5. Integrity
Every individual, like a statue, develops in his life the laws of harmony, integrity, and freedom; or those of deformity, immorality, and bondage. Whether we wish to or not, we are all drawing our own pictures in the lives we are living....
—Harriot K. Hunt (1805–1875), U.S. Physician and Feminist
To starve to death is a small thing, but to lose one’s integrity is a great one.
—Chinese Proverb
Acting Consistently with Principles, Values, and Beliefs
This is the primary moral competency that encompasses the others. Acting consistently with principles, values, and beliefs means being purposeful in everything you do and say. Integrity is authenticity. It is saying what you stand for and standing for what you say. Awareness is the first step to acting with consistent integrity. That’s why it’s so important to be clear about what’s in your moral compass. Acting consistently with your moral compass also means letting others know the principles that are most important to you, and holding yourself accountable for decisions and behaviors consistent with that. Before becoming an advisor with financial services company Thrivent Financial for Lutherans, Walt Bradley spent 20 years selling cars. One day, a young woman came on the used car lot to buy her first car. The only car she could afford had a lot of miles, a few dents, and a leaky exhaust. Walt told her that if she bought the car, they would check out the leak and fix it. “When we inspected it, the pipe was shot,” says Walt. “My boss said to just patch it. I argued with him, but he said, ‘I don’t give a shit. Just get it out of the building. There’s no warranty.’ Right in front of my boss, I told the mechanic not to do that—to fix the car right. My boss and I got into a shouting match about it, but the mechanic fixed it.” Asked how hard was it to stand up to his boss, Walt replies, “I hate confrontation, but the woman trusted me, and I know that if my word isn’t any good, then my product isn’t any good.”
The high cost of inconsistency. Leaders who blatantly ignore universal principles do great harm to their constituencies and ultimately to their bottom line. But just as bad are leaders who pay lip service to integrity while ignoring it in practice. Take this example of Kevin Reynolds (pseudonym), CEO of a $400 million dollar consumer products company. Kevin talked a lot about integrity in his speeches to shareholders, employees, and his board. But Kevin’s direct reports didn’t trust him at all, and each could cite numerous examples of betrayal or deception on Kevin’s part. None of Kevin’s direct reports was willing to go out on a limb for their company in the environment that he had created. Some of them spent a lot of time planning how to protect themselves from his treachery, while a few braver souls openly threatened to leave if the board did not fire him. The final straw came when, at the end of a financially troubled year, Kevin manipulated the bonus pool to get his maximum year-end bonus, leaving his team with unfairly low payouts. For a time, Kevin managed to conceal his bonus scheme by withholding information and presenting confusing data, but eventually, his mishandling of the bonus money leaked out. The board asked for his resignation. No one mourned Kevin’s departure. His reputation for dishonesty dogged him in the industry, barring him from landing a top executive post anywhere else.
In corporate settings, a lack of integrity usually signals a lack of moral competence, as was the case with Kevin. But at times, a lack of integrity stems from a deeper lack of moral intelligence. There are some people whose moral compass is badly dented, like Jeff Walsh (pseudonym), who applied for a job as regional sales manager for a large Fortune 500 company. On paper, Jeff had a great track record in sales and management and an MBA from a prestigious university. The vice president of Sales was so impressed after interviewing Jeff that he was ready to hire him on the spot. “Don’t let that one get out the door,” he told the recruiter. But when the recruiter checked his credentials, he discovered that Jeff had no undergraduate college degree, let alone an MBA; he had never taken a single college course. When the recruiter confronted him, Jeff broke into a sweat and admitted that he had faked his resume. You might think that the sweat on Jeff’s forehead was evidence that he knew right from wrong. But Jeff recovered his composure quickly and promptly talked his way back into the VP of Sales’ office to try to convince him that it really wouldn’t matter that he did not have his MBA. Without a functioning moral compass, Jeff completely missed the notion that lying about his credentials was a big deal. He might sweat because he was caught—but not because he had a guilty conscience.
Telling the Truth
Susan Desimone (fictitious name) was chief financial officer for a major division of a huge financial services firm. Her CEO, a demanding and explosive character (in actuality a high-profile top executive), was determined to meet Wall Street’s expectations for the quarter’s profits—no matter what it took. The financial analysts who worked for Susan were stressed. “The CEO is badgering us to make these numbers work,” they complained. “If we show him the results we have right now, he will blow his fuse.” Susan knew they weren’t exaggerating, but she also knew she could handle her CEO’s tantrum without letting it unhinge her. “What is the worst thing he can do to us?” she replied. “He’ll yell at us for sure, but he’s yelled at us before, and we are going to tell the truth.” Susan’s moral stance did more than keep her company out of the scandal section of The Wall Street Journal. She provided “cover” for the people in her finance unit and by her actions made it safer for them to do what they knew was right. Her truthful response to the CEO’s pressure was both morally skilled and fiscally smart. She motivated her people to keep working for the company during an economic boom when their skills were highly marketable and corporate attrition was at record high levels.
Leading with the Truth
Imagine that you are captain on a sailboat cruising through the Caribbean. When you left dock a few hours ago, it was warm and sunny with a gentle breeze pushing the boat forward. Then the weather turns suddenly ugly. Before long, the wind is fierce, the waves are pounding, and your passengers are afraid. What should you do? You tell them the truth. You say, “This is a dangerous storm. Something bad could happen. You need to keep your life jackets on and stay below deck while I get us through this. I have been through storms like this before, and I am very optimistic that we are going to weather the storm.”
In organizational settings, telling the truth often means defining reality under challenging circumstances. When times are tough, leaders need to tell the truth while providing people with real reasons for hope and optimism.
Sally Jewell, CEO of outdoor gear retailer REI, agrees: “Over the past two years we have learned some tremendous lessons, and one is about the importance of consistently telling people the truth about what’s going on.” Sally continues
Shortly before things started falling apart in the fall of 2008, we started sending weekly messages to employees about the storm clouds on the horizon and what we were doing about it. At the time we felt that perhaps we were even over-communicating. But we’ve discovered that trust in senior management went up during that period. The confidence in the company went to an all time high. It fell a bit this year and we realized that we haven’t been communicating as consistently this past year as we did during that period. We weren’t over-communicating at all—this is what we need to do all the time!
We also had a layoff during 2009. We were upfront about this as well, and gave the business reasons why we needed to do this. We worked really hard to train managers and to role play with them how to answer questions. Afterward, multiple people who had been laid off sent me messages about this. Some said they obviously didn’t like being laid off but they understood why it had to happen. Many said they’d come back to work for us in a heartbeat.
So, what did we learn? Taking the mystery out of the situation and speaking the truth right up front was the lesson we learned. The more we communicated the more we were reinforced for communicating. And people expressed their appreciation. Several said things like, “Thank you for being on top of these things.” It was a great opportunity for our leaders to reduce the uncertainty that people were feeling.
Larson Doors’ Dale Larson is another advocate of the need for leaders to tell the truth:
We had a period of time when we lost a big account—Home Depot. We had to tell everyone that their jobs might be in jeopardy. I guess we could have held off that information for a while, but we felt that we needed to be honest with our employees about what was happening. And because we did, we came bouncing back and are a lot better for it today. We did have to lay off a lot of the factory workers for three or four months but many of them came back. And at least we were able to give them as much time as possible to prepare for tough times.
Lon Dolber, president and CEO of American Portfolios Financial Services. doesn’t shrink from telling unpleasant truths either. He’s discovered it’s the only way to secure the trust of employees and customers. Until a few years ago, American Portfolios used two firms to clear financial transactions. Then Lon realized that it would be best for the business to merge into one clearing firm. But there was a catch: The clearing firm’s charges would result in financial gains for Lon’s business, while lowering brokers’ compensation. As Lon relates:
I could have said we had to consolidate, that we had no choice. The truth was I decided that we needed to do this to be competitive. I didn’t hide the fact that the brokers would make less and the efficiencies we gained would actually mean more profit for us. I pointed out that we need to do this to grow and sustain ourselves during the economic downturn. I explained why I did it. I could constantly blame the government and regulators, but I never do that. I’m always honest about it. I say, “We are doing it and these are the reasons.” So I’ve developed more trust with the brokers. If you’re truthful, you’ll develop trust. You’ll develop loyal customers [the brokers] with trust. I believe that truth leads to trust and trust leads to loyalty and loyal customers are the best customers. Our customers recognize and feel very comfortable with that.
Telling the Truth About Performance
Many of us are afraid to discuss poor performance with a subordinate. We imagine that people will be upset, and we don’t want to be responsible for causing them pain.
Paul Clayton, former president of Burger King North America, and former CEO of Jamba Juice, is not known for pulling his punches. The only time he can recall when he has withheld the truth was when he had to sit down with someone and talk about his or her performance. “I have made mistakes in not being direct enough. I had to give a negative performance review and circled around the issues, and I’ve had that happen to me as well. I’ve always been critical of my communication skills, but for a long time, no one said a word to me. I knew that if someone had the courage to tell me sooner that I needed work, it would have helped me.”
We have all heard horror stories about co-workers who got a glowing performance review coupled with a bonus, only to be fired a month later. When that happens, it is usually because the manager has not been honest about the employee’s performance problems over some period of time. Some managers are so nonassertive that employees who are being given negative feedback have no idea that they are being criticized. We know of several extreme examples when an employee who was fired on a Friday showed up for work as usual on Monday because she didn’t realize she had been terminated.
Exceptions to the rule of honesty. A seemingly contradictory aspect of the competency of telling the truth is that it includes knowing when not to tell the truth. Consider an example posed by 18th century philosopher, Immanuel Kant. Imagine that a murderer comes to your door, wanting to know where your friend is—so that he can kill her. Your friend is hiding in your bedroom closet. Most people would probably agree that your obligation to your friend overrides your general obligation to tell the truth. For some brave World War II Europeans, this scenario was not hypothetical—they risked their lives sheltering Jews from the Nazis. The Diary of Anne Frank is a famous telling of the story of a Dutch Jewish family hidden by a former employee of Anne Frank’s father. When the Nazis made their regular sweeps of their Amsterdam neighborhood in search of Jews, the family protecting the Franks would have failed in moral competence if they had told the truth about what they were doing.
Honesty is often complicated for business leaders as well. At times, a leader has information that cannot be divulged. This is common in situations involving downsizings, initial public offerings, and mergers and acquisitions. When planning workforce reductions, for example, leaders know that employees would find it helpful to get advance warning that their job could be at risk. On the other hand, leaders have a responsibility to owners not to divulge information that could be harmful to the market value of their companies. To tell the truth prematurely would be a disservice to the business, yet to say when asked that no reorganization is looming would be dishonest. If there are legal requirements to withhold information, the leader should simply acknowledge that. A leader can still be truthful by saying something like, “We do have plans but we cannot discuss them at this time. Please know that we will implement the plan with high regard for our employees, our customers, and the people who own the company.”
Withholding information is also justified to protect the privacy of employees. Consider computer programmer, Jeanetta Shaw (pseudonym) who discovered that her husband and his family were all involved in criminal activity that was about to hit the newspaper headlines. Her distress was obvious to her co-workers, and they began to ask their manager what was going on. The manager decided to tell the truth, but not the whole truth. He told Jeanetta’s colleagues that there were personal circumstances beyond her control that were causing her a great deal of stress. He expressed his commitment to help her get through a rough time and asked others to do the same.
The painful truth? Telling the truth and tact are not incompatible. Some of us pride ourselves on being honest to a fault. We might say things others would be afraid to say, but it doesn’t necessarily add up to more truth. Some of us use “honesty” as an excuse to vent our hostility. We might make cruel, competitive, or aggressive comments under the guise of “calling it like you see it” and then excuse ourselves by claiming, “I’m only being truthful.” According to Jefferson Bus Line’s CEO, Charlie Zelle, the disclaimer “‘I’m just being honest’ is a classic Minnesota passive-aggressive way of being hurtful.” When we go out of our way to communicate a hurtful truth, we are usually not being honest with ourselves. So, when we feel obligated to tell another something “for his own good,” we need first to examine our own motivations. Are we competitive? Are we jealous? Are we trying to even up an old score? And we might be wise to add one more question: Is there a way we can be compassionately honest versus brutally honest?
Good intentions. Truth telling works best when paired with the emotional competency of self-awareness. We need self-awareness to understand how our own goals and desires influence what we say to others. Leaders who limit information about pending changes should rigorously examine their motivations. Although it is important to protect their companies, leaders who withhold information because they put personal stock option considerations over employee well being, clearly violate principle of integrity.
We also need emotional competencies to understand other’s emotions and discuss the truth in ways that people can accept and use productively. Employees sense when their leaders make self-serving decisions or shade the truth about pending changes. The resulting negative impact on morale and performance can undermine the implementation of any change effort.
How truth fuels performance. Truth telling has a huge impact on leadership effectiveness and workforce engagement. When people work for a dishonest leader, they censor information to protect themselves from a negative or unpredictable reaction. The dishonest boss creates a climate dominated by political intrigue. Instead of working productively, people who work for dishonest superiors spend a lot of time wondering about their manager’s agenda, trying to gather information, trying to jockey for power, and doing only those things they think will keep them out of harm’s way. In contrast, leaders who are known for being honest generate a powerful climate of trust. People who work for honest superiors relax because they know there will be no hidden surprises coming out of the organizational woodwork. People accomplish more and can work with great creativity when they don’t have to waste energy watching their back.
Standing Up for What Is Right
Leaders who live the principle of integrity inevitably must take principled stands.
Ben Smith began his career as an attorney and has extensive executive experience in the banking industry as a former Co-CEO of American Partners Bank, former EVP of Wells Fargo and former EVP at GMAC. Ben relays this story about taking a stand when it was difficult to do so:
One of our top loan officers was a great guy and well liked by everyone at the bank. It came to my attention he would do more than one loan per year to quite a few of his customers to both keep them from default and to generate new business for himself and the bank. What he was doing wasn’t illegal, but it wasn’t right. Sometimes he would give three loans to the same customer in one year. I knew this wasn’t good for those customers because it enabled them to stay current on loans they couldn’t really afford, and it wasn’t good for the bank long term even though it generated income for the bank in the short term. It also generated commissions for the loan officer. I chose to terminate him, and that was hard to do because I liked him personally and because people liked him at the bank, but that was the right thing to do.
Ben’s leadership approach also highlights how often the principles of integrity, responsibility, and compassion are interrelated. On one occasion, American Partners Bank had a job candidate for an underwriting position. Ben really wanted to hire her. But she had a young child and wanted the flexibility to work from home, so Ben agreed. She quickly became one of the banks’ best underwriters. When American Partners Bank was sold, Ben made sure that the new owners retained all but two of their employees. After the acquisition, the new owners planned to lay off a woman who had just had a baby. Ben knew she really needed the income, so he persuaded the new owners to retain her in a contracting role for another year. Was Ben demonstrating integrity? Responsibility? Compassion? Clearly his behavior demonstrated he was aligned with all three principles.
American Portfolio’s Lon Dolber is another role model for standing up for what is right. When clients are unhappy about the results of an investment, it’s tempting to heed the lawyers’ advice to “Make it go away.” It’s one thing if a broker does something that’s not good for the client. In that case, Lon believes the firm should stand by the client and make it right. But most investment losses are not the fault of the brokers who sold them. So there are instances when Lon believes he must stand up and fight. One time, for example, his firm had a sophisticated client who bought an investment that he wanted through a broker and the investment went bad, so the client took the firm to arbitration. As Lon recalls:
[He was] an accredited investor and knew the risk, but [he] got an aggressive lawyer who was looking to pin it on us. It was absolutely not a case of an uninformed investor or a broker misleading an investor. Well, we won the case. If I hadn’t won, it would have made me rethink the business I’m in. If we could be taken to arbitration for everyone who loses money, it would be a loser of a business. So, in fighting this, we gained more trust from our brokers and we stood up for what’s right, and the employees and the customers all see that. It’s smart both ways.
University of Washington e-commerce professor David Risher recalls this incident of standing up for an employee during his tenure as a Microsoft executive:
One day, we were in the middle of a meeting, and my strong-willed boss started to beat up on a young, new employee of mine, asking her questions she couldn’t possibly have answered because she was so new. My boss was a hard person to stand up to, but in this case, I did. I remember that it caused a bit of a commotion in the room because people couldn’t believe I was standing up to her—she was just that strong. When I later went to Amazon.com, my former boss ended up working for me. She ended up being a supporter of mine, and I think it was because she respected me for having been willing to stand up for people.
Gary Kessler, senior vice president of Human Resources, Administration and Corporate Affairs with American Honda Motor Company recalls a time when he took a quiet but vital stand. He discovered that a member of his team who was also a personal friend had fabricated his academic background. Gary knew that he could forgive his friend, and he knew he could keep anyone else from finding out what his friend had done. But Gary believed that to ignore his friend’s deception would be deceptive on his part. It would devalue the efforts of others who were expected to have a certain level of academic training. So he steeled his courage and fired his friend.
Unlike Gary’s admirable private stand, most principled stands must be taken in the face of stiff resistance. Don Hall, Jr., is the president and CEO of Hallmark Cards. Early in his career, Don headed product development. Don had a fine-tuned sense of what customers expected from Hallmark. He steadfastly resisted proposals to save on production costs by cheapening their product. To maintain customer loyalty, Don insisted that quality, rather than cost, be the company’s primary focus.
Defying conventional wisdom to make a principled stand can be challenging. In most organizations, there is a lot of pressure to agree with popular positions. People who take unpopular stands can put their career advancement or their livelihoods at risk. Acting with integrity means that you accept the risks that come with taking a principled stand because the moral consequences of looking the other way are unacceptable. Think of the hazards that have resulted when no one stood up for what was right—buildings that collapse because of poor construction, lives lost because a bridge’s need for repair was ignored, bankruptcies caused by predatory lending practices in low-income neighborhoods, and the explosion of the space shuttle Challenger after NASA executives ignored engineers’ concerns about faulty O-rings.
Keeping Promises
Keeping promises is a hallmark of integrity because it demonstrates that we can be trusted to do what we say we will do. Keeping promises is a competency highly valued in organizational settings, but in our wired 24/7 world, it’s a competency many of us have a hard time practicing consistently. We have good intentions but may let our ever-expanding to-do list overtake our earlier promises. This was the case with Kari Wang (pseudonym), a senior executive in a professional services firm, whose career was in jeopardy and whose team was delivering inferior results. Kari had lost the respect of her colleagues because of her poor track record in keeping her commitments to them. When a high-profile project came her way, Kari dug in and took over all the detailed work herself, saddling herself with more work than even an overachiever like Kari could handle. Kari resisted delegating, rationalizing that she’d be happy to delegate if only she could find someone who could do a good enough job. When Kari did reluctantly delegate, she routinely forgot to provide all the information needed for the work to be done successfully. She changed her mind about priorities seemingly every hour and then failed to communicate those changes to her staff. Kari was incapable of saying “no”—she agreed to do so many things that she inevitably dropped the ball on some important commitments.
People who knew Kari well did their best to work around her bad habits, believing that though her execution was poor, her motives were good. People who did not know Kari personally saw only her lapses. They mistrusted her and labeled her a liar. Her harshest critics viewed her missteps as deliberate efforts to advance her own career by sabotaging others. Fortunately, Kari’s boss proposed that she use a leadership coach to help her make the transition from high-powered individual performer to leader of others. As a result, Kari came to recognize the costs of her actions and developed the disciplined work habits that would eventually enable her to rebuild her credibility with her team.
Keeping promises usually requires assistance from a few emotional competencies–the self-awareness to recognize the inconsistency between our intentions and actions and the self-control to adopt disciplined work habits that enable us to keep our promises.
Honoring confidences. One of the most frequent promises leaders are asked to keep is to preserve the privacy of others. A common complaint about low-integrity leaders is that they have failed to keep confidences. Some leaders betray confidences with good intentions because they believe that sharing the information with someone else will help the person who revealed private information. Others wrongly believe that it is acceptable to share confidential information about a third party that they trust will not pass the confidential information on to others. It’s ironic that some of us expect a third party to keep a confidence that we ourselves have betrayed. When you discuss private information about another person with anyone, you can assume that it will become public—and that the person whose confidence you betrayed will know that you were the source.
When leaders betray confidences, they lose more than the respect of their work associates. They also dry up valuable sources of information because their employees and colleagues learn to withhold sensitive information from a loose-lipped leader.
Leaders who pass on confidential personal information do not suffer as much career damage as those who lack other dimensions of integrity. If the leader has an otherwise good reputation, people may try to compensate by emphasizing forcefully to the leader that certain information must be held in confidence. When a well-intentioned leader hears the urgency of the request, he will usually get the message.