Ethics - The Only Way To Be A True Leader.

ying yangeth-ics (noun) - that branch of philosophy dealing with values relating to human conduct, with respect to the rightness and wrongness of certain actions and to the goodness and badness of the motives and ends of such actions. Right and Wrong. Good and Bad. And the most important part - the motive and ends of such actions.

There are many executives out in the marketplace today that know what they are doing is wrong . . . and bad. But they still do it because the motives and ends of such actions will deliver one or both of these results:

  1. The company will do better.
  2. They will make more money, be more successful, and ensure a continuous launching pad to bigger and better positions.

Now here's the REAL question - Can they still achieve these same goals listed above if they do the right thing . . . good things?

Now we can get into the semantical argument that what I see as good might be bad for another (or vice-versa). Or that based on our differing opinions of ethics, what you might see as 'bad' might be 'good' viewed by another. But let's cut out the BS - as an executive, you absolutely know when you are doing something that is slightly (or gravely) unethical (until you do it so frequently that it becomes 'good' in your eyes).

I took ethics in college (I state that I am not an expert) and know that there are two arguments (or more) for every ethical issue. But I've also lived in the corporate world for 20+ years and coached top level executives for 10 years. I believe that in business, there is rarely gray, there is only black and white. Why? In business, everything is measured, everyone is conservative, and risk is constantly minimized. Most of the time (not all mind you), you can faithfully predict how your actions will affect your bottom line, customers, employees, shareholders, etc. Not on a granular scale - but more on a ballpark one.

But when it comes to bad and wrong, I know it when I see it.

Bad and Wrong decisions go against the company's natural grain of behavior. You've probably felt this if you have worked in corporate - you are marching down the street with a strategy, everyone is singing the same tune. Suddenly, management makes a 180° turn and states that we will be doing the exact opposite of what they were pontificating 6-12 months before.

Now I understand that markets change. Customer wants and needs change. But 180 degrees? We were going North, but now we are going South? That clearly communicates to me that the people at the top don't know what they are doing, are open to the fickleness of certain corporate soothsayers, or dramatically underestimate the market to the point that they were COMPLETELY wrong. Candidly, these people should be FIRED. But these are not Bad and Wrong decisions in an Ethical context.

I honestly think that when executives make bad and wrong decisions do so for three reasons (the motive and ends):

  1. They're lazy. Going the 'bad' or 'wrong' direction is easier, less risky, more profitable in the short term, etc.
  2. It's a personality thing. They feel that making contrarian decisions keep them above the rabble, they are smarter than the rest, and they are fooling the masses.
  3. They believe that there is a LOT more money and power to be made by going bad.

Bernard Madoff was a #2 & #3. Not only did he realize that there was a LOT more money to be made by deceiving his investors and the market, it probably was a personality thing. Bottom line - most unethical executives have abnormal self-esteem (very low or very high) so they compensate by doing unethical things.

Many executives who testify in front of Congress (honestly - they've probably done something wrong!) usually have all three personality traits. Go back and view the testimonies of the investment firms, insurance companies, tobacco companies to get a good feel for #1, #2 and #3.

OK - That's enough for one day. My next post will discuss the treatment.