Leading with Integrity

FT MBA ‘17, Bus 691 Fall 2016 Prof. Peter Topping DOES INTEGRITY MATTER? Recognize these individuals? “We are at the end of a difficult generation of business leadership and maybe leadership in general. Tough-mindedness, a good trait, was replaced by meanness and greed, both terrible traits.”

Jeff Immelt, GE Chairman and CEO Describe the impact on you and others of managers who operated with…

High level of integrity Low level of integrity Survey of AMA Leaders

• The American Management Association – 2003 survey of 461 Executives • What characteristics and skills are needed to be an effective leader today? – Top three answers:

① ethical behavior (56%) ② sound judgment (51%) ③ being adaptable/flexible (47%) Power and Ethical Leadership

• Power: the capacity to influence the behavior of others • Leaders exercise power • Power has a great capacity to be abused, even unintentionally • That is why we are so insistent that power be exercised ethically • In addition, acting ethically is itself a source of power (and influence) Why is acting ethically powerful?

People who behave with strong ethical principles: • have fewer or no hidden agendas • are taken at their word and not second guessed • foster trust which is at the heart of successful organizations’ • tend to be relied upon for advice and counsel by superiors • have little need for “cya” or to watch their back. • develop better organizational reputations • are more resistant to opportunists and “takers” • have more responsibility delegated to them and less intrusive supervision, as they are trusted to report problems • lose less time in internal wrangling personally, and promote more cooperation and less pettiness organizationally • have and foster staff esteem and satisfaction Most Important Aspects of Ethical Leadership

• Self-knowledge, reflection • Self control/self discipline • Prudence • Courage – Emory University... members work collaboratively for positive transformation in the world through courageous leadership … • Humility • Moral insight Mistakes will be made

“Good judgment comes from experience. And where does experience come from? Experience comes from poor judgment.”

-- Mark Twain Defining “Integrity”

The latin root of the word integrity is similar to that for integer, meaning whole number. The concept of wholeness, or consistency is clearly relevant.

A working definition of action with integrity could be "behaviour and decisions which are consistently in line with our principles“. The dictionary would also suggest that these principles should generally be accepted as ethical and honest.

One of the important elements of integrity is consistency - if we are unpredictable, if our decisions are dependent upon the day of the week, and the way we are feeling, others are unlikely to see us as maintaining integrity. IN·TEG·RI·TY n. 1. Quality of being honest and up-right in character. 2. Condition of being complete. [Wikipedia] Syn: honour, veracity, reliability Ant: “cheat”

These concepts and their definitions are obvisouly contextual. As a leader, you will be seen as one with integrity in the context of both your own and other’s expectations, values, rules, and .

Thus, living and leading with integrity suggests that one: (a) has a formal relationship with one’s “self” (or inner compass), and (b) is connected to society in acting morally and ethically.

[Stanford Encyclopedia of Philosophy] Integrity is a concept of consistency of actions, values, methods, measures, principles, expectations, and outcomes. In ethics, integrity is regarded as the honesty and truthfulness or accuracy of one's actions.

Integrity can be regarded as the opposite of hypocrisy in that it regards internal consistency as a , and suggests that parties holding apparently conflicting values should account for the discrepancy or alter their beliefs.

The word "integrity" stems from the Latin adjective integer (whole, complete). In this context, integrity is the inner sense of "wholeness" deriving from qualities such as honesty and consistency of character. As such, one may judge that others "have integrity" to the extent that they act according to the values, beliefs and principles they claim to hold.

wikipedia Leading with Integrity

Walk the talk. That is what integrity really is all about. At the heart of integrity is being consistent, honest, moral, and trustworthy. Leaders with integrity are consistent in the face of adversity, show consistency in their words and actions, and are unfailing with who they are and what they stand for (Palanski & Yammarino, 2007).

Leaders with integrity act with authenticity and honesty by speaking the truth, presenting themselves in a genuine way with sincerity, showing no pretense, and taking responsibility for their own feelings and actions (Peterson & Seligman, 2004).

“The Irony of Integrity” CCL White Paper, 2012 Integrity is an important factor in the performance of top-level executives and middle-level managers. Those at the top of organizations are figureheads who should role-model the organization’s values (Hambrick & Mason, 1984). This is important to an organization because C-level executives interact regularly with external stakeholders, develop networks inside and outside their organization, and try to build consensus among multiple stakeholders (Sosik, Juzbasich, & Chun, 2011).

Integrity is also important for middle-level managers who must relate well with people in order to build and maintain strong social networks and relationships with others across the organization as well as above and below them in the organizational hierarchy (Huy, 2001). Integrity makes it easier for others to trust a manager, which is likely important as middle-level managers fulfill their duties in networking, consensus-building, and relationship management.

“The Irony of Integrity” CCL White Paper, 2012 One can describe a person as having ethical integrity to the extent that everything that that person does or believes: actions, methods, measures and principles — all of these derive from a single core group of values.

One essential aspect of a consistent framework is its avoidance of any unwarranted (arbitrary) exceptions for a particular person or group — especially the person or group that holds the framework. In law, this principle of universal application requires that even those in positions of official power be subject to the same laws as pertain to their fellow citizens. In personal ethics, this principle requires that one should not act according to any rule that one would not wish to see universally followed.

For example, one should not steal unless one would want to live in a world in which everyone was a thief. This was formally described by the philosopher in his categorical imperative. In a formal study of the term "integrity" and its meaning in modern ethics, law professor Stephen Carter sees integrity not only as a refusal to engage in behavior that evades responsibility, but also as an understanding of different modes or styles in which discourse attempts to uncover a particular truth.

Carter writes that integrity requires three steps: "discerning what is right and what is wrong; acting on what you have discerned, even at personal cost; and saying openly that you are acting on your understanding of right from wrong." He regards integrity as being distinct from honesty.

“The true test of a person’s character is what they do when no one is watching”

attributed to C.S. Lewis Defining

• From Latin, mor, meaning “custom”; • The implicit and explicit norms people use to guide their behavior in a given context; • People act according to moral norms without careful thought because such action is widely accepted, uncontroversial, and clearly expected; • Morality, according to Lynn Paine, provides an “invisible infrastructure of norms and precepts”, which support human interaction. Defining Morality

• of, pertaining to, or concerned with the principles or rules of right conduct or the distinction between right and wrong; ethical: moral attitudes; • orals are deeply rooted principles, societal in nature Cultural Differences and Morality

USA and Western Europe

Asia

Africa

Latin America Difference between morals and ethics?

• Ethics are the science of morals, and • Morals are the practice of ethics Defining Ethics

• Ethics is the “study of moral standards” – Moral standards deal with matters that we think can seriously injure or benefit human beings – Moral standards are based on impartial considerations..rather, that goes beyond personal interests to a ‘universal’ standpoint – Moral standards are associated with special emotions and a special vocabulary

Velasquez, “ Concepts”, 2001 Defining Ethics

• Ethics refers to the conscious and reflective activity of making good decisions and justifying our actions. • that branch of philosophy dealing with values relating to human conduct, with respect to the rightness and wrongness of certain actions and to the goodness and badness of the motives and ends of such actions • Typically, ethical analysis is required when what is right either is unclear or involves conflicts between competing moral norms. Nature of Business Ethics

• Focuses on moral standards as they apply to business policies, institutions and behavior • Applies the analysis of moral norms and values to the assortment of organizations and activities that we call business • Business ethics investigates three kinds of issues: – Systemic issues are ethical questions raised about the social systems in which businesses operate – Corporate issues are ethical questions raised about a particular company – Individual issues are ethical questions raised about one or more individuals operating within a company Velasquez, 2001 Personal decision making at the heart of the matter SEARS CASE STUDY Sears Case Study

• Describe the current outlook about the future within Kenmore as a brand and Sears as the larger company. What impact might it have on Rebecca’s current dilemma? • What type of issue(s) is Rebecca facing when deciding how to move forward? • What groups/individuals will be impacted and in what way if the heater is defective? • How does time influence Rebecca’s dilemma? • What are the risks associated with launching the heater? What are the risks associated with not launching the heater? • What are the potential costs associated with not launching the heater? • What should Rebecca do in this situation? Ethical Decision Making

• Making good ethical decisions requires a trained sensitivity to ethical issues and a practiced method of exploring the ethical aspects of a decision and weighing the considerations that should affect a choice of a course of action • It is important to have a method for decision making which, when practiced regularly becomes so familiar that it is possible to work through it automatically • The following framework for ethical decision making has been found useful in exploring ethical dilemmas and identifying ethical courses of action. Framework For Ethical Decision Making

• Recognize an ethical issue (or the ethical components of an issue) • Get the Facts (from multiple stakeholders) – What additional info do you need? – Why do stakeholders differ? Whose interests are being served? • Evaluate the primary nature of the situation – Is it an issue of communication? Differing values? Professional roles? Policy? Organizational structure? • What are the values in conflict? – There are always values in conflict, that is what makes it an ethical issue. • What are the possible courses of action? • What are the consequences of those courses of action? – What are the practical consequences? – What are the ideological/principled consequences? • Who are the decision makers? • Make a Decision – Determine how best to communicate the decision • Monitor, evaluate, and revisit the decision with a commitment to alter the decision should the situation warrant. Ethical Decision Making: three different approaches

1. The Actions or means people use to achieve their goal.

2. The Agent (i.e., person) who is acting in the situation.

3. The Purposes (i.e., ends or goals) and Consequences (i.e., outcomes) of actions. Actions: Standards of Conduct

• Is an action ethically acceptable, regardless of its consequences? • In moral philosophy, this refers to “deontology”, the means or actions we use to pursue our goals. • In most moral dilemmas, the conflict is between two compelling morally good actions rather than between good and evil. • Ethics involves doing the hard work of sorting out the relevant moral claims and choosing the best course of action. Agent: Character & Virtue

• Strength of character of the agent refers to the fortitude that allows individuals to adhere to their convictions or moral standards, even when the costs of doing so may be great. • Virtue refers to traits that are morally commendable, such as fairness, trustworthiness, and courage. However, what counts as virtue is often determined by the context in which one operates. • Integrity is the central aspect of good character. It literally means wholeness or the sense that you have a clear conscience and can affirm who you are and what you have done. Persons of integrity usually have high moral standards and the strength of character to act according to their beliefs, particularly when they are in difficult situations. Purposes & Consequences

• Ethics has to do with pursuing and achieving laudable ends. Focus is on the moral importance of the purposes or “ends” we set. • The moral worth of our actions should be determined by the likely consequences they would generate; do our actions create more good than harm in terms of realizing the purposes we set? • The phrase “the ends justify the means” is often used to describe this branch of ethics, known as “consequentialism”. • Utilitarianism is the most famous branch of consequentialism and refers to creating the most favorable balance of benefit over harm. Purposes & Consequences: two core features

1. Morally defensible purposes – People need to be sure that the purposes or ends they set for themselves are morally defensible.

2. Creating favorable consequences – People need to undertake actions that create the most favorable consequences toward realizing their purposes Decision Making Process John’s situation on price fixing scheme • Consequences – Implement price fixing makes boss happy – Not implementing plan makes boss angry • Outcomes – Making boss happy helps you get promoted – Angering boss helps you get fired • Values/Goals – Getting promoted leads to financial security – No job, no financial security

“How to Make Values Count in Everyday Decisions” by Joel Urbany Decision Making Process John’s situation on price fixing scheme • Consequences – Implement price fixing makes boss happy – Illegal action • Outcomes – Making boss happy helps you get promoted – Risk personal legal problems/reputation damage • Values/Goals – Getting promoted leads to financial security – No personal integrity

“How to Make Values Count in Everyday Decisions” by Joel Urbany An important leadership competency for addressing complex organizational challenges in the 21st century DEALING WITH PARADOX “We look for lessons in the actions of great leaders. We should instead be examining what goes on in their heads – particularly the way they creatively build on the tensions among conflicting ideas.”

Roger Martin “How Successful Leaders Think” HBR, June 2007 “Human beings are distinguished from nearly every other creature by a physical feature: the opposable thumb. Thanks to the tension we create by opposing the thumb and fingers, we can do marvelous things – write, thread a needle, guide a catheter through an artery….Analogously, we were born with opposable minds, which allow us to hold two conflicting ideas in constructive, almost dialectic tension. We can use that tension to think our way toward new, superior ideas.”

“To take advantage of opposable minds, we must resist our natural leaning toward simplicity and certainty.”

“We often don’t know what to do with fundamentally opposing models. Our first impulse is usually to determine which is ‘right’ and, by process of elimination, which is ‘wrong’.”

Roger Martin HBR, June 2007 “…the ability to hold two opposing ideas in mind at the same time and still retain the ability to function” – the sign of a truly intelligent person

F. Scott Fitzgerald A Problem

Characteristics Of Problems To Solve Difficulties are not ongoing There is an end point They are solvable Problem Language Problem language is Either/Or Example Who do we hire for this job? Do we build or buy? A Polarity to manage

Characteristics Of Polarities To Hold Difficulties are ongoing There is no end point They are not solvable Polarity Language Polarity language is Both/And Example How can we achieve stability and change? Polarity Definition

Polarity Ongoing tension between opposing interdependent imperatives (poles) Polarity Map Template

Shared Purpose Benefits: Benefits:

Left Pole Right Pole Negative Consequence Negative Consequence of Over-Emphasis: of Over-Emphasis:

43 The Polarity Map Organizational Effectiveness

Benefits: Benefits: Fast Interdependence Flexible Integrated Responsive Economies of scale Engrained Efficient “Ownership” Shared learning Focused Consistency and Close to standardization customer Local Global Negative Consequence Negative Consequence of Over-Emphasis: of Over-Emphasis: Redundant Out of touch with local Inefficient markets/customers Independent Conformity& compliance Fiefdoms Ineffective Not learning oriented Overly bureaucratic Slow Misaligned Non-entrepreneurial

Originated by Barry Johnson, Ph.D., This model presents a way to display and work with the elements making up the polarities we encounter in our lives. The Polarity Map Organizational Transformation

Benefits: Benefits:

Stability Change Negative Consequence Negative Consequence of Over-Emphasis: of Over-Emphasis:

Originated by Barry Johnson, Ph.D., This model presents a way to display and work with the elements making up the polarities we encounter in our lives. Discovering the Genius of Both/And

Polarity The object in Polarity management is to create synergy Management from the best of both opposites while also avoiding the limitations of each

BOTH AND  Self-discipline  Flexibility  Give  Take  Specialization  Integration  Continuous Improvement  Breakthrough Thinking  Being supported  Critical Analysis  Diversity  Commonality  Getting the Job Done  Building Teamwork  Ideas and Dreams  in the Past “The art of progress is to preserve order amid change and to preserve change amid order.”

Alfred North Whitehead Ethical Leadership

Some reflection: • Who do I serve? – Superordinate and subordinate • Subordinate – What are the promises that I have made to them? – How well am I meeting the expectations? – How well am I being faithful to the promises? • Superordinate – Am I serving the greater community? – Am I safeguarding the institution? • Is the vision/mission I have consistent with my behavior?

48 BUS 691 COURSE REVIEW Goizueta Instructional Team

• Dr. Peter Topping – Instructor of record for the course

• Dr. Shweta Sharma Sehgal – teaching assistant

• Dr. Rick Gilkey – moral reasoning & decision making Course Logistics: 8 sessions total

– Dates for faculty led class sessions (4): • September 6 & 8 • September 15 (Thursday – for all sections) • September 27 & 29 • November 15 & 17 (team case presentations) – Guest speaker sessions meet in Auditorium (Gbs 130) in combined sections (4) • 8:30 sections meet together, then the 10:00 section meets separately on same date Guest speakers 2016

Guest Speakers Dates • Mr. Jon Biele, Director • Tuesday, Oct 4th Investment Banking, SunTrust • Mr. Lobsang Negi, Director • Tuesday, Oct 18th Emory-Tibet Partnership • Ms. Tina Whitelaw (WEMBA th ’15), founder/CEO Connect to • Tuesday, Oct 25 Creative • Mr. Herman Kooyman, • Tuesday, Nov. 1st President, Aviation Excellence & Mr. Hamid Rouchdi (WEMBA ‘07), owner/founder Café Vendome BUS 691 ONE COURSE ASSIGNMENT Team Assignment

• Write a case study and teaching note for the case • Case must be real in organizational setting – from team member’s experience – a person outside the team willing to be interviewed – in the news over the past 3 years – Protagonist not at C-level in organization – Addresses a dilemma of integrity and/or ethics Team assignment continued

• Form your own teams of 5 - 6 members – Professors reserve right of adjusting teams • Submit topic of case study to Prof. Topping by October 6th • Written case – 6 pages, single spaced, including appendices • Teaching note – 4 pages, single spaced, excluding appendices • Intent is to generate usable, publishable cases • Assignment due by November 14th • Each team will present a 5-minute overview of their case and key learning objectives during final class What is a case study?

• an intensive analysis of a person, situation or a problem (for this course, the protagonist is a middle manager or someone below a C-level leader) • involves an in-depth, longitudinal (over a period of time) examination of the above situation/problem Three Basic Steps of Case writing include:

1. Research (Library, other) 2. Analysis 3. Writing and editing of case Organizing the case study

• Introduction of the Problem • Any Background Information Pertinent to Case • Any additional factors conducive to the case - business, economic, financial impacts • Use of Appendices (Charts and Graphs) depicting demographics of case (specific population, population size, area of the country where problem exists, etc). • Conclusion – Rather than solving the problem, should offer options – Frequently raises more questions Teaching Notes

• Guide the person teaching the case for an MBA classroom audience • Brief synopsis of the “dilemma” (one paragraph) • Identifies the key learning objectives • Provides 2-3 review questions for students to use in preparing for case discussion • Outlines sequence of teaching the case – Major discussion points – Application of models/frameworks to resolve dilemma – Suggests questions to ask to generate discussion – Does not prescribe what protagonist should do – May provide “what really happened” non-judgmentally