Leadership in Three Time Zones . . .

tm19

My daughter was leader of the National Youth Orchestra of Great Britain for the 2014-2015 concert season and over the past several years has been fortunate enough to play under the skilled baton homepage-news-imageof numerous excellent classical music conductors, including Vasily Petrenko (pictured), Simone Young, Sir Mark Elder, Paul Daniel, François-Xavier Roth and Edward Gardner (pictured).

The  National Youth Orchestra is made up of 165 young people aged 13-19 and each year they have three courses, Winter, Spring and Summer, of 10 days each followed by three successive concerts in major venues around the UK, including the BBC Proms in the Royal Albert Hall in London and the Konzerthaus in Berlin.

While the young players learn tons about how an orchestra works and how all the various Conductor Vasily Petrenkoinstruments and parts fit together, they also get to see very different styles of conducting and orchestra leadership.  All are experienced and professional conductors, but their styles are very different, yet each is effective at merging 165 individuals into a collective, high performance orchestra.

We were having dinner one evening and my daughter was talking about the craft of conducting.  She is an aspiring young conductor so watches every conductor intently for style, technique and musical expression. Stephanie had a very interesting insight about the mental world of a conductor.

Basically, the conductor has to be simultaneously in three different time zones.

She explained is like this:  The conductor has to live in the Future, that is, knowing the score so well that he/she knows what is coming up next, what transitions are required, whether the mood or tempo is about to change and thus can get ready to lead the orchestra properly when the time arrives.  In essence, living in the future.

At the same time, a conductor must live in the past.  Understand what just happened, edespecially if there was a mistake by one of the sections coming in late or a wrong chord or note was played in a solo.  By understanding what just happened, the conductor can work to make corrections and put the orchestra back on track.

And yet, the conductor must also live in the present, being “at one” with each note, phrase and the overall theme and “picture” of the piece as is being played, in order to give the proper cues to the sections and deliver a unified interpretation.

A multi-dimensional time zone juggling act if I ever heard of one.bigstockphoto_business_man_juggling_his_time_1326922

Later on in the evening after everyone was in bed, I began to think about leaders and the craft of leadership.  It dawned on me that a successful business leader, like a professional classical music conductor, has to live simultaneously in those same three time zones.

The future is about seeing over the horizon and anticipating changes in markets or technologies that might throw the company off course. A big part of being successful as a CEO or business leader is the ability to “bring the future forward”, to see things others don’t see that have yet to materialize and getting the company prepared, in advance.  In this category falls such important activities as executive development, capability building, investments in R&D, listening to the voice of the customer, tracking global and industry trends, hiring now for future needs, seeking out acquisitions.

Living in the past is about being able to honestly assess the strengths and weaknesses of the organization and constantly using the 5 Whys to understand root cause. To not be limited or burdened by the past, but to learn from it and not to repeat the same mistakes over and over.  Equally important is to use the past to celebrate and recognize people and achievements.  It is also important to use the past, especially stories from the past, to reinforce and sustain the company values and culture.

And of course, a successful leader must live fully in the present at the same time.  It is only in the present that real change takes place, that coaching is effective.  Relationships can only be built in the present.  A leader who lives too much in the past or the future misses tons of opportunities to guide and influence people and the organization in the Here and Now.

So, you want to improve your leadership?  Adjust your internal time zones!

 

John R. Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

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john@johnrchildress.com
Twitter @bizjrchildress

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Just published: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   
FASTBREAK: The CEO’s Guide to Strategy Execution

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Corporate Culture and Ageing Wine

john-childress-wine-250

Most of my readers aren’t aware that for a period of about 4 years (1996 – 2000) I owned an internet wine retail company.  It was one of the first internet retail wine companies out there and had a really great name, Secret Cellars.  Our USP was searching and sourcing small quantities of exceptional wine from small vineyards that were more focused on quality than quantity.  We would then offer a limited number of bottles or cases to our registered internet customers.

If you want a million dollars from a wine business, start with two million!

The Dot-com bust, combined with a weak business model, killed our business and we went bankrupt in 2000. But I definitely learned a lot about good wine and the wine business, from the vine to the glass, and also drank some exceptional small production wines.

wine-barrelsOne of the interesting things about wine is that a wine will often take on some of the characteristics of the barrels it is stored in.  Many fine wines, especially reds, are stored and aged in oak barrels, which imparts a certain amount of tannins and other elements essential for longevity and a particular robustness and taste.  Chardonnay wine aged in oak barrels is rich, buttery and “oakey” in taste whereas the same wine stored in aluminium vats has a crisp, “steely” character.  Some wines are even stored in old whiskey or sherry barrels, giving the wine a heady aroma and sweeter taste.

Like aged wine, corporate cultures tend to take on the characteristics of their surroundings.  A corporate culture can be developed by the company founders to fit their own belief and ideas about how a business should be.  And for the first 5 or so years of its life the culture tends to closely match the founder’s intent.

But as a business grows, new employees are added, the influence of the founders diminishes through sheer size of the company, and sometimes neglect of the values and culture in favour of profit and growth.  With an influx of new employees coming from different company cultures, bringing in their own work habits, tends to dilute the original culture.  And very few companies project their original culture with robust new employee on-boarding programs or culture workshops.

In addition, some of the internal policies and work process are changed in order to add more control or a greater focus on profit maximization and cost reduction.  The original policies of exceptional customer care that put the company on the map now are overshadowed with policies designed to propel growth and earnings.

One of the lessons we have learned over the years in our advisory work on culture and business performance, is the strong, yet almost invisible, impact that company policies and work processes have on culture and employee behaviour.

Structure and Policies Shape Behaviour and Culture

2ihatetrafficnti_468x324What if each player on a rugby team was paid solely on the number of points they scored? It would be a different game, indeed.  Reward and remuneration policies tend to drive behaviour, sometimes in ways that cross the line.  It is well-known that Traffic Wardens write more tickets, and more “dodgy” ones, when they are on a tickets-written-per-week bonus system.

The top-down sales goals imposed on bank employees for opening more bank and credit card accounts led to a massive 2 million fraudulent accounts being booked  by Wells Fargo employees in order to meet sales quotas based on the number of accounts opened.  And the fact that many financial institutions have mortgage brokers and lenders who are remunerated on the number of loans they write have led to multiple cases of poor quality lending, doctored loan applications, and misselling throughout out the financial services sector.

Wine barrels provide the structure to hold the wine during its ageing and development and also imparts its own unique flavours.  Company policies and organizational structures shape employee behaviour.

The culture you wind up with may not be what  you expected when you developed your policies and work processes.  Our suggestion is to take a very close look at your policies and internal processes to determine the behaviors they are really promoting. You may be surprised.

A great wine reveals its true nature, not the nature of the cask!

oak-barrels

Written and Posted by: John R. Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

Website: www.johnrchildress.com

e: john@johnrchildress.com
Twitter @bizjrchildress

Read John’s blog,

On Amazon: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   FASTBREAK: The CEO’s Guide to Strategy Execution

John also writes thriller novels!

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The Good Habit Rabbit: Again

It’s school time again and I thought my readers might find this old post from 2013 of some value, especially those with kids.  Enjoy!

rabbit_1500988cgood habits

We had our usual panic one morning before school. “Where’s my canteen card? I can’t find my mobile phone!!  My iPod battery is empty …..”  I’m certain all the parents out there can recognize the situation – kids never put things away and then at the last-minute, when it’s time to go, they can’t find anything! (Maybe it’s not just kids, but that’s a story for another time).

Anyway, after several weeks of this early morning panic, frantic running up and down the stairs, sometimes accompanied by tears, I decided to figure out a solution.  Frontal lobotomy came quickly to mind, but too messy.  I was looking for an elegant solution that was more about a change in thinking than a set of punitive consequences or another of “Dad’s rules”.

Then I remembered the story of the “Good Habit Rabbit”.

Once upon a time there was a colony of rabbits who had dug their dens in an open meadow, where they could easily forage for tender young grasses.  During the early morning and evening hours all the rabbits would be out feeding.  This wasalso the meal time for Mr. Fox as well, who loved tender young rabbits.

While most of the young rabbits were eagerly eating and playing, one very peculiar young rabbit would spend a few moments eating, then quickly dart back to his hole, only to come out again, go to another part of the meadow, begin eating, then dart back to his hole again.  This went on at each feeding time.

All the other young rabbits thought he was stupid to be wasting so much time running around back and forth when he should be eating and playing with the others.  His reason for this “unreasonable” behaviour when asked was:  “I know Mr. Fox is out there somewhere and if and when an attack comes I want to have my escape route so well memorized that I can quickly get back to my den from anywhere in the meadow without really thinking about it.  It will be easy,  just like a habit.”

The other young rabbits laughed at all this wasted time building a silly habit, until one day, several foxes attacked at once.  There was instant pandemonium with little rabbits rushing too and fro, squealing and frantically trying to find the safety of their dens.  The “Good Habit Rabbit” was one of the few survivors that day!

So, at dinner one evening I told the story of the Good Habit Rabbit, then we talked about a single place for her mobile phone, her canteen card and her iPod.  We set up a special area in her room for these where they were to be put first thing when she came home from school.  It worked.  We are now working on building a “Good Habit Rabbit” set of behaviours for other things as well.

By the way, it’s also a good management and leadership technique for being effective and efficient during those days that are packed with meetings and other executive duties.  Think about the value of becoming a “Good Habit Rabbit”!

Some of mine are:  summarizing my notes at the end of every meeting rather than relying on my memory (after a full day of back to back meetings I can’t keep all the details or my agreements straight), keeping a daily log of things I learned or need to think more about, and even some simple ones like a specific place in my briefcase for Passport, car keys, wallet, security card, etc.  Just a set of good habits to make life run a little smoother.

“Sow a thought, and you reap an act;
Sow an act, and you reap a habit;
Sow a habit, and you reap a character;
Sow a character, and you reap a destiny.”
― Samuel Smiles

Written and Posted by: John R. Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

Website: www.johnrchildress.com

e: john@johnrchildress.com
Twitter @bizjrchildress

Read John’s blog,

On Amazon: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   FASTBREAK: The CEO’s Guide to Strategy Execution

John also writes thriller novels!

Posted in Human Psychology, John R Childress, Life Skills, Organization Behavior, parenting, Personal Development, Psychology, Self-improvement | Tagged , , , , , | 5 Comments

Why Corporate Culture is Like a Limpet

limpets

As a former marine biology student (a long time ago) I was always fascinated by limpets, which are a special type of gastropod (snails and mussels, etc.). Every time I visited an intertidal area, whether it be Hawaii, the Pacific Coast, the Atlantic or the Mediterranean, there were limpets clinging to the rocks, sometimes submersed by a high tide, at other times exposed to the hot sun or freezing cold of winter. Hardy creatures and very interesting.

Not only do they cling to a rock with a strong foot muscle, they also have tiny teeth that rasp away at algae clinging to the rocks, and have an ability to etch the rock and form a depression, which makes them even more difficult to remove. And they tend to clump together, each one independent yet the same species.

limpet

My marine biology days are long over and now I study business organizations instead of marine organisms. Businesses are equally fascinating, especially when it comes to their corporate culture.

And believe it or not, there are some strong similarities between corporate cultures and limpets!

For example, like a limpet clinging to a rock that is nearly impossible to remove without damaging it, corporate culture is very difficult to change. Like the mucus on the muscular foot of the limpet, corporate culture seems to have a strong “glue” that holds it together and resists change.  That glue, we have come to understand after much research, is the power of peer pressure and informal social networks of acceptance. Strong human to human bonds that tend to mould thinking and behaviour (which are the major elements of corporate culture) and then perpetuate themselves through social reinforcement. An excellent review of the power of social networks and culture can be found by reading Homo Imitans: The Art of Social Infection: Viral Change in Action, by Dr. Leandro Herrero.

Another similarity is that there is not one big limpet, but lots of independent limpets of the same species clumped together on a rock.  To me this is analogous to the fact that there is no one corporate culture inside a company, but a series of strong subcultures that tend to operate somewhat independently, yet all are part of the same company.

subcultures2

Left unmanaged, corporate culture tends to divide into multiple subcultures

Corporate cultures are incredibly hardy, as are limpets. Limpets survive submerged at high tide and exposed at low tide.  Corporate cultures, especially subcultures, tend to survive no matter what type of organization structure senior management devises, what the business strategy is, how many speeches senior managers give about new values and culture, how many posters on the walls about desired behaviours and ethics. Culture is stronger and will outlast just about anything management can throw at it. It definitely will outlast the CEO.  CEOs, like the tide, tend to come and go, but strong subcultures tend to remain.

And believe it or not, some limpets are territorial, keeping others out of their particular patch of rock algae.  Well, many subcultures don’t mingle well with other subcultures either and as a result a particular set of toxic behaviours often occur between various subcultures inside a company, where blaming, lack of trust, miscommunication, weak sharing of information and other negative behaviours tend to become common place. At least the limpet is more direct, it just pushed the intruder away!

If leaders wish to reshape or change culture, one of the first things they have to do is understand how cultures are formed and sustained.  And in the case of subcultures, they need to find the respected and trusted informal leader that is central to the cohesion of each subculture, recruit that individual to help reshape the stories and behaviours that will ultimately reshape the culture. If you are curious about the “biology” and ecology of corporate cultures, I suggest you read LEVERAGE: The CEO’s Guide to Corporate Culture, available on Amazon and Kindle.

And the next time you find yourself at the seashore, stop and look at the limpets, but watch out for the high tide!

waves

Written and Posted by: John R. Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

Website: www.johnrchildress.com

e: john@johnrchildress.com
Twitter @bizjrchildress

Read John’s blog,

On Amazon: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   FASTBREAK: The CEO’s Guide to Strategy Execution

John also writes thriller novels!

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Reshaping Conduct and Risk Culture in Banking

(Note:  the thoughts below are drawn from a keynote address and workshop I will be giving in Sydney, Australia on October 12th to the Culture and Conduct in Financial Services Conference.)

rotten-apple-barrel

Between 2008 and 2015 the global financial services sector has been fined over $300 billion by regulators and government agencies for excessive risk taking resulting in trading losses, money laundering, outright fraud and mis-selling of products and services. And many industry and academic experts put the global recession which began in late 2007 down to the casino-like dealings of banks, S&Ls and Insurance companies in a search for greater and greater ways to make profits, which usually came with greater and greater risk.

As a result, the banking industry is currently at the bottom of the consumer trust table for institutions, and just barely above politicians for trust by the general public.

trust-in-institutions-2015

And a number of once highly respected, bell-weather banking institutions, like CitiGroup and Bank America, have been trading at one half to one-third their pre-recession high share price for the past 8 years!

citigroup-share-history

Culture Change and Risk Culture is the Flavour of the Month

The term Risk Culture is used within the financial services industry to describe the shared perceptions among employees of the relative priority given to risk management, including perceptions of the risk-related practices and behaviours that are expected, valued and supported

According to a recent Ernst & Young study, nearly 75% of global banks and financial institutions claim to have begun efforts to improve the culture of banking and in particular, improve the risk culture.

Yet that same study concluded that only 38% of executives believe their risk culture is aligned with the stated risk strategy (risk appetite) of the bank. In simple terms, the movie and the words don’t synch!

As a result of external pressures, such as greater regulation and compliance requirements, mounting fines and declining public trust, banks and financial institutions are implementing multiple actions and additional risk structures in order to improve risk conduct and decrease the number of negative risk events.

bank-responsed-to-risk-culture

Great, But Something’s Missing!

If you look at the above carefully you will see many actions and internal risk structures that banks are taking to improve risk conduct.

But to me, something very important is missing with all these activities.  An understanding of the Overall Corporate Culture in which all these activities take place.  New Risk Structures are supposed to improve the Risk culture, which in turn is supposed to improve conduct.  But what most people don’t understand is that this process takes place inside the existing corporate culture!

banking-culture-context

Corporate culture is much like the waster in an aquarium.  Clean and clear water makes everything work.  Dirty and foul water makes the whole aquarium toxic!

culture-as-aquarium

On October 12th in Sydney, Australia I will be giving a keynote address and workshop to a conference on Culture and Conduct in Financial Services.  My goal is to help the attendees understand what culture is, why it is important, and what are the 4 key levers that can truly impact and improve conduct and risk-related behaviour in the financial services industry.

Here’s a link to the conference if you want to know more.  As you can see, I am the only non-banker on the list.

http://www.criterionconferences.com/event/ccfs/

Should be fun!

Written and Posted by: John R. Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

Website: www.johnrchildress.com

e: john@johnrchildress.com
Twitter @bizjrchildress

Read John’s blog,

On Amazon: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   FASTBREAK: The CEO’s Guide to Strategy Execution

John also writes thriller novels!

Posted in consulting, corporate culture, Human Psychology, John R Childress, leadership, Organization Behavior, strategy execution | Tagged , , , , , , , , , , | Leave a comment

A Modern Twist on an Old Chinese Proverb

There’s no denying the wisdom of Confucius, and this quote especially resonates with me. Perhaps more than anything because my parents were both teachers and stressed the importance of education for all children.  And I don’t just mean schooling and the 3-Rs, but learning in general.  My mother inspired in me a curiosity about things that has kept me learning and trying new things all my life. I am not a fast learner (as some of my friends can attest to), but I am eager to learn new things and figure out how they can be applied to improve my own well being and the world in general.

But there is a well engrained trend in the world today, probably driven by technology speeding things up to where we expect instant results and immediate gratification.  Long term thinking and long-term planning has definitely taken a back seat to short-termism, especially in business.

PRE-CHRISTMAS-SALE_2765583bFor most businesses, performance for the Quarter (every 3 months) is about as far ahead as they think.  Maximizing quarterly performance drives many executive teams to focus on short-term fixes, cost cutting, product promotions and price cuts to generate revenues and profits before the end of the quarter.  And the last quarter of the business year is even more hectic, when travel budgets are routinely frozen, hiring to fill empty positions put on hold, and account managers pressured into collecting outstanding invoices and booking revenue.  Some companies even book revenue in the current quarter even though the work will be done at a later date, further perpetuating the quarter by quarter frenzy for revenue and profit growth. Thank you, Wall Street and greedy shareholders!

Much of business today is focused on quarterly reporting and thus much management time and attention goes into maximizing quarterly performance metrics.  Business decisions that have a short-term payoff are often at the expense of longer term investment decisions.  The simple fact is, profit maximization decisions are usually short-term and decisions around future sustainability are long-term.  In the rat race to show ever improving quarterly performance, longer term investments generally loose out.

A Few Leaders Are Becoming More Focused on the Future and Sustainability

“We don’t do three-month reporting any more. We’re not going into the three-month rat-races. We’re not working for our shareholders. We’re working for the consumer, we are focused and the shareholder gets rewarded.”  ~Paul Polman, CEO Unilever

Unilever-Paul-PolmanUnilever has taken the lead among global businesses in focusing on building a sustainable business for the long-term by investing considerable time, management resources and money into reducing the impact of their products on the environment, using less water and producing less waste in their supply chain, manufacturing and distribution systems. And the CEO, Paul Polman speaks regularly at Davos, the United Nations and business and social conferences about his commitment to not only build a sustainable business model, but to also improve the lives and livelihoods of those people and communities where his products are manufactured and used.

This is not CSR or funding humanitarian projects, but a new and developing business model called Positive Impact, which is defined as: the intentional creation of enduring social and economic value (with an emphasis on the and).

So, to paraphrase Confucius in business terms:

If you want a successful business this year, cut costs. If you want a successful business for 10 years, innovate. If you want a sustainable business for 100 years, invest in creating enduring social and economic value.

And here’s another sage quote from old Confucius:

The best time to plant trees is 10 years ago,
the second best time is now!

Written and Posted by: John R. Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

Website: www.johnrchildress.com

e: john@johnrchildress.com
Twitter @bizjrchildress

Read John’s blog,

On Amazon: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   FASTBREAK: The CEO’s Guide to Strategy Execution

John also writes thriller novels!

 

Posted in consulting, corporate culture, ecosystems, John R Childress, Organization Behavior, strategy execution | Tagged , , , , , , , , , , , , , | 1 Comment

Cultural Drift

Change happens, whether we force it or ignore it!

plate_history_lge

I clearly remember my second year in college sitting in a marine geology class and discussing the then revolutionary topic of continental drift. After decades of theories and much scoffing at the subject of plate tectonics by renowned scientists, in 1968 Geophysicist Jack Oliver published seismology evidence supporting plate tectonics and continental drift. Massive areas of the ocean floor could move, although extremely slowly (geologic time), but small movements over millions of years have created our dynamically changing planet earth.

The analogy between continental drift and shifts over time in corporate culture is quite clear to me and needs to be better understood by business leaders.

You get the culture you ignore!

Almost all early stage companies have some sort of foundation principles, usually based on the beliefs and values of the founders, for how they will conduct business and how people should behave at work. While perhaps not as codified as the example from Netflix, which has a 124 slide deck of what the Netflix culture, values and behaviours. HubSpot and Zappos.com also have rigorous “acculturation” on-boarding processes which help establish the accepted ‘ways of working’ in the company and prove highly useful in establishing alignment between customers, employees and the organization. So in some sense, all founding organizations had a culture by design, some stronger and more transparent than others.

The problem with most organizations as they grow and change is that nearly everything gets managed, sometimes micro-managed, except the culture

culture drift .

Culture is often left to its own and as a result, organizations experience ‘cultural drift’ and over a fairly short period of time wind up very different from how they started.

One of the prime reasons so many well aligned cultures shift out of alignment over time is that executives at the top don’t fully understand or appreciate the importance of culture.

Most don’t know how (and some don’t care) to manage corporate culture. This lack of understanding and appreciation can lead to lost ‘leadership moments’ that could have kept the culture in alignment.

As a result of culture neglect and lazy leadership, over time a culture will drift from aligned and optimal towards the median, or mediocre. And given the pressures of growth, mergers or acquisitions, sudden competitive challenges, or significant leadership changes, toxic corporate cultures and negative subcultures can and will evolve.

If you are not actively managing the culture, who is?  Chances are you won’t like the answer!

(above excerpted from LEVERAGE: The CEO’s Guide to Corporate Culture, by John R Childress, Principia Associates Press, 2013. London)

Written and Posted by: John R. Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

Website: www.johnrchildress.com

e: john@johnrchildress.com
Twitter @bizjrchildress

Read John’s blog,

On Amazon: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   FASTBREAK: The CEO’s Guide to Strategy Execution

John also writes thriller novels!

Posted in corporate culture, ecosystems, John R Childress, Organization Behavior, the business of business | Tagged , , , , , , , , , , , | Leave a comment