The Imperative of Positive Business
In this era of change in the business world, the media is rife with reports about various philosophies of business and leadership. In February, I announced the new strategic plan for the Ross School, and the Ross philosophy of positive business was a key component of this plan.
At first blush, the notion of positive business can get dismissed as a “nice to have” philosophy that doesn’t have the heft to carry people and organizations through challenging and complex times. Yet it is precisely because our era of competition and globalization demands increased productivity and regular innovation that positive business is crucial to the success of firms. And it is for this reason that positive business forms a key component of our plan.
Between 1998 and 2010, the average annualized return for companies on the S&P 500 was 3.83 percent. During the same period, companies on Fortune’s list of 100 Best Companies to Work For realized a return of 11.06 percent.1 This difference isn’t a coincidence. The philosophy of positive business is what makes places great to work, and is a key tenet of what inspires leaders and employees to deliver transformative results.
The Ross approach to positive business is based on the Michigan Model of Leadership, which focuses on effectively working one-on-one with individuals and collectively through organizations. It emphasizes a leader’s ability to exercise empathy, courage, integrity, and drive, and to create cultures and organizations in which people have a sense of purpose and are bringing their best selves to work every day. Positive leaders energize and transform individuals, organizations, and society by creating a vision of what is possible and leveraging the strengths of people.2 The Ross philosophy of positive business also includes using business to make a positive difference in the world, which I discussed more fully last month.
The Michigan Model of Leadership derives from a unique body of research developed at Ross. For example, faculty member Gretchen Spreitzer’s research demonstrates the value of helping individuals to thrive, meaning to be fully engaged, passionate, willing to learn and adapt, and motivated to shape their organization’s future. It shows workers who thrive demonstrate 16 percent better overall performance and 125 percent less burnout than workers who are not thriving on the job.3
Ross research is replete with evidence that higher levels of performance result from various aspects of positive leadership: Positive leaders increase employee job satisfaction, well-being, engagement, and performance.4 When individuals and teams have more positive connections with each other, they are more resilient and adaptive.5 And minimizing incivility and fostering a positive work climate increases workers’ ability to take in more information of greater complexity, make richer interpretations of data, and experience higher levels of flexibility, creativity, and productivity.6
These are just a few examples of an extensive body of research at Ross that is being leveraged to improve performance by organizations throughout the globe. In 2012, the faculty of Ross’ Center for Positive Organizational Scholarship won the Academy of Management’s Research Impact Award for translating knowledge into practice, and faculty member Jane Dutton, a founding member of the Center, won the Academy’s Scholarly Contributions to Management Award, the equivalent of a lifetime achievement award.
Ross students develop the skills and acumen to apply the Ross philosophy of positive business through the Ross Leadership Initiative, our co-curricular leadership activities that span the BBA and MBA experiences. For example, during the Ross Impact Challenge in Detroit, MBA students develop for-profit business concepts benefiting social causes in Detroit under stiff time pressures and complex circumstances. And guest speakers such as Whole Foods CEO Walter Robb, who recently spoke at Ross, are providing first-hand accounts of implementing positive leadership practices in their firms. In 2014 we will host a new global conference on positive business, which will bring students, business leaders, and researchers together to discuss and experience first-hand the power of a positive approach to business.
As a leader, I believe strongly in the benefits of enacting positive approaches in my own style of management. For example, this winter I have been working with faculty and staff to develop a vision for Ross’ positive work community for the year 2023 as well as a plan to achieve that vision. I have instituted transparency in our budgeting and reporting structures with the goal that all of us know how the school generates and expends resources, and each of us understands what we can do to be the most effective steward of the resources entrusted to us by students, parents, taxpayers, and donors. And I make a concerted effort to notice and appreciate the strengths and successes of the people I work with. I know I have much room to do better, and I therefore continually assess and improve the ways I enact positive business.
People and organizations have immense capacity to achieve extraordinary things. Through the power of positive business, I believe the challenges of our time will be overcome and the full potential of our economy and society can be realized. I look forward to further building on Ross’ strengths in this exciting area and becoming the leading center of excellence globally for positive business.
1 CNN/Money website, January 19, 2011.
2 More information about the Michigan Model of Leadership can be found on our website.
3 Harvard Business Review website, January 2012.
4 Owens, B., Baker, W., and Cameron, K., Relational energy at work: Establishing construct, nomological, and predictive validity. Presented at the Academy of Management Meetings, San Antonio, Texas, 2011.
5 Stephens, J.P., Heaphy, E., Carmeli, A., Spreitzer, G., and Dutton, J., Relationship Quality and Virtuousness: Emotional Carrying Capacity as a Source of Individual and Team Resilience. Journal of Applied Behavioral Science, 49, 1, 2013.
6 Kim Cameron, Positive Leadership: Strategic for Extraordinary Performance, Behrett Kohler, San Francisco, 2012, pp 25-28.