Debasing the coinage of management decisions

Sir Thomas Gresham
Rijksmuseum, Amsterdam

There seems to be no end in sight to the series of corporate write-downs, business failures, lawsuits, criminal trials and SEC fines marking Corporate America’s love affair with naked competition and profit at any price. We shouldn’t be surprised. A cursory glance at the history books shows nineteenth century and early twentieth century business tycoons were every bit as ruthless and unprincipled as today’s. The pursuit of wealth in business, like the desire for political power, always attracts as many unscrupulous adventurers as genuine entrepreneurs.

Sir Thomas Gresham in sixteenth century England knew all about sharp business practice. In those days, the value of a currency depended on the amount of gold or silver in the coins themselves. The markings on the coins, in his time the head of Queen Elizabeth I, guaranteed the content of precious metal. It didn’t take long for the Elizabethan equivalents of today’s greedy executives to see how to work that to their advantage.

Forgery and debasement of the coinage became common. After all, if you accepted a coin because it carried the Queen’s head, anyone could play on your trust by producing coins that looked right but had much less silver or gold in them. Let that happen, and in a short time, the ‘bad money’ would replace the good. That statement by Sir Thomas was later codified into Gresham’s Law.

Gresham’s Law explains why the ‘good coinage’ of ethical business is constantly under threat from sharp practice and dishonesty. We want to believe that corporations and executives are honest, just as we want to believe in the value of the currency. So long as we take both on trust, forgers and cheats will seek to exploit our gullibility. Read the full story

Since power in the workplace exists in so many forms, the question of the correct use of power is at the heart of any ethical approach to leadership.

Exercising power is an essential part of leadership, whether it’s formal power by virtue of position and authority; informal power derived from expertise, influence or personal charisma; the power that comes from expert knowledge; or the kind of power having the ear of the right people offers to anyone who can sway their viewpoint. Without power, formal or informal, leadership scarcely exists. Power is power and we all know it when we see it. How and when to use that power, for what purposes, and with what intentions, are decisions no leader can avoid.

Anyone who can compel, persuade or entice others to do what he or she wants exercises power over them. There’s the power to spend resources, the power to make decisions that are binding on others and the power to give employment or take it away. If you grant rewards or set punishments, you’re exercising power. Read the full story

All may be fair in love and war, but the business world is certainly not the first and need not be the second. It’s time we all remembered that.

English people living abroad (a category that includes me) must get used to being made fun of for coming from the nation that invented cricket (unless, of course, they’re in another cricket-playing country like Australia or India). In the USA, the saying “it’s not cricket!” — in a mock-upper-class English accent — is a typical way of expressing superiority over those sad Limeys who can’t even appreciate baseball, let alone admit the superiority of the American way of life.

Don’t get me wrong. I’m not whining about about some harmless leg-pulling (the English have their own set of insulting stereotypes about Americans).What I want to suggest is that it would be a good idea to stop and reflect for a moment on what the phrase “It’s not cricket!” means and whether a little more of the attitude behind it might not be something worth recapturing. Read the full story

It’s infuriating when somebody makes a promise to you and then breaks it; or agrees to do something, then blows it off like it doesn’t matter.

I’m not talking about an occasional ‘can’t-be-helped’ situation beyond reasonable control, like late air flights, or a wreck tying up traffic. I’m talking about serial agreement breakers. The people who don’t much care whether they keep their promises or not.

Healthy and conscious relationships are open, honest, and safe wherever people are acting and being in integrity. One of the major foundation blocks of trust is that people keep their agreements.

That foundation begins to crumble when people feels betrayed because another fails to commit to or keep promises. It’s one common reason why many relationships at work (and outside) do not work well.

Promises and agreements

The Cambridge Dictionary defines ‘agreement’ as: “when people approve of or accept something; a decision or arrangement between two or more groups or people.”

The purpose of an agreement is to create harmony, so that two or more people can engage in an interaction without any subterfuge. Sticking to an agreement precludes any hidden agenda, duplicity or lack of transparency. An agreement is effective only insofar as it comes from a deeper, internal place of motivation. Seems simple enough.

Dis-agreements

Yet life at work often seems rife with disagreements, betrayals, dishonesty, and disharmony. Why should this be?

The underlying cause of not living up to your promises is that you have entered into some agreement knowing that your true commitment is half-hearted.

Often people enter agreements because: (1) they are afraid of what will happen to them if they don’t enter the agreement; (2) they want to feel safe in some way — mentally, emotionally, physically, psychologically, socially, financially; (3) they are giving to get; agreeing, in order to achieve some personal, self-centered goal; or (4) they want to avoid the discomfort of disagreement or conflict, so they agree to “go along to get along.” Such agreements never come from the right place — the place of integrity and trust.

Agreements, in and of themselves, never lead to safety, trust and harmony. Acting on agreements, consistently, is what leads to safety, trust and dependability. Effective agreements are always built on a clear purpose that leads to action. Whatever the excuse for entering an agreement that comes from a place of duplicity, follow-through and being in integrity never happens.

When agreements work

For your promises and agreements to work — that is, for agreements to generate safety, trust, harmony and dependability — you must first reflect, deeply and consciously: “Why am I agreeing to this?” “What is the true and real purpose underlying this agreement?”

Without this internal clarity, agreements nearly always self-destruct sooner rather than later; and the fallout and collateral damage from such failed agreements can be extensive.

Once an agreement is broken, the first thing to erode is trust. That generates emotions like betrayal, fear, resentment, blame, guilt, and shame. Vague apologies and new pledges to make up for the broken agreement won’t help. The level of trust can almost never be regained to the degree that it existed when the agreement was made.

In working cultures without trust, there are no healthy relationships — just toxicity and a low-level-fever-grade type of agitation; and a continual watching of your back.

In contrast, when you create agreements that reflect integrity, authenticity, heart-felt purpose and accountability for one’s actions, you are creating a workplace culture that exudes safety, trust, harmony and well-being. Productivity, performance and conscious, healthy relationships grow and thrive in such workplace environments.

So, some questions for self-reflection:

• How would you characterize your relationships at work? Do you honor and keep your agreements, consistently? What would your boss, colleagues, direct reports, clients, friends, spouse/partner say?
• Do you create agreements with a win-win, or win(me)-lose(other) motive? Do you generally blame others when agreements break down?
• What is the level of trust in your relationships? How can you increase it?
• Have you been betrayed often? Do you enter agreements with a feeling that you’ll be betrayed at some point? Is trusting others a challenge for you? Why?
• Are your relationships characterized by communication and openness? How much do you trust people at work?
• Do you believe that work is largely “political”? Are you continually vigilant of who are your allies, opponents, adversaries, and “friends” at work? If so, why?

Technorati Tags: trust, honesty, openness at work, creating a culture of trust, making agreements that work, building co-operation, team-working, trust at work, relationships, corporate culture

Psychopathic captains, promotion by intrigue and treachery, no job security, and a ruthless financial short-termism. Does that sound familiar?

(This is a guest post by John Fletcher. John is an Englishman now resident in Europe, with a long career in the public sector in several countries. He has spent a good deal of time in working environments outside the Anglo-Saxon world, and has written and lectured on organizational issues.)

When the finance company Bear Sterns went belly-up a few weeks ago, my first thought was, “what’s that?” I had never heard of it before; nor had most people, I suppose. But my second thought, on reading that apparently fourteen thousand people were going to lose their jobs as a result, was, “Fourteen thousand people? What an earth can they all be doing for a living?”

It was the collapse of Bear Sterns that made many people realize, for the first time, that there is an immense shadow financial system in the world economy employing hundreds of thousands, maybe millions, of people, and largely devoted to trading in all sorts of arcane financial products with other people’s money. The fact that this system has grown geometrically in the last generation has had some significant, and unforeseen, consequences — and even for how we think of work itself.

Of privateers and pirates

When we try to make sense of this shadow financial system, it’s tempting to compare it to a casino. That’s understandable, but not really accurate. At a casino, nearly all the players lose nearly all of the time, which hasn’t been the case with the bond dealers of the world until recently. Perhaps there’s a better analogy, and one that is more worrying for what it suggests about many of the world’s economies.

The late 17th and early 18th centuries were the great age of piracy in the Caribbean. The pirates, operating, oddly enough, from the sites of some of today’s hedge funds, like the Caymans, preyed on respectable traders in precious metals, as their successors do today. Indeed, the comparison between the two is one that today’s traders seem positively to invite, with their vocabulary of dawn raids and buccaneering CEOs, their backstabbing, wealth-at-any-price ethos.

In spite of their “yo-ho-ho” Hollywood reputation, real pirates were parasites who preyed on anyone weaker than themselves. But they were a very small part of their economy compared to their equivalents today.

Economics textbooks try to persuade us that commerce works because far-sighted entrepreneurs recognize demands and respond to them. That may have been true, to an extent, in the past, but much of today’s economy is itself parasitic in nature, trying not to address a demand, but to create one. The new-style financial services industry — getting on for a quarter of the US economy — has been a particularly extreme case.

Whatever was true in the past for old-fashioned lending banks and insurance companies, the industry today is one huge pirate flotilla, ripping off the world economy by selling people debts they can’t repay so that they can buy things they don’t need. As a result, there are factories, shopping malls, and residential areas today in danger of being as gutted by pirate financiers as any port ever raided by Blackbeard three centuries ago.

Some disturbing comparisons

What are the consequences for an economy where so much is owed by so many to so few? Can people really be happy working for organizations which exist to rob and pillage? We don’t know much about the personnel management and career development practices of pirate ships, but we can assume they weren’t particularly enlightened. Reports from the time speak of psychopathic captains, promotion by intrigue and treachery, no job security and a ruthless financial short-termism — a short life and a merry one, as the famous pirate Bartholomew Roberts put it.

In the end, it wasn’t just government intervention that closed the pirates down; it was also that there was nothing left to steal. Shipments of gold and silver from the New World had slowed almost to a trickle. Similarly, the financial services industry today has no more money to lend, and people can’t take on any more debt anyway.

But whereas there were, at most, only ever a few hundred pirates, their modern descendants must be numbered in many, many thousands — and many are now faced with the task of finding a legitimate job as their industry collapses.

If the financial services companies are forced to walk the plank in the next few years, it’s going to be sudden death for most of the new pirates of the Caribbean. What — and who — else will they take down with them?

Technorati Tags: financial piracy, financial system, speculators, pirate financiers, macho management, rogue traders, super-capitalism, financial short-termism

We should all take time to consider the dangers of “management fundamentalism” and the dangers it brings.

Photo by Ramy Majouji, Wikimedia Commons

Writing in the British newspaper, The Observer, on Sunday March 23rd, 2008, Business Editor Simon Caulkin pointed to “management fundamentalism” as the primary culprit for the current financial and economic woes afflicting the global economy.

His article’s title, Capitalism’s too important to be left to capitalists, lambasts the business thinking of today — especially that pioneered in the United States — as “a system with no commitment, trust or long-term relationships.”

Caulkin says:

It is not just that ‘Wall Street is predicated on greed’, in the phrase of a former Bear Stearns director last week. ‘Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible,’ obligingly warned Milton Friedman, the patron saint of market fundamentalism.

The duty of managers

Is the only duty of managers “to make as much money for their stockholders as possible?” That seems a dangerous path to follow, if taken at face value. Aside from a convenient denial of any kind of responsibility to society as a whole (of which all businesses are surely part), it implies that just about any action is acceptable — even praiseworthy — that results in profits for shareholders.

Certainly, some managers act as if this is their doctrine. The obsession with “stakeholder value” ought really to be termed “shareholder value,” since other stakeholders in an enterprise (employees, suppliers, the local community) are given scant consideration compared with the Wall Street traders who buy and sell the stock for their own gain.

Is amoral leadership acceptable?

At best, such an approach is amoral: unconcerned with any ethical or moral questions. At worst, as we have seen repeated in recent years, it becomes immoral and degenerates into crime and dishonesty in pursuit of still larger profits.

If you can make the business more profitable by throwing local people out of work, sending jobs overseas, manipulating the accounts, and engaging in all kinds of sharp practice, management fundamentalism would not appear to stand in your way. Its basis is the claim that everyone should have the freedom to put their own self-interest before the interests of others.

A convenient idea

Perhaps it is no co-incidence that the once-idolized former head of the Federal reserve, Alan Greenspan, was known to be an admirer of Russian-born novelist and philosopher Ayn Rand, whose ‘Objectivist’ movement held that the only moral social system is laissez-faire capitalism.

Rand thought selfishness a virtue and wanted all property to be privately owned, with the state entirely separated from economics. Indeed, it’s hard to see what purpose a state had, in her view. Far from helping to balance competing demands and protect the weak against exploitation by the strong, the state should keep out of any ‘interference’ with people’s freedom to do whatever they thought to be in their own interests — economically or otherwise.

The convenience of this philosophy is clear. Instead of having to wrestle with tough issues of right and wrong, the leaders and managers who take on this approach can set all that aside and deal only with the relative effectiveness of choices in producing financial returns. And, if the rich and powerful take the lion’s share of the nation’s wealth, that is what freedom means. The poor are poor because they either choose to be so, or lack the energy and determination to improve their lot in life.

Detachment may not work

It’s obvious that ideas such as these take ‘freedom’ to an extreme and leave little space for humanity or compassion, favoring those who grab want they want, usually by taking large risks with other people’s money.

But I wonder if there isn’t an extra drawback to amoral management; one that doesn’t simply involve the ‘moral hazard’ of allowing the wider economy to be put at risk by the greed of a few — or the fact that you cannot live without the assistance of others and to be fully ‘free’ and selfish is only possible for hermits and those willing to give up society’s benefits as well as its obligations.

Maybe some of the stress and anxiety endemic to much of modern working life comes, not just from long hours and constant pressure to ‘perform,’ but from the inner knowledge that your actions will cause hurt to others? A few people may be hard enough to ignore any pain their actions inflict, but I suspect they are the exception. For the rest, closing your eyes to the harm you do won’t make it go away; nor free you from the nagging knowledge that your time on this earth may not have been a positive factor in events.

Which is to blame: individuals or the system they must work under?

It’s undeniably tempting to focus criticism on the people who run our enterprises: the CEOs and other top dogs whose fantastic earnings epitomize both selfishness and greed; tempting, but hardly helpful.

If all it would take to sweep away our economic problems and financial crises was to curb or replace a few thousand wealthy individual managers, there would be no reason to hesitate. Sadly, these people are, in many ways, as much the victims of a corrupted system as the ordinary people whose lives they sometimes ruin.

We have allowed approaches to business to flourish that are themselves based entirely on greed and the freedom of the strong to exploit and fleece the weak. If such systems demand similarly amoral behavior from the managers within them, that is unsurprising.

Some questions to ponder

• If you assume, as I do, that most people are fundamentally decent, what is the effect on them of having to work within an economic system that demands that they lie to, exploit, and manipulate their fellows for the benefit of the owners? Is this contributing to stress and burnout?
• Since all business is ultimately based on a degree of trust (credit, especially), are we seeing not a ‘credit crunch’ but a catastrophic failure of trust? If no one trusts other businesses enough to lend them money, the system of capitalism itself must collapse. How can sufficient trust be restored without demanding that corporations act according to agreed standards of honesty — even if that means limiting their freedom to do what seems in their own, albeit short-term, interests?
• If amorality coincides with a lust for immediate gratification — as it surely does today — is it possible that corporations and individuals may mistake their best interests, focusing on short-term gain in ways that harm their long-term welfare? Should we stand back and let them ruin themselves in this way, even if many innocent people are also hurt in the process?
• In a nation so avowedly ‘moral’ as the United States, how has business come to be exempt from the moral and ethical standards expected of individuals? Can corporate morality set itself different standards than those that apply to individuals?
• What are your own ethical values and standards? How far are you willing to compromise them for monetary gain or advancement? Have to thought about this carefully, or are you simply shutting your eyes to the problem? Will you be able to live with what you might be called upon to do?

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Technorati Tags: management fundamentalism, economic, financial crisis, leadership and morality, business ethics, corporate ethics, honesty in business, trust, credit, failure of trust

What happens when simple over-confidence leads to a nightmare of tension and lies?

There’s a reasonable belief that a healthy dose of self-esteem is necessary in a leader; that a person placed in charge of important activities needs to be courageous in facing problems and confident in his or her ability to overcome problems and obstacles.

But what happens when external pressure to deliver near-impossible goals pushes confident people into promising what cannot be done? When that all-important attitude of “can do” becomes a liability, tempting otherwise admirable people into situations where deceit seems the only way out?

That’s the important question posed by this article in “Knowledge @ Wharton,” referencing a study by Professor Catherine M. Schrand and doctoral student Sarah L. C. Zechman titled Are Overconfident Executives More Inclined to Commit Fraud?

When macho management meets personal ambition

In a culture of macho management, being confident and capable isn’t enough; you must be willing to say “yes” to every demand from above, however unreasonable. You must act as if you believe you can deliver whatever results are laid upon you. It isn’t sufficient to be courageous; you must be a superhero.

In such an atmosphere, “can do” confidence quickly morphs into over-confidence about personal and corporate ability to perform. Ambitious leaders can slide insensibly from showing self-esteem into finding themselves promising to meet expectations so high that they exceeded anything that might be reasonably possible — at least without some degree of manipulation or outright deceit.

“Eventually, the manager’s only option is to ‘cook the books’ by falsifying documents and making the kinds of accounting misstatements that are prosecuted by the SEC,” the authors write. An overconfident manager with unrealistic beliefs about future performance is more likely to engage in fraud “because he is less likely to correctly anticipate the need for more egregious earnings management in subsequent periods.”

Having once promised the moon, and maybe got away with it by a combination of luck, outrageous overwork, and sheer guts, the leader finds that that reputation for super-performance becomes a millstone that forces him or her into ever more unrealistic promises. Read the full story

Respectfulness towards others is the key to a more civilized workplace

The challenge for life at work is this: how to be a “business” person and a “human being” at the same time. How to be compete, yet cooperate; be hard-nosed, yet ethical; keep one’s nose to the grindstone, yet still take time to “see” and acknowledge others; be professional, yet personal; to make a profit and yet not be greedy.

You don’t have to look far to discover folk whose life at work takes the low road. Business magazines, journals, and news shows are replete with instances of individuals whose workplace demeanor is described as rude, insensitive, disrespectful, unethical, uncivil, ego-maniacal and self-serving, greedy, and dishonest. You might rub elbows with one or more such people on a daily basis — despite the plethora of books, courses, seminars, workshops, policy and procedure manuals, and treatises focusing on ethics and codes of conduct.

On the other hand, there are those whose lives at work are driven by an internal moral compass: guided by principles that support behaving decently, truthfully, and with integrity — people who take the high road, even when they face major challenges, problems, and difficult choices.

What can support you to change lanes and move from the low road to the high road is “Li.” Confucius comes into it because he wrote about the nature and practice of Li.

What is “Li?”

Around 500 BCE, Confucius described Li as a code of conduct that focuses on such things as learning, tea drinking, how to dress, mourning, governance, and interaction with others. The underlying notion of Li is how to be respectful of nature and one another. Translations or meanings for the word “Li” include propriety, reverence, courtesy, ritual, or the ideal standard of conduct.

Li is what the sage uses to find that which is appropriate. It is both the means which sets the example for others, and the end which maximizes understanding, pleasure, and the greater good. Words and behaviors that show respect for another are contained within the framework of Li.

Confucius believed that Li was the source of right action in all behavior — that coming from a place of respect for all others was at the heart of living a harmonious and worthwhile life. As the practice of Li was continued through centuries, one central theme began to stand out — cultivating your natural human tendency to be decent and kind towards your fellows.

Li in the workplace

The practice of Li runs the gamut from smiling at a co-worker to holding a door open for another; from serving others to being self-responsible. It includes questioning practices that are unethical, corrupt, and disrespectful or demeaning of others. It means choosing to behave in ways with a conscious focus and intentionality on supporting the well-being of the workplace and those who work there.

Li, however, does not come to consciousness naturally. It has to be cultivated. You must first learn, then practice, the art of being in integrity; respecting the dignity of every human being. Only then can you become become committed to, and disciplined in, the practice of Li.

The challenge in today’s workplace is to overcome more common modes of behavior, based on phoniness and convenience; approaches in which, more often than not, rudeness and selfishness are the guiding principles.

The opposite of Li is the common focus on “me, me, me.” It’s a way of life given over to rudeness, insensitivity, verbal abuse such as bullying, gossiping, and being disrespectful, and treating others as irrelevant. It’s being ego-driven and not cognizant of others around you: constantly interrupting in meetings, “one-upping” and speaking over others, and hijacking others’ experiences. It’s also revealed in simple, everyday things, like needing to be the first one on and off the elevator, not holding a door for another, not saying “please” and “thank you”, and slyly speaking ill of others.

How to cultivate Li

The way to cultivate and practice Li at work begins with becoming conscious: asking yourself, “How am I behaving right here, right now?” “Am I taking an opportunity to allow my natural tendency to be decent, good and kind to arise?” “How am I showing up?” “Am I being authentic”?

Li is not syrupy stuff. It’s not fluff. It’s not being effusive. It’s not being fake or phony. It’s not being patronizing. Li is being natural, honest, sincere, self-responsible, and relaxed when you interact with another — any other.

And practicing Li does not mean you stop being firm and assertive or stop holding others accountable. Still less does it require you to stop telling the truth or the bad news. Those who practice Li strive to come from a place of internal truth and integrity that supports them to be more forthright and courageous; it requires trusting that they “show up” in a way that is respectful and decent; that they can be who they are right here and right now — without using any “side” to shore themselves up.

Confucius believed that to truly achieve the principles of Li — the character of the true person — you must look within yourself. This is what he means when he says:

We know what is proper (Li), especially in difficult situations, from the wisdom arising out of contemplation.

Li means regularly spending time on self-reflection, inner listening, and sensing your “gut”, to access that inner wisdom that leads right knowing, right understanding, and right action. Li supports us to live life, even life at work, with your eyes wide open; to act decently, even when it might be “inconvenient.”

Each of us is born with Li. Over time, however, we lose our sense of it as we allow life get in the way of being our true and real selves. We take on fake personalities, personas, and masks and become poseurs. In the process, we learn to navigate life, especially life at work, with our “eyes wide closed” — reactive, fearful, resistant, and deficient in basic humanity and decency.

Questions for self-reflection

• Do resentment or greed drive your interactions with others? Do you admit when you are wrong? Do you apologize openly for misdeeds?
• Do you ever lie or stretch the truth? Do you ever lie, cheat, or steal simply because it’s convenient — because you can?
• Are there others you admire because of their integrity, sincerity and authenticity? Would folk at work (and at home and play) characterize you as a decent human being? Would you characterize yourself as a decent human being? Do you live up to this characterization?
• Does your organization have a code of ethical conduct. Do you follow it? Do others?
• Do you have a personal code of conduct? Do you follow it?
• What one or two things can you do right away to begin to cultivate and practice Li at work?

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Technorati Tags: Confucius, Li, finding a code of conduct, respectfulness towards others, the key to a more civilized workplace, looking to the greater good, the practice of Li, why you should support others’ well-being, how to be a decent person

Why “slow and steady” wins the (business) race

I don’t normally post articles at weekends, but I had to draw your attention right away to Joe Nocera’s article in today’s New York Times Business section. The piece is entitled Put Buyers First? What a Concept.

The article is about customer service at Amazon.com and Wall Street’s reaction to it. Two brief extracts will show you why I feel it is so important. The first is this:

Legg Mason’s legendary fund manager, Bill Miller, who has made a small fortune for his investors by betting big on Amazon, told me that “Wall Street is almost fanatically focused on margin expansion and contraction.”

But I couldn’t help wondering if maybe there wasn’t something else at play here, something Wall Street never seems to take very seriously. Maybe, just maybe, taking care of customers is something worth doing when you are trying to create a lasting company. Maybe, in fact, it’s the best way to build a real business — even if it comes at the expense of short-term results.

Here’s the second extract:

What Wall Street wanted from Amazon is what it always wants: short-term results. That is precisely what Dell tried to give investors when it scrimped on customer service and what eBay did when it heaped new costs on its most dedicated sellers. Eventually, these short-sighted decisions caught up with both companies.

Please read the article and think about it. It has implications far beyond buying and selling. In just about every aspect of our lives — especially in the workplace — we are constantly faced with choosing between short-term gratification and long-term benefits that require patience to mature.

When you choose to create relationships that people value and trust, it may take a while for the returns to show up, but once they do, they nearly always grow strongly over the years. It’s a long-term bet on something that will last.

When you resort to “grab-and go” management, and manipulation for short-term benefits to yourself, the returns may also take a while to show themselves. And when they do — as they surely will one day — they tend to be swift, unexpected, and brutal. It’s a short-term bet on something that will likely evaporate as quickly as it arose and leave you wishing you’d never done it.

As in all of life, you get to choose. Make sure you choose wisely.

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Technorati Tags: customer service, something worth doing, long-term benefits, relationships that people value and trust,

This guest posting is by Douglas Ross, who describes himself as a displaced Canadian now living in Georgia, awaiting his green card. You can read more of his ideas at www.resultsthroughintegrity.com

Over 1800 years ago, Marcus Aurelius said “If it is not right, do not do it. If it is not true, do not say it.” These are simple words from another time and place. Do the right thing and speak the truth.

Integrity is about wholeness, consistency, objectivity and purity. In simple words, it is about doing the right thing (wholeness), doing the next right thing (consistency), and doing things right (objectivity). Marcus Aurelius also points out that what we say is as important as what we do.

Some people mentally walk away when words like this appear. Maybe they believe they already know the truth of these words. Maybe they just do not care. Only a few reflect on the true standard of behavior set out in these words.

Defining integrity

Today, many people define integrity in a vague way that only roughly distinguishes good from bad. These people usually recognize integrity as a refusal to engage in lying, blaming, or other behaviors that evade accountability.

This definition, although simple and easy, misses part of the meaning. Webster’s Third international dictionary defines integrity as precluding expediency, artificiality, and shallowness. This means you don’t use others for your own purposes (expediency); make promises you never intend to keep (artificiality); or hide behind politically correct and social acceptable things (shallowness).

Maybe you define integrity as ‘do what you say and mean what you say.’ This definition adds to the clarity and suggests integrity is compromised when you break promises you truly meant to keep; break promises to one person to meet a promise to others; or break promises to yourself to keep promises to others.

Unfortunately this definition too, although helpful and easy to remember, misses another part of the meaning. The intent of action is as important as the action or the words. Some people do what they say and mean what they say, but they do it to serve their own ends. That is not integrity either.

Organizational integrity

Many organizations, like all too many people, treat integrity lightly. Any time a company delivers less than they promised in terms of quality, quantity, or service, there is a breach in integrity. Some companies make promises they can’t keep. When they are caught out they blame others or refuse to accept the consequences for broken promises.

For example, in manufacturing there is a term called the death spiral. It works like this:

• In response to increased Return on Investment demands, leaders put pressure on their organizations to increase sales and to cut manufacturing costs. The sales group makes unsubstantiated quality and delivery promises to attract customers, while manufacturing cuts people and programs to reduce costs.
• As sales increase, product quality and delivery suffers as manufacturing struggles to achieve more with less. Warranty costs rise and increased customer service demands negatively impact the bottom line. Pressure to perform grows again. A new cycle of broken promises and cost cutting efforts fuels the death spiral.

Fortunately, some organizations do strive to make integrity work. They learn their lesson and start developing their internal systems and structures to ensure integrity in the marketplace. They know that economic sustainability is not built on expediency, artificiality, and shallowness.

Some people also strive to make integrity work in their lives. They weigh the costs of their promises and commitments before making them. They take responsibility for broken promises and instill the discipline to act and speak with integrity through a process of correction and validation. They learn that speaking the truth, not only to others but to themselves, is the right thing to do. This motivates them to do the next right thing and to do it right.

Be that person, not for the world, but for yourself.

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Technorati Tags: wholeness, consistency, objectivity, integrity, business ethics, corporate ethics, honesty