'How' matters more than 'what' in business and in life

"A leading company should be a company of leaders," says Dov Seidman, a consultant whose career focuses on how companies and their people can operate in both a principled and profitable way. Seidman's new book, "HOW: Why How We Do Anything Means Everything … in Business (and in Life)" is a thoughtful and incisive look at why "how" matters more than "what" in business, and how "should" matters more than "can." The bottom line, he says, is that in a fast-changing, hyperconnected and hypertransparent world, success is redefined as a quest for significance.

"A leading company should be a company of leaders," says Dov Seidman, a consultant whose career focuses on how companies and their people can operate in both a principled and profitable way. Seidman's new book, "HOW: Why How We Do Anything Means Everything … in Business (and in Life)" is a thoughtful and incisive look at why "how" matters more than "what" in business, and how "should" matters more than "can."

The bottom line, he says, is that in a fast-changing, hyperconnected and hypertransparent world, success is redefined as a quest for significance. Seidman's company, LRN, teaches ethics and morality in business to companies large and small, including Disney, 3M, Dow Chemical, eBay and Raytheon. He founded the firm years before the corporate world exploded in high-profile scandals, the most notorious being Enron.

Seidman is a Harvard Law graduate who also holds a bachelor's and master's degree in philosophy from UCLA and a BA with honors in philosophy, politics and economics from Oxford University. As you might expect from an author with this pedigree, "How" is not light reading.

It delves deep into psychology, sociology, economics and philosophy, but is truly enlightening and entertaining fare for the curious and focused business reader. Skipping through this book may leave you with some basic nuggets of information, but you will have missed a great intellectual ride. Seidman uses laser-focused research, fascinating anecdotes and well-presented graphics to illustrate his points.

Creating "the Wave"

Seidman chose the metaphor of the "Wave" phenomenon in sports stadiums to thread throughout the book. A wildly successful phenomenon born of passion and inspiration, the "Wave" was invented 27 years ago by Oakland A's professional cheerleader Krazy George Henderson. "If you consider the Wave as a process of human endeavor, you realize immediately that anyone can start one," writes Seidman.

"You don't have to be the owner of the stadium, the richest or most powerful person there, or even a paid professional like Krazy George. … It is a truly democratic act." The author spends a chapter analyzing the Wave through research in human behavior, and drawing a comparison to how the process can be followed in business practice. "Waves result from how we do what we do," Seidman explains.

"Individuals start Waves by acting powerfully and effectively on those around them … Organizations can build stadiums that allow Waves to happen. Teams can create environments that allow Waves to happen. "In today's business world, companies building lasting success, those that seem to be getting it right in highly competitive markets, have something going on in them, certain energy, very much like a Wave."

Transcending the status quo

Within any reasonably profitable company, performance, productivity and service are a given. It is no longer enough to settle for business as usual in a "flat" global economy where a successful product can be reverse-engineered in a few days and the Internet, blogs and customer chat rooms abound. In days before high technology we were doing business with reputation as a high value. Our ethical behavior was essential in small towns and industries.

But you could outwit the system; for example, a physician sued repeatedly for malpractice could move to another town and hang out his shingle. Now, technology has caught up to the point where once again, we are a small town with transparency and connections everywhere we look. The new world calls for innovative solutions to old problems.

The companies that succeed in this arena are those that integrate values into their everyday behavior. One fascinating example of this, Seidman relates, exists at the University of Michigan Health System. Like any medical business it routinely dealt with expensive malpractice suits, traditionally handled by a "hunkering down" and defensive strategy.

But leaders in the company studied the situation and stepped up, deciding to try something different — something that sent shock waves throughout the medical industry. They reasoned that, as professional healers, with healing as the company's highest value and vision, it was time to implement that value in the arena of its biggest problem, litigation. Doctors began to handle many of these litigious situations (primarily the ones in which a medical error did not result in serious health consequences to the patient) by apologizing when a mistake had been made.

Amazingly enough, the health system's malpractice cases declined significantly once this policy was put into effect. In forging a connection of trust, the doctors discovered that patients were usually willing to acknowledge that human error is inevitable and doctors are only human.

This had the effect of short-circuiting their anger at "the system" because it now had acquired a human face — one that offered an acknowledgement of its error. The University of Michigan Health System had transcended the typical model for doing business by opting to live its values. It based its behavior not on "what can we do?" but "what should we do?" "Trust," according to Seidman, "has become the hardest currency in our lives today."

Models of corporate culture

In "How," Seidman offers numerous stories about individuals and companies that live out their values, with resultant success. Some of these stories are well documented (Southwest Airlines culture of service, for example) and others will be heard for the first time. In telling these stories the author demonstrates that the old order of corporate governance is less and less effective in today's business workplace.

The old "command and control" model, for example, results only in dissatisfied and distrustful employees. A slightly more evolved model, the "carrots and sticks" approach, may motivate some workers but usually doesn't bring about stellar performance. A company that adopts a workplace culture based upon inspiration and value, however, is much more likely to attract customers and elicit word-of-mouth praise.

Why is this? Because, says Seidman, the "what" of any business can be copied, but a corporate culture — the "how" of doing business, cannot. "A culture is like a family," he says. You can have the same number of people, but in the end every family is different.

The author concludes with this reflection on success, comparing it to happiness: "You cannot do success; you cannot achieve it by pursuing it directly. Success is something you get when you pursue something greater than yourself, and the word I use to describe that something is significance. "Pursuing significance, in the end, is the ultimate HOW."

Bottom Line:

Dov Seidman's first five "hows" of leadership: The keystones of behavior upon which his Leadership Framework rests:

• Vision — True leaders mentally envision a better future for themselves, the tasks at hand, and those with whom they labor.
• Communicate and Enlist — To reach success you must enlist those around you and help them see what you see; you must be open and forthcoming about your motives, be transparent in your communication, and reach out to others in a way that they feel you have truly shared.
• Seize Authority and Take Responsibility — If you never step up, you consign yourself to a career of always following. Leaders stand up for what they envision, and are not afraid to occasionally take center stage.
• Plan and Implement — The gutters of business are littered with the great ideas of those who envision but cannot implement. Self-governing people step up, seize the moment, and find ways to get things done.
• Build Succession and Continuity — The key ingredient to progress, to getting ahead, is to leave a foundation behind. Though we need heroes from time to time, to truly thrive we must build self-sustaining approaches.