10 Ways your firm can find new clients

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Building a new accounting or bookkeeping firm or growing an existing brand is hard work. And driving new client growth is essential to your success. Especially when your time is precious. The best way to find new clients – or replace lost ones – is with a smart, proactive strategy.

Mix new channels and old rules to find new clients

The rules of marketing are changing fast. Potential clients can be found in more places than ever before. Some of the channels and techniques you used in the past may no longer work.

Think carefully about the best approach and remain focused. Here are ten steps to improve the length and quality of your client list.

1. Identify your target clients

Not all clients and prospects are created equal. You can probably put your existing clients in three groups: great, average and not-so-great.

Think about the factors that determine what a great client looks like to your firm:

  • How easy are they to deal with?
  • How much total revenue do they generate?
  • Can you work quickly and effectively with them?
  • How profitable are they?
  • Do they bring positive exposure?
  • Do they create connections to other great clients?

There may be other factors you need to consider. The important thing is that you understand what your ideal clients look like before you start chasing them. Sometimes there are trade-offs involved. It’s not always financial factors that put a prospect on the list. You might be moving into a new area of expertise. You may be prepared to work for less profitable clients while you’re building your reputation.

Or if your firm has a specialty, you may be able to charge a premium. Looking for new clients in the area you specialize in could be a natural and profitable direction for you.

2. Partner with other qualified and trusted professionals

Your clients may already use other firms for services you don’t offer, such as:

  • legal representation
  • investment advice
  • recruiting needs
  • technology

Even if these aren’t your firm’s areas of expertise, it’s important you play a role in helping them with referrals if you can.

Think about establishing or improving the business alliances you have with other trusted professionals. Good lawyers, investment advisors, technology consultants and recruiters can help serve your clients. And you may receive mutual referrals from them.

It may also pay to establish non-competitive relationships with other firms you trust. But make sure you’re not in direct competition. For example, a firm with strong company tax expertise may offer bilateral referrals with a firm that has substantial company advisory experience. Or if you’re changing your firm’s focus, you could partner with a less specialized general bookkeeping or payroll practice. They could take on the day-to-day functions as you begin to specialize in higher value services.

3. Don’t be afraid to ask for referrals

It’s hard to find a better salesperson than a satisfied client. Your clients don’t exist in an exclusive relationship with you. They interact with other businesses of all shapes and sizes. Their recommendation of your firm adds value to your reputation.

Don’t take a “wait and see” approach with referrals. Be proactive. Ask your best clients to spread the word about your firm. Remember to use professional networking services like LinkedIn for recommendations and endorsements. Put testimonials on your website. Some firms use a more structured referral rewards program. These provide existing clients with defined discounts or benefits as a result of a referral.

4. Upsell complementary services to your existing clients

You can often increase business by offering additional services to clients you already serve. If they use your competitors for services you also offer, explain why your firm can serve them better. But pick your moment and take your time. Set up a special meeting, presentation or workshop. Think about the most suitable forum.

And don’t just talk about your firm. What are the additional benefits you can offer to your client? These could be:

  • cost or fee benefits
  • improved productivity
  • more accurate and reliable data
  • better service
  • smarter and more experienced people.

And if your clients are already well served? Look for opportunities to provide additional services to their partners, friends and colleagues.

5. Learn how to network more effectively

Networking events are vital if you learn how to make the most of them. Even in today’s digital age, in-person events are great opportunities to meet new prospects. It’s still hard to beat face-to-face interaction when done well. Networking events are even more effective for businesses who serve other businesses.

It’s important to be prepared before you attend networking events. Find out as much as possible about the other attendees before you go. It may be possible to get an attendee list in advance. Think about what would make your firm valuable to these potential clients. Make sure you meet key people and be sure to follow up afterwards.

6. Open doors by doing business with like-minded people

When you spend time with like-minded people, you’ll find casual opportunities to share stories and network. Non-traditional events, groups and activities provide great networking opportunities.

Do you participate in activities or hobbies that include business decision makers? You’ll already have a starting point for conversation. Whether you’re active in community projects, a cycling group, or a golf club, these interactions can become strong client relationships.

7. Look for businesses with the same approach to technology

Many businesses have moved to the cloud in the last few years. It’s not simply a fad or a buzzword. If your firm is comfortable with remote working, and if digital collaboration with clients is second nature, you’re already well placed to serve similar businesses.

Make the most of your love of technology by marketing your services to the right prospective clients. Invite them to tech and innovation conferences – ideally where you’ll also be. Send them links to new, relevant and interesting tech stories and clips. Share technology providers you rate such as:

  • cloud providers
  • IT security firms
  • web design companies and agencies
  • development and integration shops
  • ISPs and hosting providers
  • hardware resellers.

Don’t spam your clients endlessly. Less is more. An insightful link shows you understand their world.

8. Think strategically about cold calling and visits

Cold calling often has a bad reputation, but it can be very effective. It depends on your perspective, preparation and execution. The key to cold calling is to gain as much insight as you can into your potential client before your interaction. Know who you want to speak to, what their role is and what some of their needs are. And don’t forget to listen carefully. A natural conversation is more effective than a sales pitch.

Some firms use specialist salespeople to make calls to key decision makers at potential clients’ businesses. This can be extremely cost-effective. This method can be used to turn a list of unsorted prospects into cold, medium and warm leads. Once qualified, the warm prospects can then become leads for senior sellers in your firm.

9. Use speaking engagements and seminars to raise your profile

Think about the best conference or seminar you’ve ever been to. Who was the best speaker at that conference? Chances are you’ll never forget what you heard or saw. That’s an incredibly powerful tool.

There’s no reason why your firm can’t leave a lasting impression. You need to make sure you pick the leading conferences where the right people will be. And use your best speakers or presenters. Make sure the presentation is memorable. Use storytelling to communicate your ideas. A story well told is memorable, compelling and interesting.

10. Extend your reach with social media, blogs and content marketing

You have a rich store of valuable industry information and knowledge in your head. Now think about the collective intelligence of your firm. That’s an incredible amount of intellectual property that can be unlocked and shared with potential clients.

You can reap the benefits from this knowledge using your website, social media, blogs and other online content tools.

New clients aren’t hard to find when you genuinely understand their business

Selling your firm’s services and finding new clients isn’t just about solving problems. It’s about genuine insights, empathy and understanding. If you really understand a business, you can sell to them before they even know the problems they’re facing.

Use the steps above to find new and better clients and extract more value from your existing ones. Life at your firm will be more profitable and enjoyable.

Source: https://www.xero.com/za/resources/accountant-bookkeeper-guides/marketing/find-new-clients/

Accountants are more important than ever

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It is our role as accountants to ensure that we provide credible information in the financial statements that is useful and can be used to make sound financial, fiscal and policy decisions

We find ourselves in an environment where our time and other resources are constrained. We need to be purposeful in our actions. This requires reflection and includes being more mindful about our broader role as finance professionals in executing our day-to-day responsibilities and our ultimate purpose in preparing the financial statements.

We often do not consider the role that financial statements play in strengthening the system of public financial management.

There are generally four ‘pillars’ that result in stronger public financial management:
  • A credible, transparent outcomes-based budget that includes public participation
  • Financial statements that are prepared using information generated from a strong control environment, using generally recognised principles that provide information to its users that helps them make decisions
  • Assurance on the financial statements by independent auditors
  • The exercise of robust oversight over the planning, execution and assurance phases

What we need to reflect on is how financial statements lead to stronger financial management, which means better decision-making, better accountability, and as a result, better fiscal policy, frameworks and decisions.

Let’s unpack this in terms of our current environment.

The pandemic and its effects are not over

This is particularly the case in emerging economies where a steady recovery is not assured, as segments of the population remain susceptible to the virus and recovery. Broader access to vaccines is only expected in late 2022. Advanced economies are about 40% vaccinated, emerging economies about half that number, and low-income economies only a fraction. There is a low recovery of employment, which is highly uneven. Youth, women and lower-skilled individuals have the lowest rates of returning to work.

From a South African perspective, it is forecast that our gross debt to GDP will be 77,5% in 2021. A significant amount of support has already been provided in response to the pandemic.

Fiscally, the government2 will need to continue to respond to the effects of the pandemic and respond to social needs to address poverty, unemployment, inequality and other factors.

We live in an information age

We have no shortage of access to data in our current environment, and this includes financial data. Throughout the year entities process thousands of transactions, events occur, and circumstances exist within our communities and areas of responsibility, in other words ‘data’ is generated. This is where the role of accountants is important.

While accounting is about numbers and a certain level of precision, accounting is fundamentally a social science. Our role as accountants when we prepare financial statements is to analyse data and interpret it in a way that is meaningful to users of the financial statements.

If our role is to interpret data and provide information to users of the financial statements, the next questions are (a) to whom do we need to provide information and (b) what do they want to know?

Who uses the financial statements and what do they want to know?

Financial statements produced as part of a public financial management system address the needs of a variety of users. Financial statements are often the only tool that is publicly available to – for example – members of the public when they want information about a municipality, public entity, or government department. As a tool used for public accountability, the range of users is broad and includes:

  • Resource providers – Lenders, taxpayers, ratepayers, creditors and rating agencies
  • Service recipients – Those who depend on government services
  • Representatives of resource providers and service recipients – Parliament, legislatures, and municipal councils

The financial statements should be geared towards giving these users the information they need to (a) hold entities accountable and (b) make decisions.

The Conceptual Framework to the Standards of GRAP outlines comprehensively the range of accountability and other decisions that users are likely to make based on the financial statements.

As noted earlier, significant resources have been provided to support the effects of the pandemic, and users of the financial statements will continue to have an interest in this information going forward. As the financial statements provide credible financial information, policymakers and others may use this information to influence future frameworks, policies and reforms.

As the staff of the Accounting Standards Board (ASB) we published a document last year outlining potential ‘risk’ areas to consider in preparing the financial statements during the initial stages of the COVID-19 pandemic. These are largely unchanged.

It’s a balancing act

The information provided in the financial statements should balance the needs of various users and the focus and context of the key messages.

In the reporting period for 2021 we continue to feel the effects of the pandemic, dire economic consequences, and the elections. The messages communicated in the financial statements should not be overly negative or overly optimistic, and should be balanced.

The ‘qualitative characteristics’ from the Conceptual Framework outline the key qualities of information in the financial statements. Information should be:

  • Relevant – Capable of making a difference. Materiality is part of relevance. If omitted or misstated information could influence users’ decision, then it is material.
  • Faithfully representative – Represents underlying economic phenomena, is complete, neutral and free from error.
  • Understandable – In plain language, presented in an easily understandable way.
  • Timely – Make information available to users before it loses its capacity to be relevant.
  • Comparable – Allows users to identify similarities or differences in information.
  • Verifiable – Assures that explanatory and prospective information is faithfully representative. Information disclosed, methodologies adopted, and that factors and circumstances that support opinions expressed are transparent.

The demand is greater than before

African Bank, VBS Bank, Steinhoff, Tongaat Hulett − all synonymous with when accounting and accountants failed. We cannot afford a failure of this magnitude in the public sector. Unlike these companies that could call on government for help – a ‘bailout’ – government cannot do the same.

The demand for relevant, credible information is greater now than ever before. We need to do better, and it is never too late to start.

REFERENCES
1  The information is drawn from the International Monetary Fund’s Fiscal Monitor: Database of country fiscal measures in response to COVID-19 (July 2021) and the World Economic Outlook Update (July 2021).
2  Government refers to the ‘general government sector’ which includes national, provincial and local government.

Published by Accountancy SA | Author: Jeanine Poggiolini, Technical Director at the Accounting Standards Board
Source: https://www.accountancysa.org.za/advice-accountants-are-more-important-than-ever/

Over-Disclosure and over-transparency?

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As both accountants and good corporate citizens we advocate for accurate and transparent disclosure that will cater for a wide user audience and aid in decision-making. This also talks to acting in the public interest, which is one of the core mandates of an accountant

Disclosure had advanced over the years. Originally disclosure was used to help unpack or analyse a balance. For example, a large balance sheet item such as accounts payable would in the early days have a note that illustrated the breakdown of these creditors and whether any other amounts such as accruals or provisions were also included in the balance sheet amount. To an extent, then, disclosure was originally an illustration of a reconciliation to the users of financial statements.

As reporting advanced and after the adoption of IFRS, disclosure was enhanced to include detailed analysis of transactions, balances, acquisitions and disposals, among other items. Disclosure also progressed from merely an arithmetical exercise (as described above) to rather include a qualitative and quantitative analysis of the entity at financial year end and to allow the user to make informed decisions and exercise his or her judgement based on the detailed information now found within disclosure.

In recent times this has increased to include financial and non-financial reporting, integrated, forward-looking reporting that task to multiple stakeholders and − a current global focus – that of sustainability, climate and ESG as a whole. So, all good then: more and more and better and better disclosure.

Public entities listed on the Johannesburg Stock Exchange (JSE) need to adhere to the listing requirements of the JSE. One of these is that directors of listed entities are required to disclose their remuneration including salary, bonus, share options or any other fees earned or fringe benefits received.

In October 2021, the Draft Companies Amendment Bill 2021 was published with a period of 30 days for commentary. One of the major changes is the requirements for listed entities and state-owned entities to provide a remuneration report that, inter alia, clearly lays out the entities remuneration policies and all remuneration received by the entities’ principal management, namely its directors. However, the new requirements further require that this report disclose, to the fullest extent possible, the entire suite of remuneration earned by the highest-paid employee of the entity, most likely the chief executive officer.
The requirement further extends to include the same disclosure requirement as the CEO, but to the lowest-paid employee of the entity instead. Essentially then the requirement serves to disclose the earnings gap between the highest- and lowest-paid employee.

A further requirement is the disclosure of the average remuneration of all employees as well as the median of that of the top 5% earners and bottom 5% earners.

The objective of this piece is not to provide a detailed analysis of all these amendments and the other proposals but to rather ask the question if ‘over-disclosure’ or too much transparency may actually have the opposite effect to what was intended − in other words, the unintended consequences of perhaps too much disclosure. Even within the public domain there is certain information that contains inherent sensitivity that renders it potentially inappropriate to have in the public domain. Strategic advantages, recipes, databases, etc, are often the privy of the holder thereof, and to require this type of information to be publicly disclosed could impair their inherent value quite dramatically. (Like that beloved grandmother who never shared her chocolate cake recipe with anyone and took it with her to the grave …)

It can be argued that remuneration is one of those extremely sensitive areas. Generally speaking, payroll is extremely confidential, and entities take caution and put controls in place to keep remuneration within the entity confidential to only that of top management and/or the appropriate governance committee.

With this in mind, one must consider the unintended consequences of the requirement to these prescribed remuneration disclosures. What could the impact on staff morale be? What would the disclosure of the gap between the CEO and the lowest wage earner achieve? How would this information add value to the users? It is almost guaranteed that the gap will be vast. How would make the lowest or lower wage earners feel, how would that affect their morale? Could it incentivise them to strive to climb the corporate ladder to achieve the status of CEO in time to come, or could it rather disincentivise them and either spur on potential wage negotiations, discussions and even unrest? The lowest remunerated employee by mere context will always earn less than other employees – most notably than that of top management.

Executives carry a significant amount of risk, of accountability to shareholders, to government, to stakeholders. They often carry vast amounts of experience, technical expertise and knowledge that allow them to create opportunities and business and to afford the entity the ability to employ staff. Seemingly, without these executives business would not survive and the impact on both employee and the economy could be devastating.

To the point of disclosure then, and enhanced disclosure and its related transparency, disclosure should serve a purpose, should create additional value, should give further insight that would ordinarily would not have been accessible to allow the regulator/user/stakeholder to make the most informed decision possible. Disclosure then should give insight and perspective.

Sensitivity needs also to be applied when considering disclosure in a public environment and both the intended and possible unintended consequences should be evaluated. Arguably, and as illustrated by the proposed remuneration disclosure within the draft amendments, it is possible to over-disclose, to be overtly transparent to the point that it may erode value or lack benefit rather than enhance the user insight or experience.

Bill Boughey said in 2018, ‘Transparency fosters a sense of trust and provides serious motivation.’ In the case of the proposed remuneration disclosure, the opposite may in fact be true.

Published by Accountancy SA | Author: Milton Segal CA(SA), Senior Executive: Corporate Reporting | Standards
Source: https://www.accountancysa.org.za/recommend-xbrl-and-why-it-is-important-to-cassa/

Where does the value of a firm come from?

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As more and more firm owners look to transition, it’s crucial that they understand what, exactly, is valuable about their practice. The Visionary Group’s Bob Lewis and Doug Lewis dive into what makes a practice saleable — and what doesn’t.

Click below to listen to this very informative podcast

 

Published by Accounting Today | By Daniel Hood
Source: https://www.accountingtoday.com/podcast/where-does-the-value-of-a-firm-come-from

 

How Women Can Get What They Want in a Negotiation

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Tara, an MD/PhD who works for a large public university, contacted one of us (Suzanne) a few weeks after participating in a negotiation workshop she ran, wanting to share some positive news about successfully negotiating an 11% pay increase. A faculty member for six years, she had come to learn that she was not only underpaid but also had a higher teaching and clinic load than others in her group. She, like many women, accepted her job offer without negotiating.

How common is Tara’s situation? Research suggests that 20% of women never negotiate at all. A woman who opts not to negotiate her starting salary upon graduation will forgo an average of $7,000 the first year, and will lose between $650,000 and $1 million over the course of a 45-year career. Why would women leave money on the table? There are several factors. When selecting metaphors for the process of negotiation, men pick “winning a ballgame,” while women pick “going to the dentist.” Expectations drive behavior. If women see negotiation as a chore, they either don’t negotiate or do so in ways that can hurt the outcome. There is also the (very real) fear, backed by research, that negotiating may come at the cost of being disliked.

The good news is that negotiating skills can be enhanced. Based on a growing body of research on gender in negotiations, combined with burgeoning research on positivity and mindfulness, we offer five strategies that can help women both choose to engage and perform more effectively in negotiations. They include:

  • preparing fully
  • cultivating positive emotions
  • boosting emotional intelligence
  • negotiating communally
  • negotiating a package

Preparing Fully

In general, people don’t like doing what they believe they’re not good at, and often opt not to engage in activities in which failure is likely. The more we fear something, the longer and more fervently we stay away from it, and the greater power we give it — a vicious cycle. How many people shrink at the thought of public speaking…and avoid it at all costs? Investing effort in preparing for a negotiation — knowing what you want and why, thinking through acceptable alternatives, and developing specific strategies for being persuasive — can significantly increase your confidence and competence. Moreover, thinking through other desirable outcomes or alternatives will give you flexibility and comfort, knowing that you don’t have to take whatever is offered.

Once Tara started gathering salary data from Glassdoor and other reliable sources, she began to understand her worth, and she committed to taking steps to achieve parity. Compared with men, women are less likely to be aware of, and are more uncomfortable expressing, their value in dollars. Tara’s preparation helped her to overcome this barrier. Going into a salary negotiation with such data, along with a planned and persuasive explanation of achievements and capabilities that warrant a higher salary, can greatly increase one’s confidence in and expectation of a successful outcome. Visualizing or practicing (by role playing, for example) the negotiation in advance further embeds the skills and cognitive and behavioral readiness for the negotiation, increasing the chances of success even more.

Cultivating Positive Emotions

Positive emotions can help women negotiate more effectively by increasing their willingness to seek mutually beneficial solutions and improving their ability to engage in creative thinking to identify a wider range of options. People in positive moods prefer collaboration over competition. By cultivating positive moods, women will be more likely to work to achieve integrative gains — asserting their needs while encouraging the other party to do the same. This will increase the probability of reaching a mutually satisfying, optimal agreement.

Research demonstrates that people experiencing positive affect show patterns of thought that are more flexible, unusual, integrative, and open than those whose affect is negative or neutral. Thinking of a joyful memory helped students perform better on a standardized test, and boosting the moods of medical students by giving them candy improved their accuracy and creativity. Prior to a negotiation, women can use positive priming (thinking about something positive or engaging in a joyful activity) to increase positive emotions, resulting in greater creativity, openness, and willingness to collaborate, all of which are essential to successful negotiation.

Boosting Emotional Intelligence

Emotional intelligence involves an awareness of one’s own emotions and the emotions of others. Being more aware of her emotions can boost a woman’s confidence in negotiating. It lowers the intensity of emotions and reduces reactivity by providing a moment in which to consider how best to respond. This emotional control can help women negotiate more successfully and give them greater self-assurance, especially in difficult situations.

With increased confidence, women will be more likely to assert their needs. Confidence may also reduce anxiety about negotiating, which women experience to a greater degree than men. This can increase the likelihood that women choose to enter a negotiation to begin with. And a greater awareness of the emotions of others during a negotiation can help women better understand their needs and interests, which can make it easier to find integrative solutions.

Emotional intelligence can be developed through mindfulness. Mindfulness is paying attention to the present moment — what’s going on in the world around you, as well as your thoughts and feelings. Being mindful can, therefore, increase your emotional awareness. One of the best ways for women to become more mindful is to practice meditation. Focusing your attention on something like your breath, and bringing it back each time your mind wanders, even for a few minutes a day, builds your ability to stay focused. It has also been shown to decrease the emotional reactivity of the amygdala, which is activated when facing situations perceived to be dangerous, overwhelming, or threatening.

Negotiating Communally

While male (or masculine) negotiators may win the battle but lose the war because of their competitiveness and unsympathetic approach to relationships, women may suffer on both accounts — issues and relationships — because focusing on their own needs causes others to view them as bossy and aggressive. One way to overcome this challenge is to reframe a negotiation as though you are negotiating on behalf of a group or other individuals. For example, a woman who negotiates for increased resources to enhance the quality or the productivity of a department that has been stretched by downsizing and low morale will be seen as collaborative, not aggressive. Research demonstrates that women who adopt a “relational” or “I-we” strategy, in which they show concern for the other person’s perspective, can minimize the social cost of negotiation.

The ability to reframe the negotiation — even one with the goal of increasing one’s total compensation — into one where the other party also benefits is particularly important for women. The collaborative or communal mindset — enhanced by preparation and a positive mood — can help a woman find an I-we strategy that is good not just for her but also for the company or for some larger cause that she and the other party both believe in. Women would do well to consider the interests of the other party and suggest integrative solutions. For example, instead of saying, “Getting an MBA is important for my development as a manager,” frame your ask as a win-win: “With the additional financial and managerial skills I’ll gain in an MBA program, I’ll be able to assist in or lead more complex tasks or projects, enabling you to focus on more strategic and high-level priorities.”

Negotiating a Package

People from other cultures negotiate differently. Whereas Americans and Germans prefer a linear, one-issue-at-a-time approach, the French prefer a more holistic approach, and will move back and forth on issues that other negotiators may have believed were long since settled. While the latter approach might appear confusing or chaotic to some, the multi-issue or package approach to negotiating enables women to be viewed as less competitive or aggressive. When there is one issue, the negotiation is more likely to be seen as adversarial: win or lose. However, when multiple issues are considered, women can be more collaborative and problem-solving: “If I give you this, then you can give me that.” This will help them to be seen in a more positive way.

In the case of salary negotiation, women would help themselves by looking at the total compensation package, which might include paid time off, the hiring of an assistant, or a commuting allowance — all of which have monetary value — as opposed to salary alone. Whereas a package offers opportunities to trade off issues that may have different value to each party, a singular salary focus can lead to an impasse (neither party budges), win/lose distributiveness (one party outmaneuvers the other), or compromise (both parties give up some of what they want). In some situations, salary ranges can be fixed, whereas performance bonuses, housing allowances, and other forms of compensation are not. Rather than saying, “My minimum salary expectation is $120,000,” try, “I’d be willing to consider a salary that is below my minimum if we can agree on the total compensation package. In addition to my eligibility for year-end bonuses, I’d like to discuss administrative support, relocation assistance, and the possibility of two months’ rental in a furnished apartment, given my 800-mile relocation.” Ideally, this request is backed up by some data gathering of norms in the industry, the region, or, better still, the company.

Whether negotiating salary, company resources, or complex, multiyear contracts, women need to overcome challenges with respect to their motivation, confidence, and the expectations of others. By preparing effectively and enhancing their negotiation skills, they’ll increase their ability to come up with creative solutions that work better for everyone involved.

 

Published by Harvard Business Review | Written by Suzanne de Janasz and Beth Cabrera
Source: https://hbr.org/2018/08/how-women-can-get-what-they-want-in-a-negotiation?utm_medium=social&utm_campaign=hbr&utm_source=LinkedIn&tpcc=orgsocial_edit

The Dalai Lama on why leaders should be mindful, selfless and compassionate

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Over the past nearly 60 years, I have engaged with many leaders of governments, companies, and other organizations, and I have observed how our societies have developed and changed. I am happy to share some of my observations in case others may benefit from what I have learned.

Leaders, whatever field they work in, have a strong impact on people’s lives and on how the world develops. We should remember that we are visitors on this planet. We are here for 90 or 100 years at the most. During this time, we should work to leave the world a better place.

What might a better world look like? I believe the answer is straightforward: A better world is one where people are happier. Why? Because all human beings want to be happy, and no one wants to suffer. Our desire for happiness is something we all have in common.

But today, the world seems to be facing an emotional crisis. Rates of stress, anxiety, and depression are higher than ever. The gap between rich and poor and between CEOs and employees is at a historic high. And the focus on turning a profit often overrules a commitment to people, the environment, or society.

I consider our tendency to see each other in terms of “us” and “them” as stemming from ignorance of our interdependence. As participants in the same global economy, we depend on each other, while changes in the climate and the global environment affect us all. What’s more, as human beings, we are physically, mentally, and emotionally the same.

Look at bees. They have no constitution, police, or moral training, but they work together in order to survive. Though they may occasionally squabble, the colony survives on the basis of cooperation. Human beings, on the other hand, have constitutions, complex legal systems, and police forces; we have remarkable intelligence and a great capacity for love and affection. Yet, despite our many extraordinary qualities, we seem less able to cooperate.

In organizations, people work closely together every day. But despite working together, many feel lonely and stressed. Even though we are social animals, there is a lack of responsibility toward each other. We need to ask ourselves what’s going wrong.

I believe that our strong focus on material development and accumulating wealth has led us to neglect our basic human need for kindness and care. Reinstating a commitment to the oneness of humanity and altruism toward our brothers and sisters is fundamental for societies and organizations and their individuals to thrive in the long run. Every one of us has a responsibility to make this happen.

What can leaders do?

Be mindful

Cultivate peace of mind. As human beings, we have a remarkable intelligence that allows us to analyze and plan for the future. We have language that enables us to communicate what we have understood to others. Since destructive emotions like anger and attachment cloud our ability to use our intelligence clearly, we need to tackle them.

Fear and anxiety easily give way to anger and violence. The opposite of fear is trust, which, related to warmheartedness, boosts our self-confidence. Compassion also reduces fear, reflecting as it does a concern for others’ well-being. This, not money and power, is what really attracts friends. When we’re under the sway of anger or attachment, we’re limited in our ability to take a full and realistic view of the situation. When the mind is compassionate, it is calm and we’re able to use our sense of reason practically, realistically, and with determination.

Be selfless

We are naturally driven by self-interest; it’s necessary to survive. But we need wise self-interest that is generous and cooperative, taking others’ interests into account. Cooperation comes from friendship, friendship comes from trust, and trust comes from kindheartedness. Once you have a genuine sense of concern for others, there’s no room for cheating, bullying, or exploitation; instead, you can be honest, truthful, and transparent in your conduct.

Be compassionate

The ultimate source of a happy life is warmheartedness. Even animals display some sense of compassion. When it comes to human beings, compassion can be combined with intelligence. Through the application of reason, compassion can be extended to all 7 billion human beings. Destructive emotions are related to ignorance, while compassion is a constructive emotion related to intelligence. Consequently, it can be taught and learned.

The source of a happy life is within us. Troublemakers in many parts of the world are often quite well-educated, so it is not just education that we need. What we need is to pay attention to inner values.

The distinction between violence and nonviolence lies less in the nature of a particular action and more in the motivation behind the action. Actions motivated by anger and greed tend to be violent, whereas those motivated by compassion and concern for others are generally peaceful. We won’t bring about peace in the world merely by praying for it; we have to take steps to tackle the violence and corruption that disrupt peace. We can’t expect change if we don’t take action.

Peace also means being undisturbed, free from danger. It relates to our mental attitude and whether we have a calm mind. What is crucial to realize is that, ultimately, peace of mind is within us; it requires that we develop a warm heart and use our intelligence. People often don’t realize that warmheartedness, compassion, and love are actually factors for our survival.

Buddhist tradition describes three styles of compassionate leadership: the trailblazer, who leads from the front, takes risks, and sets an example; the ferryman, who accompanies those in his care and shapes the ups and downs of the crossing; and the shepherd, who sees every one of his flock into safety before himself. Three styles, three approaches, but what they have in common is an all-encompassing concern for the welfare of those they lead.

 

Published by Harvard Business Review | Written by Rasmus Hougaard
Source: https://hbr.org/2019/02/the-dalai-lama-on-why-leaders-should-be-mindful-selfless-and-compassionate?utm_medium=social&utm_campaign=hbr&utm_source=LinkedIn&tpcc=orgsocial_edit