Burkhard Schwenker's understanding of ethics
Professor Schwenker, as CEO of Roland Berger Strategy Consultants your aim ultimately is to improve your clients' finances. Very often management consultants include strict cost rationalization actions among their recommendations. How do you reconcile this with your understanding of values, so necessary to us at the present time? Isn't your position as Trustee of the "Values Commission" (an association of German top managers that has the goal of persuading companies to employ a management style committed to values) diametrically opposed to your position as CEO of a firm of management consultants?Not in the least. Our job as consultants is to support our clients in the best way we can. We help them to achieve lasting success and competitiveness. Restructuring and downsizing naturally play a part in this, particularly in times of crisis. But for every top manager and every consultant that I know, laying people off is a measure of last resort – a way of helping the company to survive, thereby safeguarding a larger number of jobs. In fact, companies are taking a highly responsible attitude in the current crisis, as shown by their efforts to retain jobs in the long term rather than making short-term cuts. Reduced working hours and new training measures are two examples. The aim is sustainability – a value that the "Values Commission" and I myself strongly support.Management consulting firms have a reputation for caring more about money than morals. In his book "Rip-Off!", Neil Glass calls to account the giants of consulting. He claims that many consultants resort to dirty tricks, charge excessive fees for services that their clients don't really require, cheat their clients, fudge analyses and shirk responsibility wherever possible. What is your view on consulting practices? How important to the industry are human values?You know, the things you mention are just clichés about the industry. They have very little to do with reality. Of course some consultants are better than others, as in every business. We are not resting on our laurels by any means. But do you really think that our clients would keep coming back to us if we didn't give them added value? Our major clients have a lot of experience working with consultants. They have clear expectations of us. If we're not creative, if we can't show a track record of successes, or if we try and foist some standard methodology on them, we're out – it's as simple as that. We have to offer a continuous level of excellence in order to survive the competition. Quality is everything. It's all about fundamental values of good consulting: objectivity, impartiality and independence. And with them sincerity, honesty and the courage to speak up for your convictions.In your book "Strategisch denken, mutiger führen" ("Thinking strategically and managing boldly") you state that trust in managers has sunk to an all-time low. How can managers win back lost trust from society?I believe that there are three important things that we can do to rebuild trust. First of all we need to let the public know that this whole discussion about irresponsible managers is very one-sided – and also untrue. German managers in particular have done extremely good work in recent years and put German companies in an excellent global position competitively. The current crisis will ultimately show that this is indeed the case: I am convinced that we in Germany would be facing much bigger problems today if our managers had not been doing their job so well. Secondly we have to be open about where we have gone wrong, too. This is no place for false solidarity or closing of ranks. We must denounce misconduct in no uncertain terms, whether it's corruption, tax evasion or bonuses awarded despite poor performance. And thirdly managers must act as role models for the entire company in their day-to-day work. That's the most important point, and the most difficult. They must communicate honesty and reliability in a really credible way, particularly in these difficult times. Leadership and honesty belong together, along with the ability to communicate difficult truths and not to pretend that everything is OK when it patently is not.You have said in the past that "management requires personality". What does "personality" mean for you? Personality means having a sure focus on people when it comes to questions of trust and management. To my mind, managers require three characteristics more than anything else: a cool head, a warm heart and working hands – to quote the Swiss academic Martin Hilb. A cool head to be able to deal with an increasingly complex world and the changes in our environment. A warm heart to win people over and motivate them, taking them with you on the road to change. And working hands – commitment in day-to-day work – so as to act as a model for others. It must be clear that managers are giving their best just like everyone else. And maybe a little bit more besides.On your Internet site you write as follows: "Luckily, doing good by the environment and society should and can bring financial return ... In our experience, corporate responsibility must be a driver of profitable growth... " The same line is taken by Michel E. Porter, for example. He argues that social responsibility should be approached with exactly the same measures and methods as all other corporate decisions. But doesn't that mean that ultimately corporate social responsibility becomes simply a tool of neoliberal market logic? A for-profit organization cannot, by definition, function altruistically. If it did, who would pay the wages? Who would drive innovation? Who would create employment opportunities? You mention neoliberal market logic: I agree with Milton Friedman, who says that "the business of business is business." To invest in corporate responsibility projects, you need money. That money first has to be earned. Of course, companies then use their CSR projects to improve their image. That's legitimate, just like ordinary people including their contributions to charities in their tax returns is legitimate. Our best people pay close attention to what their employers and other companies are doing on the social front. CSR and commercial activity are not in opposition to each other. Indeed CSR can create value for society and the company at one and the same time. Worldwide around four billion people survive on less than USD 2,000 a year. These people also have needs, and they too require opportunities. Without a cell phone, computer or banking services they may find themselves unable to run even a small one-person business giving them enough to live on. When companies come up with appropriate products, such as cheap cell phones or microloans, they help consumers who previously had no access to them. And at the same time the companies help themselves by opening up a new market.Did the values you learned as a child help make you the success you are today? Should values have a particularly important place in academic courses at universities, schools even? My father ran a small carpentry business. At home I learned that you have to work hard to achieve success. Nothing comes for free. You must always give your best. And you must believe in what you do. At the same time I also learned that caring for others and the human touch are critical. That good quality is the only way to ensure happy customers. And that new ideas are what keep you close to the customer. Yes, values should have a particularly important place in academic courses. Not as an optional extra, but integrated into all subjects and classes. This is what we try to do at the Leipzig Graduate School of Management (Handelshochschule Leipzig, HHL), where I am an honorary professor. We must ensure that values are seen as an integral part of the whole. The same goes for schools – even more so, perhaps. School classes in ethics are of limited use. To reach this goal we need every teacher in every subject to communicate and live out the values that we consider important. That's why having the right teachers in place is so important for our future.Authors: Dennis Lotter and Jerome Braun
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