Are You a Good Leader?
You will be if you draw on key ethical principles. Here’s how to do it, whether you’re a CEO, a banker, an entrepreneur, or anyone else in business
“Never underestimate the other guy’s greed.” This isn’t just a classic line from the 1983 Brian De Palma film, Scarface (written by Oliver Stone). It also reflects the attitude that has caused the economic disaster we’re now clawing ourselves out of.
Isn’t it time for a new way of thinking?
I propose the following leadership guidelines for C-level executives, investment bankers, entrepreneurs, and everyone else whose decisions can affect the financial well being of other people.
1. WHAT’S GOOD FOR THE GANDER IS GOOD FOR THE GOOSE.
At a time when companies are slashing their labor forces and freezing salary increases, and when some employees are being asked to take lower-paying positions, it is deeply unethical for leaders to retain their sky-high compensationand to expect enormous bonuses. They should follow the example of Michael Kneeland, CEO of United Rentals, who recently asked for, and was given, a 20% pay cut. Let’s hear more reports like this one.
2. KNOW YOUR PRODUCT.
According to a recent three-part story in The Wall Street Journal, the willingness of investors to buy and sell financial products whose complexity they didn’t fully understand was one of the primary catalysts of the bust. From our current sober perspective, it seems unbelievable that self-identified experts could be involved in transactions with so much at stake and at the same time be ignorant about exactly what it is they were buying or selling, but this is what happened, and on a grand scale, no less.
Because money was being made in these deals, no one thought to question what was going on or had the strength of character to speak up about any suspicions. However, knowing your product isn’t a nicety of doing business. It is an ethical obligation-to your company, your clients, and yourself.
3. WINNING (AT ALL COSTS) IS FOR LOSERS.
Most of us were taught that we should treat people the way we’d like to be treated ourselves. However, too many business leaders have failed to take this seriously. Instead, the guideline seems to be, “Get all you can by any means necessary.” Look at credit-card companies that charge exorbitant interest rates, changing customers’ fees without telling them why. These companies defend such practices on the grounds that they will lose their competitive edge if they don’t play hardball.
This kind of leadership is shortsighted, unfair, and ultimately bad for business, since the consequences will be more federal regulation and oversight. Good leaders know that if they don’t regulate their businesses themselves, someone else will.
4. TELL THE TRUTH.
A leader has an ethical obligation to be honest with stakeholders about issues that directly concern them. One of these issues is the leader’s own health. Consider the recent 10% drop in Apple stock after CEO Steve Jobs announced that he was taking a five-month medical leave of absence. Because Jobs battled pancreatic cancer several years ago, there was speculation that his cancer had returned, even though Jobs had announced earlier that he was merely suffering from a “hormone imbalance.” While stockholders may have punished Jobs for his announcement, he did the right thing in saying he was taking a leave for medical reasons. There is no shame in being ill, and true leadership involves being forthcoming about one’s illness-and anything else that can affect the flourishing of the organization.
5. PREVENT HARM.
When you can reasonably foresee that a decision is likely to hurt people and you make that decision anyway, you’re being both irresponsible and stupid. For example, subprime mortgage lenders and brokers who lend money to people likely to default are enriching themselves at the expense of the rest of us, since the federal government may be called upon for financial rescue.
What such predators don’t realize is that in the long run, their practices will come back to haunt them in the form of bankruptcy filings, bad PR, and perhaps even prison time for the worst offenders. The good leader recognizes that preventing harm to clients and company alike is both an ethical responsibility and a wise business policy.
6. DON’T EXPLOIT.
It is easy to take advantage of a situation for financial gain, but doing so isn’t consistent with good leadership. After Hurricane Ike hit last year, the wholesale price of gasoline shot up, which was nothing more than price gouging.
In the short run, companies that exploited a natural tragedy may have profited financially, but the long-term negative consequences are real and significant: In New York State, for example, more than a dozen companies were fined more than $60,000 for unfair business practices following Hurricane Katrina. Of course, the reason to do the right thing is simply because it is the right thing to do. But it is also true that taking the low road can be harmful professionally and personally.
7. DON’T MAKE PROMISES YOU CAN’T KEEP……
…and keep the promises you make. There are rare circumstances in which we not only have a right but an ethical obligation to break a promise, but generally speaking, we have a strong duty to be true to our word. This is, after all, one of the primary ways that we show our respect to people. Recall that last March, Dr Pepper said it would give out free cans of soda to “everyone in America” if Chinese Democracy, the long-overdue album from Guns ‘n’ Roses, came out by the end of the year. When Axl Rose surprised the music world by releasing the album in November, the beverage company was unable to deliver a soft drinksto everyone who wanted one (Whether it’s ethical for a band that has only one of its original members to call itself “Guns ‘n’ Roses” is another matter.) Good leaders are careful to make only those promises they are likely to keep and keep the promises they do make. When they are unable to keep those promises, they own up to it, which brings us to the next rule of good leadership:
8. TAKE RESPONSIBILITY FOR YOUR MISTAKES.
Transparency and accountability should be the new buzzwords. This means, in part, that business leaders who make mistakes should apologize to those they have let down and do whatever is necessary to make amends. In the wake of the toy industry’s lead-paint scare in 2007, Mattel CEO Robert Eckert took the high road and told a Senate subcommittee that the company failed “by not closely overseeing subcontractors in China whose toys didn’t meet U.S. safety standards,” and that Mattel was working with the Consumer Product Safety Commission to ensure that these products would be safer. It must have been extraordinarily difficult for Eckert to apologize publicly, but by finding the courage to do so, he demonstrated ethical leadership.
9. PEOPLE, NOT PROFITS.
We often recite-incorrectly-President Calvin Coolidge’s statement, “The business of America is business.” (What he actually said was, “The chief business of the American people is business.”) But far more important is what followed that statement: “Of course the accumulation of wealth cannot be justified as the chief end of existence.” Coolidge’s policies are often blamed for bringing about the Great Depression, but if enough people had heeded the latter statement, perhaps our history would have been different. Money has no intrinsic value; it is good only for what it can get us. For the good leader, this means that the ultimate goal in business-and life-is not hoarding riches but making things better for all, especially the neediest.
10. BE KIND, NOT KING.
The relentless quest to be No.1 can blind us to what’s really valuable in life: being a decent human being. Yes, good leaders are enthusiastically devoted to accomplishing their mission, but this pursuit cannot be at the expense of the well being of others. For example, leaders with the unenviable task of letting people go will avoid taking the easy way out . No one likes being the bearer of bad news, but the good leader does so with the dignity that leadership of the highest order demands.
BONUS RULE: YOU ARE NOT YOUR CAREER.
It’s admirable to be passionate about your job, but passion can easily become obsession, and that’s where the danger starts. When your life’s work becomes your life, it is time to take a step back and reevaluate your priorities. I’ve already shown why you ought to take vacations andstay home when you’re sick. More critical than either of these is recognizing what’s really important in life-and it’s not your career, no matter how satisfying that may be. Good leaders not only make room for family, friends, and spirituality; they know these are the things that truly make life worth living.
It should be obvious by now that the above rules apply not just to those in the financial sector but to everyone else, too. They are, after all, based on the five fundamental principles of ethics: Do No Harm, Make Things Better, Respect Others, Be Fair , and Be Loving. As Peter Drucker pointed out, it is not enough to do things right; we must also do the right things. The good leader today is concerned not only with getting from A to B, but with deciding whether B is worth getting to in the first place.
Dr. Bruce Weinstein is the public speaker and corporate consultant known as The Ethics Guy. His new book, Is It Still Cheating If I Don’t Get Caught?, (Macmillan/Roaring Brook Press) shows teens how to solve the ethical dilemmas they face. For more information, visit TheEthicsGuy.com.
This article originally appeared on Businessweek.com on January 30, 2009 as part of Dr. Weinstein’s regular column, “Ask the Ethics Guy”. It was reprinted with the expressed permission of Dr. Weinstein.
Fear
Ultimately we know deeply that the other side of every fear is a freedom.
~ Marilyn Ferguson (1938-2008)
I grew up in Brooklyn, New York in the 1970s. It wasn’t Brooklyn’s finest decade. Drugs, gangs, vandalism and street-level violence were part of everyday life. As a youngster my daily fun included being robbed, chased and assaulted with primitive weapons (for example, knives, baseball bats and brass knuckles, although not all at once!). To get a sense of New York in those days, I recommend renting the movie “Death Wish,” or the original “Taking of Pelham 123,” recently remade with John Travolta as the lead bad guy.
Children learn to accept their daily experiences as normal, so we didn’t complain much. As a result, the adults in my youth were somewhat oblivious to the risks we confronted. I walked (round trip) about three miles to school. During the hours between 3 and 6 p.m., I could have been anywhere in a maze of 200 square city blocks, up to God knows what. Cell phones didn’t exist so there was no way to “check in.” Our parents (who were educated, responsible, and intelligent) didn’t fret much, despite the growing awareness that crime and violence were spiraling out of control. When I said I was “going out” that meant I could head off in any direction I chose, to do anything I wanted, as long as it was not illegal. This might involve crossing busy highways, scaling and climbing over the diversity of broken urban terrain, picking up things that were rusted and filthy (including, for example, live ammo), investigating abandoned cars or houses, and taking the subways and busses to wherever they went, miles away from home.
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Today, I live in a quiet, orderly Pennsylvania suburb with my wife and our four children age 5 to 14. It is the safest place I can imagine. In fifteen years, I have never witnessed anything illegal, nor experienced even the slightest worry about crime or violence. Nevertheless, the adults in our community have scared our children to death. Our local public schools teach children how to avoid kidnappers, sexual predators and bullies. A recent seminar focused on avoiding cyber-stalkers, presenting the Internet as yet another terrible threat. Our children have absorbed the message that they live in an extremely dangerous world. It hit me one day when my son, then eleven, didn’t want to walk alone to a neighborhood store several blocks away because “something might happen” on the way.
Given my childhood, this fear seemed preposterous. But upon reflection, I realized that I myself had acquired an irrational need to know exactly what my kids were doing at every hour of the day, and to know that they were always 100% safe. I had begun to feel uncomfortable that they would try to cross a four lane road to go the ice cream store near where we live. An adult needed to help with that, right?
Some might say (including me) that I’ve become a paranoid nut, but frank conversations with other parents of my generation reveal the same underlying emotion: fear. We are worried to death that our children will be hurt out there in that awful, mean, cruel world. Indeed, having bragged about the safety of my neighborhood, I am now imagining that I will be struck down in some ghastly, random act of violence. It would serve me right for being so disrespectful of the dangers!
The modern media is at least in part responsible for our pervasive fear. The 24-hour video news cycle guarantees that the most hideous and despicable acts of mankind will not only make headlines in all their gory detail, but will also be morbidly enshrined in novels, movies and television shows. Today we have not only CSI Las Vegas, but also Miami and New York, so that serial killers and sociopaths can entertain all parts of the country. Meanwhile on Fox’s 24 nuclear bombs and biological weapons go off and mortally wound the heroes, even superman Jack Bauer.
And of course, there is 9/11, played, replayed, commemorated and serving as the backdrop for every serious conversation about national security. With 9/11 seared into the national consciousness, America today is not only home of the brave, but of the suspicious, worried and wary. Every day millions of travelers are reminded about the pervasive threat of death at the hands of terrorists masked as fellow citizens. That was the goal of the terrorists, right? To scare us.
But fear is also relative. In the 1970s, in the midst of the cold war, each day we faced the prospect of total nuclear annihilation. At risk were not just our little lives, but all life on earth. The famous Flintstones cartoon featured a comic character from the future, the “Great Gazoo,” sent back to the Stone Age as punishment for inventing a switch that could obliterate the universe. Mutually assured destruction did have its perverse comforts. There was something oddly reassuring in the idea that if one of us would go, so would we all. And not just us, but also the dogs and the hummingbirds. We speculated that the roaches and rats would survive as mutants. Do you remember Charlton Heston’s final chilling line from Beneath the Planet of the Apes?
In one of the countless billions of galaxies in the universe, lies a medium-sized star, and one of its satellites, a green and insignificant planet, is now dead.
Somehow the prospect of our universe snapping out of existence put all the small dangers we faced in perspective. Compared with instantaneous extinction of all life, global warming and terror seem like manageable threats.
Mark Twain said that worry is paying interest on a debt you may not owe, a thought my grandmother repeated to me. Lately it seems our post-cold-war, post- 9/11 zeitgeist, with its dreaded mushroom clouds, dirty bombs and pandemics, teaming with bizarre serial killers stalking this No County for Old Men, has produced a mountainous debt of paranoia, serviced at subprime interest rates of worry. The worry payments drain our spiritual capital reserves, pushing us to the brink of cultural and community bankruptcy, a state that leaves us with nothing but to cower inside our mini-fortresses, with our 2nd Amendment guns and duck tape, watching late night cable-TV experts whining “what a world!” in front of spellbinding touch-screen displays.
Aristotle, perhaps the most famous philosopher of the subject, thought of courage as the rational mean between fear and confidence. In his view, the courageous were not fearless. On the contrary, they were fearful, but marshaled the inner strength to move forward in the face of it, confronting risk head-on when reason justified the cause.
Aristotle got it right. The courageous live fully despite fear and risk, not without it, recognizing that the quest for total security yields a terrible reward. Security’s prize costs us everything we cherish, because life’s greatest gifts - freedom, love, friendship, creative expression, adventure, the growth of the heart and mind - require vulnerability. As Tom Jones wrote poetically in The Fantasticks, “Without a hurt, the heart is hollow.” Seeking a full heart, the courageous brave a hurt.
Americans must recapture the true meaning of courage. True courage does not obsess about security. We who live in the “home of the brave” must not sacrifice freedom to avoid risk. Let your children cross the road by themselves. Let them get lost and explore the city and the frontier. Go to a “dangerous neighborhood” and strike up a conversation. Take the bus late at night and walk home in the shadows. Go to a foreign country and live with strange people who think differently and might hate you. Someone is probably going to get seriously hurt. But someone might also experience the thrill of actually living.
Kellogg Fellows Making News
Obama’s Surgeon General Pick: Dr. Regina Benjamin (KNFP-13)
Picture by Robert Giroux, Getty Images
On July 13th, President Obama gathered the press corps into the Rose Garden in order to announce his next pick for the post of Surgeon General, Dr. Regina Benjamin (KNFP-13). Speaking in conjunction with his overall plan for heath care change, President Obama lauded Dr. Benjamin for her efforts to bring about change in the Gulf Coast area, “If there’s anyone who understands the urgency of meeting this challenge in a personal and powerful way, it’s the woman who will become our nation’s next Surgeon General, Dr. Regina Benjamin.â€
Read the Remarks by the President in Announcement of US Surgeon General
Free Speech vs. Cultural Sensitivity
Suzanne Burgoyne (KNFP-02) engages campus leaders from nine schools in “Difficult Diagnosis” workshop hosted by the University of Missouri. The workshops are geared to tackle the recent confrontations seen on college campuses by promoting civil discourse and an environment for the free exchange of ideas on college campuses. Participants spent four days swapping stories about volatile classroom encounters and tips on promoting academic freedom, while tolerating offensive speech without allowing racial, ethnic, cultural and religious slurs or sexually explicit remarks.
Picture by L.G. Patterson, AP
Read more about it on the WashingtonPost.com