Leading Effectively e-Newsletter - August 2008 Issue

Sins & Virtues
Ethical leadership in a tough economy

Economic news is bleak these days. The crash of the mortgage and housing markets, weak job numbers, the leaps in price of a barrel of oil and a gallon of gas, and the increasing cost of food have left many people asking, how did this happen and what can be done?

"Certainly, many factors are at play in each of these scenarios. But underlying many of today's economic headlines, we can see that unethical behaviors have contributed to the problems," says CCL's Cresencio Torres. "Ethical leadership is needed to respond to economic troubles and address the complex challenges that individuals, organizations and nations will continue to face."

But Torres is clear that the ethical gaps in political and business life are deeply personal. In his writing and work with leaders, he addresses the personal flaws - "the deadly sins of leadership" - that lead to unethical behaviors at any level in an organization.

Three sins — gluttony, greed and pride — have been powerful forces leading to today's economic woes, Torres suggests, and can be just as destructive at the organizational level.

Gluttony is the desire to use or consume more than one requires. Greed, closely related to gluttony, is the excessive desire for possessions beyond what one actually needs. "Energy and food costs are no laughing matter, but in much of the world, the United States is seen as a gluttonous consumer of more than our share," says Torres. "We should pause and consider, at a personal and professional level, if we are pushing an agenda of excess."

Pride can mean having a sense of your own proper dignity or value, or it can mean having an excessively high opinion of yourself. Pride can also be the cause of arrogance and self-centeredness. "Many lenders, underwriters and investment fund managers seem to have fallen into the trap of pride, thinking that they are immune to failure," Torres notes.

If gluttony, greed and pride have contributed to an out-of-whack U.S. economy, then anger, envy and sloth are likely to get in the way of finding good solutions.

"Everyone gets angry at times, but, when carried to extremes, it can lead to abuse and destruction. Blaming, lying and manipulation are signs of anger and will stall the clear, innovative thinking that is needed to address complex problems," says Torres.

Envy — feelings of resentment and unhappiness driven by a desire to have what others have and to be what we are not — can further fuel anger, solidify positions and divide factions. Sloth — the avoidance of work - prevents us from digging deeper to take on the tough physical, mental or spiritual work that is required.

To counteract the deadly sins of leadership, Torres advises leaders to practice and encourage virtuous behaviors, including:

• Temperance. Leaders who show temperance are less self-centered and better able to balance their work and personal lives. They create an environment in which moderation is valued, different points of view are respected, leaders are more inclined to reward others and people are free to express themselves. Temperance is reflected in self-motivation, resilience in the face of disequilibrium and adversity, and the capacity to make trade-offs.
• Generosity. Generous leaders pay more attention to others and have an open mind and heart. They are better able to learn from others and from mistakes, to seek and use feedback, to motivate others and to delegate effectively.
• Kindness. With kindness, leaders learn to be more respectful and forgiving of others. They are able to manage conflict skillfully, exhibit compassion and sensitivity, put people at ease, act with integrity and cope with pressure.
• Humility. Humble leaders respect others. They are able to listen without judgment, bring out the best in people, build healthy relationships, learn through others and practice self-awareness.
• Love. Operating with a genuine sense of love allows leaders to celebrate the good fortune of others with generosity and full acceptance. They demonstrate love at work by being open to influence and participative management, valuing diversity, being straightforward and maintaining composure.
• Fortitude. With fortitude, leaders and their coworkers can more resolutely face crises, hardships and dangers. An atmosphere is created in which people feel more connected and have a greater sense of purpose. Leaders model fortitude by being courageous, adaptable and flexible and willing to take risks.