Morality is the New Status

As a recent Stanford MBA graduate with internship experience at Apple and several accolades from professionals and professors alike, Jeanine's world was her oyster. She could do just about anything, it seemed. Jeanine received six offers from prestigious organizations within her first two months of interviewing for a marketing position. She rejected each one.

Why? Jeanine, like most millennials and an increasing number of people in the workplace, placed culture above position and pay. Indeed, a Deloitte's 2016 survey of nearly 7,700 millennials found that 64 percent in senior positions (heads of departments and above) said their personal values and morals are the most influential factor in their decision-making at work. Meeting their organization's profit or revenue targets ranked fifth.

Instead of seeking status, position, or prestige, many of today's emerging class of movers and shakers place morality foremost on their decision making pyramid. People like Sallie Krawcheck, who had just been fired as head of CitiGroup’s wealth management division for reimbursing clients for their losses. She again decided as the chief of Merrill Lynch’s wealth management division to make a hard but morally right decision to save the wealth of low-income earners who invested in one of her company's funds as part of their retirement savings plans.

There were two options, one of which was to say tough luck to employees who owned a fund that was supposed to be low risk but had lost value, says Krawcheck, or to put money in, in order to increase the fund's value. She chose the latter in order to save the wealth of those low-income earners. Thankfully the CEO recognized her moral fortitude as an asset and rewarded Sallie with greater responsibilities.

Sallie's advice: "Know what your indicator is. My indicator has always been my stomach. When my stomach starts to hurt, I know that something’s wrong." That moral indicator, or gut check, is becoming increasingly in vogue as society's new wave of leaders esteems morality over expediency. One might even say that morality is the new status. Whereas status used to the most important criteria in making decisions, it's now making a positive impact when choosing the right culture fit for a job, or just making routine decisions.

In a world where almost half of surveyed workers expect to change every one to three years, loyalty has gone the way of rotary phones. Purpose now supplants just putting in long hours. This is reflected in a social shift from working for a company to an increasingly large on-demand workforce. Today 34 percent of the workforce gains their income from independent contracting, freelancing or being self-employed - and it's rising to almost half of the population within the next five years. "Why work for the company store when you can control your own moral boundaries?"  This appears to be the mantra of the emerging class of leaders. 

Common reasoning is that there's no bigger cause for this shift in attitude than the importance of ethics and morality in work and life. We no longer take morality for granted - it has to be earned, as the 1979 Smith Barney commercial once stated. And workplaces that offer a culture of integrity get rewarded with the most qualified employees.

But defining morality and ethics can be like nailing pudding to the wall. It changes from person to person and generation to generation - or does it, really? Essentially, ethics is about behavior. In the face of challenges, it is about doing the right thing. Today's exemplary contributors take the “right” and “good” path when they come to mutating ethical choice points.

So let's go through the process of how you can lead your thoughts and actions toward helping create a positive, ethics based culture - one that will attract like-minded others. Because your ultimate success in joining the emerging world of values-leadership starts with your being morally upright. It begins with an often-used axiom in organizational behavior thought which asserts that values ultimately drive our behavior. Our personal values, through social and reasoned experiences exert influence over our attitudes, and attitudes influence our behavior. Values impact virtually every facet of our lives.

Extensive research points to how values relate to effective leadership. Values-based leadership begins with synthesizing information into something for the common good. The end product is a driving force called wisdom, which develops from using one’s experience to interpret information in a synthesized manner to produce wise decisions. This is why leaders who synthesize information can view issues form a "10,000 foot" perspective, viewing systems instead of parts.

A systems approach can better produce moral clarity by reasoning complex situations in the context of what's right or wrong for the larger good (re: Moral Clarity Study by David Newman and Scott Wiltermuth at the University of Southern California). Conversely lower echelon leaders, or managers, work with parts and the minutia of life - their focus is doing things right versus the leader's focus on doing the right things.

A prerequisite for ethical leadership is knowing right from wrong, and this happens when selfish temptations are sublimated for the greater good of others. This altruistic capacity to take the ethical path requires a commitment to the value of acting with self-control, and with both self-awareness ("knowing thyself") and social-awareness (knowing how our behaviors impact our social environment). Ethical people can say “no” to individual profit if it is inconsistent with the overall benefit to others.

At the root of ethical leadership is this concept called "fairness." Fairness happens when each individual perceives that they've received a fair return for their efforts. For instance, doing the right thing becomes real when preferred individuals and groups are given the same treatment as those who are not favored. The hallmark of ethical leadership is the ability to allocate resources regardless of personal preference - it is based on what favors the whole of the organization or group.

It's a rare quality to find within people the capacity to think beyond themselves - those who are willing to sacrifice personal power in favor of authenticity and love. We don't think of leadership as love (so much), but it's a quintessential ingredient of ethical leadership. Loving leadership, as researchers have confirmed and documented, translates into a passionately positive reaction to another person or group. Organizations with a "soul" encourage expressions of love, as often displayed by compassion and kindness between people. This in turn produces a culture of goodwill that can be resourced when the organization faces ethical challenges.

The courage to be honest about declaring right from wrong and acting accordingly always finds its strength in love. Love for those we lead impels us to consistently do what is right for the right reasons, even when it is not easy. For example, the capacity to give productive feedback and offer guidance is most effective when expressed with a sincere desire to see the other person succeed - because of caring.

The redeeming grace in doing what's right, even when it's hard, is the perception that such actions are made within the framework of caring, fairness, and genuine love. Even unpopular decisions are made easier to accept when they are perceived to be derived from a sense of being cared for in love.

Acting with a genuine desire to see what's best for individuals and the organization is a long-term driver of ethical behavior; remember the “Golden Rule.” Mutual agreement or buy-in occurs best when decisions are interpreted as being fair to all involved. Believing in a power and source beyond ourself tends to diminish selfish actions and increases humility, by placing organizational and personal interests above self interests. Treating people with kindness helps increase the reservoir of positive affection, as does recognizing and encouraging others for their contributions.

Bottom line, ethics and morality require the courage to do the right things consistently without regard to personal consequences. So I ask this question: “What can leaders do on a proactive basis to encourage ethical behavior?" At least eight practices help leaders steer their organizations toward ethical conduct:

1. If you know what is the right thing to do, exhibit the courage to do it. Sadly, morally failed leaders confess that they knew what was right, yet they failed to do it, because they often rationalize their choices. The honest truth is that they simply failed to “do the right thing” in spite of their understanding. They chose self-interests over making wise decisions.
2. Be very discerning about who joins your inner circle or organization. Many successful leaders believe that selecting people based on their wisdom is as important if not more important than choosing them for their skills or experience. Consider this: If you had to choose between someone who used wisdom to make the right decisions or someone with great skills and experience yet lacked the wisdom to make good decisions, which one would you choose? As Jim Collins says in his bestselling book Good to Great: long-term success depends on putting the right people in place. Choosing people who demonstrate wisdom is vital to creating an ethical culture and long-term success
3. Accountability and reliability are critical in creating a culture of high ethics. Protocols that remind people of their commitments and measure these commitments with their corresponding actions produce a culture of doing the right thing. In organizations with behavioral integrity, words that are followed by deeds matter most. When values that demonstrate high integrity drive behavior, the alignment of words and actions fosters an ethical work culture.
4. Value statements and codes of conduct can help bolster a culture of integrity and promote ethical organizational behavior if measured and acted upon. The best codes of conduct usually include specific guidelines for acting within specific functional workplace areas that are measured routinely. For example, a sales organization may establish rules of entertainment for customers. Behavioral standards that ensure ethical conduct can ingrain people with a clearly defined sense of right and wrong.
5. Base decisions on values rather than beliefs. Well-known culture consultant Richard Barrett notes, “When a situation arises that we have to deal with, there are three different ways we can arrive at a decision on what to do: we can use our beliefs to formulate a response, we can use our values to formulate our response, or we can use our intuition to formulate a response.” (Barrett, 2005, p.1). Barrett explains that if you use beliefs to make decisions, those decisions will reflect your history in dealing with similar situations. History, however, is always context-based, and beliefs are not equipped to handle complex new situations that have not been experienced previously. Beliefs are steeped in our histories, habits and traditions, and are therefore constrained by individual experiences and not very adaptable to new situations. Conversely, if you use values to make decisions, those decisions will align with the future you want to experience. Values transcend both contexts and experiences. Thus, they can be used for making tough decisions in complex situations that have not yet been experienced. As a result, values provide a more flexible mode of decision-making than beliefs.
6. Create a vision that inspires others to make that vision a reality. Martin Luther King Jr.'s "I Have a Dream" speech changed a society by making people passionate about doing the right thing. Too often leaders focus on the numbers, and not enough on the passions that result from an inspiring vision that excites others. According to Peter Ernest, CEO of Values Journey, “when a truly values-based leader ensures that his organisation has an engaging process for the people to explore their personal values, as well as their teams’ and the organizations’ values, there are benefits on many levels." It challenges people to evaluate their life priorities and the gap between their current and desired values, and that drives positive behaviors.
7. Lead by example, which means, do the right thing for the right reasons and do not compromise your core principles. A leader who embraces a limitless and non-fearing approach to taking the right actions typically forges a strategic vision that fosters the support and collaboration of other potential business partners. Steve Jobs, CEO of Apple Computer, Inc., once remarked, “The only thing that works is management by values. Find people who are competent and really bright, but more importantly, people who care exactly about the same thing you care about.” (Koteinikov quoting Jobs, 2008).
8. Respect differences among team members, customers and others. Take advantage of and learn from different perspectives presented by supporting the diversity of people, and learn about their cultural and environmental underpinnings. Wells Fargo Chairman and Former CEO, Dick Kovacevich said it this way: “We’re proud to be recognized by Business Ethics for our leadership in corporate community investment, human rights, diversity, and our commitment to serving all of our stakeholders to the highest standard of integrity (www.wellsfargo.com).”

While these principles will most certainly help to create a culture of integrity, each of us invariably faces people who possess contrary principles and values. As a personal example, I encountered such a challenge at one of my former places of employment. My supervisor was by several accounts having an affair with the executive who hired this supervisor. Anyone who appeared to challenge their relationship was viewed suspiciously, which resulted in a culture of favoritism. As a result, this particular supervisor overlooked what was important to the team.

Employees felt they were solely judged by how much time they spent with the supervisor, with some employees even vacationing with the supervisor - minus spouses. Eventually the team acted competitively towards one another instead of partnering their resources to support the greater good of the company. The fact that some strong performers on the team were passed over for promotions was probably a pretty good indicator that a culture of distrust and unfairness had been created.

This type of environment presented a seemingly insurmountable dilemma for me. Ultimately, I left this position and no longer had to compromise my values. I had arrived at the conclusion that I could not operate in an environment where the company’s failure to deal with an egregious moral failure led to a culture of favoritism and distrust, and this lack of moral clarity eventually sullied the company’s decision-making process. I did not want to be held accountable to a leader’s standards that were so markedly divergent from my own.

Each of us is responsible for demonstrating values‑based leadership in our personal lives as well as the lives of those for whom we have responsibility. Values are absolute, unchanging and non-negotiable. In a world where change can cause confusion, values offer a foundation for determining our actions, our decisions and the means by which we treat others. They connect us with the most powerful forces governing our actions: integrity, conscientiousness, and respect. These factors also represent the fundamental factors which shape our capacity to lead. And this brings us back to the opening story of Jeanine, who graduated with honors from Stanford.

Jeanine finally selected an employer that paid her a lower salary than some others, and one which offered her a position with less status. She insisted on holding firm to the values that had been instilled deeply within her moral fiber - choosing a culture of collaboration that encouraged lots of input, less 'command-and control,' and more team based. Like many millennials, she wanted more blending of the personal and professional at work. As Jeanine stated, "my choice was a culture that is transparent about values and priorities at work and outside the office, being open about going to a fitness class in the middle of the day and then working later if needed - focusing more on results rather than office-time."

As Jeanine discovered, choosing a life path isn't always a smooth process. It may mean passing on what appears to be a better option. Indeed, our decisions often come with unanswered questions that challenge our comfort zone. Staying true to yourself isn't always easy. However as long as you make the choices and decisions you believe to be right – your principles will be preserved and your decisions will generate respect from others and preserve your self-worth and integrity.

Of all the facets in our nature, integrity might be the most critical – it builds valuable trust between people. Many say, “Integrity is doing the right thing when no one is watching.” More practically speaking, integrity in action is the adherence to a moral or ethical principle, implying a philosophical conviction, followed by the pursuit of what's right by learning from one's ‘misbehaviors’ and seeking continual self-improvement.

Having integrity means that you live in accordance to your deepest values; you're honest with everyone, and you always keep your word. It begins by identifying your core values - values that you refuse to compromise, no matter what. The follow-up is to analyze each decision to ensure that you're doing the right thing. Finally, it takes developing a culture of integrity around you by building your self-confidence and your love for others; and then fostering relationships with others who live with integrity. The result is a life well lived, while helping others to enjoy the same positive results.

- Randy Kay is a CEO of TenorCorp/PACEsetters, a strategic and talent development firm. Prior to this he has overseen training and development for top performing companies, been a biotech CEO, Board Member for over 20 organizations, executive for Fortune 100 companies, and has published four books and several articles in business magazines such as Switch & Shift and Forbes as well as conducted interviews through numerous networks. He is also an ordained minister and trained corporate counselor. Do you want to grow and develop your career and life? Contact Randy Kay directly (@ randy_kay@tenorcorp.com) or discover more at www.pacesetters.training