Integrity Is Not About Profit

Contributor: William Cohen, Ph.D.
Posted:  07/13/2009  12:00:00 AM EDT
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Tags: Drucker | ethics | leadership | Peter Drucker | leader | leaders | integrity | William Cohen | The Stuff of Heroes | Business Strategies

Peter Drucker was one of the most ethical individuals I have ever met. He admired the way the military led, and I shared research I had done on military leadership applied to business with him. He was enthusiastic about my publishing it. It eventually appeared as my book The Stuff of Heroes (Longstreet Press, 1998) but it is long out of print. Nevertheless, I haven’t forgotten the results of this research.

A Question of Ethics

A former student I know was hired by a non-profit institution after several years working in direct marketing for a mail order company. Let’s call her Debbie. One day Debbie called me and asked if she could stop by. She sounded troubled, and I readily agreed to see her the next week. When she came to my office, we got right down to business.

“It’s strange,” Debbie said. “Everyone has this negative image of mail order. But boy, my old company had very high ethical standards. If we said something, we meant it. If the person didn’t like the product, we refunded her money, plus the postage, no questions asked.”

“What about your new company?” I asked.

“Not the same at all,” she said. “My new company isn’t really a company. It’s a non-profit institution. That part is fine. However, we won’t return money once it is donated. I guess that’s OK since it is policy, but we do a lot of other things my former mail order company would consider highly questionable.”

“Such as?” I asked.

“Well,” she continued, “in one of our campaigns we tell the person donating the money that he can pick among various places where the money can go. But after the campaign is over, we divide up the money according to need. We follow the donor’s choice only if it happens to fit our own. I asked about this and was told that’s just how things are done.

“We also do telephone solicitations. I was told that according to the law, the person doing the soliciting can’t pretend to be someone they are not, like a policeman getting money for the annual police ball, or something like that. But I watched a woman asking for money for the sick and handicapped, and she kept coughing and acting in sort of a helpless way. I knew she didn’t have anything wrong with her, so I asked her about it after her call. She told me that she wasn’t pretending to be anybody, but that she was much more successful when she coughed and acted as if she were sick herself.

“I asked my new boss about these things. He told me not to worry about it. He said that it’s all for a good cause and it didn’t hurt anybody. He said that for that reason we don’t have to stick to the same rules as a mail order company is that they’re just after profits. We do what we do to help people. What do you think?”

Maintaining Ethics

“Debbie,” I said, “I spent almost eight years researching and interviewing combat leaders who went on to highly successful careers in business, including 62 generals and admirals. Why combat? That’s about the worse environment you can find. It’s high risk every day, and very uncertain. ‘Working conditions’ are horrible. Leaders are not only responsible for getting the job done, but also for the lives of those who work for them. It’s probably the only situation where both leaders and followers would rather be somewhere else. If you can lead effectively in combat, you can lead anywhere.

“But I didn’t stop there. I personally interviewed dozens of other highly-successful corporate leaders. Almost every single individual I surveyed or interviewed spoke about integrity as the most significant factor in successful leadership, in or out of the military.

“You may not realize it, but most of us are leaders without realizing it. Sure, business people are leaders, but so are teachers, politicians, coaches, salespeople, parents and solicitors of funds for non-profits. When you convince someone to do something, like be a donor for a worthwhile cause, you are a leader.

“Now once a leader starts lying or failing to do what he knows to be right, even to make a difficult job easier, or to do a better job for a good cause, that leader loses personal credibility. Not only to others, but to himself. If you can’t perform your job with integrity, my advice would be to get out as soon as you can.”

“But is that practical?” asked Debbie. “I mean, I can see that theoretically what you say is true, but I have to eat.”

“Debbie, integrity means adherence to a set of values that incorporate honesty and freedom from deception. But it is more. It means doing the right thing regardless of circumstances or benefits to the leader or the organization. It means doing the right thing even if no one is looking.

Integrity Should Be Present Even When Others Aren't

“Have you ever heard of Mildred ‘Babe’ Zaharias?” I asked. Debbie had not.

“Zaharias was a champion in the 1932 Olympics and later a professional golfer. On one occasion she penalized herself two strokes when she accidentally played the wrong ball. ‘Why did you do it?’ asked a friend. ‘No one saw you. No one would have known the difference.’ ‘I would have known,’ Zaharias replied.

“I read this story about Zaharias in a book by retired Major General Perry M. Smith. General Perry knows something about integrity, too. He was a highly paid consultant for CNN. CNN isn’t a non-profit organization, but it’s an institution that prides itself on maintaining high standards of integrity. In this case, it failed, but no one paid any attention. So, General Smith resigned his highly-paid position even though they threatened him with a lawsuit if he went public. In doing so, he shined a spotlight on CNN and forced the famous network to retract an erroneous story regarding the American military’s using gas to kill its own men in Vietnam. He lost a lot of income, but he did the right thing. Maintaining absolute integrity is the bottom line rule any leader who wants his or her subordinates to follow under any or all circumstances. It is the only way to insure complete commitment to any project and any task.”

Integrity and Effective Leadership

"And he’s not the only leader to give up income in order to do the right thing. A few years ago, Leonard Roberts became CEO of Arby’s, the fast-food restaurant. It was losing money, but Roberts turned the company around. However, he resigned from the board of directors to which he had been appointed when Arby’s owner threatened to withhold bonuses for Robert’s staff and not give promised help to Arby’s franchisees. In retaliation for his stand, he was fired.

“Roberts went from the frying pan and into the fire. He was hired as CEO of Shoney’s, headquartered in Nashville, Tennessee. To his dismay, he found that Shoney’s was the subject of the largest racial discrimination suit in history. Unfortunately, this was no misunderstanding. It had apparently been the policy of Shoney’s owner not only not to hire African-Americans, but also to fire any restaurant manager who did. Roberts promised that the suit would be settled fairly. Shoney’s owner agreed to pay up and settle, but only if Roberts would resign afterwards.

“When I interviewed Roberts, he told me, ‘My stand on integrity was getting a little hard on my wife and kids. However, I knew it had to be done. There was no other way.’

“Debbie, Roberts became CEO of Radio Shack, and a year after that, CEO of Tandy’s, which owns Radio Shack. Soon, Brandweek magazine named him Retailer of the Year.

“Many leaders of integrity are like that. Their leadership succeeds in the end probably because of their integrity, even though it’s hard on them or their families when they are forced to take a stand. Many get fired. But most will tell you that it doesn’t make any difference whether they win or lose. They are simply going to do the right thing anyway. Those are the kind of leaders everyone wants to follow.”

“So, my advice to you is to be a leader of integrity regardless of where you work or who you are working for.”

The Ethical Way Wins Out

Debbie left. She was frowning, and I wasn’t sure what she would do.

Some weeks later, I got a call from Debbie. “Well guess what happened?” she asked.

“I can’t imagine.”

“Last week my boss told me to lie on some results we got on a direct mail campaign. I refused, and he threatened to fire me. I still refused. Anyway, he got someone else to do it. I was waiting to get my notice to leave when the other person got caught. He spilled the whole thing to my boss’s boss. They fired my boss! It turns out that this whole unethical thing was because of his influence, and it’s not what top management wanted at all. Now we’re having special meetings and being trained on ethics and ethical behavior.”

“What happened to the employee who lied?” I asked.

“Well, he got off with a warning, but the general feeling is that he won’t go any further in our organization. No one trusts him.”

“How do you feel?” I asked.

“Great,” answered Debbie. No one knows I was ordered and refused to lie, but I know it. It has changed my whole outlook on everything. I mean, now I know what I am made of and how far I’ll go to do what is right. I have integrity, so the answer is . . . all the way!”

Debbie learned that integrity is not about profit. It’s not even about whether you have the right to do something under the law or not. Integrity is about doing the right thing.




Contributor:   William Cohen, Ph.D.



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