Chapter 1
New Times Demand New Leaders
For political and business leaders in America, the onset of the 21st century has brought with it a millennium of change and challenges. Politically and economically, the world is now a different place than it was when the 20th century drew to a close. Politically, the last half of the 20th century may have seemed complicated at the time, but looking back, times were actually a lot simpler when it was just the West versus the East – Capitalism versus Communism. Political leaders had an easy job. It was us against them. We knew who “us” was and who “they” were.
Today every point on the compass portends crisis and conflict that is difficult to delineate and even more challenging to resolve. In some part of the world America has been in a shooting war for this entire century. And we are still not sure who we are fighting, or why. Worse yet, there seems to be no clear way to define objectives and determine victory.
Believe it or not, as perplexing as the political world may be, the business world has become just as convoluted and confusing. That’s because the American economic system has been at war with itself since the start of this century. It was not so long ago — in simpler times — when top- and bottom line-growth (no matter how achieved) was the only objective of business leaders. The simplicity of that model and the abuses it perpetuated has caused the very fiber of the business world to unravel. As a result, we are now trying to figure out how to climb our way out of “The Great Recession.” Everyone now accepts that the same will never be the same again.
It seems like a distant memory, but just 10 years ago the biggest fear facing the business world was the purported oncoming “Y2K” computer crisis. (We know now that this “crisis” was nothing more than a sophisticated effort by devious, geeky IT consultants to bilk companies out of billions of dollars.) If one had been prescient enough at the time to predict all that was going to change in the American economic system in just the first decade of this century, they would either have been ignored or committed.
Think about it. In less than 10 years, we have suffered through the illicit machinations of the leaders of companies such as Enron, Tyco, Adelphia, Halliburton and many, many others. The airline industry has crashed. The auto industry has shrunk like an ice cube on a Key West beach. We have had to learn terms such as subprime lending, derivatives, hedges, credit default swaps and collateralized mortgage obligations.
Who would have believed that during the first decade of this century that icons such as General Motors, United Airlines, AIG Insurance, Lehman Brothers, Merrill Lynch, Bear Stearns, Fannie Mae, Freddy Mac, Citicorp and scores of other established institutions would be in turmoil, file for bankruptcy, disappear or be acquired? What is even more unbelievable is that many of these companies would become owned and controlled by the U.S. Government. While it is still hard to fathom that these events have happened, what is even more surprising is how quickly they happened.
Living in the New Order
Certainly we are living in new times, and if we as a society are going to effectively respond, it is incumbent upon us to grow a new type of leader. And that is what this book is all about. It discusses how we can grow these new leaders to meet new times and how you can be one of them.
Traditionally our society attempts to grow leaders by planting the hybrid seeds of ethics and leadership skills into an individual at a young age. Education about ethics seems to start right after we are old enough to go potty by ourselves and does not end till we are too old to go potty by ourselves. The idea of us growing up to be a great leader starts the first time our parents see us and can swear they hear Hail to the Chief playing as background music in the delivery room.
With that as a start, our lives are forever more bombarded with what ethical people do (or don’t do) and how leaders lead. Be it at home, school, church, boy/girl scouts and even at work, we are besieged and implored to be ethical and to learn to be a leader.
But, this book is not about basic ethical mores. Enough people have already told you not to lie, cheat or steal so you know what it means to be ethical. And, it’s also not about being a “good leader.” After all, how many times can people tell us that in order to be a leader we have to have vision, trustworthiness, courage, dedication and enthusiasm?
My belief, honed from decades of experience and observation in the business world, is that it will take more than the traditional concept of being ethical and more than the classic traits of leadership to emerge as a new type of leader who can be successful in these new times.
The business world is filled with thousands of ethical individuals working hard to be effective leaders. And, that is good, but it is not enough to stand out and distinguish oneself as a “new leader for new times.” If you want to rise above the rest and achieve truly unique levels of success as leader, it is not enough to simply follow the rules and lead like everyone else. You need to be different and do more than other ethical individuals in positions of leadership.
Think about the world of professional golf. There are literally thousands of professional golfers who are highly talented and make a good living playing the game. They have spent most of their lives being schooled in the rules and techniques of golf. These professional golfers spend untold hours honing their skills and learning their game.
But the reality is that among those who make a living as professional golfers, there is a razor thin difference in the knowledge of the game and skills at striking the ball. Despite only the slightest differences in experience and talent, certain golfers consistently rise above the rest to achieve remarkable success.
On the PGA Tour in 2009, the number one golfer – Tiger Woods – averaged 68.84 shots per round, while the number 100 ranked golfer – Ted Purdy –averaged 70.68 shots per round. That is less than a two-shot difference per round. And yet this ever so slight difference in scoring translated into six victories and $10.7 million in earnings for the player ranked number one in scoring compared to no victories and $800 thousand in earnings (not such a bad living) for the player ranked number 100. And that does not even count monies earned by endorsements and other benefits gained by being the best. Clearly it is not physical ability that separates golfers; something else makes the difference between a good and great golfer.
The world of leadership and success in business is much the same as the world of professional golf. There are countless thousands of individuals who have the education, opportunity, experience and ethics to be successful leaders. And yet some leaders seem to do more and emerge from the pack. As in professional golf, it may be only a slight difference between those who are good leaders and those who become great leaders, but that difference makes all the difference in the world. And it is that difference that new leaders will need to meet the challenges of new times.
My belief is that it is possible for all of us to absorb what we have learned regarding ethics and leadership and then take it one step further. Doing so enables us to break out of the crowd to become an exceptionally effective and successful new type of leader.
While we have learned all the rules of ethics and the traits of leadership, what has not been taught is how to thoughtfully go beyond the basics of ethics and leadership in a way that allows us to merge them into a new system and philosophy of ethical leadership.
Here is what I mean.
Traditionally being an ethical leader means doing the right things that are required to be done. However, to meet the new times we face, being an ethical leader means doing the right things that are not required to be done.
Ethical Leadership is the process of social influence in which one person can use simple concepts and techniques that enlist the aid and support of others in the accomplishment of goals for the benefit of all. Ethical leadership is simply doing more than what should be done and doing what can be done.
When a CEO rejects a bonus and instead shares the proceeds among rank and files employees – that’s true ethical leadership. When a manager pitches in to work on an assembly line when an emergency arises – that’s ethical leadership. And when top management is open and eternally forthcoming with corporate information and power, that’s true ethical leadership. And ethical leaders demonstrate this trait in a multitude of permutations for the good of themselves and the companies they lead.
There is nothing complicated and secret about this new order of ethical leadership. Ethical leadership has only been a secret because it is not taught and rarely practiced. And that’s all the more surprising since the benefits of ethical leadership are legion.
Being an ethical leader – on whatever business level you seek to achieve – will enable you to be more successful and lead a richer, more satisfying career than you ever thought imaginable. Being an ethical leader will pay you dividends that far exceed those of the average leader, even the most ethical of them.
It is no coincidence that companies that operate under the aegis of ethical leadership consistently perform better than those that don’t. It does not mean that competing companies are managed by leaders without ethics, but only that those with ethical leadership traits are able to outperform on every business level.
You may not fully believe that the payoff for ethical leadership will be significant, but just like consistently scoring only one shot better in a round of golf creates a significant difference in results over time, the evidence is everywhere in the business community that ethical leadership, as defined here, does make a difference.
For example, every year Fortune magazine surveys and then rates the top 100 companies to work for. Not surprisingly, analyses of the companies that achieve the “Best Place to Work” list share common traits, each springing from the wellspring of ethical leadership. Each company has developed a cultural environment that goes well beyond the standard of ethics an employer is expected to offer an employee. This activity is not limited to simple salary and benefits but reaches to the very heart of a motivating relationship between an employer and employee to create a place where people really want to work and contribute.
And the Moral of the Story . . .
Leaders and companies that exhibit traits of ethical leadership operate in a constant, consistent, respectful, parallel and open manner (remember those words; you’ll be hearing a lot more about them in future chapters). They are willing to share the success of the organization with those who helped achieve it. Ethics does not require that they do this, but they do it anyway because they fully understand that for every inch they go beyond the norm, they will always be paid with a foot, even a yard of a more harmonious, successful business.
The objective of this book is to fill in the gap between understanding ethics and learning to be a leader by discovering how to combine these attributes in a way that will allow you to become an ethical leader who stands out from the pack and always shoots at least one shot better than the rest.
Chapter 2
What it takes to Become
An Ethical Leader
It may seem strange to say, but it takes more than solid ethics and polished leadership skills to become the type of ethical leader that is needed in these new times. Despite dramatic examples to the contrary, i.e. Bernie Madoff el al, the vast majority of people we encounter in life and business have a fairly decent core of ethics. Likewise, there are thousands of people who work hard to become good leaders. However, there are precious few who understand what it takes to blend ethics with leadership to create a new type of hybrid leadership. The individual practicing ethical leadership starts with a solid base of ethics and leadership skills and then combines these attributes in a way that magnifies their effectiveness.
It is not unusual for those with strong ethics and leadership skills to achieve success. After all, success is the incentive to be ethical and to work hard to sharpen leadership skills. However, studies clearly show that those who have taken the next step to grasp and apply a different concept of ethical leadership consistently achieve success that separates them and the organizations they lead from the rest.
Once ethics and leadership traits have been embedded in a person’s psyche, it is an easy step to rise above the rest. Unfortunately, that next step is rarely taught. Those who adopt this leadership style have, for the most part, learned it on their own. This uncommon approach to leadership is seldom taught because it is more of a concept than a tactic. Tactics can be taught, while concepts need to be experienced and felt. “Nothing ever becomes real,” said the poet Keats, “till it is experienced. Even a proverb is no proverb to you till your life has illustrated it.”
Ethics is easy to quantify and teach. However, as the Ten Commandments illustrate, teaching ethics is more of a negative science, i.e., thou shall not do this and shall not do that. To learn ethics is to learn what not to do, such as not lying, cheating or stealing. Teaching leadership is more positive, but is still based on specific tactics to be learned and then applied. The belief driving this approach is that the individual who learns and applies specific leadership tactics, while not doing what should not be done can become a successful leader. This philosophy worked well for the vast majority of people in past times, but it falls short of what is needed for those who seek to achieve uncommon levels of success in these times.