U.S. businesses far and wide have instituted formal ethics training in an effort to discourage acts that pose legal risks, affect compliance, or compromise corporate and social responsibility. But even with the best intentions, the training often leaves unaddressed the moral dilemmas leaders face in real-life situations. Acting with integrity and moral purpose is not accomplished purely by adhering to a prescribed system of checks and balances; it’s a far more involved process of honoring personal and organizational values while considering the far-reaching consequences and implications of actions.
For example, when the person at the top won’t accept accountability for the actions and the impact of the decisions made throughout the company—as witnessed in the recent Murdoch abdication of responsibility for the News Corp. hacking scandal—it sends a signal to the rest of the organization about the importance of acting with integrity. When political leaders jeopardize the credit rating of the U.S. with sandbox squabbling over self-serving partisan agendas, it shines a blinding light on the dwindling integrity of our political system and makes a mockery of America in the global community.
Leaders in business and politics should go beyond the defined do’s and don’ts of the organization’s ethics policy and ask themselves the following questions.
1. Do I Exhibit Clarity of Intent?
Employees have to waste too much time searching for hidden agendas in order to decode leadership intent. As a leader, you must create a vision others can believe in and walk the proverbial talk. By doing so, you create a culture of safety, predictability, and trust in which employees can thrive. When you operate without clarity of intent, you become the alchemist of chaos.
Ruth’s experience is a prime example. She served as a senior leader with responsibility for a growing business within the portfolio of a large private conglomerate. The organization’s founder had recruited her, assuring that his dream was to invest in the business and allow it to compete with the best in the industry. Within 18 months of taking the job, Ruth had recruited and ignited an outstanding team. She submitted strategies and plans for state-of-the-art facilities and gained approval for moving forward. What followed, however, was a frustrating year of limited progress. Despite repeated promises from the founder to support her plans, he never came across. In truth, he wanted her to shore up a limping corporate asset to prepare it for sale. Learning their employer had hoodwinked them disengaged Ruth and the best members of her team; they all resigned from the organization before they could realize the founder’s plans.
Today’s volatile business environment has prompted organizations to adopt a nimble stance and prepare to morph at a moment’s notice. But leaders must ask, what is the vision we are pursuing and how does every action we take support that vision? Are we clearly and honestly communicating with employees? Are we creating realistic expectations within the workforce?
2. Do I Operate with Purity of Motive?
Great leaders concentrate on the highest good, rather than "I win, you lose" scenarios. Individual or company success need not occur at the expense of others. Collaboration based on purity of motive will be essential for organizational growth and sustainability as our concept of community expands across national boundaries. Leaders cannot establish thriving partnerships with other countries and organizations or with their own employees unless everyone gets to share the bounty. At the same time, leaders shouldn’t ask individual players to sacrifice their own beliefs and values in the process of meeting company goals.
As a leader, you don’t have to look far for evidence (or lack thereof) that the company operates with purity of motive. Consider, for example, your diversity program. Does the way the company operates demonstrate unequivocally that you believe in diversity, or are you giving attention to the issue because of government regulations? Do you value the quality of input that diverse views can bring to business issues and actually incorporate that input into business decisions, or are you paying lip service to minority perspectives? If you’ve had a diversity program in place for 20 years and there is no substantial increase in women and minorities at top levels in the company, no pay equalization across race and gender lines for the same job level, no examples you can point to where diverse opinions created a better business solution, you have your answer.
3. Do I Demonstrate Integrity of Action?
Your actions as a leader represent the interface where intent and impact meet. It doesn’t much matter what you have said, stood for, or written if your actions don’t support your intent. Think about that last contract negotiation with a supplier who offered services at volume pricing and to whom you later returned the contract asking for half the volume at the same discount. It was a small contractor and you were certain they would sign, because in this tough economy some business is better than none. You rationalized all this as you obtained the services at a sharply reduced price, but what does it say about you and your company? What does it say about your integrity?
Today, the airline industry is facing a crisis of integrity of action. When the FAA shut down in July and was unable to collect federal taxes, such airlines as Delta (DAL), US Airways (LCC), United Continental Holdings (UAL), and JetBlue (JBLU) began pocketing millions of dollars in additional revenue generated by marking up their fares to match the domestic ticket sales taxes and segment fees previously collected. It is estimated that this windfall for the airlines represents $30 million per day. (Unlike their competitors, Virgin America, Spirit Airlines, and Alaska Airlines (ALK) passed along tax savings to customers.) In an industry already struggling for customer loyalty and brand reputation, actions truly speak louder than words.
Marc Cugnon, chief executive of Purpose Linked Consulting, contributed to this post.