Ethical Leadership is More Than Just Being Ethical



Ethics is doing the right things that are required to be done. Ethical leadership is doing the right things that are not required to be done. 

Ethical behavior is considered a surefire precursor to effective leadership and success in business. It means behaving in compliance with society’s laws and accepted mores; which basically boils down to not lying, cheating and stealing.
Possessing solid ethics is not all that challenging or rare. Publicized “perp walks” to the contrary, the business world is filled with thousands of ethical individuals working hard to be effective leaders nd successful in business. That is good, but for the individual who desires to stand out from the crowd and distinguish themselves as an exceptional leader – in all ways – it is not enough to simply comply with the minimum rules of ethics. Ethical leadership requires an effort to do more than other ethical individuals in positions of leadership. The way to do this is to turn ethics from a negative – don’t do this – admonition into actions that create a positive connotation by adopting a pro-active approach to ethics.

Here is what I mean.

Traditionally, being an ethical leader entails doing the right things that are required to be done. However, when it comes to ethical leadership it means going beyond the standards of others and consistently doing the right things that are not required to be done. True ethical leadership is simply doing more than what should be done by doing what can be done.

For example, there is no requirement to give a single-parent extra paid time off to be with a sick child, but it is the right thing to do and a leader who does so is doing more than what is ethically required and this translates into ethical leadership.

Adopting this elevated level of ethical leadership is neither complicated nor a secret. Leaders who exhibit traits of ethical leadership operate in a constant, consistent, respectful, parallel and open manner. Basic ethics does not require that they act this way, but they do, because they understand it is what will distinguish them from other leaders. Those who practice ethical leadership also realize that reciprocal respect, loyalty and commitment will be willingly offered by those working under this philosophy of leadership and, in the long run, it offers them the greatest chance for success.

Companies led by those who have embraced the concept of ethical leadership go well beyond the standard of ethics that an employer is required or expected to offer an employee. This activity is not limited to salary and benefits, but reaches to the very heart of that relationship. The end result is an environment in which people are highly motivated to work and contribute to the success of the leader and organization.

It is no coincidence that companies functioning under the aegis of ethical leadership consistently perform better than those that don’t. That does not mean competing companies are managed by leaders without ethics, but only that those with ethical leadership characteristics are able to outperform the competition on every level.

The world is crowded and competitive. If you want to be more than just part of the crowd trying to compete, you have to stand out and be different. Adopting a philosophy of ethical leadership – not just doing the right things that are required to be done, but also doing the right things that are not required to be done – will set you apart and put you on the path to being recognized as an exceptional leader.

When you get right down to it, it is the most ethical thing to do.

Be Surprised if You Win the Lottery, but Not by Your Success.

from “If You’re Not Making History, You Are History” by Bob MacDonald

If success surprises you, it means you were not in control of the outcome.

There were a lot of people surprised by my personal success and the success of the company – LifeUSA – that I helped bring into being, but I was not one of them.

After flunking out of college I was able (but only barely) to find a job selling life insurance door-to-door. Few could have foretold a successful career path for me, but I could.

From the very start of my career I began to collect and put aside one of every personal business card depicting my climb to the top of the business-ladder. I did this because I visualized a time when those cards would be framed and hanging on the wall in my top-floor executive office.

And that happened 15 years later when I became president and CEO of ITT Life Insurance Company. I mention this, not as some ego trip, but as validation that at least I was not surprised by my success; for me it was anticipated and expected. This confidence in my ultimate success motivated me to chart a winning course and do the things that would make the vision of those cards hanging in my office become a reality.

In 1987, when we were forming LifeUSA, the virtually universal reaction from those outside our group was that because the insurance industry was dominated by huge companies, it would be impossible for a new, start-up company to compete and be successful. My response to anyone who would listen was, “In five years, LifeUSA will be a national company competing effectively against the very largest companies.” Not many believed that, but I did.

Five years later, when LifeUSA was a national company competing effectively against the very largest companies, people constantly came up to me and asked, “Aren’t you surprised by the success of LifeUSA?” My response was always the same, “No! My only surprise is that it did not happen sooner.”

To some, this response may have seemed arrogant, but only because most people are surprised and think it must be an accident when others are successful. Isn’t it interesting that most people are not surprised when they witness or experience failure? And yet when they see success, they assume those who attained it must have been just lucky or at least surprised by it, because they would certainly be.

But have you also noticed that often those who are the most successful are the ones least surprised by their success? That’s because they planned and worked hard for their success. It’s fine to be surprised if you win the lottery, because you have no control over the outcome; if you win it is a random happening that is not likely to be repeated. However, if you are surprised by success it means that you were not in control of your success and it becomes a random happening that is unlikely to be sustained.

The point here is that when you prepare for success – rather than just hope for it – you are more likely to achieve it and when you do, you are not surprised. Nor should you be.


The Rules Rule

from “If You’re Not Making History, You Are History” by Bob MacDonald


The upside is that rules mandate stability and conformity – eliminating disorder. The downside is that rules mandate stability and conformity – eliminating resourcefulness.

Rules. They’ve always been with us. In fact, when archaeologists found evidence of the first written language deep in a cave in Mesopotamia (circa 3200 B.C.) it’s reported the researchers translated that primitive attempt to use writing to communicate as follows: “No drawing on this wall!” With this one primitive scrawl, rules were born. And we’ve been dealing with them ever since.

Not only have rules existed since man dragged his knuckles across the African Savannah, the more advanced man and his activities have become, the more copious and cumbersome are the rules that decree how to go along to get along.

Rules are necessary and can be good things, because they promote structure, organization, conformity and consistency. Without rules chaos would surely follow, but there are also times when a little flexibility and nonconformity can create a positive type of chaos; the chaos that allows for innovation and progress. The key to being a successful leader is to learn how to use rules to promote stability and structure, without killing the initiative to create and innovate.

Rules are Especially Prolific in the Business World

It seems the rule is that the larger the company, the more the rules. As companies become successful, rules governing process and procedure are implemented in an effort to codify established activities. That’s fine, but the downside to these rules is that they stifle innovation, creativity and risk taking; all components necessary for a company to attain and retain success. All too often complying with these rules becomes the sole objective, rather than progress and performance.

This conflict between the rules of conformity and the freedom of creativity calls for a delicate balance that is rarely resolved by the rules imposed in the business world. It seems that the managers and bureaucrats who support the rules of conformity almost always end up winning; even if the company loses. We’ve all heard the refrain. “Those are the rules and we’ve always done it that way.”

The perceptive leader discovers that, in reality, there are two types of rules: Those that are called “rules of direction” and those that are identified as “rules of performance.”

Rules of direction dictate to people exactly what the task is and how to perform it to achieve an objective. On the other hand, rules of performance set out the objective and broad guidelines outlining what the organization will or will not do to achieve it. The striking difference is that the latter approach to rules gives those charged with realizing the objective the power and freedom to determine the what and how part. Both types of rules promote structure and organization, but only the rules of performance allow for any innovation or creativity.

For example, let’s say you are leading an insurance company and the objective is to become a leader in providing retirement products. Under rules of direction, employees would be told exactly what the products are and how they are to be sold. Using rules of performance the objective would be the same, but those working in the company would be empowered with the freedom to develop and market any variation of product they could conceive, so long as that product met the company guideline of providing income for retirement.

Rule the Rules to Make History

You can’t avoid the reality that you are going to have to live with rules, but that does not mean that you can’t make rules work for you. The key to being a successful leader depends on understanding the two types of rules; along with the strength and weakness of each.

One thing a leader should recognize is that reliance on rules of direction is a clear sign of lack of trust in the worker, while rules of performance send a message of trust and respect. And most workers will echo back the message received from the leader. This means that the leader who makes an effort to rely on rules of performance will ultimately have the best chance to maintain the needed structure and organization, while still giving breath to innovation and creativity.