10. The Moral Leader

Dick Harrington served as president and CEO of The Thomson Corporation, a global electronic information company, prior to its acquisition by Reuters in 2008. On September 11, 2001, Dick was in London for a meeting of The Thomson Corporation Board of Directors. He was talking on the phone with his Connecticut headquarters when he got word of the attack on the World Trade Center. Harrington, along with the other members of his executive team in London, was thunderstruck. More than 2,200 Thomson employees worked in the neighborhood of the World Trade Center, with offices of approximately 200 employees in the twin towers. It would be days, even weeks, before it knew for certain that 11 of its employees had been killed, including one who had been a passenger on the plane that struck the North Tower.

In the early hours following the terrorist attack, nothing was clear. But Dick and his team quickly shook off their shock and prioritized: people first, business second. They mobilized cell phones and Blackberries to track down missing employees. They commandeered limos from Connecticut to pick up employees who had escaped uptown or across the river to New Jersey. As they confirmed who was missing, they contacted family members, they sent cash and catered meals, and they arranged for transportation so that family members of victims could be together.

Beyond that, Dick and his team extended generous benefits to victims’ families that they were too modest to publicize. What’s more, even while they attended to the needs of victims’ families, they didn’t miss a beat when it came to serving their other constituencies—employees, shareholders, and customers across the globe. They communicated early and often. They comforted traumatized employees. They reassured investors and customers.

The moral leadership that Harrington exhibited was the norm for him and his fellow executives—and it was reciprocated with the same degree of loyalty from Thomson’s employees. One employee’s first act after escaping from the World Trade Center was to race to the back-up facility in New Jersey. Other employees talked their way back into condemned buildings near Ground Zero to rescue critical financial data. By September 13, Thomson announced that the financial information technology so crucial to Wall Street was up and running.

Other leaders demonstrated powerful moral leadership in the crucible of the 2001 attacks. Nine days after the World Trade Center towers collapsed, American Express CEO Ken Chenault gathered nearly 5,000 New York employees for a meeting at Madison Square Garden. Eleven American Express employees had died in one of the towers, and the company’s headquarters across the street from the World Trade Center had been seriously damaged. Employees were shell-shocked and suffering from the loss of relatives, colleagues, and friends in the financial services community. Although business continuation was vital, Ken’s first priority was his employees’ well-being. The meeting wasn’t about “busting butt” to keep the company on track. Instead, Ken expressed his grief about those who died in the attacks and invited his employees to share their own feelings of loss and remembrance. He encouraged people to reflect on all they were grateful for and to spend time attending to the parts of their lives that mean the most. Then he communicated his sense of hope and confidence in the face of tragedy. He told the gathering how the company was helping those who were affected—employees, customers, and the New York community—in their recovery. Ken’s employees didn’t need to be told to work hard. They needed to hear that their leaders cared about them. That is what enabled American Express employees to move forward in the aftermath of the attacks.

How did Ken Chenault manage to inspire and comfort his employees at a time when he was personally grieving and facing unprecedented threats to his business? Ken made hundreds of conscious decisions—and every one of them required not just business skills, but moral skills. Though we all need moral skills to be effective in our lives, as leaders we have a special responsibility to use our moral intelligence to ensure that the people and groups we lead act consistently with the principles of integrity, responsibility, compassion, and forgiveness. As leaders we have influence and power that we can use to communicate the importance of moral skills to the rest of our organizations.

Not all CEOs affected by 9/11 responded like Dick Harrington or Ken Chenault. Some had to consult professional handlers, PR firms, or legal experts before they did anything. Some took so long that when they finally did respond with compassion for victims’ families, it came across as artificial and forced. Harrington and Chenault succeeded where others dropped the ball because they both operate from a set of principles, values, and beliefs that factor into every business decision they make. The result? Morale and job performance has remained consistently high in both companies. Thomson (now Thomson Reuters) employees say their company is a place they’re proud to be part of. “No matter what my job level,” said one information specialist not long after 9/11, “I know that Dick Harrington respects me enough to communicate about significant issues. I’m going to stay, and I’m going to recommend Thomson as a great place to work.” With the kind of moral leadership that engages its workforce to do its best, Thomson Reuters has continued to produce enviable returns during both economic recession and recovery.

Leveraging the spotlight. When you are a leader, you are always on stage. Everything you do is scrutinized, analyzed, and interpreted by those around you. Celebrities and politicians recognize that visibility is a double-edged sword. On the one hand, you can use the spotlight to promote worthy causes. On the other hand, it’s nearly impossible to hide bad behavior from the public eye. Sam Bronfman, former senior executive with Seagram Company, recalls a time when he eviscerated a marketing manager for presenting a merchandising plan that Sam thought was ridiculous. “Everyone was shocked. I eventually apologized for it—but people still remember the incident. I hope they remember the apology, but I think people remember the outburst more.”

Sam’s incident reminds us that a leader’s high profile requires a particular sensitivity to those emotional states (in self and others) that have the strongest potential to stimulate either moral alignment or moral breakdown. Greed, jealously, envy, hate, and anger can all easily disrupt alignment, whereas emotions such as love, compassion, happiness, and joy have a tremendous capacity to enhance moral competence. Leaders who consistently display negative emotions tend to get involved in negative behavior, and by example encourage negative behavior in those around them. Leaders who act out of love, who demonstrate respect and regard for people, tend to encourage moral competence in others—like the CEO we know who spends $1,500 a month more on his commercial cleaning service than he could negotiate with another vendor because the woman who owns the cleaning business has been loyal and responsible, and he knows that their family relies on that income.

There is an upside to your visibility as a leader—you can capitalize on it by modeling moral skills for others in your organization. To communicate moral messages effectively, it might be necessary to stand up for what is right in an exaggerated way. In live theater, for instance, actors’ makeup is plastered on thick so that their faces can be seen throughout the audience. You as a leader may need to “lay it on thick” to make your values clear to all of your audience. You may think that it should be obvious to others that certain business tactics are wrong and that you would never approve of them. But to avoid saying so is to miss an opportunity to underscore the importance of integrity to everyone’s success. Harvey Golub, retired chairman of the Board and CEO of American Express agrees. “I made it a practice,” Golub says, “to always model the behaviors I wanted others to show...I didn’t just hope they observed well, but would point out behaviors to make sure they understood.”

Leveraging power. Power is another leadership asset that you can use to influence your organization to adopt moral skills. Leadership and power are virtually synonymous, as evidenced in the characterization of leadership as “being in power.” A common definition of power is that it is “possession of control, authority, or influence over others.” Power, like visibility, is a double-edged sword. Certainly, you can use power to accomplish worthy goals through others that you could not reach on your own. But there is something about power that makes it potentially as dangerous as it can be helpful. Power is addictive. Using power activates brain chemicals called endorphins that create a highly enjoyable physiological state. Power can provide pleasure much like the satisfaction offered by food, sex, or vigorous physical exercise. Most people in formal leadership positions value power. But some leaders crave it. It is easy to get accustomed to the perks of the leadership role. It feels good to have people with less organizational power defer to our ideas and desires, so unlike our experience with family members who treat us like the fallible humans we actually are.

Leadership power is not just asserted by the leader—it is given to leaders by followers. Followers allow leaders to be powerful. Because leaders have power, followers are careful about how they present information to their leaders. Research has demonstrated that the higher one goes in an organization, the more distorted the information they receive. Followers provide information that they believe leaders want to hear and censor information that they fear would upset or anger leaders. The more heavy-handed leaders are in their use of power, the more distorted the information they are given. But even benevolent leaders who are careful in their use of power have trouble establishing accurate communication channels because of followers’ strong tendency to defer to the leaders’ position power, independent of the leaders’ actual behavior.

Deference to power affects not only the quality of “hard” business data related to financial reports, product quality, and customer attitudes, but deference to power also limits the amount and quality of “soft data” available to the leader. When leaders make mistakes, it is difficult for followers to tell them so. Many organizational cultures discourage interpersonal feedback, even among peers, so imagine how reluctant most followers would be to openly criticize the actions of someone with greater power. This leaves most senior leaders operating in a feedback void. Their accomplishments might be praised, but their personal flaws are not brought to their attention. The absence of appropriate negative feedback about our leadership behavior can leave us with the mistaken notion that we are far better leaders than we actually are. Without accurate information about the business and about our own capacities, we are at risk to making a big mistake that can lead to a devastating business outcome. Workaholism can reflect a subtle abuse of power. When you insist on doing everything yourself rather than delegating work, you deprive others of opportunities for development and their own share of power.

So use power with caution. It’s not a drug you can quit cold turkey. Like food, power can’t be eliminated completely from your life. For a formal leader, power is inescapable; it comes with the territory. But power, like food, can be used carefully to promote health and well-being. You can leverage your power to accomplish morally positive goals that also produce higher business performance. As a moral leader, you can use power positively by modeling the moral skills that keep you in alignment. You also can use your power to encourage followers to live in alignment with their own moral compasses.

Higher standards. When you are highly skilled in all the moral competencies, you can use your leadership power and visibility to produce the best business results. We do know business leaders who are quite effective despite some gaps in their moral competencies. But we have never known a consistently successful business leader who was not highly skilled in the integrity and responsibility competencies. Many effective and honest senior executives are respected because they demonstrate integrity and responsibility, even though they lack notable compassion or forgiveness. But leaders who inspire their followers’ best efforts are compassionate and forgiving as well. When followers see that such leaders actively care about them and are willing to let go of mistakes, they forge a bond with their leaders that just doesn’t happen otherwise.

Why does emotional bonding between follower and leader matter? When leaders show compassion and forgiveness, they create a safe emotional environment. In this positive climate, followers feel free to be creative because they know their leaders will tolerate the inevitable mistakes that come from creative risk-taking. When followers believe their leaders care about them, they want to give their best efforts to the work at hand. It is as though the integrity and responsibility competencies come from the “head,” while the compassion and forgiveness competencies come from the “heart.” The most effective moral leaders are those who have both the head and the heart fully engaged.

It is interesting that moral competencies of the “head” are necessary and sufficient for a minimal level of leadership effectiveness, but moral competencies of the “heart” are not sufficient for effective leadership. Leaders could seem to actively care for others (“I feel your pain!”), could forgive themselves or others, and be open about mistakes, but if they do not tell the truth, don’t keep promises, and don’t act consistently with the values, beliefs, and principles of the organization, then they will not be effective leaders. Leaders who are known for their compassion and forgiveness, but who lack integrity and responsibility are often considered “nice people” but by virtue of their lack of integrity do not command the respect and trust required for high performance.

How moral leaders look at followers. So far, we have seen why moral leaders need to operate at the top of the moral competence scale. Because of their power and visibility, their behavior has a major impact on the behavior of those around them. In addition to high proficiency in moral and emotional competencies, the most effective leaders operate from a central organizing belief that informs their transactions with followers. Everything they do is inspired by a belief in the essential goodness of people. It can be summarized as follows: Even though people are not perfect, and even though they make mistakes, most people have good intentions. This belief is the moral leader’s key to inspiring the best in others because your belief that people are essentially good has a profound impact on your leadership behavior. Knowing that the person with whom you are working has an ideal self (who he would like to be at his best)—and that the person would rather be his ideal self than his current flawed real self—allows you to practice compassion, forgiveness, and integrity. When you believe in a person’s essential goodness, you cannot help but commit yourself to helping him become who he most wants to be.

Belief in the goodness of people is not a “technique.” It is a potent frame of reference that, paradoxically, enables you to be as tough as nails in managing individual performance. Why? When followers sense your deep belief in their ideal selves—their potential to be their best—they are much more receptive to your feedback about their mistakes and failures. Similarly, when good performers recognize your belief in their ideal selves, they are inspired to give even more effort to your shared work.

Tom Perrine is senior vice president of Enterprise Systems IT with Cardinal Health, the largest health-care products distributor in the United States. Tom demonstrates his belief in the goodness of people when he says, “Helping others create who they want to be is a way of life for me.” Tom adds, “Number-one value to me is people matter most, and they deserve to be treated with respect, consideration, understanding, and empathy. Do you brighten their light bulbs or dim their light bulbs? How are you managing the energy of your people? The greatest job of leadership is not personally doing things but helping others do things, and managing the energy of the workforce is what it’s all about. If you do that well, you can accomplish great things as a company or in the world.” Tom also notes the cost of temporarily losing touch with his positive beliefs about people. When Tom was chief development officer at Coca-Cola, he was forced to make a unilateral decision about an important issue because the team responsible was argumentative and uncooperative. Tom thought the resulting decision was not as good as it could have been if the team had focused on solving the problem instead of fighting with one another. So he convened the team and told them what he thought of them. “No one likes to be called on the carpet,” recalls Tom, “and I called the group on the carpet. The manner in which I delivered the message was culturally unusual at Coca-Cola because people there weren’t used to being reprimanded as a group. I didn’t name names, but I was clearly angry and upset. After that, many of them decided they couldn’t trust that wouldn’t happen again, so for quite a while, they avoided coming to me with issues. My comments about their poor teamwork were factually true, but I delivered the message in the wrong spirit and mismanaged the energy of the group.”

Developing employees. The moral leader’s approach to performance management and development is guided by the leader’s belief in the essential goodness of the people who report to him or her. It is an approach that encourages employees to live in alignment, releases their positive energy, and inspires their best efforts.

As a moral leader, you hold yourself responsible for helping others stay aligned with the ideals that are important to them. How? First, you do so by believing in employees’ potential to do wonderful things for themselves and your organization. Second, you can use performance discussions to discuss the life goals that your employees care about—not just their business goals. Third, hold them accountable for meeting all their personal and professional goals.

When you acknowledge your employees’ whole selves—ideal and real—they are energized by your support. Because you care about them and believe in them, employees are inspired to give you—and your company—their best efforts. Employees do not have to be coerced into performing—over the long term, you can’t force people to produce. You cannot create good employees. You can only create conditions that spark their talents into a bonfire of innovative thought and action.

Developing employees is the central building block of moral leadership. Why? It’s because people development is the way you create a workforce committed to the moral principles necessary for the sustained success of your organization. When moral leaders invest in employees’ development, they goes beyond the typical focus on technical skills and behaviors that produce short-term corporate results. Development plans that lead to lasting business performance are comprehensive—they include actions that help employees realize not just business goals but also all their important personal and professional aspirations. An effective development plan is not the sole responsibility of your employees—it is a shared plan for the employees’ growth to which both you and you employees are committed. You and your employees collaborate to achieve goals that are important to the employees and at the same time are intended to produce desirable organizational results.

Leaders who accept responsibility for helping employees achieve their development goals spend substantial amounts of time coaching employees. Leaders who are too busy meeting among themselves to spend time helping employees grow miss golden opportunities for better business results. Investing time in developing employees may seem daunting, but the payoff is exponential. Every hour we spend coaching employees translates into countless hours of enhanced performance.

Each element of a performance development discussion—communicating belief in the employee, reciprocal disclosure of beliefs and goals, contracting for mutual feedback, and mutual accountability—should be discussed and negotiated with every employee for whom you are responsible. If you are a leader responsible for a large organization, it is important to ask all supervisors in your organization to use this approach with their direct reports.

Communicating belief in the employee. Actions may speak louder than words, but communicating a belief in the goodness of the follower needs to be actively spoken as well. In reality, most of us are starved for affirmation. We appreciate any genuine communication of caring. The effective leader affirms employees most powerfully by acknowledging their strengths. Verbal references to the employees’ accomplishments and abilities reinforce the notion that the leader believes in the employee’s best self. Beyond acknowledgment of strengths, the leader should look for opportunities to state directly, “I believe in you. I know that you are capable of even more than you have already achieved.” In our hard-nosed Western business culture, such a message may sound saccharine. When an employee makes a serious mistake, however, stating your belief in that employee’s ideal self helps him or her deal more productively with the fallout of his or her real self failure. Even when employees under-perform, the wise moral leader concentrates primarily on how to improve performance by leveraging their strengths. Emphasizing an employee’s weaknesses is rarely useful, as London Business School Professor Nigel Nicholson, reminds us:

... emotions can never be fully suppressed. That is why, for instance, even the most sensible employees cannot seem to receive feedback in the constructive vein in which it is often given. Because of the primacy of emotions, people hear bad news first and loudest.

Managers should not assume they can balance positive and negative messages. The negatives have by far the greater power and can wipe out in one stroke all the build up-credit of positive messages. In fact, because of the primacy of emotions, perhaps the most discouraging and potentially dangerous thing you can do is to tell someone he or she failed. Be careful, then, of who you put in charge of appraisal systems in your organization. These managers must be sensitive to the emotional minefields that all negative messages must navigate.¹

Reciprocal disclosure of the manager’s and employee’s respective moral compass and goals. Sharing your beliefs and goals and inviting your employee to do the same provides the basis for both to support the other’s actions. You may want to introduce this idea to your employee by saying something like this:

To be a good manager, I need to know where I am and disclose that to you. I also need to know where you are at, and our shared knowledge of each other will give us the foundation for a trusting relationship.

Begin by sharing the principles, values, and beliefs that form your moral compass because many employees will not have had a previous experience with a superior who asked for this kind of information. Your willingness to disclose personal beliefs will usually minimize any discomfort on the part of your employee. But you also should make it clear that your disclosure of beliefs and goals is not a formality. You are sharing your beliefs and goals because you also want help from your employee. You can tell your employee that you hope that together you can be enablers of each other. After you have discussed your own beliefs and goals, your dialogue as manager might sound something like this:

My job as your boss is to help you develop the necessary habits and routines that will help you achieve your goals while honoring your principles and beliefs. I start with a belief in you, but if we are going to work together closely, I need to do more than imagine greatness in you. I want to know what you really want your life to be about—the things that really matter to you. What roles do you play, and how good do you want to be at each of them?

Contracting for feedback. Managers often assume that they have a unilateral right to dispense feedback by virtue of their position. Unsolicited feedback is neither welcome nor effective. Managers are often frustrated to discover that negative feedback frequently results in further performance deterioration rather than improvement. This performance drop is caused by the negative emotions that uninvited feedback causes. Employees who receive unsolicited negative feedback feel unappreciated, misunderstood, and powerless. These are destructive emotions that cause further breakdown, not alignment. In contrast, critical feedback solicited in an environment in which the employee feels empowered is likely to enhance performance. The manager should seek permission to offer feedback and to solicit feedback from the employee about the manager’s own performance. Seeking permission to give feedback and asking for feedback levels the emotional playing field for the employee. Because receiving feedback is part of a contract and because the employee has the opportunity to provide feedback to the manager, the employee feels empowered rather than ashamed. If the manager has been successful in communicating deep caring and belief in the employee, the employee can calibrate the negative aspect of the feedback in the context of feeling positively valued by the manager. Finally, if the manager can characterize the feedback as an opportunity to help the employee accomplish important personal or professional goals, the employee will see the feedback as a performance aid rather than an attack.

In contracting for mutual feedback, you might want to say something like this:

I know we will both make a bunch of mistakes. I want us to agree to help correct each other. I’m going to mess up. Would you be willing to let me know when you see me making a mistake?

Now who would not agree to that? When you have your employee’s agreement, you may then ask this:

If there are times when your performance is not consistent with the goals you have shared with me, may I let you know about that?

Now you have set the stage for discussing performance problems in the context of goals that are important to your employee.

Mutual accountability. Contracting for feedback sets the stage for confronting performance gaps that will inevitably arise. Because you have invited your employees to call you on your own behavior, the way you respond to their first attempt will affect the quality of the relationships going forward. In short, you need to make it easy for your employees to offer feedback in the future, by responding well to their feedback. Responding well to employee feedback does not necessarily mean that you agree and instantly change your behavior. It does require at a minimum that you actively listen to their feedback, play it back to ensure that your employees know they have been heard, tell them how you plan to respond (even if you plan simply to think about it), and thank them for the respect they showed you by offering their feedback.

When you need to give negative feedback to your employees, it is important to reinforce the context of your belief in them. You might say something like this:

Based on everything you’ve shared with me, I know you want to be great at the work you do. I’m sure that you are aware that [your performance in this area] has not been good, and we need to focus on these few areas to help you reach the goals you agreed were important to you.

Performance Problems

Focusing on others’ strengths and goodness does not mean that the moral leader ignores performance deficits. On the contrary, it is exactly that focus on others’ ideal selves and the respect created by reciprocal disclosure of beliefs and mutual feedback that establishes an emotional bond between the manager and employees. That bond, in turn, enables a manager to be extremely tough in tackling performance issues.

When values collide. Caring for people and believing in their essential goodness does not necessarily make your leadership job easy. Perhaps the most daunting challenge moral leaders face is how to manage individual performance in a way that reconciles competing commitments to their people and their organizations. Jim Thomsen of Thrivent Financial for Lutherans understands the challenge well. Jim recalls how he dealt with the performance of a direct report who was also a close friend, “I should have decided to get him out of his job much earlier than I did. My personal relationships with the people I work with tend to be very strong. So it took me six months after I had made the decision to act on it. I tried to help him see that he was in the wrong job, but he never came to that conclusion. My decision to let him go damaged our friendship, but letting him stay would have had negative consequences for the organization. People who weren’t close to this person thought it was about time we held an executive accountable for under-performing. For those loyal to him, I became the ‘evil empire.’ Emotionally, it was very hard. Out of integrity and responsibility I had to act, but I also had to be compassionate.”

Moral leadership and management techniques. Believing in the goodness of people and managing employee performance consistent with that belief does not imply abandoning any of the leadership tools you may have found useful in the past. Most organizations provide leadership training and other resources that enhance their effectiveness in the day-to-day management of work and people. Other leadership techniques work best when you begin with your employees’ ideal selves in mind, focus at least as much on their strengths as their weaknesses, and invite them to help you improve your personal performance just as you are trying to help them improve theirs. Any leadership technique will be that much more effective when you genuinely care about and believe in your employees and their potential. Leadership tools applied in the absence of caring and belief in others often backfire because employees may experience them as mechanistic or manipulative. On the other hand, leadership techniques infused with the spirit of caring tend to work very well, even when not perfectly applied.

Endnote

1. Nigel Nicholson. “How Hardwired Is Human Behavior,” Harvard Business Review, July 1998.