Is There Hope for High Integrity Leaders?

April 14, 2010

Chapter 8 Pg’s 207-209 Lead With Love By: Gerry Czarnecki

 The negative conclusion of the previous section should not be where we leave the discussion of integrity. There is little doubt high integrity leaders should have a strong commitment to integrity, and therefore, we cannot assume they will be unable to change an organization from within. The previous section sounds like a particularly pessimistic view of changing an organization with rotten values. The good news is organizations can change, and recent studies reflect that American corporations are increasing efforts to improve their cultures. According to the 2005 National Business Ethics Survey, which surveyed more than 3,000 American workers, 69 percent of employees said their companies implement ethics training, which is a 14 percentage point increase from 2003.

 Tragically, much of the change that occurs in organizations, as in the world of politics, results from a crisis. Often the behavior predicated on the lack of integrity encourages or precipitates a crisis. Many organizations have found a way out of a crisis because leaders, either from within or from without, have committed to change. If the crisis is severe enough, the entire culture can be shocked into a dramatic shift. It is important the cancer of lost integrity is not so pervasive that the organization is populated by only the weak or the $awed. One example of an organization that lost its way at the top is

Hewlett-Packard (HP). This organization has very high standards and a rich culture of commitment to a value system known as the “HP Way.” It appears much of the culture remained intact, but not at the top. The tragic story of HP’s apparent illegal practice called “pretexting” demonstrates that even an organization known for its virtuous business ethics can be polluted by a breach at the top. The scandal that ensued caused many to leave the board and the organization, and several individuals, including the former chair of the board of directors, were indicted in California. Those individuals appeared to have strayed from the company’s tradition of sound values and integrity. However, the strong culture that exists deep into the organization has reportedly survived and seems to be working with the new leadership to save the company from demise.

 The HP story suggests that an ethical culture at the bottom of an organization can eventually prevail. If integrity is a value that has positive influence on the organization, then hopefully, the lack of an integrity culture at the top will eventually lead to an organization’s failure. If that is true, then the good leaders at the bottom can overcome the “bad leader” at the top, hence invalidating the Law of Bad Leadership. The mission of restoring integrity within an organization may be influenced by its size, complexity, and geographic dispersion, but it can be accomplished more easily when the top fails than when the entire organization fails.

 Some organizations manage to mask their lack of integrity for a surprisingly long time. The Enron story is once again a perfect example. Enron had been the darling of the investment community for decades, and it took a financial crisis to bring the house of cards down. In the case of WorldCom, it took the courage of an internal auditor to speak up and tell the Board Audit Committee she thought there was “something

wrong” with the accounting. In the final analysis, neither Enron nor WorldCom survived as stand-alone entities. The message is clear: eventually the “bad guys” get caught, but it is difficult for outsiders to see that a corporate culture lacks integrity. The good leaders from within must be the organization’s salvation and cause others to commit  to the value of integrity.

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