Integrity - The New Leadership
This is the first chapter of our forthcoming book, "Simple Stories For Leadership Insights In The New Economy". It is a book about stories. The stories tell how leaders dealt with people, complex issues, and tough decisions. Some of the stories are sad, others uplifting and some are funny. Some stories involve a few people others involve thousands. All gave us important leadership insights. They all are real and you might find that a few relate to your own experience.
We both went through many leadership programs, seminars, books, articles and other leadership products. We found many of these well meaning but lacked capturing the complex context in which leaders live. We agree with Manfred Kets de Vries, one of today's top Leadership Thought Leaders who said, "The literature we find on leadership, though vast, isn't always helpful." 1
We found that the best leadership lessons were learned from experience. We lived these stories and learned many lessons about leadership. But the key lesson and the one that seems to be a part of most of our stories is the absolute importance of Leadership Integrity. We learned that if leaders don't have Integrity, nothing else matters much. (We use Integrity synonymously with Authenticity, Credibility and Trust.)
A quick search for the definition of Integrity surfaced this --"Integrity comprises the personal inner sense of "wholeness" deriving from honesty and consistent uprightness of character" This seems to fit, but the following from Howard Adamsky, from his article "A New Day for American Leadership" captures what Integrity means for Leadership, "…leadership is part vision, part art, part science, part experience, part faith and part know-how, all bound together in an ironclad package called integrity." 2
Leadership is always important for Business success, but now Leadership with Integrity is critical. We are in the midst of a seminal change in the business environment -- from the Information Age to the New or Knowledge Economy. Key for business success is leadership and organizational culture. And yet the news is filled with CEOs who are falling from grace and there is talk of a "leadership crisis" and of "toxic cultures."
Leadership Integrity Lost and Found
There has been a continuing erosion of trust across numerous business sectors in America according to the Golin/Harris Trust Survey.3 Nearly 70 percent of survey respondents said, "I don't know whom to trust anymore," and said they will "hold businesses to a higher standard in their behavior and communications."
But for those of us who have worked in corporate America, we've seen poor leaders in action daily. It just wasn't news worthy in the past.
Despite much advice from the $15 Billion Leadership Industry (business schools, seminars, books, tapes, journals), it seems that many so called leadership experts; business books and publications failed us.
We may be seeing the results of Business School-Media-Corporate complex. Perhaps in concept similar to the once Military-Industrial complex former President Eisenhower warned about in the 1960s:
"This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist." 5
This Business School-Media-Corporate complex seems to have engaged in a group think of enormous proportions - professors, consultants, journalists, students and executives all feeding on their own diets of best practices, theories and what defines leadership.
Business is at a crossroads. Capitalism is facing a crisis. All of us who believe in business -- from CEOs to business-school professors -- must recognize that we have contributed to this crisis. "Memo to: CEOs," FastCompany, June, 2002 6
Not since the days of the insider-trading poster boy Ivan F. Boesky and the junk-bond king Michael R. Milken have M.B.A. programs been so assailed for their role in preparing future corporate executives. Many of the schools are scrambling to rewrite case studies, dust off their ethics lessons, and defend professors who have worked for the very companies now under scrutiny. The Chronicle of Higher Education September 20, 2002 7
The image of business leaders has been declining for some time. Starting in the early 1980s we began to see a seemingly endless parade of mindless downsizing, reengineering, reorganizing and inauthentic PR all focused on satisfying the investment community. Corporate leaders seem to excel at Investor relations and fail in the vital relationships with their own people and their customers.
The damage caused by these poor leaders is too often hidden until it is too late. We need to examine business practices that lead to how these scoundrels got to their high office and identify the true characteristics of real authentic Leaders. After all somehow these scoundrels got to the top, whether by promotion or approval by the Board of Directors.
This is the darker side of leadership. Manfred Kets de Vries has identified several of those shadows that leaders fail to recognize. One of these is "mirroring, or the tendency to see themselves as they are perceived by their followers and to feel they must act to satisfy the projections or fantasies of followers. A certain amount of mirroring is part of human existence. Our understanding of the world will always reflect some shared perceptions of what is real. But, in a crisis, even the best of us is likely to engage in distorted mirroring. The impact is most serious when leaders use their authority and power to initiate actions that have serious, negative consequences for the organization."
Be careful of your "Mirror."
We observed that as people moved up the corporate hierarchy, and received more and more perks, many became consumed with their own importance. Their position and rank became more important than just about anything else. I remember one of my bosses who said, "you know why the guys at the top have such large offices? It is to house their huge egos." Very few were able to resist the temptations and seductions of power. And they didn't last long.
It takes real courage to be an authentic leader. You have to be willing to honestly look at and acknowledge your own weaknesses. To use Kets deVries' metaphor, look at yourself in a clear mirror, not a distorted mirror.
In a survey by Lou Harris and Associates, only 40 per cent of US office workers believed that it was "very true" that the management is "honest, upright and ethical", with 85 per cent of them saying that it was "very important" for management to be so. Louis Harris8
Never extraordinarily high, trust levels between employees and senior managers are falling. Only 39 percent of employees at U.S. companies say they trust the senior leaders at their firms.
Between 2000 and 2002, there was a five point drop in both the percentage of employees (45 percent) who say they have confidence in the job being done by senior management and the percentage of workers (63 percent) who believe their companies conduct business with honesty and integrity. Watson Wyatt 9
Recent business news has chronicled some large scale leadership failures. More insidious and perhaps just as damaging as this example are the smaller but more numerous examples of ineffective, inauthentic practices that we saw each day carried by so called leaders.
Many would-be authentic leaders are out there pleading, trotting, temporizing, putting out fires, trying to avoid too much heat. They're peering at a landscape of bottom lines. They're money changers lost in a narrow orbit. They resign. They burn out. They decide not to run or serve. They're organization Houdinis, surrounded by sharks or shackled in a water cage, always managing to escape, miraculously, to make more money via the escape clauses than they made in several years of work. They motivate people through fear, by following trends or by posing as advocates of "reality" which they cynically make up as they go along. They are leading characters in the dreamless society, given now almost exclusively to solo turns. Warren Bennis, Forward in Counterfeit Leadership 10
GE Chairman & CEO Jeff Immelt's Message to Employees As GE learns and grows in the 21st century, three traditions of Our company become more important. Along with commitment to performance and thirst for change, we must always display total, unyielding integrity. 11
Despite the news about leader scandals, we find some examples of leadership integrity.
At Enron it was Sherron Watkins who had the courage to do a "skip level" and go right to Ken Lay with the bad news. This was dangerous because her boss, Jeff Skilling, was notorious for not wanting to hear bad news. She wasn't in on the complex, off balance sheet partnerships that were starting to unravel, but she knew that there was trouble and she let Ken Lay know what is was. In one of her earlier memos that have become public her heroic efforts seemed to be ignored, "The viewpoint is that I can effectively play devil's advocate on the accounting issues and be sure we anticipate the tough questions answers. My personal opinion is that it's very hard to know who in the organization is giving us good answers and who is covering their prior work." 12 Too bad for Enron's employees and shareowners that her warnings were unheeded.
Here's a great leadership story that didn't get the same news attention as the classic J&J Tylenol case. Merck & Co.'s development of a drug for human river blindness is an example of leading with integrity. In West Africa, river blindness had affected millions of villagers and for years the disease was controlled with pesticides. However spraying could not be done on a large scale and river blindness continued unabated.
In 1978, a research scientist at Merck & Co. believed he found an agent that successfully combated similar disease-causing parasites in livestock. He asked the laboratory director, Roy Vagelos, for approval to develop a form of the drug for human use. This effort would cost millions of dollars and require extensive testing in African villages. And even if the drug was able to cure human river blindness, there was virtually no chance that there would ever be consumers who could afford to pay for the drug.
For Vagelos, denying the request, even knowing the financial risk, would conflict with the company ethic that health precedes wealth. So he approved the request and the drug, named Mectizan, was developed. One of his greatest challenges yet lay ahead - distributing the drug that took a decade to produce. Although Merck's credo made health its first priority, freely offering and distributing the drug was without precedent.
Ultimately, Vagelos, who eventually became CEO, decided to provide the drug to all who needed it, free of charge and for as long as the need remained. "Sometimes in your life," he said, "you've got to take a leadership position and make a decision." 13
In our story "Wise Women Leaders", we chronicle the leadership of an innovative woman executive whose vision saw that the real route to competitive advantage was through the hearts and minds of people.
Max De Pree, in his book Leaders Without Power, addresses authenticity: "Vital organizations don't grant their members authenticity, they acknowledge that people come already wrapped in authentic humanness. When an organization truly acknowledges the a priori authenticity of each person and acts accordingly, how many ways open up for people to reach their potential!" 14
Authentic leaders in certain companies understand this vital relationship. It might be helpful to look at a list of the Top Authentic Leaders. Seems that people like "Lists Of The Top (You Name It). Well, there isn't any list of the Top Authentic Leaders. This didn't get press because authentic leaders are hard to find. We have a suggestion for how we might find authentic leaders. Take a look at a list of The Best Companies To Work For. Compiled by Robert Levering's Great Places To Work Institute. Here are the Top 20 US and UK Companies (Table 1.2.):
Table 1.2: 2003 Best Companies to Work For
We should look at the leaders in these companies to find Authentic Leaders. "A company doesn't become a Great Place to Work® by accident. It is the result of the attitudes and actions of a management that seeks to develop trust and co-operation. Good workplaces are not just about tangible staff benefits. The culture counts, too." 15
Look at the Organizational Culture statement of SAS "If you treat employees as if they make a difference to the company, they will make a difference to the company. That's been the employee-focused philosophy behind SAS' corporate culture since the company's founding in 1976. At the heart of this unique business model is a simple idea: satisfied employees create satisfied customers. From managers who work on projects alongside their staff members, to flexible scheduling that allows employees to work hard and play hard on the job, the environment at SAS is designed to enable employees to do great work and to have a life outside of work, as well. 16
It is also interesting to note that there aren't many Fortune 500 companies on this List. Why don't more big companies appear on this list? Because these organizations can't seem to develop leaders that understand the vital relationships they need to develop with people and customers, and to inspire and align a compelling organizational culture.
Take our short test in Appendix 1 to see how your company rates as an Enlightened 21st Century Organization.
Profile Of The 21st Century Leader
While leadership is always important to corporate performance, there is a growing realization that effective leaders with integrity are absolutely crucial to successfully navigating the New Economy of the 21st Century. In addition there is also a growing realization that the characteristics of the Leader of the 21st century are dramatically different than the leader of the past, even the recent past.
Command and control is out, organizations are getting flatter, the competitive landscape is chaotic, people are looking for meaningful work, customers are in control, these and more demands are being placed on today's leaders. Transition to the New Economy are frequently compared to movement to the Industrial Economy, the Information Economy, but the breadth of developments and changes in the New Economy are so dramatic that there is little precedent.
The real job of leaders is to inspire and create meaning and direction in the midst of drastic change and even chaos. In such a world of change and ambiguity, a new leadership style is needed. This involves the need to grasp the paradoxes inherent in the New Economy and to master the competencies required by the business environment now being created. This new leadership relies on the leader acting as an authentic and inspirational force developing effective relationships with people in the company, partners, customers, competitors and any other stakeholders.
We developed a Profile of the 21st Century Leader. Figure 1.1. Through our experience and research we defined the characteristics that will be needed to lead in an increasingly changing business landscape. This not to say that there is a definitive leadership model. Rather, we believe that leaders need to continuously adapt and change their approach as needs dictate. Leaders will need to apply these characteristics in an artful rather than a rigid scientific manner.
While all these leadership characteristics are needed, the most important is Integrity. We've seen too many leaders who lack Integrity. While most companies are not ethically (and now financially) bankrupt like Enron, there still exist leaders whose credibility is in question. Lack of Integrity must not be tolerated since they will undermine everything else that contributes to corporate success.
Leadership Integrity Guidelines
Integrity is a delicate jewel. Building integrity in leaders and their organizations takes time, continuous effort and cannot be feigned. You must feel it in your gut, in your core beliefs that being honest and trustworthy is the right business practice. If you feel that integrity is the route to financial success you are doomed to failure.
Accountability is the foundation for authentic business relationships. At least it forces the process of identifying and resolving issues. Authentic people take full and complete ownership for their lives, their choices, thoughts, feelings and actions, without blame or faultfinding.
Not financial acumen. Not vision. Not creativity. What employees want most from their business leaders are basic principles in practice such as honesty, integrity, ethics and caring, according to the results of a survey conducted by Right Management Consultants. 17
Authentic people know their deepest values without hesitation and fulfill them in thought, word and deed. Integrity is their nature. They do not depend on their position for power. A leader with Integrity:
So can integrity become as much a part of a company's daily existence as turning on the lights and answering the telephone? Shouldn't that be the goal? PricewaterhouseCoopers "Stand and be counted" 18
Suggestions For Building Leadership Integrity
We offer some suggestions you might want to consider as you build integrity within your leadership team. The suggestions are aimed at integrating Integrity within the underlying organizational culture. You must address "the way we do things here in company x", or the norms that govern how people make decisions each day.
Building Integrity takes time and continuous vigilance to ensure that ensure that it is maintained. We admit that these guidelines are not conclusive. We of course don't know the business context in which you live. But if you follow our suggestions you will be off to a good start.
Leadership Integrity Quotes
Leadership integrity must be firmly grounded in the company's values and integrated into individual employee values. Small business owners must build a company culture based on its core values and supported by a storehouse of stories - telling your people what the organization stands for, what it is trying to achieve and what is in it for them. Winning Your Way, November 2002.
Our society and our workplaces are tired of everything including one's principles being situational. Such traits as honesty and integrity must never be compromised. Leadership integrity is essential to the process of gaining the support of the rest of the organization in bringing about change. If the front line team senses that such integrity is not in place, the levels of trust required to make empowerment and quality a reality will never be generated. Altoona Metro Transit, "Focus on Excellence,
The transformational leader sets the moral tone for his subordinates by the example of integrity he provides in both his official duties and in his private life. Honesty cannot be instilled by contract - but it may be enhanced by education about its importance to mission accomplishment and by example. Colonel Malham M. Wakin, "Ethics of Leadership," in Military Leadership, ed. James H. Buck and Lawrence J. Korb (Beverly Hills: Sage Publications, Inc., 1981), 105.
"Integrity has no need of rules." - Albert Camus
"The supreme quality for leadership is unquestionably integrity. Without it, no real success is possible, no matter whether it is on a section gang, a football field, in an army, or in an office." Dwight D. Eisenhower
"There can be no friendship without confidence, and no confidence without integrity." - Samuel Johnson
"Nothing is at last sacred but the integrity of your own mind." - Ralph Waldo Emerson
Integrity is so perishable in the summer months of success. Vanessa Redgrave, "Wisdomquotes.
Personal trust, based on faith in a person's integrity, is trust at its most fundamental and widely understood. It is the trust of confidences shared without thought of betrayal, ideas revealed without fear of appropriation, and tasks doled out to teammates with the assurance that they will try hard not to let you down. Personal trust develops in the workplace through shared experiences and knowledge of colleagues' characters. From such crucibles as impossibly tight deadlines or shop-floor emergencies, we quickly learn on whom we can rely. Joni, Saj-nicole A, The Geography of Trust, Harvard Business Review, Vol. 82, Issue 3 (Mar 2004).
Our promise, just like a brand, is a promise that gets fulfilled or not, depending on the strength of our integrity. "Integrity audit" - taking some time to ask ourselves whether what we believe, how we act, and how we allocate our resources are aligned. I think responsible leaders take this kind of time regularly to check whether their "deeds match their creeds." Al Watts, "Integrity and Leadership.
Life is full of ethical complexities and ethical challenges. In the game of life, there isn't a space you land on that says: "Draw an ethics card now." That means integrity is a lifelong task. History shows us there will always be a few who are incorrigible and unteachable, and maybe even oblivious of what they are doing wrong. Even the best intentioned, most principled people have ethical lapses occasionally. But the great majority wants to act ethically. Unfortunately, among this majority, some number can be swayed to act against their better nature if they perceive that being honorable puts them at a financial or a career disadvantage. Mike Ruettgers, "Responsibility Lies In Leadership," Vital Speeches of the Day, Vol. 70, Issue 5 (12/15/2003).
SmartLeaders are committed to a life of integrity. Yale University Professor Stephen Carter has called integrity "The First Virtue." Before a leader can achieve true success in any area there must be a commitment to strive for integrity. Influence, success, achievement and soundness are all dependent on a leader's commitment to integrity. Searcy Nelson, Thinking About Integrity.
"Integrity. Without integrity you are dead as a leader…and it's going to be true throughout your career." Noel Tichy, Leadership Starts With Integrity.
"There are still CEOs who won't sacrifice long-term interests for short-term gains, financiers who walk away from unethical deals, consultants who level with their clients no matter what, athletes who won't endorse useless products, and professors who refuse to bend the truth as expert witnesses. These are people for whom integrity and self-respect are basic values -- absolute needs -- that are not open to negotiation" Robert Simons, Henry Mintzberg, and Kunal Basu, "Memo to: CEOs," Fast Company (June 2002).
"For executive leaders, character is framed by drive, competence, and integrity. Most senior executives have the drive and competence necessary to lead. But too often organizations elevate people who lack the moral compass. I call them `destructive achievers.' They are seldom evil people, but by using resources for no higher purpose than achievement of their own goals, they often diminish the enterprise. Such leaders seldom last, for the simple reason that without all three ingredients -- drive, competence, and moral compass -- it is difficult to engage others and sustain meaningful results." Warren Bennis, The Leadership Advantage.
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