Tag Archives: Business Ethics

Distinctively Different Times Call for Distinctively Different Leaders

The long-held dictum that if you do what is expected of you, you will do well is no longer the sure path to success.

There have been more changes in business orthodoxy in the first 15 years of the 21st century, than occurred during the entire 20th century. When the last century ended, it marked not just a turning of the page, but also a closing of the book.

The world of accepted business mores and the time-honored requirements of success and leadership were hit with the unannounced suddenness and destruction of a 9.2 magnitude earthquake. This tremor of transformation shook the traditional concepts of business and leadership to the core, and the resultant tsunami of change washed away all that had been customary and comfortable. The result is that these new times call for a new type of leader; a leader who not only does what is ethical, but is cheerfully ready to go the extra mile.

Perhaps you think these comments are too dramatic and overstate the situation to the point of biblical hyperbole (Matthew 5:41, “And whosoever shall compel thee to go a mile, go with him twain (two).” Well, consider the following. It’s fair to say that the American economic system (if not the world’s) has been at war with itself since the start of this century. It was not so long ago when – in simpler times – top- and bottom-line growth (no matter how achieved) were the sole goals of business leaders. But over time, the simplicity of that model and the abuses it perpetuated ultimately caused the very fiber of the business world to unravel.

Think about it. In just a little more than a decade we have witnessed the illicit machinations and ultimate destruction of Enron, Tyco, EthicsAdelphia, Lehman Brothers and many others; all the result of slavish – to the point of being unethical – focus on top- and bottom-line growth. It is still hard believe that over a span of just a few years such icons as General Motors, United Airlines, AIG, Merrill Lynch, Bear Stearns, Fanny Mae, Freddy Mac, Citicorp and scores of other established institutions of business suffered the turmoil of restructuring, bankruptcy, dissolution or acquisition; but it happened.

The game is different now; meaning that for individuals to become successful leaders in this new environment, they are going to have to be different, too. The conventional concepts of ethics and leadership skills are not going to be enough to be successful. It will take more than the time-honored perception of being ethical and more than the classic traits of leadership if one is to emerge as a new type of leader who can be successful in these new times. The successful leaders of tomorrow will be those who employ new concepts and altered skill-sets.

The business world is filled with thousands of well-intended, dedicated individuals working diligently to meet the standards of ethics and to apply the accepted techniques of successful leadership. That is good, but it is not enough to stand out and distinguish oneself as a leader in these new times. If you want to be the one to rise above the rest and achieve truly unique levels of success as a leader in this new environment, you first have to come to grips with the understanding that it is no longer enough to simply follow the rules and lead like everyone else. You need to be willing to take a different approach than other hard-working, ethical individuals trying to achieve leadership and business success.

Believe it or not, it is possible – and not all that difficult – to absorb what has been learned in the past regarding ethics and leadership and then take it just one step further. Being willing to go “one step further” is what will distinguish the average leader from the exceptional one.

Traditionally, being ethical means doing the right things that are required to be done. Follow the laws and regulations and don’t lie, cheat or steal. That’s the way it has always been. However, to distinguish oneself as a new type of leader will require doing the right things that are not required to be done. It is a different philosophy of leadership that embodies the notion of simply doing more than what is required to be done and instead focuses on what should and can be done.

A Pregnant Idea?

The idea of “maternity leave” is a simple example of how this new concept of ethics in leadership might work. Most states have laws mandating maternity leave, a period of paid absence from work, to which a woman is legally entitled during the months immediately before and after childbirth.

Failure to comply with these laws certainly would be unethical as it is something required to be done. Compliance with the law is the accepted and ethical way of acting, but what if the mother is given the option to “take as long as she needs” to be with her baby? Even if taken without pay, allowing the mother to take as much time as she needs and keeping the job open for her when she returns is not required, but it is what should be done.

Many will argue that this type of approach will only increase costs and the payoff is not measurable; but they are wrong.

Leadership that is based on doing more than what is required becomes a social influence that encourages followers to reciprocate with increased loyalty and effort for the leader.

It is no coincidence that companies with a culture of leadership that is dedicated to doing more than what is required to do and doing what should be done do better. Many, in fact, are extending the concept of “parental” leave to include maternity, paternity, and even adoption leave. Smart move.

The Price of Merely “Being Ethical”

Another, more complicated, example of this leadership concept would be the current travails of General Motors. Ten years ago GM discovered an important safety defect in cars they were manufacturing. If you trace all the actions of GM management from the time they GMdiscovered the defect to the present, you will find the company complied with everything “they were required to do,” but not one leader stepped up and said, “We have to do more.” GM set about to discover the defect and find a solution; they reported the incidents and actions to the National Travel Safety Bureau, it made refunds to complaining buyers under “lemon laws,” but they went no further. The NTSB dropped the ball and did not order a recall and so GM did not do a recall. GM did what was required, but no more.

In the meantime GM profited from the sale of millions of defective cars that resulted in the deaths of at least 15 people killed and hundreds injured. No leader at GM stood up and said, “Look, we are being ethical by doing what is required to be done, but we need to do more than that.” They were playing by the accepted old rules of leadership and business; and look at the cost to GM is now.

If, 10 years ago, there had been leadership and a culture at GM that set the standard of not just doing what was required to be done, but what should have been done, then GM would have been transparent regarding the problem, recalled the defective cars and stopped making others until the problem was solved. No doubt it would have been time-consuming and expensive, but GM would be better off for it today.

And the Moral of the Story …

Times are different now and the old way of leading and doing business is not enough to assure success. What is needed now is a different attitude and approach from leaders and businesses. The old idea that doing what others are doing and just doing what is required to be done is the wrong thing to do now.

The new world calls for a new type of leader and corporate philosophy if real success is to be achieved and maintained. There is nothing complicated or secret about this new order of leadership. All it calls for is an attitude and a new standard for doing the right thing. Understanding that doing the right things that are required to be done is not enough and that the real standard for successful ethical leadership in the 21st century is doing what should be done.

What’s So Hard about Doing the Right Thing?

Plenty! If it were easy then more people would to it.

There is no question that most people understand and want to “do the right thing.” What makes it so difficult to consistently stand up and do the right thing is that the requirement to do so usually confronts us at the wrong time.

All of us have been sickened by the nature of the alleged serial child abuse charges that have been leveled against former Penn State assistant football coach Jerry Sandusky. No crime triggers deeper contempt and disgust than attacks on the innocence of children. In this case, the wound is made even deeper by suspicions of a decade-long cover-up of these activities by the iconic football coach Joe Paterno and the most-senior administrators at Penn State. In fact, it is the specter of a cover-up that has become the focus of the scandal.

More media attention and discussion has been fixated on the cover-up of Sandusky’s alleged crimes, than on the repugnance of the actual crimes and concern for the purported victims. The reason for this is that in America we have this on-going, simplistic and romanticized belief that if only we “do the right thing,” then everything will take care of itself. In our society, having knowledge of a wrongdoing and failing “to do the right thing” by reporting or stopping it, is often considered worse than the transgression itself.

In the Watergate political scandal of the 1970s, it was not the two-bit burglary of Democratic headquarters in Washington that brought down President Nixon, but rather the orchestrated cover-up of that activity that opened a Pandora’s Box of political hijinks. In the Penn State scandal, despite the fact that they apparently complied with the existing policies and laws of the time, Joe Paterno and Mike McQuerary (then the graduate assistant coach who is purported to have observed some of Sandusky’s actions) have received as much – if not more – vilification for their failure “to do the right thing,” than has Sandusky for allegedly committing the crimes.

It will be months, if not years, before we really know what happened at Penn State, but even when we do, using the scandal as a trigger for discussing “doing the right thing,” is not really appropriate, because the lines between right and wrong in this case are so bright. The truth is that if McQuerary witnessed the abuse and Paterno, along with the administrators knew of it and did not take actions to stop it, then their failure goes beyond merely not doing the right thing; it becomes an affront to humanity. But there is a point to be made here.

If the clear-cut, egregious activities within the Penn State football program are not enough to crystallize the concept of doing the right thing in the minds of otherwise highly regarded individuals, then how is one to know what the right thing to do is when the lines are not bright, but cast in fuzzy shades of gray? This is especially the case in the business world, as discussed in this earlier blog.

It is not that difficult to understand or define the right thing to do, but that is not enough. What makes doing the right thing difficult is that often the test of doing the right thing never happens at the right time, a time when our lives are completely unfettered by any personal concerns we obviously have including jobs, career, finances, family, friends, health and well-being. In the real world we are always pestered by personal concerns that render our perceptions of what is honorable into a conflict between two “rights.” And worse, there are often no clear boundaries as to what type of activity is actionably wrong and what is not. An example will prove my point.

Your Career in Motion

Let’s say you are early in your career with a good company, married with a baby and another on the way. You observe your boss systematically cheating customers in order to enhance the performance of his department and ultimately the company. You see him receiving accolades and even increased bonuses, but you know his behavior is a sham and certainly not the right thing to do.

What do you do? Do you challenge him? Do you report this activity to his boss? You have heard the exulted words of high ethics uttered by senior management and read the “policy guide” issued by Human Resources, but how do you know this activity is not being surreptitiously condoned or even encouraged by the higher-ups? (Enron and AIG come to mind here.) You are not actually taking part in this subterfuge, so should you just ignore it? Is that the right thing to do?

In the abstract it is easy to say that doing the right thing is – at the very least – reporting the improper activity. But what if your report seems to be ignored? Are you off the hook and have no further responsibility? Even worse, if you do report it and your boss survives with nothing more than a reprimand, what might this do to your personal well-being and your future with the company? In theory, of course, you could quit your job and find another; but in this economy, is that possible? Is now the right time to put you and your family’s financial future at risk? You could go halfway and say nothing while you look for another job, but is that the right thing to do?

This type of enigma is not an academic exercise. Anyone who has ever been in the business world, with ambitions to be successful and rise up the pyramid (and support a family) knows this type situation – and a wide variety of others – is more reality than theory. The real questions are:  At what point are you willing to dilute or even trade in “doing the right thing,” to protect your career by “going along to get along”? At what point do you break and become willing to rationalize the elements of “doing the right thing?”

We don’t have all the facts now, but it appears that Mike McQueary is a living example of the real life challenges that can be encountered when trying to do the right thing. Here is a young guy for which football has been his life. His burning ambition has been to become a head football coach. He was talented, worked hard and was willing to pay the price to achieve his goal. For McQueary, his testing crucible for doing the right thing was thrust upon him at the wrong time, when he witnessed one of his bosses engaged in despicable actions with a young boy in a shower. One can only imagine the thoughts, conflicts and even fear that must have gone through his mind at that time.

No one else was in the locker room and with his career at stake he could have walked away and said nothing. He did not step into the shower to confront his boss and stop the activity, but he didn’t ignore the wrongdoing either. What McQueary did was to follow the letter of the law at the time by reporting the incident to his boss Joe Paterno. This action allowed him to convince himself he had done the right thing and was thus absolved from taking any further action. (One has to wonder what action he would have taken if that had been his own son in the shower?) Of course we know now that McQueary sold his soul for his future and now he has none.

Fortunately, very few will ever be tested to do the right thing the way Mike McQueary (and for that matter, Joe Paterno) was, but all will be tested. We don’t know what form the test will take, but we do know that when it does come, it will not come at the right time. That will be the real test of our ability to do the right thing.

And the Moral of the Story …

What can we do to make sure that when we are tested to do the right thing, it will be at the right time for us to take the right actions?

When confronted with complicated and conflicting challenges, the best solutions are found in identifying simple things and simply doing them. The same concept works to prime us to meet what can be complicated and conflicting challenges to do the right thing  every time and any time they may come up. This comes down to two simple questions that cut through personal rationalizations and questionable behavior: How would it feel if I were the one being wronged by someone not doing the right thing? How would my actions appear if each and every one of them were transparent and would become fully public?

These are simple concepts for doing the right thing and if simply followed, then anytime will be the right time to do the right thing.


Tips to Take from the Terrible Travails of Tressel

How trying to cover-up will sometimes make you naked

In 1972, Richard Nixon was running for reelection against a woeful candidate who was the Democrat party’s answer to the incompetence, irrationality and incoherence of someone like Michele Bachmann. With a lead in the opinion polls approaching 30 percent, the most memorable moment of the campaign was when one pundit quipped that the only way Nixon could lose the election was for him to be found in bed with a live man or a dead woman.

Neither happened and Nixon, of course, won a victory of such overwhelming proportions that it earned a place in election record books: Nixon captured the electoral vote in 49 states, harvested more than 60 percent of the vote and received a plurality of 16 million votes, the largest margin in the history of presidential elections. And yet, in less than two years, the president who began the phased withdrawal of U.S. troops from South Vietnam, eased cold war tensions, initiated strategic arms limitation talks with the Soviet Union and opened relations with the People’s Republic of China was  forced to resign from office in disgrace. He left behind two years, six months of his four-year term and some $500,000 in salary.

Jim Tressel has been the football coach at Ohio State for the past 10 years and during that time compiled one of the most successful records in college football. Under Tressel Ohio State won 82 percent of their games, participated in eight BCS bowl games, played in 3 BCS title games and won the national championship in 2002. Maybe most significant of all – at least for Buckeye fans – is that during Tressel’s tenure Ohio State defeated Michigan nine out of 10 times. And yet, like Nixon before him, Tressel has been forced to resign in disgrace. He had four years left on his estimated $3.5 million-a-year contract.

What happened and what can be learned from these tragic failures?

Much like a single match that can ignite a cataclysmic explosion, it was the small things that led to the downfall of both Nixon and Tressel. For Nixon it was a two-bit burglary seeking information that even if successfully purloined, would have made no difference in the election. For Tressel it was a penny-ante sale of football memorabilia in exchange for a few non-memorable tattoos. As you can readily see, it was not the magnitude of the transgressions that caused the downfalls of Nixon and Tressel, but how they responded to them. When both Nixon and Tressel were informed of the indiscretions of others, they answered by covering up their knowledge of what had happened.

These attempted cover-ups merely whetted the suspicions of the media whose watchdogs are ever-hungry for the scent of wrongdoing. Nixon invited the frenzy of the Washington Post’s Bob Woodward and Carl Bernstein; Tressel caught the investigative eye of Sports Illustrated, as well as NCAA officials.

Assuming Nixon did not know beforehand (which is a big assumption) of the break in at the Democratic headquarters, when he did learn who were responsible, instead of taking quick actions to condemn and terminate those involved, he conspired with others to create an elaborate plan to protect those implicated and hide his knowledge of the event.

Assuming Tressel did not know beforehand (which is a big assumption) that players were receiving illegal benefits by selling memorabilia, when he did learn what was happening, instead of reporting the transgressions and putting a stop to them, he entered into an elaborate plan to protect those players involved and hide his knowledge of the events.

The decision to cover-up inappropriate actions, rather than disclosing them created two problems: for both Nixon and Tressel it generated an air of suspicion and led to discovery of a pattern of abuse.

We now know that Nixon’s motivation to cover up the Watergate burglary was his knowledge of (and participation in) a pattern of immoral, unconstitutional and often-illegal actions that had been standard operating practice in his administration. Nixon knew that once the dam of collusion began to leak, a gusher of deceitful information would certainly drown his presidency. We don’t yet know all the facts that motivated Tressel to embark on the cover up, but we can surmise that, at the very least, it was done, ironically, to protect his carefully crafted, pristine reputation for demanding high ethics from his coaches and players. While Tressel has claimed he went into cover-up mode to “protect his players,” it does not take much cynicism to conclude that his real reason was to keep the players eligible in order to protect his winning record and possibly to hide other abuses; only time will tell.

So, what can we learn from these actions and the results they generated?

Well, we could draw the conclusion that if we are going to avoid falling into a pattern of activity that could ruin our reputation and future, we need to have a better plan for cover up than Nixon and Tressel had. But of course there is a better approach and one much more likely to promote success.

It may seem simplistic, and I guess it is, but the only way not to fall into the trap that ensnared Nixon, Tressel and scores of others is to assume that all decisions you make and all actions you take will become public knowledge.

If, when Tressel first became aware that players were systematically violating NCAA rules and before he decided to warn the player’s representatives and cover up the activity, he he should have asked himself, “What will this look like if my actions become public?” He may have lost a few football games by coming clean, but his job and reputation would today be intact. (That is unless like Nixon he knew of other activities would make the situation even worse.)

Admittedly, when Tressel learned his players were violating NCAA rules (even if stupid rules) it would have been difficult to turn in his players knowing they would lose eligibility and possibly impact the rest of their lives. It may be that Tressel was simply trying to protect the players, but by failing to consider the impact of this action becoming public, he made the problem much worse than it would have been.

We don’t have to be president or a big-time football coach to gain the benefits of a philosophy that assumes any and all our actions will become public. If you travel for a company and assume that each and every expense report you complete will be closely audited, there is little chance you will ever be questioned. If you serve on the board of a company and operate on the basis that every decision made and every action taken will ultimately become public, then there will never be a temptation to engage in a cover-up.

This philosophy is more than complying with the “letter of the law,” it means complying with the “spirit of the law.” How many times have CEOs, companies and boards of directors found themselves in trouble for attempting to comply with the laws of disclosure, but in reality covering up the intent of what they were trying to do?

The simple point is that if you ever find yourself in a position where you have to attempt to cover your tracks, then it is obvious that you have taken the wrong track. And while there may not be a Woodward or Bernstein, or some other media or government watchdog who follows the scent of your misfeasance, you would do well to act as if there could be.

And the Moral of the Story …

If, whenever you are presented with a decision or action to be taken, you always ask yourself, “What will this look like if it becomes public?” then there will never be a need to have to consider a “cover up strategy.”

That does not mean that you will not have to make difficult decisions and it won’t protect you from being criticized or from making the wrong decision, but it will protect your credibility and your ability to make other decisions in the future. And best of all, you’ll never have to lie when you say, “I am not a crook.”