Wednesday, February 1, 2012

Death By Dictatorship - Why corporate leadership is intimately linked to wellbeing

Its commonly understood how leadership affects performance and research clearly identifies how corporate wellness also impacts business performance.  But what’s the link between corporate leadership and corporate wellness?

The reality is that we are not individuals living in isolation.  Our actions affect others, and other people’s actions can affect us if we let them.  In many ways we are all leaders or influenced by leadership in some way, shape or form.

Many of us work in large or small organizations, or do business with them, buy products from them or hear about them regularly on the 6pm news.  It’s commonly accepted that leadership affects performance within organizations and research clearly identifies how team members levels of wellness also impacts business performance.  But what’s the link between leadership and your wellbeing?

A glance at the latest article on corporate stress in Time magazine or Business Review Weekly shows the latest statistics on how the majority of people working in professional jobs in the western world are not fulfilled in their work lives or not satisfied with their employer or employment situations and we know how this affects productivity and performance at every level. 

When team members are healthy and well, organizations also perform better.  Great companies like Virgin know this and maybe that's why they started their own gym chain. Many companies have wellness programs offering free gym memberships or fruit bowls sitting next to the cakes and chips on the afternoon tea trolley.  But how does leadership style impact on the health and wellbeing of staff?  Can a model of leadership enhance staff health and wellbeing?  Are some systems of leadership leading not only shortening the lived of organizations but also the very people that work for them?  


Lets first consider the factors that influence wellness and longevity.  Here are a few varied expert opinions.  In a lecture on mindfulness & happiness in 2010 Dr. Craig Hassed from Melbourne’s Monash University, department of general practice identifies his 7 pillars of health as being education, stress management, spirituality, exercise, nutrition, connectedness and the environment.

The Gallup organization conducted studies over a number of years in 150 countries with thousands of participants.  Through their research they identified 5 topics that affect wellness which they coined Financial wellbeing, Physical Wellbeing, Mental Wellbeing, Community Wellbeing, Social Wellbeing. 

Recently, in a 2007 article in the Harvard Business Review, Tony Schwartz and Catherine McCarthy discuss how professional people can enhance energy at work by also focusing on four different levels comprising physical, emotional, mental and spiritual energy.

In his study of the Blue Zones - which he identifies as five places around the world where people live longer and more often become centurions than anywhere else - Dan Beuttner identifies a wide spectrum of factors.  They include food, physical activity, sleep, a realistic optimistic mindset, a sense of purpose, financial stability, good close relationships, strong community support and a sense of spirituality.

Some people believe wellness is purely physical and is dependent solely to exercise, food, rest and sleep.  But as the intrepid researches like Dan Beuttner, Tony Schwartz and Catherine McCathy and the Gallup organization showed earlier in this chapter, this simplistic model is far too one-dimensional and fatally flawed.  However you choose to categorize the elements, wellness is multidimensional and emotional, mental and spiritual aspects of life must be factored in.  Yet a quick Google search under ‘corporate wellness’ reveals carbon copy companies all providing services that focus only on these elements.  Food, exercise, sleep, food exercise sleep; Important yes, the whole picture? No. 

In a world where chronic health and stress related conditions are on the rise at epidemic rates, wellness programs that target only the physical components of
wellness are one-dimensional and therefore need to evolve.  Until we appreciate that the emotional, mental and spiritual elements have just as big an impact in terms of happiness, productivity and longevity corporate wellness will always be like a sticking plaster over a broken leg. 

"A company has a greater responsibility than making money for its stockholders,"  "We have a responsibility to our employees to recognize their dignity as human beings,” David Packard – Hewlett Packard

Now that we have clearly identified the whole picture around what contributes to the wellbeing of people…including leaders, executives and team members…lets turn it around and ask how can organizational leaders contribute to wellness. 

Of course if you are a leader of some description or another – and we all are – the question you might be asking is ‘how can we as business leaders maintain our focus on the performance of our organization while also improving the wellbeing of ourselves and others?’

With our new understanding of the bigger picture of our wellbeing, lets follow the path to where it intercepts the path of leadership.  Where the natural point of union occurs.

In his celebrated book Good to Great, Jim Collins explains how a company's long-term health is directly linked to leadership style.  He describes how leaders who can infuse the company with its own sense of purpose, instead of his or hers, tend to have the greatest success.  In his article titled And the Walls Came tumbling Down he explains how the best and most innovative work comes only from true commitments freely made between people in a spirit of partnership, not from bosses telling people what to do. 

To this end he confirms that the exercise of true leadership is inversely proportional to the exercise of power.   He explains that instead of dictating their own desires and relying on systems of coercion and control as one might see in a dictatorship they must build mechanisms of connection and commitment rooted in freedom of choice.

Jim Collins goes on to outline his concept of level 5 leadership which has become popular worldwide.  He bases his vies on exhaustive research into a number of businesses that transformed themselves from just getting by to great performers in a short space of time. His research showed that the Chief Executives of such businesses did not match the usual macho image we have of great leaders. They turned out to be humble and modest though very single-minded.
He explains how Level 4 leaders have their own visions of what organisations needs to do to succeed. They decide on direction and then get people to implement their vision. This is what Collins refers to as "first what, then who." Level 4 leaders are very much in the conventional mode. They may be effective when it is not too difficult to decide what to do, but they struggle in more complex, high tech businesses that compete through rapid innovation.

The reason, Collins explains, that level 5 leaders are humble is that they see clearly their own limitations in a complex environment. So, instead of promoting their own visions, they get their best people together and grill them with penetrating questions to draw new strategies out of them. Hence the related Collins slogan: "first who, then what." Because Chief Executives can't decide what to do alone, they need the input of a team of smart associates. They get the best "who" into a room and together decide the best "what." This makes them participative leaders. 

This idea is the very essence of democracy.   It is commonly acknowledged that democratic organisations can produce high quality and high quantity work for long periods of time. Many employees like the responsibility and freedom and respond with cooperation, team spirit, and high morale.

The democratic leadership style is also called the participative style as it encourages employees to be a part of the decision making. The democratic manager keeps his or her employees informed about everything that affects their work and shares decision making and problem solving responsibilities. This style requires the leader to be a coach who has the final say, but gathers information from staff members before making a decision.

Level 5 leadership is really a modern take on the democratic leadership style that has been around for hundreds if not thousands of years.


While there is no universally accepted definition of democracy, equality and freedom have both been identified as important characteristics since ancient times.  The term democracy came into existence following a popular uprising in Athens 508 BC through which a new style of leadership emerged.  

The democratic principle has been described as "not only a political system but an ideal, an aspiration, intimately connected to and dependent upon a picture of what it is to be fully human.

Jim Collins research highlighted with dramatic effect how people who can translate purpose into action through democratic mechanisms and practices - not force of personality - establish a culture that provides for much greater organizational longevity. 

But a sense of purpose, fulfillment, spirit, freedom to choose, and the opportunity to be involved in decision making are not only linked to organizational performance.  As our earlier discussions confirm these ‘spiritual and emotional factors also influence wellbeing. 

One of my favourite examples is provided by the Gallup organization whose research showed a link between engagement at work and cholesterol levels.  Imagine going to your doctor and having them prescribe you a 12-week course of business coaching to treat your high cholesterol!

But there are also more practical aspects to it.  Ricardo Semlar from Semco explains how in times of uncertainty delegating tasks & decision-making shares responsibility and doubles thinking capacity.  I have spoken to many clients who, when given the freedom to choose their own hours, arrange their timetables so they can better manages their lives, which in turn improve productivity and reduces stress. 

I remember talking to a Colleague Suisun McKenzie who helped a Melbourne based construction company Probuild implement an integrated work/life program including a work-life toolbox initiative.  The work-life toolbox involved a weekly meeting where construction worker teams rearranged shifts so that the guys could take care of sick family members and children and dependent parents as needed. This is done in a fair and democratic process – and it works!!  The work-life program has helped Probuild become an employer or choice and a hugely successful construction company that employees love working for and don't want to leave. 

This is why your wellbeing is affected by the culture of your organization and where your leadership style can affect the wellbeing of others.  By being a system of governance and law that enhances spiritual freedom and empowerment, democracy and democratic leadership improves spiritual wellbeing!

North and South Korea provide another interesting example.  These are two countries with a shared history where many families are split on each side of the border because the split has been so recent.  They are of very similar size with very similar environmental characteristics – but with vastly different political systems. 

South Korea is a democratic nation, where as North Korea is ruled through a dynastic dictatorship.  In South Korea the average life expectancy is 80 yrs. (World Bank Data) where as in North Korea the average life expectancy is only 68 yrs. 

People have a fundamental need for guiding values and a sense of purpose that give their lives and work meaning. They have a fundamental need for connection to other people, sharing with them beliefs and aspirations to form a common bond. 


Semco is best known for what Wikipedia calls its radical form of industrial democracy.  I.e. it works as a democracy!  Currently Semco is one of Latin Americas fastest growing companies.  Revenue has grown from US$4 million in 1982 for $212 million by 2003.  It is acknowledges to be the number one company to work for in Brazil with a waiting list of thousands of applicants waiting to join.

It all started in 1982 when Ricardo Semlar took over from his father and saw how the vast majority of the workforce were demotivated, disengaged, working at about 30% productivity, overloaded and stressed.  In his book Maverick he explains how he decided that he was going to focus on making Semco first and foremost a great place to work.  This led to Semlar infusing real democracy into the workplace to genuinely empower his workers.

Over the last 30 years Semco has developed a policy of complete internal financial transparency.  They teach factory workers how to read accounts so they can understand the company's books and provide input into major decisions.  Salaries are largely public and employees can set their own salary.

Semco is an incredibly efficient organization.  All memos in Semco are limited to 1 page – no exceptions.  Even for marketing reports.  Each business unit is small enough so that those involved understand everything that is going on and can influence the outcomes.  Semco workers set their own production quotas employees voluntarily work overtime to meet them.  As a result Semco doesn't have receptionists, secretaries or personal assistants, regarding them as unnecessary.

Semco operated a reverse hiring policy in that people promoted to leadership have to be interviewed and approved by their subordinates (how democratic!).  Profit sharing is practiced right down to factory floor level and the entire company has input into how the profit is shared.

Now days, Mr. Semler, is the leading proponent and a tireless evangelist of what is often called participative management, corporate democracy, and “the company as village.”  He has proven on a grand scale that organizations thrive best by trusting employees to apply their creativity and ingenuity in service of the whole enterprise, and to make important decisions close to the flow of work.

Interestingly Semco does not have an internal corporate wellness program.  It seems they don't need to!  By creating an environment where employees can thrive and have the freedom to live healthy fulfilling lives wellness is part of the very fabric and spirit of the organization.

To find out more about Ricardo Semlar and Semco read his books Maverick and The 7 day workweek or look him up on YouTube or Wikipedia.  You can even look up Wikipedia to find out about the democratic schools he has set up.

Democracy seems like second nature to us as westerners yet many of our workplaces are largely autocratic dictatorships.  So how democratic is our society really?  Is current best practice really the most effective way or is there room for improvement?
More than at any time in the past, we are asking for operating autonomy, where we are allowed freedom and responsibility.  Many of us want to be part of organizations that stand for something because unconsciously we have an inbuilt understanding that it affects us all.

As leaders who maintain a steely resolve but encourage active participation, it is possible that we release not only the entrepreneurial spirit of those around us but also the very will to live.  But is might also be true that this also improves our very own quality of life and life expectancy.

I am not Ricardo Semlar and am both humbled and delighted by his achievements. But one thing I do know form personal experience is that whether your goals is personal, professional, altruistic or family orientated, its much easier to change the world around us if we first change the change the world within.  Its easier to empower others if we become empowered ourselves first.  It’s easier to push for a more democratic and just society if we are first compassionate towards ourselves, and work towards our own internal harmony.


More than at any time in the past, people are asking for operating autonomy, where they are allowed freedom and responsibility.  People want to be part of organizations that stand for something because unconsciously we have an inbuilt understanding that it affects us all.

Democracy seems like second nature to us as westerners yet our workplaces are often autocratic dictatorships.  We say we live in a democracy but how democratic is our society really?  Is current best practice really the most effective way or is there vast room for improvement?

Leaders that empower workers, foster a democratic participative environment and develop democratic organizational processes not only enhance the possibility for long-term business success they also create an environment that facilitates improved wellbeing and longevity for staff.

As leaders who maintain a steely resolve but encourage active participation, it is we release not only the entrepreneurial spirit of those around us but also peoples very will to live.  But is might also be true that this also improves our very own quality of life and life expectancy.

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