How Selfishness Eats Profits

By Don Schmincke

“Some of my employees are focused on the business, but others are only concerned about their personal agendas.”

“Where did these entitlement attitudes come from?”

“If they’re not trying to ‘look good’ to me, they’re trying to take credit for someone else’s ideas.”

“How do I always get pulled into turf battles?”

Managers commonly voice such complaints in all industries, but why do they arise in some organizations more than others? Seeking an answer led our research to a unique laboratory - the death zone; that altitude above 26,000 feet where lack of oxygen threatens long-term survival. Climbing teams bear a resemblance to corporations. They live passionately while confronting impossible odds. They have some employees who are deeply humble; and others who are psychotic narcissists. And their employees come with all levels of competence; from naive wannabes to elite athletes. And when put to the test, organizations react like climbing teams: sometimes heroically, other times self-destructively.

We expected to find new principles that separate the great organizations from the not so great, but we found something else. Organizations that produce peak performance in the face of extreme challenges - what we call high altitude organizations - succeed by recognizing and surviving specific dangers. Complaints like those above thrive where a particular danger exists: Selfishness.

At altitude, selfishness kills people when teamwork is critically needed to deal with injuries, equipment malfunction, limited resources, and threats of avalanche and weather. In corporate teams, selfishness kills performance, projects, profits, and possibilities. This persistent danger stalks organizations at every altitude. What may seem like innocent office politics ends up bringing down the largest of organizations. Postmortem business school case studies blame the failures on reasons like strategic missteps or poor implementations of good ideas. But digging deeper among the carcasses, we find that selfishness alone drove the denial, avoidance, blindness, or cover-ups until it was too late.

At the SAGA Leadership Institute, when we develop high-performance cultures in client companies, we get a close-up of how much selfishness damages an organization. Our conclusion: Selfishness eats profits.

How much profit is lost? Selfishness drives the protection of sacred cow projects, blaming, accountability avoidance, backstabbing, political maneuvering, silo protection, power plays, passing the buck, gossiping, and grin faking (smiling in agreement when you have absolutely no intention of supporting the project).

Analyzing the resulting damage with over ten thousand executives from 1997 to 2007 produced an alarming statistic: selfish behavior sucks 20 to 80 percent of productive time out of organizations, with the overall average hovering around 50 percent. Rarely does a company measure this damage to productivity, quality, and speed. And the damage extends even further to immeasurable costs from missed sales opportunities, quality erosion, higher legal exposure, lower competitive advantage, increased waste, employee turnover, and poor morale. What’s a manager to do?

Overcoming Selfishness: Aligning Passions With a Saga: Throughout history, great leaders constantly focused on creating passion in their people by inventing stories of gods, kings, and heroes. The ancient Norse called it a saga, and leaders for millennia knew the art of conceiving one. The compelling saga leverages the leader’s power in aligning people toward a higher cause than someone’s selfish agenda. High Altitude Organizations use sagas today to drive fervor and zeal for achieving a strategic result, and such sagas possess:

• A dramatic theme to beat an enemy, achieve an ideal, or fulfill a purpose

• A difficult goal to achieve, a challenging summit that needs to be conquered

• A language that drives performance, values, and strategic focus even in the face of risk, sacrifice, or pain

• A context of how success (or failure) will be defined

• A focus on strategic results, not selfish, territorial, gossipy, soap operas

• A brief statement, though it spawns stories and legends which permeate an organization’s culture

Today’s companies no longer teach sagas. Instead they create visions, missions, and values. Great ideas but many of these turn out to be passionless platitudes that fail to provide the background for the struggle and pain, the triumph and sacrifice. They explain the business but fall short in giving people something to “die” for—to subjugate their selfishness to. The result ends up being empty content hanging on walls. Because of this, employees abandon their mission statements at the first sign of distress—if they believed in them at all. The ensuing passionless vacuum gets filled by employees with their own selfish, petty dramas.

Why aren’t compelling sagas used more often? Two reasons commonly show up:

1)      Industry experts earnestly promote positive, touchy-feely, optimistic statements and shy away from the ugly, uncomfortable, and even painful elements of the epic journey. Yet it is precisely the epic journeys that drive passion.

2)      One company’s compelling saga may not inspire passion in another. In an age where copying quick-fix ideas are the rage, few companies take the time to truly craft their own.

If we look at successful contemporary organizations over the past century we see signs of a compelling saga in their language. Look what happened to the following companies who crafted sagas in their early growth stages or in new market initiatives:

• Wal-Mart: Give ordinary folks the chance to buy the same things as rich people.

• Mary Kay: Provide unlimited opportunity to women.

• Nike: To experience the emotion of competition, winning, and crushing competitors. (Nike’s saga today is, “Bring inspiration and innovation to every athlete in the world.” It does.)

• HP: To make technical contributions for the advancement and welfare of humanity.

• Komatsu: Encircle Caterpillar.

• Citicorp: Become the most powerful, the most serviceable, the most far-reaching world financial institution that has ever been.

• Coke: Put Coke within arm’s reach.

• Harley-Davison: Fulfill dreams through the experience of motorcycling.

Some may have labeled these missions or visions, but they had a saga-like component which separated them from the missions of their competitors. Passions aligning people toward high-performance behavior drive the greatest achievements. A compelling saga drives this strategic drama. What’s driving your company right now?

Read other articles and learn more about Don Schmincke.

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