Business Brains

Disruptor | Dov Seidman, founder and CEO, LRN

Posting in Design

One of the hottest advisers on corporate culture suggests business leaders spend far too much time enforcing compliance and far too little encouraging ethical behavior.

"The shorts were short and the hair was big," chuckles Dov Seidman, pausing in his narration of the 30-year-old photograph that has become part of show-and-tell for his mid-morning visitor. Sporting said attire, his teenage self beams proudly in the California sunshine, frozen in time aside R&B singer Lionel Richie -- a loyal client of Seidman's first venture, a car-detailing business with buddy Reuben Sloan.

While the gap-toothed grin is mirrored in the present, it's difficult to reconcile the long-ago image with the charismatic entrepreneur who has just entered the brightly lit conference room on New York's 5th Avenue, with his hair close-cropped and wearing an elegant cobalt blue and black tie, tasteful cuff links and understated black (Gucci perhaps?) loafers. Behind him looms an oil-painting parody he commissioned 20 years ago of Eugene Delacroix's Liberty Leading the People, which depicts France's 1830 revolution overthrowing Charles X -- it's a not-so-subtle reference to the revolution he has been inspiring for the past two decades.

As founder and CEO of LRN, Seidman, 49, is one of the most in-demand advisers on corporate culture and leadership, headlining gatherings of The World Economic Forum and the Clinton Global Initiative (CGI). The updated version of his groundbreaking book about behavior, HOW: Why HOW We Do Anything Means Everything, boasts a foreword penned by none other than President Bill Clinton. And Seidman's nearly 20-year-old company is the exclusive corporate partner for an annual ethics essay contest for U.S. college students run by the Elie Wiesel Foundation.

Considering his advanced degrees in philosophy and law from the University of California, Los Angeles, Oxford University and Harvard Law School -- along with numerous other honorary degrees -- I wonder out loud why Seidman chose to apply moral philosophy to business instead of academia. The answer lies partly in his short-term clerkship at a massive law firm, where he witnessed firsthand the cost of organizational dysfunction and rules followed simply for the sake of the system.

"I always felt that just like human beings act from character -- malice aforethought, depravity of heart, was this intentional homicide or negligent -- that we act from character, and why don't we impute a character onto an organization?" he answers. "Why do we always say that people have character, but organizations don't? It always felt obvious to me that organizations have a character. It's harder to get at, because there's a collective of people, but there's a character."

At an early age, Seidman was known to be very philosophical, which is pretty understandable for a young boy who split much of his childhood between Israel and California, whisked in and out of a new school situation almost every year.

"I remember being at family gatherings, my brother and sister -- who were very social -- would have a great time in the gathering," he relates. "I would always get up and talk to the person that no one was talking to. I think this sensitivity to human dynamics and the human condition started early in life, and always remember thinking about right and wrong and good and bad."

His acute dyslexia further complicated matters: Seidman jokes he earned just two A's in high school (one for physical education and the other for "body shop"), and despite preparing rigorously, he was only able to boost his SAT scores by a mere 10 points to 980 after taking the test a second time.

It wasn't until 10th grade that Seidman actually spent two years in a row with the same classmates in Beverly Hills, which is when he started washing cars with Sloan to pay for college tuition. Every week, the pair trekked to Richie's home in a guest house on Kenny Rogers' Bel Air estate, where they were paid the then-princely sum of $50 per vehicle to hand-wash four cars (two each from Rolls-Royce and Mercedes-Benz).

When it came time to check into their University of California dorms, the two went separate ways. Sloan headed to the Los Angeles campus, while Seidman headed north for Santa Barbara. It took less than 24 hours for Seidman to realize he was in the wrong place. So he took action, writing a two-page letter to the UCLA admission office filled with myriad reasons they should let him register. "I just laid it all out there," he recalls. The plea was answered, and Seidman was invited to register -- provided he sign up for remedial English. That's when he discovered his other course options were extremely limited.

"The only class that was open was moral philosophy because it intimidated people, it had a reputation of being really hard," he recalls. "Moral philosophy rewards you for reading 10 pages in a deep, penetrating way and thinking deeply. History rewards you for skimming 500 pages. I would have flunked the 'easy' history class, and when I was in the philosophy class, I discovered it was me."

Although Seidman was on the path to a traditional law career, the idea for LRN was born out of his desire to help democratize the availability of legal research. Over the years, it evolved into its role as a "knowledge service provider" that has helped more than 700 companies worldwide navigate complex regulatory environments and foster more ethical cultures -- almost 85 percent of its revenue comes from recurring subscriptions for its training and educational content rather than through consulting engagements. Some of its big-name clients include 3M, Dow, Johnson & Johnson, Loews, Pfizer and Siemens. In 2004, Seidman testified before the U.S. Sentencing Commission, offering several proposals -- subsequently adopted -- designed to encourage companies to move beyond a "check-the-box" approach to compliance to policies that encourage ethical behavior.

More recently, LRN has turned its attention toward ethical culture in the non-profit sector, through a $1.5 million, two-year-long CGI commitment focused on two organizations: Population Services International (PSI), a global health initiative, and Network for Teaching Entrepreneurship, a support network for young people from low-income communities. Both have benefitted from LRN's leadership development guidance, workshops on culture and other services.

"Ironically, mission-based organizations sometimes have greater challenges doing this," Seidman says, adding, "In some ways, they are more relaxed about making the organization really operate optimally. In some ways, they are behind for-profits. In some ways, they take for granted that 'We are so about the mission.' [The truth is that] everybody is not 'here' because they love the mission … so that was an ironic lesson."

PSI CEO Karl Hofmann noted that such differences matter. "PSI's work with LRN has been eye-opening, provocative and action-forcing," he said in a case study published about his work with Seidman's team, adding, "We can get a lot better at driving our outcomes higher, and I think we are just at the start of an LRN-inspired journey."

That word, "journey," is one Seidman is using with far more frequency of late. He sees a profound disconnect between life, where ups and downs are the curvilinear route to truth and progress, and business, which prefers a much more linear path.

"Business has stopped journeying because to embrace journeying is to embrace the ups and downs," he says. "Business needs to get back to the ethic of journeying. Journeys are about resilience and progress and growth simultaneously. They are about pivoting and experimenting and measuring progress, not just end state and bottom line."

LRN tries to embody what it preaches, acting as a laboratory for ideas. The 240-person company -- which has an international presence in London, Paris and Mumbai -- holds elections for its various councils rather than appointing them. The conference rooms in its New York space (named for influential philosophers) can be reconfigured for size or intimacy using glass diving walls, and pale yellow Jerusalem stone wraps the pillars, a nod to Seidman's heritage. Each person is required to create a network of people who will evaluate their work over time. The idea is that the people with whom they regularly collaborate and interact are best suited to give them feedback.

"We would rather people be free from what their one supervisor is going to think of them throughout the year … It's messy, exhausting, frustrating, and it's delightful and it's meaningful. It's all of those things."

Asked to name a CEO he admires, Seidman points to Southwest Airlines founder Herb Kelleher without hesitation. "He did what CEOs are now starting to do. He said, 'I'm not in charge. He eschewed command and control leadership so early, and went to work on creating a culture where people could be free to contribute their own character and creativity. He was in the business of building the organism and not commanding anything."

Some people name-drop celebrities, Seidman does the same with philosophers. Our conversation swings widely from the Socratic faith of the Catholic Jesuit tradition (he admires the tangible, early moral authority emerging from Pope Francis); to Heraclitus, who argued that your character is your fate; and Archimedes, credited with the declaration: "Give me a long enough lever and a place to stand, and I will move the earth."

But it is Aristotle who shapes his firmest conviction, that excellence lies not in any single act but in principled, practical behavior that has become habitual.

"His emphasis on habituation around character development I think was important," Seidman explains. "His whole notion of pursuing what I call significance is that life has to have a purpose larger than the immediate, larger than the material … The paradox of happiness is that if you pursue happiness, it eludes you. But if you do something of meaning and significance, that you are passionate about, you create the space for happiness to find you. I think we have not managed, in our lives, that paradox. We tend to pursue happiness directly, and the corollary to that in business is that we have tried to pursue success directly as opposed to significance, and thereby creating the space for success to find us."

Editor's Note: This story was updated Oct. 28 to clarify Seidman's degree, the misuse of a word in a quote, the focus of his book, and when he moved back to California on a more permanent basis. One quote was also removed.

Photo: GSG/Creative Juice

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Heather Clancy

Section Editor

Heather Clancy has written for United Press International, ZDNet, Entrepreneur, Fortune Small Business, the International Herald Tribune and the New York Times. She holds a degree from McGill University. She is based in New Jersey. Follow her on Twitter. Disclosure