The Power of Leadership

Leadership Effectiveness Leading a Culture of Ethics

Leadership Effectiveness Leading a Culture of EthicsEquifax. Target. Wells Fargo. Sonic. Enron. Tyco. Waste Management. Yahoo. U.S. Military. Madoff. Fox News. Harvey Weinstein.

Are you tired yet? I am. The list above includes companies/organizations that have committed a range of very serious ethical breaches. Some of the organizations listed allowed huge data breaches to occur, some committed fraud, some allowed sexual harassment to occur. Some were revealed this month, some are old. Sadly, this list is just a sample. There are so many more.

The organizations all have something in common though. Their corporate cultures – which are set from the top, starting with the CEO – allowed these egregious situations to develop. Most of these occurrences are not one-off events. They happened over time—and are still happening in some cases.

Senator Heidi Heitkamp, (CNBC, October 5, 2017 Somebody should go to jail for Wells Fargo Scandal) speaking about the Wells Fargo ethical breaches, and Supriya Venkatesan, the author of the New York Times article on women in the military (New York Times, October 18, 2017, Military Women, Too, Should Serve Unmolested) both strongly make the point that these shocking events occur because those in charge let them happen. Sen. Heitkamp highlights the Wells Fargo attitudes of: “I did not know; it happened in the community banks.” “Ignorance is bliss so I am not at fault.” Oh, come on! Who sets the culture? Who sets the goals, vision, and strategy? We all know where the buck stops, don’t we?

Regarding the military, the author of the NYT article makes the obvious point that the military is all about giving and taking orders. Harassment happens because the brass lets it happen.

A critical role of the CEO is to ensure the organizational culture is one of accountability, starting with the leadership team AND all through the ranks. The CEO of Wells Fargo cannot say or even think that it is “not his fault” – because it happened at the community banks. Upper management can’t abdicate. The CEO must hold him or herself accountable because he or she is at fault for not creating a culture of integrity.

What should a CEO do?

  1. Look in the mirror, for starters. If a CEO is not willfully cheating people (Madoff) and is truly striving to head an ethical organization, he or she needs to recognize that others will observe and follow behavior modeled by the CEO. If you want to be known by the community, competitors, investors, employees, and prospective employees as an organization in which integrity is the first and immutable value and that everyone from top to bottom is held accountable for—demonstrating integrity in all aspects of the organization—you must be where integrity and accountability start.
  2. Do not tolerate ethical breaches. Ever. Don’t sweep them under the rug, move people around to avoid detections, or pretend you did not know. As a practical matter, it will likely come back to haunt you. As a matter of integrity, you must call it by name and address it head on. If the event happened because of lack of knowledge in the organization, clearly there is an educational opportunity. If the event happened because someone thought they could get away with it, then there must be consequences.
  3. Probably all or most of the organizations named at the top of this article have/had values and codes of conduct or the equivalents. Leadership must reward upholding those values and show serious intent to discover breaches and deal with them in a way that excludes retaliation against the person who reports this issue (the whistleblower). Some CEOs have instituted Ombudsman programs for this purpose and some have ethics hot lines; some try to do it through management, which is harder to do.

Alan Simpson put it quite succinctly: “If you have integrity, nothing else matters. If you don’t have integrity, nothing else matters.”

Give serious thought to the concerns you have about the culture of ethics and integrity in your organization: What do you have to do to ensure that values, behavior, rewards, and consequences are aligned? Do you have the courage to make it happen?

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