It is the job of the leader to set standards. High ones. One of the best examples of a leader seizing the initiative and shifting standards in an organization is that of the CEO of the Chinese white goods manufacturer Haier, Zhang Ruimin. In 1985, after receiving letters from consumers complaining about quality problems with Haier refrigerators, Zhang joined employees in demolishing seventy-six of the sub-standard refrigerators with sledgehammers. The point was made: Haier had to match or exceed the highest quality standards. The story is constantly referred to and one of the destroyed refrigerators remains on display in Haier HQ.
Such symbolic displays are hugely powerful but require constant reinforcement. There are few overnight successes in leadership or in organizations. Standards have to be set over time; values acquired, agreed upon and tested; examples set. Consider the story of Levi-Strauss & Co., one of the world’s largest apparel companies with revenues nearing $5 billion and 16,000 employees. ‘Next time you’re in a Shanghai launderette, or a juke joint in Joliet, or a boardroom in midtown Manhattan, look for us. We’ll be a simple, but essential, part of someone’s individual style,’ runs one company ad.
Not only is Levi’s a top ranking global brand, it has got there the ethical way. The company has consistently won awards from public bodies and praise from business leaders for its commitment to ethics, values and social responsibility. In a poll of US business leaders, Levi-Strauss was voted the country’s most ethical private company – an honor shared with the Merck Corporation, consistently recognized as America’s most ethical public company.
At Levi-Strauss, ethics and values are not an afterthought, concepts bolted on to the business when economic success is guaranteed. They are at the core of its culture and are perceived to be key drivers of business success. The company manages its ethics and values commitments with the same degree of care and attention that it devotes to other critical business issues. As with John Lewis in the UK, Robert Bosch in Germany and Tata Industries in India, the company’s commitment to good ethics and values was set by its founding family. But it has successfully transferred the family’s personal commitment to ethics, values and social responsibility into its worldwide business ethos and management practices.
Extract from page 104 of 'What we mean when we talk about leadership'