INTEGRITY—Begin Every Action with a Commitment to Integrity

March 30, 2010

The rash of horrendous scandals that have plagued corporate America in recent times has put a spotlight on the integrity, and lack thereof, among today’s business leadership. Seldom in the history of the twentieth and now in the early twenty-first century has there been a period of time in which corporate travesties of this nature have captured the attention of the American public. The result has been a huge loss of public confidence in corporate leadership. Leaders in corporate America are now ranked near the bottom on evaluations of trust and respect, even lower than politicians.

 This situation has created severe angst in corporate boardrooms and has incited a strong determination to regain the trust that American consumers once had. Many in corporate America protest that the current public opinion resulted from just a handful of corporate leaders who made serious missteps and that the rest of the leadership community has been unfairly tainted by those mistakes. Indeed, only a small number of leaders have been accused, indicted, and convicted of corporate malfeasance; however, that does not disprove the view that the leadership of America’s business community cannot be trusted. A large segment of our society has concluded that the typical corporate leader follows the Gordon Gekko philosophy of “greed is good.”

 The same people tend to believe the pursuit of financial reward drives corporate leaders to do whatever it takes for the corporate compensation system to work in their favor and that their (potentially) short tenure as CEO or senior executive will be richly rewarded for the substantial risk they take in assuming that perilous position. Far too many CEOs face the prospect of a one- or two-year tenure and consequently arrange or negotiate terms of compensation systems that are not affected by the quality of their performance. Unfortunately for corporate America, the erosion of corporate integrity has created a burden for all leaders that will be difficult to carry in the coming years. Once the public’s trust is lost, it is a huge challenge to regain it. Time may heal the wounds, but scars will remain. Trust and mutual respect are fundamental to all human relationships. Without trust, our relationships with customers, shareholders, associates, and vendors will be difficult to sustain. When there is a basic level of trust, the parties to a business relationship behave much differently than when that trust does not exist. Trust allows us to have enjoyable and efficient relationships as we pursue our organizational goals.

At the heart of trust is the commitment from every individual in an organization to behave in ways guided by a commitment to integrity. Our conduct must adhere at all times to the highest moral principles and professional standards. Truth, honesty, and fairness are not optional; they are mandatory. It may be challenging and occasionally unpleasant, but behaving with integrity is the only way to build trust and achieve success. Integrity and the trust it inspires provide great comfort to those who have business relationships with us. A breach of integrity forces our business partners to rely on testing and other controls that would be unnecessary if they had implicit trust in our behavior . Leaders must build relationships founded on a commitment to integrity. Unfortunately, our society makes that commitment difficult. It appears, even to the casual observer, that standards of integrity in our society have changed dramatically over the years. Under the traditional rules of early America, integrity was a core value of the society.

 Those were the days when a handshake or verbal commitment would be honored. Some believe the secularization of our society has diminished the impact of the moral and ethical standards established by the commitment to a religious belief. The “absolute truth” standard seems to have given way to the more “nuanced” view that answers are not simply right or wrong, but rather much more “gray.” The transparency of our society, with the media constantly watching and listening to every word, has caused politicians to avoid “telling it like it is” and opt instead to “spin the truth.” Most of us are so accustomed to political spin we seldom expect the words we hear to be a fully accurate reflection of the truth. A true commitment to integrity would require that we never spin anything.

Some argue one breach of integrity by a leader can destroy any trust associates might have. Others argue it is our ongoing pattern of behavior that determines how we are perceived. There is no doubt some people find it difficult to accept any misjudgment they perceive to be a breach of integrity. In a discussion on leadership and integrity at the Wharton Business School, Kenneth I. Chenault, chairman and CEO of American Express, said, “If your people believe you have the right values, they will tolerate a few mistakes. In fact, they will stay with you. They want to see that you are decisive and compassionate, because they are asking people to take risks, to take chances. But don’t confuse compassion with a reluctance to act decisively when necessary.” Leaders must balance their commitment to integrity and their commitment to love. Often leaders tell substantially less than the “whole truth” so as to avoid jeopardizing the psychological well-being of one of their associates. In the guise of caring and sensitivity, leaders may mask the full, candid, and potentially hurtful truth when communicating with their associates. Such caring is not love, and it often stems from fear that the truth will have painful consequences. Love demands the truth, and leaders must exercise their commitment to integrity if they are to be effective in their application of love during virtually every interaction they have with their associates. A candid counseling session only has meaning when the “candor” is expressed with love. Candor without love can be brutal and hurtful.

 Fear can influence a leader’s willingness to be candid or direct with associates during discussions about their performance. Leaders may fear reprisal from their associates, or they may be concerned their associates have legitimate reasons to question, doubt, or even aggressively challenge the accuracy of the observations. How many times have you as a leader provided feedback to an individual and found the subsequent conversation more painful than it would have been had you remained silent? Leaders who have had this sort of experience may try to avoid such difficult conversations in the future. In so doing, they fail to effectively lead (and love) their associates and the organization. If an associate does not receive your honest feedback, whether positive or negative, the result is the associate is being led with anxiety rather than love. The loving thing to do is to provide feedback that helps your associates find ways to improve their performance or behaviors. An entire organization suffers when leaders fail to have candid, direct, and meaningful conversations with their associates. Organizational performance reflects the sum total of individual performers in the organization. The leader is ultimately accountable for the quality of that performance. When a leader fails to provide meaningful feedback that is truly of the highest integrity, the organization is cheated of the potential for improved performance. Excellence cannot be achieved without the commitment to continually improving each individual’s performance. It is the leader’s responsibility to use every leadership tool available to maximize the performance against expectations set by the organization and its leaders. Leaders who have the highest standards of integrity understand this obligation to the organization and, irrespective of their contemplated fears, commit to taking high integrity actions.

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