Ethical Behavior Coupled with Integrity

Continuing on the topic of Integrity from last week, let us look at how ethical processes support a leader's integrity in driving the business success.

A recent study performed by the Institute of Business Ethics (IBE) found that companies displaying a ‘clear commitment to ethical conduct’ consistently outperform companies that do not display ethical conduct. The director of IBE, Philippa Foster Black stated, “Not only is ethical behavior in business the right thing to do in principle, it also pays off in financial returns.”

Part of your commitment as a business leader is to create and maintain the processes and a culture that dictates ethical behavior. Ethical behavior is not an easy path, nor is it a path taken without thought and consideration. As a leader, decision with value connections will be presented frequently. Examples could include employees stealing from the company, doing personal business on company time, modifying accounting records, or extending a customer discount that was not earned, etc.

Clearly defined organizational goals and clearly stated organizational values are integral to your ability to make the best decisions and take the right actions. As you deal with different types of situations you are being evaluated very closely by your team. As you lead by example, you become a champion for the organization’s commitment to ethical behavior. As you look to enhance the ethical policies and processes within your company, here are some principles to take into consideration:

·         Be trustful: Recognize that customers and employees want to do business with an organization they can trust. When trust is at the core of an organization, it is easy to recognize.

·         Meet obligations: Regardless of the circumstances, do everything in your power to keep commitments and obligations to employees and customers. An incredible amount of trust is built when an organization honors its commitments. If unforeseen events stand in the way of meeting an obligation, immediately communicate the challenges and work together to find resolution.

·         Reevaluate all documents and materials: Make sure all department and organizational documents and literature are clear and precise. Make sure they don’t misinterpret or misrepresent.

·         Have documented processes: Every organization is structured differently. However, having documented processes and policies on how your organization interacts with customers and employees is critical. If processes are properly documented there is no question what a product or service should be or whether a customer exception falls within the acceptable guidelines. Take a hands-on approach to all accounting and record keeping as it will allow you to end an inappropriate action in a timely fashion.

·         Be respectful: Treat employees and customers with respect regardless of differences, positions, titles, ages, or diversity. Always treat others with respect and courtesy even if you agree to disagree.

Successful implementation of these five principles becomes a leader’s daily commitment and responsibility.

Oprah Winfrey said it quite simply, “Real integrity is doing the right thing, knowing that nobody’s going to ever know whether you did it or not.”

Integrity Really Matters

When preparing future leaders to take on greater responsibility, organizations are looking for integrity and excellent communication skills.

In a recent study conducted by Robert Half Management Resources, it was concluded that beyond technical and functional expertise, the following traits were high on an organization’s list of leadership requirements. The survey included 1,400 CFO’s from a random sample of US companies with 20 or more employees.

• Integrity – 33%
• Interpersonal/Communication Skills – 28%
• Initiative – 15%
• Ability to Motivate Others – 12%
• Business Savvy – 10%

Pay attention to any form of business news and it will quickly confirm that integrity in business is becoming a lost art. Companies want quick fixes, fast money, and magic bullets. Companies are not spending the necessary time to create and maintain cultures of integrity, values, and processes, or making the right decisions for the right reasons. Lack of corporate integrity has been the documented cause of organizational demise, severe embarrassment, and financial loss many times within the last fifteen years.

The examples start with the avalanche of accounting scandals in 2001 and 2002, which included the Enron debacle and companies such as Tyco, Arthur Anderson, and Kmart. Forbes magazine created a Corporate Scandal Sheet listing just accounting imbroglios like the companies listed above. The list was published on August 26, 2002 and sadly is quite long. In the last few years, we have seen similar challenges in the financial and mortgage world with AIG, Goldman Sachs, Freddie, and Fannie.

Corporate integrity is not a choice, nor should it be implemented for shear convenience. Integrity is the concept of consistency of actions, values, methods, measures, principles, expectations, and outcomes. In ethics, integrity is regarded as the quality of having a sense of honesty and truthfulness.

Fast Company conducted a study with the objective being to gather perceptions about specific characteristics of leaders. 95% of respondents said “yes” or “absolutely” when asked. Do the ethics of the CEO play a meaningful role in the way business gets done? Respondents go on to say “Good ethics is also good business. It builds the brand, draws customers, and saves money in the long run.” (Fast Track Leadership Survey August 2005)

Organizations must take the time to define their core values. Clearly defined core values create a sense of unity and help the company steer all of their resources in a focused and meaningful direction. It is the spirit that drives the company regardless of its industry or size and helps the organization make appropriate decisions in tough times. Core values provide answers to tough questions and act as a guiding light in situations of conflict. Leaders with integrity must have an unwavering commitment to the organization’s core values and they must be willing to defend them.

There are no quick fixes, or magic bullets. Money needs to be earned. Show your external and internal customers, as well as all of your stakeholders, that your organization stands for something and that it has self-imposed rules that guide all decisions.

Leading with integrity sends a powerful message to employees.

Your leadership by example is critical to creating an environment and culture of integrity throughout the entire organization.

Integrity really does matter!

Leaders Who Inspire Start with “Why”

How does a leader become truly inspirational?

If the leader cannot clearly articulate WHY they exist in terms beyond its products or services, then how does (s)he expect the team members to know WHY to come to work?

Certainly we are all motivated to come to work to get paid and other incentives. But pay doesn’t motivate us to give our all, to become better than we were last month, to commit to goals or to engage our hearts and minds to our full potential.

Pay doesn’t buy enthusiasm. And that’s what is needed if you want people to act for the good of the business, for the good of all who work there, for the benefit to customers.

Leaders who clearly communicate a higher purpose inspire others work with engagement and commitment. It unleashes people’s potential for doing good work.

The trouble is many leaders do not communicating clearly about why they come to work every day. I am talking about a higher “why” than the obvious ones. I am talking about expressing your true purpose, your passion, your real reasons for getting out of bed in the morning.

Often it’s a cause or purpose greater than oneself. What is that for you? What is that for your company? Not only are some leaders not clear about what that why is, they often put it into the background, where it gets fuzzy and loses energy.

Maybe it’s because values and purpose get expressed as nouns… as in:

·                     Integrity

·                     Innovative

·                     Creative

·                     Thought leadership

But nouns don’t inspire action. You are not communicating clearly when you ask your people to be more innovative or to be creative, or to have integrity. These words may have lost their meaning and become fuzzy from overuse.

However, when a leader asks people to always do the right thing, or to look at problems from other angles, or to question their assumptions… now leadership communications become actionable. It takes transforming nouns into verbs, and connecting with why your work is important.

Some of the work I do with my clients involves clarifying the why of their careers and their organizations. The second part of that is in finding a way executives can express their why in a way that makes sense to others. Those who improve their communications by starting with why find greater results in terms of influencing others.

“People don’t buy what you do, they buy why you do it.”

What do you think about this? Are you communicating to your people, using actionable verbs, what you truly believe in, why your company exists? What is your higher purpose for your business? Leave me a comment, I am curious.

Values Build Successful Business

Following up on the Round-Table discussion that we had last week on the VoARadio Network, I am going to elaborate a little bit more on how values help leaders bring consistency and meaning to their purpose.

“The very essence of leadership is that you have a vision. It’s got to be a vision you articulate clearly and forcefully on every occasion. You can’t blow an uncertain trumpet.” – Father Theodore Hesburgh (former President of the University of Notre Dame).

A powerful vision provides inspiration, challenge, and purpose. It gives meaning to your work and purpose to your life. Your career gives you a place where you can satisfy your need to achieve. Everyone’s life needs a purpose, something important to strive for. One way to add both meaning and context to your vision is to establish values. Clearly defined values simplify decision making. They also help ensure consistency as well as ethical and behavioral standards/congruency.

Value is a word that describes what each of us searches for in many different places. We look for value in what we purchase. We look for value in what we do, and aspire for value in our relationships. Most of us would like to believe that there would have been some value to our life and to our accomplishments. In today’s global and ever-changing economic environment, values should play an important role in structuring, planning, and operating your business. Direction is provided in part by vision, which creates excitement, commitment, and purpose. Achievement and excitement must be tempered, however, by values lest people pursue goals without consideration for the ethics of other people. Values represent the core priorities in the organization’s culture including what drives individuals and how they truly act in an organization. Therefore, another key element of a successful planning process is the organization’s value statement. Throughout the life of the business, decisions must be made. Core values of the organization will lay the foundation and provide the framework for all decisions.

An organization’s values create a foundation for integrity and they define the important truths that guide your actions. They will serve as a guidepost for all those in the organization who through their individual efforts will collectively achieve the organizational goals. Values are principles or standards by which we do business and are to be non-negotiable. As you think about crystallizing your values, consider what you know to be right as well as how you want to be known by others.

If the primary function of your business is to attract and maintain customers in order to generate long-term profits or financial viability, then issues such as meeting client / customer expectations, delivering quality service, etc., must be included in the values statement. Your values should take into consideration the importance you place upon each stakeholder in your business. By definition, a stakeholder is anyone who has the power to exert influence on your organization. It may be an individual, a group, or another organization. For example, your stakeholders could include your customers, your employees and their families, your stockholders, the community, licensing and regulatory agencies, or suppliers.

Some examples of value statements are:

§ Improving the quality of life through technology and innovation.

§ The company exists to alleviate pain and disease.

§ To be regarded by our customers as easy to deal with and as a provider of high-quality, reliable products and services.

§ Our first concern is for our customer, our second concern is for our employees, our third concern is for our management, our fourth concern is for our community, and our fifth concern is for our stockholders.

There are many companies in the media over the last several years that clearly operated and made decisions with no values and we are all aware of how it impacted people’s lives. However, there are a lot of companies who have well defined values and make decisions with those values ever present.

Here are a couple of examples of such businesses: Learn why Chick-fil-A is closed on Sunday and why they believe it is part of their recipe for success.

Also, learn why McNeil Consumer Healthcare initiated a voluntary recall of all their children and infant liquid products in 2010.

What value statement(s) are you living by?