. If the power fails, the battery kicks in. If the battery runs out, it tells the storage array to shut down.

If the power is down for an extended time, I have a 7000-watt power generator on site and enough fuel for 36 hours.

Data from the hard drive is backed up to this entire system every 60 minutes.

I also have an off-site backup where data is backed up via the Internet to a third party location — which itself has a similar backup system.

This facility is located on the East Coast. I am located on the West Coast.

Now I mention all of this because my backup process is based on a simple premise.  My hard drive will fail at some point. It is a virtual mathematical certainty.

The problem with the FAA approach is they’re basing their entire operation (and I might add your life and mine) assuming that humans can be prevented from falling asleep at 3am just by commanding them to do so.

Seems unrealistic to me.

Wouldn’t it make more sense to just assume that on any given day some controller somewhere is going to fall asleep?

Wouldn’t it make more sense to design the system of people and technology such that even if one controller fell asleep somewhere, it wouldn’t actually matter?

Wouldn’t that be the more conservative, safer approach?

3) If unintentionally falling asleep is the problem, how do we get FAA controllers to be better rested in the first place?

Some researchers have indicated that unless someone is perpetually on the overnight shift, the body is just naturally tired at 3am.

They have advocated intentionally allowing controllers to nap during their breaks (where other controllers are already covering for the controller on break) as a way to re-energize overnight shift workers.

Apparently, this is already common place in other industries (emergency room medicine being one of them).

I don’t know if this is a good idea or not, but it seems to me it should at least be considered — especially if it is already working elsewhere.

But this idea has been shot down for the simple reason: “I will not pay FAA controllers to sleep on the job.”

That’s just political perception… as opposed to a fact-based analysis showing that letting controllers nap does not work.

The reason I’ve mentioned all of this is because much of what is happening with the FAA has its parallels in business — and perhaps even in your company.

Often there is a lot of debate around symptoms… and comparatively less analytical work to determine root causes.

If a root cause is isolated (and that’s a big “if”), then often there are a lot of opinions expressed and debated as to how to solve the problem.

Quite commonly, the CEO gets a favorite pet idea stuck in his or her head.. and forces the rest of the team to just follow along. This is one instance when stubborn determination is a liability.

I have seen this dynamic play out in $1M companies, $100M companies and $1 billion companies.

It is not a function of business size, sophistication or maturity. It is a function of human nature.

Don’t be this kind of CEO!

Here’s how:

* Seek a diversity of opinions in your executive team meetings.

* Encourage others to be candid by asking them to share their opinions first… keep your opinion hidden until after everyone else has spoken. I understand this is common practice in the military. If so, it’s a good idea.

* When your team is have the mother of opinion debates… force your team to bring facts to the table. What do we factually know about the situation? What do we factually know about each solution under consideration?

The idea that makes the most sense should win… not the idea that comes from the person with the most forceful personality or the most authority. (You’d be surprised how often this happens.)

* Appoint one person (a rotating role) to be devil’s advocate in every major decision meeting. It is that person’s role to point out everything that could go wrong… and to force the rest of the team to consider whether or not such risks can be managed somehow.

Accurate Thinking – for something so useful, it’s shame it’s not used more often.

Make sure you’re one of the CEOs that not only uses accurate thinking… more than that, have a mechanism in place (such as the ones mentioned above) to provide a check and balance when your own thinking is not accurate and you don’t realize it.

{ 4 comments }

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