Connect with David: https://www.davidredwards.com/contact-us
Check out David's book: https://www.davidredwards.com/about-newyouwhoknew

Full Episode Transcript:
Adam:

Welcome back to Count Me In the podcast that explores business and leadership topics from the management accountants perspective. I'm Adam Larson. I'm joined today by David Edwards to discuss how organizations and leaders can overlook the human when dealing with human capital. In other words, businesses can often see their people as assets before they see them as, well, people. David explains how this mindset often backfires on organizations and why focusing on values that motivate human beings provides a more balanced and effective approach to collaboration and productivity. And just a reminder, David,has a new book out entitled "New You! Who Knew: Surprising foundations to get more done, feel more connected, and stay balanced in a rapidly changing world." There's a link in the show notes, so make sure to check it out. Let's start the conversation.

Adam:

So David, thank you so much for coming on the podcast today. We're really excited to have you on. And today we're gonna be talking about people and the value they bring to organizations. And traditionally, as we all know people have always been looked on as assets. And through your book and through conversations that you and I have been having, you don't agree with that. So let's start there. Why don't you comment on that?

David:

Yeah. So if we go back into history, right, we haven't actually literally had people on our balance sheet for since 1860 roughly. But we treat people still very much like their assets. And you might recall, I mean, we go back into, just in my career for example, Jack Welch he made famous this kind of policy where they took the bottom 5% of their performers and then summarily fired them. And you know, and you don't wanna be in the 5% obvious, the bottom 5%, you don't want to be anyway. But you know, if we look at math, there's always gonna be a bottom 5%. You know, by default there's gonna be the top 5% and the bottom. And so, you know, this is a way of looking at human beings that says you're an asset. We look at how corporations over the years have, you know, you just move people around or we used the word drive.

David:

To me, this is non-human. So for example, I was looking at a job description the other day, and it, and it said, you know, drive, I think three times, we are gonna drive innovation. You're gonna drive change, you're gonna drive performance. So since a corporation is little more than a collection of human beings who have come together to accomplish some common purpose, right? So as a group of human beings moving towards some goal, trying to accomplish some purpose, if we think about working with human beings or as human beings working together, let's think about you, Adam. Are you married?

Adam:

Yes.

David:

If you go to your wife and say, Sweetheart I hurt my knee and I need you to drive me to Home Depot so I can get a new ladder. And if you drive me there and get me there, hmm, let me see in the next 15 minutes, you're a good wife, I want you to drive me there. So how is she gonna respond to that?

Adam:

Not very well.

David:

Not very well because you're treating her as if she was the car, right? You can treat your car that way and if your car doesn't get you there in 15 minutes, you can say bad car, you suck. And might have some other more colorful language, but you would never do that to a human being, at least I hope not, right? Because we're not machines, we're not assets. We are in fact human beings. And if we want to be successful in business or in life or in any relationship, right? We would want to say, Well, what are the principles not of a machine, or not really even business principles, right? You can't ignore business principles, but how do we want to engage with fellow human beings? And that should by definition make us more successful.

Adam:

So if we wanna be more successful, you mentioned something about principles, maybe we can dig into that. What are some of these principles that we should be implementing till we can be better human beings.

David:

So I think one of them that works very nicely as a human being as well as in business, and I'll kind of go on the business side at first. How many businesses do you know, have a statement that says, these are our values.

Adam:

A lot of them do.

David:

Right! Maybe even a majority of businesses have gone to that effort, right? So let me ask you, in your experience or talking to people or just in your life and career, how many of those businesses, I'm getting a little distracted here, but how many of them have a statement? But you know, that company well enough to know that they're not really living those values?

Adam:

You know, I can't say that I've taken the time to look at value statements to to, to pay attention well enough to know whether they are or not.

David:

Yeah. Or maybe another way to look at it is, is you've ever gone into a business and been a customer of a business. And if you ever have anybody, you know, listening or watching has had this experience where they go, you know, I don't know what their values are, but they're not, at least not today. Yeah. I mean we've all done that, right? We've all had that experience.

Adam:

We've all seen that, of course.

David:

So values as a company, I believe are extremely important because they set boundaries, right? Businesses by definition have some goal that they're trying to accomplish. And inevitably they wanna make a profit, right? This is kind of, it's part and parcel of every business. And so what values do is they set some boundary within which that company has said, we're gonna set some boundaries or limits around how we pursue these goals, right? Our business goals. And that's good, right? Because you really don't want to be operating and like anarchy basically, right? Anything goes, you know, whatever it takes. I mean, we've seen that it's happened in business probably not infrequently. People like Enron and you know, some of these kinds of, you know, famous examples, but where they go, hey, there's no boundaries. We don't have any values. We're just gonna go make a dollar.

David:

And you know, that's all that matters. However we do it, you know, that's, we don't care, right? The means justify the ends, that kind of a thing. So values are important in that regard. And it also is one way that we start to engender trust, right? If we have values and we're actually living those values, there's greater trust in between individuals and trust, right? As I think Steven Covey's son wrote the book, "The Speed of Trust", right? And if we don't have trust, you know, we pay a tax. None of us likes taxes, right? So I mean, we pay a tax for that. The same with human beings. And that's why I think values in a business as a collection of human beings makes perfect sense because values as human beings make perfect sense. And so we think of them as a constraint sometimes or as barriers, but it's much like the freeway.

David:

We've decided a long time ago that if I'm gonna be going 70 this way and you're gonna be going 70 in the opposite way, that having a big concrete barrier in between those lanes is a really good idea, right? Because it makes us safer, because it makes us more confident, more comfortable. We actually will get places faster because of that barrier, right? Because we're never gonna veer over into the other lane and run into somebody. And that's gonna slow everybody down and ruin those couple of people's days for sure. So we create these barriers for a reason and it's valid. And when I was writing my book, it was actually one of the most exciting things cuz I've always thought values were important, but in kind of a vague way it's kinda like having vague goals, right? Well, you know, someday I kind of wanna do something, you know, that's not very powerful for us.

David:

But when we take the time, and it's not a lot of time, right? Usually most people can go through and make their top five core values explicit within a couple of hours. So it doesn't take, you know, hours, it doesn't take a degree. It just takes a little bit of effort on your part. But if you'll go through the process of doing that, here's what the science tells us. Here's what researchers tell us. We will have a greater sense of meaning and purpose in our life. We will have a greater sense of wellbeing cuz you've made this explicit and wellbeing is based on this feeling that imagine that as human beings, but you know, we have feelings. And so this feeling that my life is on track, my life is kind of okay, I like the direction that it's going. Partly because, you know, you've made these core aspects of your life explicit.

David:

You actually avoid fuzzy thinking, enjoy greater clarity and focus, and finally you have less regret. Cuz here's what typically happens. You do something or you talk to somebody and you hear about something and you have this vague sense of that feels good, right? That feels right to me. Think about a LinkedIn post that you've seen in the last few days if you're on LinkedIn or Facebook or whatever, otherwise, other times you have something that vaguely feels like that makes me uncomfortable, right? I don't know what it is, but that just kind of grades against me. I don't know what that is. And again, that's the, the difference between having something that is vague versus something that is specific and explicit. And so, you know, by going through and making our values, we have all of these benefits as human beings make our lives better. And so this as a principle, as something that can guide human success is a powerful underpinning to what we call our personal motivation as well. When our values are explicit, we have motivation to pursue our goals because of those advantages that I just talked about.

Adam:

That all makes a lot of sense. You're bringing up a lot of different elements that I feel like we're gonna have to touch on, but when I think about applying this in a business setting, it all seems very good in theory. However, there are power structures set up in place and how do you transmit value in this value that you're talking about when people sometimes have different values, right? And in a setting that is set up as a top down structure, Like how does, how does that work?

David:

Well, if you're lower on that structure, there's no doubt it can be more difficult. But here's a conversation I would suggest that you have. If your organization doesn't have any values, you know, they've not made them explicit, I think you can ask the question and say to your boss, why don't we have any values? You know, what are our values? And you might do a little bit of research and think about why does it matter, right? Just like, kinda like what we were talking about. There's a lot of people that have written about values in business and what their role is in business. Why you should, you know, you're better off for having those values. And you don't have to go very far or have read, you know, business literature for very long to understand and see examples of businesses who don't have values around living their values.

David:

And you know, at some point to think about it, we talk about people getting caught, you know, the whole idea of being caught, you know, is it kind of grates against our, our nature, frankly. And so I think you can have a conversation and say, What about values? And I think if you're higher in the organization, you know, you can very much more legitimately have a conversation, you know, with your peers and maybe, you know, if you're not at the top of your organization start saying, you know, why don't we have values? And if you do have values, I think you can have a very specific conversation with whoever your boss is and say to your boss, Hey, you know, here's my report and here's how you know my work is going. And I was listening to a podcast the other day, and they talked about values, which just really kind of, you know, resonated with me.

David:

And so I really think it's important that we live our values, you know, we've got these values, it's on our website and you know, some people put 'em on the back of their business card or you know, whatever else they do, it's on the wall at the corporate office or whatever. And so do you agree that it's really important that we actually live those values and he can have this conversation and hopefully, right, if they have integrity, they're gonna say, Well yeah, duh, of course it is. And you can say, you know, I don't control what Mary or John or Jose or somebody else does in another division, but in my division I really wanna reinforce us living our values. Will you support me in that? Right? So what you're doing is you're having a conversation, one human being to another, and you are setting some ground rules, right?

David:

Which is a really good idea in any kind of relationship. What are we agreeing about? Things that are important, right? And so we've just, we have this conversation and hopefully we get to a point, you might have to have a few conversations, kinda like, let me think about it and let's get back and talk about it next time. That's fantastic, right? That's even better some ways cuz it means that this is an ongoing conversation. It can have a little more depth to it, a little more engagement in this. And I think that's very healthy. But hopefully you get to a point where you have permission to say with your boss, this is really important and we agreed to that. And then you can work with whoever you are working with, you know, on your team or if you're a supervisor, you know, your, your group that you're supervising, that values are important. And then you can start to have this conversation with your peers and your direct reports and then it can grow from there. And that's, it's kind of a, you know, in nature, all things start small and as a part of nature and human beings, you know, that's usually a good idea. Further says this company wide edict and values are important and, you know, and it becomes another program or another thing. And this becomes very organic and natural and people are gonna, it's gonna be more powerful, more influential.

Adam:

So do you think it, it still can be just as powerful and influential when an organization gets to a place where like, okay, we want the values to be measured in some way. So they put it against your personal performance assessment in some way where okay, you need to measure yourself against our value statements. Do you think it can be just as effective when it's done that way?

David:

I think it can be as long as anything that we do can be made pedantic, right? It can be made superficial. I check the box. I mean my very first job outta high school, I sold Cutco knives, and you know what? Nothing against Cutco, I still have those knives from 1978 and they still work great. I send them in every five years. They sharpen them for me for free and they send them back. You know, they've been great knives. So there's a plug for Cutco knives. You know, when my first meeting with my sales manager, you know, I'm just green outta high school and he says, Dave, how many people did you call this week? And I said, Well, I don't know. And he says, Dave, look at your report here. And I started giving him this, you know, narrative. I like narrative. And so, and he said, No, Dave, wait, wait, wait.

David:

Like if they see this box on my report, I have room to put a number. No more than two digits. So how many people did you call this week? Well, I think six. And so, you know, the idea was, you know, that we were very specific, but that can become pedantic, right? I just called people and it wasn't meaningful, right? I wasn't using skill I, whatever. But at some point, you know, you gotta get on the phone and you gotta talk to people or you're not gonna sell anything. So there's some value to it, but it can become kind of pedantic. And so the idea I think to keep it from being pedantic is again, to be more explicit. So just like we talked about in our personal values, we need to make them explicit as a corporation, I urge if you have corporate values that you describe them not in, you know, a page long, I think as short as possible, a sentence or two or three at the most that says if we have a value, let's say transparency, one of my own core values is one of our core values, right?

David:

To make any of these values explicit, you need to define it. So what does that mean for me as an individual if I'm doing my own or for a company? It would be what does it mean as a company? And it's not necessarily right or wrong, right? In other cases, it's not right or wrong. It's simply that we as an organization, as a group of people have agreed that this is what this means to us in our setting. And so you define it and then you say, what does it look like? What does the behavior look like? And again, you don't want a big paragraph, you know, you want a sentence or two or three that kind of says, this is what this looks like here for us or as an individual for me. And then you finally, there's three steps. The third step is that you say, why?

David:

So what, why am I or as an a company, why are we better off for living this value for, in other words, making those behaviors a part of our daily walk, our mental model of you all how we process. Cuz that point, it's only at that point that that value becomes profound and powerful and it provides those benefits to a single individual, you or me as a person or to a corporation, which is a collection of individuals who've agreed on these boundaries. And we've taken the effort to define them, to talk about the behaviors that reflect that and why we're better off for living it. So for example, in transparency, for me as an individual, I've defined it simply as I don't have hidden agendas, right? I'm not two-faced. And that's as simple as it could be. And it doesn't have to be any fancier than that.

David:

And what is my behavior, what my behaviors, if I'm working with Adam and John and Jose on a project, I don't tell John something so I can get what I want outta him, add something different so I can get what outta him and Jose, something different so I can get what I want outta him, right? And there's one story and we all share that same story, that same narrative. And I don't have to remember what I told who, So my life is simpler and easier and I also build trust cuz that's a necessary underpinning of trust in any kind of human relationship, right? We wanna think that when we're talking about something that's kind of the real deal. And I don't have some hidden agenda that's driving, you know, some manipulation or something. And that could work at a company as well, right? We don't have hidden agendas. We're straightforward with each other. And that's how we reflect that behavior or that value in our organization as we're working together as human beings towards these shared purposes. And it's, again, this isn't the master course, this isn't the, you know, MBA in business. But this is a foundation that even with our MBAs and our advanced degrees and all the fancy stuff we have, if we ignore the basics, we suffer the consequences. It's inevitable.

Adam:

Yeah, we do. One thing that comes to mind is there, there's a lot of manipulation that comes with businesses, that comes with politics within business. How does one keep the values when they're trying to navigate politics of business, when they're trying to keep their ethical standards up high? It's not an easy task. And what you're describing sounds great in the perfect scenario, but we rarely are in the perfect scenario.

David:

We rarely are. There's no doubt. So I think two things, One thing for you as an individual, and here's what the, another kind of surprising thing when I was doing my research was that about 80% of us have never made our own core values explicit as I've described. And so I think that one of the things that we can do to add power to any conversation that we'll have or any effort that we have to live our own values, right, as a foundational thing is to make them explicit. And just by definition, most of us listening or watching the podcast won't have done that. And again, it doesn't cost any money, it takes a couple of hours. And you could have this additional power and motivation in your life. So a couple things are gonna happen. So in any business we always want to get from point A to point B, right?

David:

At some level, at some project, right? We're getting from point A to point B as an accountant, right? You, at a most basic level, you wanna take raw transactions and you want to create useful statements so that we can make better decisions, right? We have a point A, we wanna get to point B and as we, you know, used to talk about GIGO, right? Garbage in, garbage out. So in order to do that, you have to have two things. And I use Google Maps as an example. So if you and in Newtown, where's a city that you've never been that you would like to visit? Adam,

Adam:

Toronto.

David:

Toronto, up in Canada, right?

Adam:

Yes. Never been there. Beautiful.

David:

So you want to go to Toronto you get out your Google maps, you're visiting, right? You show up at the airport, you're looking at the map of Toronto, you don't know where you're at, right? You don't know where your starting point is, but you found this restaurant that somebody recommended and you wanna go there, you can see where it is on the map, but you have no idea where you are on the map. How successful are you going to be at getting to the restaurant?

Adam:

Not very.

David:

Not very, right? Google Maps won't even let you proceed unless you can say, find where I am, you know, you know, divulge my location. Or you can say I'm at this corner of this street and that street. It isn't gonna build a map or a course to get there cuz you gotta have a beginning and you gotta have an end, right?

David:

You gotta starting place and you gotta have a goal, an ending place. And so when you wanna get from one place to the other, so what we're talking about is values as a company and as an individual. If the company has taken the effort to make their values explicit, you have to start from some place to say, how do I relate to those goals? How do I interact? How do I feel about those goals so that I can actually, you know, say yeah, I'm comfortable living them. So you've gotta have a starting place and that starting place is in fact your own explicit core values. And once you've got those, you can then map a course between your personal core values and the corporation's core values. And if you can do that as an individual and within your sphere of influence, you can encourage that.

David:

You can have the other human beings that you work with who say, you know, Dave, that just makes sense or Adam that makes sense. And so we agreed to do that, right? And you start small and again, it's kind of a natural process and if you're higher in the organization you have more influence but you are still one human being. And I've been a CEO or a CFO for probably about 30 years. And one thing I've learned is that even as a CEO, I have very little influence to change behavior. I can say no very effectively, right? I can cut off funding for a project or say we're gonna change direction or that kind of stuff. But when it comes to things like values or strategies, my power is very limited cuz I'm just one human being and an organization of any size, it takes a lot of human beings to move something like values or strategies forward, right?

David:

So then we have to use the principles of human success to engage in creating that kind of change. Cuz we're talking about is not pedantic, it's not superficial, it's really much more profound as an organization or as an individual. And so, but as a leader, what you can do as I recommend you start small again, maybe you start with your own direct team and you have start these conversations cuz the start at the bottom, we can start at the top, it can start in the middle. Each of us has a power to influence within our sphere of influence, you know, no matter how small or large that is. And that's where I would start. Make it a pet project. You know, a little side project, get permission right? From whoever your boss is. So as a CEO, my boss was usually our board of directors.

David:

So then I said, this is what I'm doing, this is why I think it's important. You get their buy-in. And if you're, you know, at the bottom of the organization, you're a first level supervisor or you're not even a supervisor at all, talk to your supervisor and say, see I was on this podcast and I had listened to this conversation. I think this is really important. What do you think? Can we have a talk about this? And you can start wherever you're at. And that's really key to life as human beings, right? We strive to have influence over things within our sphere and we recognize that most things are outside of that. So we focus on what we can do, not what we cannot. Cuz that's gonna lead to frustration, depression, anxiety, all kinds of things that you don't need in your kind of wheelhouse. And so you'd start where you have influence and you start a conversation. Cuz as human beings, that's how we connect and that's how we decide on what we're gonna do, what we're not gonna do, what our standards are, what they aren't, et cetera.

Adam:

Yeah. It goes back to that, that old adage of accepting the things that we cannot change, right? That old serenity prayer that, that people still do every week, you know, accept the things I cannot change. And it's accepting that, you know, I can't change the world, but I can change myself first and if I change myself first, then it'll ultimately affect those around me. And then essentially it may affect those around them and it'll expand from there. So exactly. We have to look inside ourselves first. So before getting overwhelmed by what's happening around us, basically.

David:

There's a pattern in boy, I can't even remember what chapter this is in, chapter eight or nine in the book or something, but I talk about there's three kind of general directions that we can go. We're trying to solve a problem typically, right? So you, let's say you've made your own core values explicit and you find there's a disconnect. Your company either doesn't have values or they have paper values that they're not living right? And this is gonna create some anxiety, some what they call dissonance in your life. And that's okay, frankly, really that's good because it means the second principle of the book. So the first principle is values, the second is awareness, right? Cause it means that through this process of your own development and becoming a better, more powerful human being, right? A more directed self-aware, guided human being, a more person with a more meaningful life and existence, right?

David:

All these good things. What it means though is that you've increased your awareness as well, which is really the second principle, talking about you gotta know where you're starting and you gotta know where you're going, right? So the beginning of that is where are you, you know? So what are my values and why is this making me uncomfortable? Let's talk about in a workplace. I had a guy in my house the other day who was a technician. He had worked for an auto company, he was a, you know, a service manager and this what he's, I quote, "I was forced or required to lie to my customers every day". And he said at some point it became so uncomfortable for me, I could no longer stay, right? And so what's gonna happen is, is you start on this journey, you know, this is a self-development journey.

David:

That's something that we start whenever we want in our life. And hopefully it continues throughout our life, throughout our career, throughout until the day we die, frankly, right? It's not like we have an end place in how we evolve as a human being, but anyways, so you gotta start someplace. And that's awareness. It takes awareness to do that. Both of yourself and as well as what's going on around you. But you might find like this guy, you know, he has practicing some awareness and he had a sense of his own values and he said, This is so uncomfortable. So you can zoom in so you can work on reinforcing how do I operate within this? Right? That's one legitimate kind of course of action. You can zoom out. So you talk to your manager, your supervisor, you have this conversation, right? You try to get a little, you know, if you're a union, you know, you talk to the union.

David:

Again, every situation's gonna be a little different, but you look at this sphere of influence. So you zoom out a little bit and say, how can I get some help here? How do we get some consensus? And then finally, you might have to zoom away. And you know, like this guy decided, he said, I'm not gonna change this. This is, you know, here long before I was here. And the other guys I'm working with, it doesn't bother them that much. So I'm never gonna get my car fixed here. And I'm gonna zoom away, right? And so we all have these kinds of decisions to make, but it's healthy, right? What is not healthy is just taking it every day and cuz it wears on you. Yeah. It creates anxiety. It can create all kinds of negative things in, you know, our mental space.

David:

And since we're all connected, right? Mind, body is all connected every time that we have this disconnect, this dissonance, unless we can address that directly, it's gonna wear away at us. And it makes us less effective as human beings. It takes away joy out of our life and we just won't get as much done, right? And we won't evolve as human beings. And so we need to deal with that. And ignoring it is just not gonna work. That doesn't serve us, It doesn't serve our companies well. And you know, by extension, as a group of human beings of nearly 8 billion folks, it doesn't serve our common humanity.

Adam:

I think those are very wise words and I encourage everyone to get a copy of the book. We'll put it that in the show note. David, thank you so much for coming on today. We could probably talk for another hour about this subject, but I just really wanna thank you for coming on.

David:

Adam. Thank you. It's been a pleasure.

Outro:

This has been Count Me In, IMA's podcast providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.imanet.org.