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Analysis Of Leadership Integrity

Leadership is always important for Business success, but now Leadership with Integrity is critical. We are in the midst of a seminal change in the business environment-from the In¬formation Age to the New or Knowledge Economy. Key for business success is leadership and organizational culture. And yet the news is filled with CEOs who are falling from grace and there is talk of a "leadership crisis" and of "toxic cultures."

Integrity is a delicate jewel. Building integrity in leaders and their organizations takes time,
continuous effort and cannot be feigned. You must feel it in your gut, in your core beliefs that
being honest and trustworthy is the right business practice. If you feel that integrity is the route to financial success you are doomed to failure.

I offer some suggestions you might want to consider as you build integrity within your lead¬ership team. The suggestions are aimed at integrating Integrity within the underlying organi¬zational culture. You must address "the way we do things here in company x", or the norms that govern how people make decisions each day.

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An Analysis Of Leadership Integrity

There are many leadership programs, seminars, books, articles and other lead¬ership products. Many of these well meaning but don't capture the complex con¬text in which leaders live. Manfred Kets de Vries, one of today's top Leader¬ship Thought Leaders who say it best, "The literature we find on leadership, though vast, isn't always helpful."1

The best leadership lessons are learned from experience. The key lesson and the one that seems to be a part of most of our stories is the absolute importance of Leadership Integrity. If leaders don't have Integrity, nothing else matters much. (use Integrity synony¬mously with Authenticity, Credibility and Trust.)

A quick search for the definition of Integrity surfaced this-"Integrity comprises the per¬sonal inner sense of "wholeness" deriving from honesty and consistent uprightness of charac¬ter" This seems to fit, but the following from Howard Adamsky, from his article "A New Day for American Leadership" captures what Integrity means for Leadership, ". . . leadership is part vision, part art, part science, part experience, part faith and part know-how, all bound to¬gether in an ironclad package called integrity."2

Leadership is always important for Business success, but now Leadership with Integrity is critical. We are in the midst of a seminal change in the business environment-from the In¬formation Age to the New or Knowledge Economy. Key for business success is leadership and organizational culture. And yet the news is filled with CEOs who are falling from grace and there is talk of a "leadership crisis" and of "toxic cultures."
LEADERSHIP INTEGRITY LOST AND FOUND
Lost
There has been a continuing erosion of trust across numerous business sectors in America ac¬cording to the Golin/Harris Trust Survey.3

Nearly 70 percent of survey respondents said, "I don't know whom to trust anymore," and said they will "hold businesses to a higher standard in their behavior and communications." February 2002.
But for those who have worked in corporate America, see poor leaders in ac¬tion daily. It just wasn't news worthy in the past.

Despite much advice from the $15 Billion Leadership Industry (business schools, seminars, books, tapes, journals), it seems that many so called leadership experts; business books and publications failed us.
 A major Business School had a business case on the success of Enron.
 Bernie Ebbers and Ken Lay are profiled in a book on the best leaders.
 In a major business magazine's list of most admired companies for 2000, Enron ranked first in quality of management-ahead of even GE. That ranking came from the votes of its peers.
 And look at what, Table 1., some management gurus said about Enron, before and after its collapse-

Table 1.
? Professor 1
Before:
"Leadership is not a solo act . . . it is a shared responsibility, a chorus of diverse and complimentary voices. To an unusual degree, [Enron] is chock-full o' leaders"
After:
"Egg all over the face is an understatement. As embarrassing as it is, we basically took the word of Lay and his people. Was there a way to spot that the emperor was wearing no clothes? I don't think so."
? Professor 2
Before:
"Skilling and Lay created `a hotbed of entrepreneurial activity and an engine of growth."
After:
"There are absolutely some strong, helpful lessons to learn by what they did right. Unfortunately, all those are trumped by the mistakes they made."
? Top Consultant 1
Before:
"Enron isn't in the business of eking the last penny out of a dying business but of continuously creating radical new business concepts with huge upside."
After:
"Do I feel like an idiot? No. If I misread the company in some way, I was one of a hell of a lot of people who did that."
? Professor 3
Before:
"Skilling and others have led a transformation in Enron that is as significant as any in business today. This is brand new thinking, and there are broad implications for other companies."
After:
"History can't be very kind to it. It's sad: The innovation and ideas and what was good about what they did may be lost in the demise of the company."
Source: BusinessWeek4

The Enron crisis motivated the Sarbanes-Oxley law that called for more oversight in corporate reporting. It also contains a Code of Ethics provision. Despite this, leadership integrity was once again lacking and this contributed to the recent economic crisis.

First there's the Edelman Trust Index5--

Seems little was learned from the Enron era. Once again there is an overarching need for tone and actions from the top of the organization.
For example there is the case of GE when CEO Welsh publicly honored a manager who did not reach his sales targets because he refused to offer a bribe that would get sales for engines to a foreign airline.

We may be seeing the results of Business School-Media-Corporate complex. Perhaps in concept similar to the once Military-Industrial complex former President Eisenhower warned about in the 1960s:
"This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence-economic, political, even spiritual-is felt in every city, every State house, every office of the Federal government. We recognize the im¬perative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influ-ence, whether sought or unsought, by the military industrial complex. The potential for the dis-astrous rise of misplaced power exists and will persist."6

This Business School-Media-Corporate complex seems to have engaged in a group think of enormous proportions-professors, consultants, journalists, students and executives all feed¬ing on their own diets of best practices, theories and what defines leadership.
 Business schools taught Ethics as a sideline.
 Many companies have lofty Mission Statements and Operating Practices statements that ad¬dress ethics, but do little to enforce them.
 Journalists give interviews to glitzy executives who brag about what they are doing to im¬prove profits.
 Executives courted Wall Street analysts who might improve their stock ratings.

Business is at a crossroads. Capitalism is facing a crisis. All of us who believe in business-from CEOs to business-school professors-must recognize that we have contributed to this crisis. "Memo to: CEOs," FastCompany, June, 20027
Not since the days of the insider-trading poster boy Ivan F. Boesky and the junk-bond king Michael R. Milken have M.B.A. programs been so assailed for their role in preparing future cor¬porate executives. Many of the schools are scrambling to rewrite case studies, dust off their ethics lessons, and defend professors who have worked for the very companies now under scrutiny.
The Chronicle of Higher Education September 20, 20028
The image of business leaders has been declining for some time. Starting in the early 1980s we began to see a seemingly endless parade of mindless downsizing, reengineering, reorgan¬izing and inauthentic PR all focused on satisfying the investment community. Corporate lead¬ers seem to excel at Investor relations and fail in the vital relationships with their own people and their customers.

The damage caused by these poor leaders is too often hidden until it is too late. We need to examine business practices that lead to how these scoundrels got to their high office and iden¬tify the true characteristics of real authentic Leaders. After all somehow these scoundrels got to the top, whether by promotion or approval by the Board of Directors.

This is the darker side of leadership. Manfred Kets de Vries has identified several of those shadows that leaders fail to recognize. One of these is "mirroring, or the tendency to see them-selves as they are perceived by their followers and to feel they must act to satisfy the projec¬tions or fantasies of followers. A certain amount of mirroring is part of human existence. Our understanding of the world will always reflect some shared perceptions of what is real. But, in a crisis, even the best of us is likely to engage ...

Solution Summary

There are many leadership programs, seminars, books, articles and other lead¬ership products. Many of these well meaning but don't capture the complex con¬text in which leaders live. Manfred Kets de Vries, one of today's top Leader¬ship Thought Leaders who say it best, "The literature we find on leadership, though vast, isn't always helpful."1

The best leadership lessons are learned from experience. The key lesson and the one that seems to be a part of most of our stories is the absolute importance of Leadership Integrity. If leaders don't have Integrity, nothing else matters much. (use Integrity synony¬mously with Authenticity, Credibility and Trust.)

A quick search for the definition of Integrity surfaced this-"Integrity comprises the per¬sonal inner sense of "wholeness" deriving from honesty and consistent uprightness of charac¬ter" This seems to fit, but the following from Howard Adamsky, from his article "A New Day for American Leadership" captures what Integrity means for Leadership, ". . . leadership is part vision, part art, part science, part experience, part faith and part know-how, all bound to¬gether in an ironclad package called integrity."2

Leadership is always important for Business success, but now Leadership with Integrity is critical. We are in the midst of a seminal change in the business environment-from the In¬formation Age to the New or Knowledge Economy. Key for business success is leadership and organizational culture. And yet the news is filled with CEOs who are falling from grace and there is talk of a "leadership crisis" and of "toxic cultures."

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