What happens when our values cost us money?

1: Getting better at getting better is what RiseWithDrew is all about.

Monday through Thursday we explore ideas from authors, thought leaders, and exemplary organizations.  On Friday, I share something we are doing at PCI in our quest to earn a spot of Fortune magazine’s 100 Best Companies to Work For.

This week we’ve been exploring the idea of “keystone habits.”  How changing one key habit can set off a cascade of other changes in our lives and in our organizations, as outlined by Charles Duhigg in The Power of Habit: Why We Do What We Do in Life and Business.  

Specifically, we’ve looked at how new CEO Paul O’Neill transformed Alcoa by focusing on safety.  Today’s post is about what happens when someone doesn’t get on board with the area of focus.

Ten years into his tenure at Alcoa, Paul was riding high.  The company’s stock price was up more than 200 percent.   His leadership philosophy was being studied by the Harvard Business School and the Kennedy School of Government.  

Then, a report surfaced about safety concerns at an Alcoa plant in Ciudad Acuna, Mexico.  Workers had apparently gotten sick because of dangerous fumes.  Several high-ranking leaders were sent to Mexico to investigate.  

They discovered a few months earlier, “there had been a buildup of fumes within a building,” Charles writes.  “It was a relatively minor event. The plant’s executive had installed ventilators to remove the gases. The people who had become ill had fully recovered within a day or two.”

2: The real issue?  The executive in charge of the facility had not reported the incident to headquarters.  This leader was one of Alcoa’s most senior managers and responsible for one of the company’s largest partnerships.

Two days later, he was fired. 

“The exit shocked outsiders,” Charles writes.  “Within Alcoa, however, no one was surprised.  It was seen as an inevitable extension of the culture.”

From Paul’s perspective as CEO, the deeper issue was around how we view mistakes.  Because the leader did not report the incident, “no one else had the opportunity to learn from it. Not sharing an opportunity to learn is a cardinal sin,” Paul remembers.  The leader “fired himself.  “It might have been hard at another company to fire someone who had been there so long,” Paul recalls.  “It wasn’t hard for me.  It was clear what our values dictated.” 

3: This incident reminded me of a situation at PCI several years back.  On a Monday morning, we had recognized our top sales person for the quarter at our all-company Quarterly Business Meeting.  Everyone clapped.  He came forward and received a plaque celebrating his achievement.  

On Friday of the very same week, we had to let him go.  There was an ethical violation.  A clear breach of our “Act with Integrity” value.  Losing our top sales person wasn’t easy.  But it was the right thing to do.  It wasn’t a difficult decision. 

Having values is a good thing.  Certainly.  It’s an important first step.  The critical second step is living by them.  Even when (or especially when) it costs us money.

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Reflection:  Think back on a situation within my organization where there was an ethical violation.  What happened?  How was it handled?  Are there any lessons to be learned?

Action:  Journal about my answers to the questions above.

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