An exclusive interview with Ron Mercer by Daniel R. Murphy-
Murphy: Today I want to welcome Ron Mercer for our interview. Ron a small book with some big ideas in it titled The Corporate Soul Handbook last year. Thank you for joining us today Ron. Can you tell us why you wrote this book?
Mercer: After a 30+ year career in commercial banking, I decided to retire. I have been blessed in many ways. I can never repay the blessings but I can try to pay them forward. I felt sharing some of the stories, experiences and lessons I learned from working with many different organizations would be a way to help others. Successful organizations excel in any economic and political environments. They do not ride the waves or the tides. These organizations find a way to sail to success with any winds. I found these organizations have something special. They have healthy corporate souls and they remain healthy because they nurture their corporate souls consistently.
Murphy: Tell us more about what you mean by a corporate soul.
Mercer: The soul of an organization is its core, the inner most feeling. It is where successes and failures are born. The soul is more important than culture. An organization’s culture is a product of the soul. Culture is how a company behaves. Behavior is a product of feeling. As we know, humans behave in certain ways due to their feelings. At its core, an organization is a group of people who have joined together for a purpose. How they feel as a group is vital to the success of an organization.
Murphy: Why is it important for an organization to have a soul?
Mercer: I believe all functioning organizations have a soul. The soul is the life of the organization. The question is does your organization have a healthy soul? A healthy soul breathes life into the organization while an unhealthy soul sucks the life out of an organization. Have you ever been in a meeting and everything is going well and then someone walks in, says something destructive and it just seems like the air has been let out of your balloon? I call those “soul sucker” moments. They can result from poor communication, repressive policies, lack of transparency, lack of trust, inadequate leadership, etc.
Successful organizations are full of life. The people associated with these organizations feel safe, feel trust, feel empowered, and feel inspired to fulfill the purpose of the organizations. These people feel a part of something that is bigger than themselves. They contribute and enjoy finding solutions with others knowing the answers they find together are much more powerful than the ones they could discover on their own.
Murphy: Business gets a fair amount of bad press in the United States. One can argue that the services and products we enjoy and the jobs we have are all provided by business. Is the bad press, when it happens, just a reflection of the dark side of any human institution, or is there something fundamentally wrong with business?
Mercer: The problem is not with ‘business” or the capitalist society. When things go bad in business it is usually because of poor leadership. You find an organization with a healthy soul and I will be able to point to strong leadership. Strong leadership with a servant attitude is key. Leaders are human too. We have had a long period of a lack of accountability. Many Boards of Directors of larger companies either lack the will, knowledge or expertise to hold leadership accountable. Without that accountability, leadership, again being human, tends to become self-serving.
When employees feel leadership is self-serving, trust is destroyed. Silos start popping up in the organization. Poor communication begins to fester. People eventually stop caring because they feel that they are not being cared for by the organization. All the while, the life of the company is being sucked out. The corporate soul is being damaged. People come to work to get a check not to fulfill the purpose of the organization. Many times the purpose of the organization gets so blurred nobody remembers what it is and the organization just drifts aimlessly. Eventually, customers leave, revenues drop, expense cuts are made and the soul continues to be damaged.
We need to focus on the leadership of organizations rather than the institution of capitalism. In short, we need to grow more and better leaders who are held accountable and who hold to values of being a servant first. That is a healthy environment. Isn’t an important part of growing and maturing being held accountable while being encouraged and learning the value of service to others? The same thing can be said for growing leaders.
Murphy: Does this concept of a corporate soul apply to non-business organizations? Does it apply to non-profits? Educational institutions? Government? If so, explain how.
Mercer: Yes, the philosophy of an organization applies to any organization. It can be applied to religious organizations, educational institutions, governments, non-profits, etc. Why? Because, again, all of these organizations have one thing in common…. People. People organized for a purpose. People have feelings when they come together. Angry people behave differently than those who are fulfilled. Scared people behave differently than those who feel safe. Organizations with a healthy corporate soul excel at pursuing and fulfilling the reason they are organized. They have a synergy that is powerful. These organizations are in touch with their souls.
Murphy: How much of your career was spent in the banking business? How does banking measure up in terms of having a soul?
Mercer: My entire career was in banking but I helped fund and counsel probably thousands of commercial businesses. At the end of my career, I helped fund and counsel hundreds of community banks. Part of the due diligence of any credit extension is the leadership of the organization and an organization’s behavior in good times and bad. I also trained other bankers on early warning signs of pending problems with organizations.
I found the larger the organization, the more difficult it is for leadership to recognize when the soul is being damaged and then what to do to nurture the soul back to health. The reason for this is the larger the organization; the further leadership is from the front lines. Without a continuous and concerted effort to stay in touch (a feeling), with the people, customers and capital of an organization, the higher probability the soul will be lost resulting in a merger, sell or liquidation of the organization.
Great examples of this are the struggles large banking institutions like Citigroup, Bank of America and JP Morgan have seen lately. The regulators have uncovered lack of accountability, self-dealing, unreasonable risks, lack of transparency and other actions by individuals within these organizations. This has come during a time of massive restructuring and really very little accountability at the very top of these organizations. All of these are signs of unhealthy corporate souls, in my opinion.
The banking industry itself is vital to our society and our economy. As a whole, the industry is filled with servant leaders. People who want to work with others to help them fulfill their dreams. Community banks have really taken an uncalled for bad rap for the economic crisis. All banks are under siege by the regulators and the Justice Department. I won’t go into it much more than say I believe it has become a witch-hunt that hurts more than it helps our country.
Many banks are thriving while all of this is going on. Those are the ones you want to study and follow. I can just about guarantee you most of those thriving banks, have a healthy corporate soul.
Murphy: For a business to survive it needs profit. Is profit in any way inconsistent with the idea of having a soul?
Mercer: Absolutely, not. I believe the four most important pillars of any healthy organization are: Capital, Management, Employees and Customers. Capital must have sufficient return in order to feel good about being a part of an organization. None of the pillars are able to strengthen themselves without strengthening the others to succeed over the long term. There will be ebb and flow but if there is trust, understanding and communication, every pillar pulls together with the others. If trust, understanding and communication are missing, the pillars quickly become silos. Silos only hold things in and are self-serving. As discussed previously, silo behavior is a “soul sucker”.
Murphy: In your book you discuss the importance of self-assessment. I think we are familiar with how an individual assesses themselves. How does an organization do this?
Mercer: The assessment in the Appendix of the book was prepared so it could be performed through team participation. By getting input from all pillars within an organization, you can find the sources of success and failure. When you get to the core, you are getting to the soul. Don’t just look for “the how we behaved” that led to success or failure. Find out why. Why did we do the things we did that led to the results that we produced? The more people who participate, the more buy in everyone will have with the results of the assessment.
Murphy: You tell us that each of the four pillars of business: capital (investors), management, employees and customers must be rewarded and nurtured. How do we do that when the perceived interests of these components of an organization appear to be in conflict?
Mercer: Here is where we get off the track on business or the capitalist system. In order to achieve outstanding results over a long period of time, all four pillars must be aligned. They all came together (organized) to fulfill a purpose. Define the purpose so everyone is clear about what they signed up for. Capital will get greater returns when leadership, employees and customers are happy. Leadership and employees will find fulfillment when capital and customers’ needs are met. Customers will get innovation, great customer service, convenience and consistency when capital, leadership and employees are rewarded appropriately.
We have to leave the “what is in it for me?” mindset. If the customers get product at below cost, they will not get the product for long. If capital is only a taker and not a consistent investor, it will soon have no organization left. It is like killing the goose that lays the golden eggs. We have seen that overly aggressive employee pay, pensions and benefits can kill the possibility of actually receiving these for a long time. We have already discussed self-serving leadership and what it can do to an organization.
All four pillars must hold up the platform of the organization, equally. All of their interest can be fulfilled but only together. Alignment is key!
Murphy: Does a healthy corporate soul lead to less conflict and dysfunction between these pillars of the organization?
Mercer: Yes, when each one of the pillars feels its needs are being met, the pillars concentrate on serving one another not on themselves. Communication is strong, understanding is felt and trust is a common thread. If you can get this feeling from a healthy corporate soul, everyone is willing to pull on the same rope, the same way at the same time with maximum effort. Wow! That is powerful!
Murphy: You discuss the importance of clear and effective communications in an organization. How do we improve communication?
Mercer: Truth builds trust. People need to feel safe to raise their hands to ask questions, object and offer ideas. All of these important attributes start with a trusting relationship. A trusting relationship cannot be present without open communication. It starts at the top. Leadership has to be transparent. Once people are surprised or feel misinformed, trust is destroyed. People clam up and communication is destroyed. Leadership has to demonstrate transparency consistently and make everyone feel safe when they communicate.
Murphy: How does an organization change zombies into zealots? What do you mean by these labels?
Mercer: Zombies are those folks we have all dealt with on a phone who sound like they are reading from a script. Zombies are the people we deal with but when we look into their eyes, they seem like they are not really there. Zombies are those folks in your organization who have already quit but they just have not bothered to tell you yet. They have quit caring. They have quit feeling. Why? In many organizations it is because it hurts (feeling) too much to care or feel. These folks are just collecting a check.
Zealots are the folks who own part of your company and brag about it to friends, Zealots are the folks who work for you and love being a part of your sports team or representing the organization in the community. They are so proud to be a part of something successful and bigger than themselves that they openly tell others about the positive attributes of your organization. If you want something that will propel your organization’s growth, get a group of Zealot customers!
How do you get Zealots? Do what you say, exceed expectations, listen, care, empower, train, encourage, recognize and get rid of “Soul Suckers”.
Murphy: One good example you provide as an organization with a healthy soul is Southwest Airlines. What is it about SW that tells us it has a healthy soul? How did they develop that?
Mercer: Southwest has Zealot customers, shareholders, employees and leadership. They started out by not concentrating on just the rules. They concentrated on their customers and encouraged their workers to have fun. They hire people with a servant attitude. Their employees feel rewarded and fulfilled and the customers enjoy the ride! This propels revenues and profits so capital and leadership are rewarded. It is a win/win situation. This organization exceeds expectations consistently.
Murphy: Southwest Airlines is a very big organization. Is it more difficult for a large organization to maintain a healthy soul?
Mercer: I referred to this when discussing the banking industry. The key is staying in touch with the front lines. I was on a Southwest flight once and the CEO of the company was on the plane. You know where he sat? Not up with the pilots. He sat with the rest of the folks. He asked them about their service and when it was time to serve peanuts, he got up and served peanuts! There are CEOs of large organizations that never call their own customer service group. They have assistants do that for them. These CEOs have no clue how the customer service works in their own companies other than excel spreadsheets and what others tell them. You have to get to the front lines. Great leaders have always done this. Remember General Patton? Gandhi? Jesus? You get the picture.
Murphy: How important is it for the top people in an organization to make the development and nurturance of a corporate soul a priority? Can a healthy soul exist if the leadership is not invested in it?
Mercer: Simply, no. What can exist is a soul at the team level. It can eventually be destroyed by an unhealthy overall organization. Remember, when a group of people has been organized for a purpose, a soul can exist. This is why you see groups within a larger organization excel even when the larger organization struggles. It takes very good local leadership to make this happen because that leader has to constantly overcome the negative or “Soul Sucker” actions of the larger organization.
If leadership just pays lip service to nurturing the corporate soul, it is just one more hollow promise. It becomes a “Soul Sucker”.
Murphy: You discuss the all too familiar problem of mission statements and vision statements that hang on a wall but do not truly guide an organization. How does an organization make the best use of these tools?
Mercer: You have to live them every day or they are just sayings on the wall. The corporate soul is the life of the organization. A healthy corporate soul can and will breath life into these wall hangings. Nurture the soul and make sure the mission statements reflect truth in what the organization is actually living. Review these statements often to make sure you are still traveling down the path intended. It may be fine if you are not. Things change so the mission statement may need to change but what cannot happen is the walk does not match the talk. People will not buy into that behavior.
Murphy: You discuss the value of a group studying a book together to learn from it. How does that work? What are the benefits?
Mercer: I did this for years as a leader. First, it is inspirational to discuss, as a team, ideas together that are positive. Second, you begin to form a common language and understanding by visiting together. Third, you form a chemistry of trust and respect within the group. Last but not least, I used it to give others a chance to lead, practice speaking in a group setting and we all know the leader learns more than the student.
I found that not all leaders are not comfortable leading these sessions. That is why I have the questions in the Appendix to help them. Once they start the process with this book, they can easily use the same principles to begin studying the books I recommend on my website. www.thecorporatesoulhandbook.com As a leader, this is a great way to practice your questioning and listening skills.
Murphy: You quote Roger Iger, CEO of the Walt Disney Company, that the heart and soul of a company is creativity and innovation. How does an organization nurture these qualities?
Mercer: Give people time to think. It is amazing how many of us are so busy doing “stuff” that we never take time to think. As I state in the book, if you want to know how prevalent thinking is in your organization, the next time someone stops by your office or cubical and asks, “What are you doing?” Just watch their body language when you reply, “Thinking”. Once people get in the habit of thinking, then you must provide an atmosphere of trust and transparency where people feel safe raising new ideas and providing solutions from a different perspective.
Murphy: You are now retired from banking. Other than writing what are you doing these days?
Mercer: I am doing some speaking and consulting as a result of the book launch. My wife and I love to travel so we are doing lots of that too.
Murphy: Is there another book coming our way?
Mercer: I have several other book ideas. One is telling the story of someone who overcame many obstacles and how he overcame those obstacles to become successful. People need hope. I feel called to provide that hope to people through stories about my life. If I can do it, anyone can do it. I am busy with this book launch right now so that may be something I pursue in 2015.
Murphy: I want to thank you very much Ron for this interview and helping our readers to understand the concept and importance of the corporate soul. Do you have any final thought?
Mercer: I want to thank you for taking time to interview me. As you know, the publishing world is difficult to navigate these days mostly because, I believe, it is in a state of change. Independent folks like yourself are critical to getting the word out about new and helpful publications that were not written by public figures where the chance for quick returns are much less risky. Society needs to be constantly challenged and refreshed with new ideas. You are helping make that happen. Thank you.
I have had great interest in the new book and the website. It is my wish that the thoughts, stories and discoveries I discussed in the book are helpful for those who really want to build legacy organizations that are fulfilling the purpose set out by the organizational charter. I would also like to invite any of your readers to visit my website and sign up for the free inspirational Thought of the Day. I believe starting your day on a positive note is very productive and the thoughts can be shared with any of their team or family.
Again, many thanks, Dan.
This interview is copyright protected by Daniel R. Murphy 2014. For permission to reproduce this article or any part thereof contact the publisher at firstname.lastname@example.org.