Bullish on Integrity

Peter Rea is the co-author of Integrity is a Growth Market: Character Based Leadership, a 232-page paperback published by Atomic Dog Publishing. The Baldwin-Wallace College business professor and his co-author, theology professor Alan Kolp, have teamed up to promote business ethics as a way to help business leaders to attract and retain talent, while focusing on meaning as well as money.

According to Rea and Kolp, the four key components to character-based leadership are awareness, alert, attention, and action. They address seven classical virtues—courage, faith, justice, prudence, temperance, love, and hope—and set out a program to put these ideas into action. With a clear plan, executives can incorporate this character base into their personal and professional life, Rea says.

Integrity is a Growth Market was published in September, 2005, initially released in the Cleveland area, and nationally by early 2006. Rea estimates that around 5,000 copies have been sold so far, but hopes that the book will be used as a college text this fall. Business leaders have shown a great interest in Rea and Kolp's efforts to restore faith in business executives after recent scandals. The authors have consulted with a variety of organizations, from the Cleveland Indians to the United Way to PricewaterhouseCoopers.

Rea recently spoke with BusinessWeek.com reporter Janie Ho. Here is an edited except of their conversation:

How receptive are your business-savvy clients to getting all philosophical and talking about virtues?
Even with the range of organizations that we've been working with, they've always been very receptive. They all know that Aristotle understood human nature and how it plays out in everyday relationships. It gives a common language to talk about what everybody wonders about anyway (see BusinessWeek.com, 6/13/02, "Where Can Execs Learn Ethics?").

How will you respond to business leaders who are skeptical about this religious or philosophical approach?
There will certainly be some skepticism. We wouldn't try to pitch this to a company that would look at it with inherent cynicism. It's more for the company that's already committed to doing the right thing and is looking for ways to strengthen it.

I would try to overcome any skepticism by showing them how most of a company's value is in intangibles, reputation. Just look in the The Wall Street Journal and see what happens to a company's stock price if there's even a hint that the earnings have been misrepresented.

Can you give me an example of how one client has been adapting to this?
With the Cleveland Indians, for example, we first explain how character and compliance aren't the same thing. Character is about choice. The Indians can't compete in terms of payroll, so they choose to compete on integrity. Their core dilemma is how to compete without using steroids. Their general manager, Mark Shapiro, clearly wants to win with integrity but if players are getting into trouble, it's a distraction. We walk them through the seven virtues and help them incorporate them into their daily actions.

How will this help the business leaders regain the trust of the public, which is lacking, according to your findings?
The solution in the post-Enron world for restoring trust has been compliance, a rules-based approach. What's missing is the culture, the character of the people who make up the enterprise. This will give the framework for companies to cultivate culture. The Fraud Institute says that only about 6% of the workforce commits fraud. Most people want to do the right thing. They don't lie, cheat, or steal.

Have any companies expressed interest in wanting to incorporate virtue in its corporate structure?
Jeffrey Immelt, CEO of General Electric (GE ), was asked several months ago by analysts what GE's strategic goals were. He said that if General Electric is to become a great company, it must become a good company—and he meant "good" in the way that Aristotle meant it. This book was written from a field-tested perspective, where leaders actually work with us a chapter at a time on how they could use these ideas and apply them.

What kind of success have you had with your target audience? Who are they?
There are two groups. One is an executive audience. Then there's a textbook option which is targeted for the undergrad and MBA audience. Most of the success has been with corporate leaders because the textbook version only came out in January.

Do you see moral or business ethics being taught more at undergrad and MBA programs?
Yes. There's all kinds of practical reasons why you'd want to focus on this, but the dilemma is that integrity can be treated as a platitude without clarification on what it is and how you develop it. That's the missing piece (see BusinessWeek.com, 3/9/05, "An Ethics Lesson for MBA Wannabes").

Can you describe some ways that you would teach this to MBAs and how they could integrate it into their work?
Just had an Executive MBA class where each of them had to take a virtue, define it clearly, and then show how it plays out in their lives between classes. We'll take "courage," define it, and have them write a one-page paper. It's simple, but the idea is to be disciplined about reflecting on how courage impacts your work. Then can you develop it further (see BusinessWeek.com, 9/6/02, "Beyond Fast Bucks at B-School").

Do you see other schools adding this integrity model to their curriculum?
My background is in business strategy, and Alan knows the classics. One of the challenges is taking the classics and applying them to the contemporary issues. We can do that together, but the challenge would be how well can that be replicated to other schools.

How will you try to make your integrity model more commonplace as a theory in the business world?
Probably primary through seminars. We'll be typically dealing with middle managers or senior leaders and tying it very directly to the issues that that company confronts.

How would you suggest that business leaders reconnect with virtue and regain Americas' trust?
Without integrity, I don't know how a company could sustain a long life. Enlightened companies have already come to that conclusion. Corporate responsibility and compliance is only one part. The missing piece of character is needed to innovate and restore trust in customers, shareholders, vendors, and employees.