The Paradox of Integrity: How Honesty and Dishonesty Coexist

Ever wondered why honesty and dishonesty in business can coexist? Here's a story that made me ponder this question deeply.

At a recent interview with a Fintech startup CTO, he casually mentioned something shocking. When I asked for clarification, he admitted to lying to investors for over 10 years to secure several funding rounds. 

He downplayed it as normal, but his chronic insomnia suggested otherwise. Constantly covering up lies can take a toll, especially at night when unresolved issues surface.

We've all told little lies—claiming a train delay when we were late, or tweaking the scale of data in a presentation to favor our perspective. 

But habitual lying about finances? That’s another level - really?

Instead of moralizing, let's explore the psychology behind it. What if lying in business has become so normalized, we don't notice it anymore? 

Let me give you a couple of examples: 

Take, for instance, painting a rosier picture of your business to keep morale high. Early last year, when asked how my business was doing, I said to a potential new client: "Couldn't be better!-" In reality, it was the lowest turnover month in that very year. 

Or the common practice of adding personal expenses to a company travel bill. 

In our Faktor E workshops on self leadership, we emphasize the importance of practicing commitment. However, it's not uncommon for participants to make promises and then break them without any remorse. 

True integrity—saying what you think or feel,  and acting on what you speak—often seems rare, not just amongst politicians and those who claim to value it highly.

Why is this the case? 

From my experience, I’ve learned that a core value like “integrity” can be understood on three distinct levels, resulting in different levels of honesty. 

These variations arise because integrity is interpreted through three different levels of human consciousness. Let´s have a closer look at those:

Three Levels of Integrity

1. Egocentric Integrity: Here, people prioritize their own interests above all else and will justify many actions if they benefit personally. 

For instance, a company owner might manipulate financial records to increase personal profit, or a supplier might collect upfront payments without intending to provide the promised services.

These actions are often considered smart if they don't get caught. Of course, this can border on criminal behavior.

2. Ethnocentric Integrity: This level views integrity from a group perspective—what’s right for my company, family, or team. Many in Western businesses operate here. It’s about loyalty to a collective “we,” often bending facts to fit the group’s narrative.

Let me share an experience that illustrates this level of integrity. When I was 7, my mum took me to a Woolworth department store. After buying some socks and T-shirts for our family of six, she went to the cashier to pay. 

Upon receiving her change, she complained that it was incorrect. The cashier insisted he had given the correct amount and suggested my mum might have misremembered the note she had handed over.

Eager to help resolve the issue, I chimed in, "Mum, this gentleman is right, I saw you giving him the note he is talking about." We left the shop, and I felt proud for having helped sort out the misunderstanding and reading the numbers so quickly.

However, my joy was short-lived, to say the least. 

Just outside the department store, my mother grabbed my arm, turned me toward her, and sternly said, "Son, you will never contradict me again in front of others. We are family, and family must always stick together!"

I was completely puzzled, not understanding what I had done wrong. It took me 25 years to find out. 

We both looked at that value “integrity” from different levels of consciousness. I didn’t agree with my mother's advice back then and still don’t today. 

However, I learned that for a refugee growing up during WWII, loyalty to family meant survival. Her interpretation of integrity was shaped by those harsh realities and defining it herewith. Me telling the (factual) truth meant breaking the family integrity. 

In organizations, most people exhibit integrity towards their company, department, peers, or team, as well as the respective goals, strategies and ideologies associated with them.

There's a sense of collective identity where different standards apply to those within the group compared to outsiders. 

Ethnocentric Integrity is the predominant form of integrity observed in business contexts.

3. Pluralistic Integrity: At this level, integrity is about the greater good, transcending personal or group biases. 

Here your deepest intention is to do what is right for everybody, though it’s challenging to achieve pure objectivity.

Take for example, an organization like Patagonia, which not only claims to operate sustainable and environmentally friendly, but also established a financial participation system that incorporates key stakeholders, such as owner, employees, employees, communities and environment.

Moving Towards Higher Integrity

Next time you question someone’s integrity, consider their level of consciousness. 

In my conversation with the CTO, I realized after initial doubts, he was trying to do the best for his company and family, even if it meant bending the truth.

His step moving from level 2 to level 3 integrity will for sure come.

To move towards level 3 integrity, we must create business systems and environments, where people feel safe and acknowledged when being honest.

I’d love to hear your thoughts on this topic. How can we create higher levels of integrity in business? Share your views below!

#Integrity #Leadership #BusinessEthics #ExecutiveCoaching #Mindset