Easily one of my favorite articles this month….insightful, inspired and an idea worth spreading…
by Rosabeth Moss Kanter
Leaders must be firm and foster accountability, but they also must know when to forgive past wrongs in the service of building a brighter future. One of the most courageous acts of leadership is to forgo the temptation to take revenge on those on the other side of an issue or those who opposed the leader’s rise to power.
Instead of settling scores, great leaders make gestures of reconciliation that heal wounds and get on with business. This is essential for turnarounds or to prevent mergers from turning into rebellions against acquirers who act like conquering armies.
Nelson Mandela famously forgave his oppressors. After the end of apartheid, which had fostered racial separation and kept blacks impoverished, Mandela became South Africa’s first democratically elected President. Some in his political party clamored for revenge against members of the previous regime or perhaps even all privileged white people. Instead, to avoid violence, stabilize and unite the nation, and attract investment in the economy, Mandela appointed a racially integrated cabinet, visited the widow of one of the top apartheid leaders, and created the Truth and Reconciliation Commission that would clear the air and permit moving forward.
Forgiveness can be costly, like the massive amounts of debt forgiveness toward countries like Greece to help create a stable foundation for restoring growth to Europe. Forgiveness can sometimes mean investing in groups that have done something negative — a counterintuitive but often very effective strategy. A striking example, which I recount in my book SuperCorp, occurred in South Korea, not a country known for being kinder and gentler, and yet forgiveness and seeking harmony were at the heart of a major business success.
Shinhan Bank, a fairly new entrepreneurial bank, was set to acquire Chohung Bank, a larger, much older establishment-oriented bank that had hit hard times, when Chohung employees staged an embarrassing action. To protest the takeover, 3,500 men shaved their heads and piled the hair in front of Shinhan’s headquarters in downtown Seoul. Shinhan signed an agreement with Chohung’s union that astonished some observers. Far from taking revenge for the protest (or walking away from the deal), Shinhan agreed to raise wages, promise no layoffs, have equal representation of both banks on key committees, and wait three years for full integration. These and other investments in the future generated a significant payoff. Within a year, shareholder value had increased (it decreases in a majority of mergers) and employees from both banks were informally integrating, with the union neutralized. Within three years, Shinhan Financial Group was outperforming not only the industry but the entire South Korean stock market.
"Revenge is not justice," says General Douglas MacArthur, as played by Tommy Lee Jones in Emperor, an engrossing new feature film about the surrender of the Japanese to American troops at the end of World War II. Like the hit movie Lincoln, the movie Emperor dramatizes a turning point in history replete with leadership lessons. (The movie will be released March 8; I saw an early screening thanks to producer Gary Foster, a …more
Posted on Tuesday, February 26th 2013