– Written by Elizabeth Farquhar, Writer, Editor for the Center for Services Leadership
One afternoon recently, marketing professor Leonard Berry paused in the middle of grading final papers and exams to describe our current frightening landscape: one million-plus COVID-19 cases, more than 60,000 deaths, unemployment growing to near-depression levels, and businesses shutting down—some never to return.
“If ever there was a time that called for leadership—at all levels and in all types of organizations—this is it,” he said. Berry is uniquely qualified to call out the depth of our challenge. A distinguished professor at Texas A&M University’s Mays Business School, he is also a senior fellow at the Institute for Healthcare Improvement and has studied service delivery in healthcare at the Mayo Clinic, other health systems, and in cancer care settings.
The social distancing policies that slowed life and commerce to a near halt this spring hit the services sector especially hard. By their nature, services are commonly delivered during interactions between people—the very activities that were discouraged to halt the spread of the disease. Social distancing poses a potentially existential threat to service businesses. In this climate, what can leaders of these companies do to improve the survival odds?
Values-driven leadership is the name Berry has applied to the type of leadership required in a services business at any time, but especially during a crisis such as the current pandemic. Service business leaders must lead with humane core values when the “product” their organization markets is a human performance. Berry explained that humane values inspire extra effort from employees. When values are humane and are genuinely embraced by employees they will infuse every service encounter, producing positive results for the firm.
“Leaders need to regularly remind employees of the purpose of their organization, what the vision is,” he said. “It’s more essential now than ever before to ground the people they lead in the organization’s values and reason for being.”
In his classic book, “Discovering the Soul of Service: The Nine Drivers of Sustainable Business Success,” Berry identifies generosity as a core value present in the successful service companies he studied. “Generous acts not only benefit society, they benefit the company too, strengthening it and enabling more generous acts in the future,” he wrote.
The pandemic requires difficult choices, Berry said, that test one’s leadership. The hospitality and travel-related sector has been particularly hard hit by Covid-19, and the tradeoffs are not easy.
“Here’s where a leader must ask: what am I going to trade in order to lead my company into the future, when I have no customers, no revenues and high costs?,” he asked. “Shall I furlough employees or eliminate jobs? Or shall I try something we have not had to do before, for example, job sharing or creating new roles for employees to keep them on the payroll even if part-time?”
“Publicly traded companies that have consistently paid dividends don’t like to give it up,” Berry said, “But the first, second and third thoughts of a values-driven service leader should be ‘how do I protect my employees?’”
Berry says that generosity is an underappreciated competitive weapon in service businesses. Executives may think they are being generous by sharing the fruits with employees and other stakeholders when they are successful, but “that’s the wrong way of thinking about it in a service business,” Berry said. “Acts of generosity in a labor-intensive service business are an input to success because they lead to a more loyal, engaged, productive workforce. “Selfish companies cannot serve.” Berry wrote in Discovering the Soul of Service.
Amidst the dire statistics of the pandemic are stories of generosity and kindness appearing in every newscast, on every news site – even in the often mean-spirited Twittersphere. Companies who distinguish themselves with their generosity in the midst of pandemic connect themselves to the most fervent hopes of their employees and the customers they serve.
Humane values-driven leadership is required.