Saturday, July 09, 2005 | Working with business leaders throughout the country to develop shared values and create values-driven corporate cultures, I frequently find myself in discussions about integrity. The concept of integrity can have a profound impact on how a company operates. Because it is a corporate value that is top-of-mind, it merits deeper discussion.

Integrity can be defined as doing what you say you are going to do. This is a common and generally acceptable definition and that is where our discussions begin. Then I ask this question: “In your business experience has anyone ever been ‘out of integrity’ with you?”

Many business leaders are quick to answer – sometimes with looks of remorse, frustration, or with a slight shaking of heads. Examples are plentiful about people who did not deliver on time, others who were late or missed meetings, or worse, business partners who do not pay on time or perform as promised.

My follow-up question has more impact: “How did you feel about that person, and what action did you take as a result?” The answers are predictable:

” “I can’t count on him.”

When someone is out of integrity with you, he or she does not do what is promised. The results are not pretty. Business people who are out of integrity fall out of favor with their customers, suppliers, vendors and with their colleagues. It has the opposite effect from what you want: synergistic, trusted alliances among business people you can count on.

My first point is simple. There are negative external consequences to being out of integrity with others. What I mean by external consequences is this: If you do not do what you say you are going to do, people will not trust you; they will see you as unreliable, and they will not want to continue doing business with you.

While negative external consequences are bad enough, from a leadership point of view the negative internal consequences are worse. After discussing the external consequences that befall people who are out of integrity, I ask another more penetrating question: “Have you ever been out of integrity with someone with whom you do business?” This question causes some squirming until brave souls come up with examples of a time when they did not do what they said they would do. Now it gets interesting.

We focus the discussion around what external consequences could result. The same answers apply: “People won’t trust me,” “Others will think I am unreliable” and “People may not want to do business with me.”

Right. Now the serious questions: “How did it make you feel when you thought people were considering you to be untrustworthy, unreliable or they stopped wanting to do business with you?”

It does not take long for business leaders to understand that the more damaging consequences of being out of integrity are the negative impacts on self-esteem. When people begin to have negative self-talk, their ability to perform at their best is diminished. Decision making is replaced by second-guessing. Others sense a lack of confidence in leaders who are plagued by negative self-talk and poor self-esteem.

My second point is this: You can’t be an effective leader if you are out of sync with your own values. The example of integrity is just one of many. Being out of sync with any of your core values, or the shared values of your organization, will diminish your ability to be a truly effective leader.

Leadership in business is more critical today than it has been in any other time. There are many examples of business leaders who are suffering external consequences from having lost their sense of values. Witness John Rigas, Frank Quattrone, Martha Stewart, Dennis Kozlowski, Mark Swartz, Bernard Ebbers, et al. The list is already legendary. Jail terms for fraud and other missteps, ranging from a few months to 85 years, are the direct result of illegal acts that are out of sync with the shared values of their fellow Americans.

As bad as these jail term consequences are, consider what it must be like to be a pariah in the very community in which you were once revered. What happens to a person’s self-esteem and ability to lead others when his or her moral fabric has been torn beyond repair?

This is the concern of values-based leaders. This is my concern. My good fortune is the opportunity to work with leaders who are driven by a sense of the right thing to do. Leaders inspire others to follow. Values-based leaders inspire others based on a shared set of values that are intrinsically rewarding. Values-driven companies have employees that are aligned, happier at work, more productive and have higher retention rates. These are some of the reasons that values-driven companies outperform the competition.

Defining core values for your business is more than having nice words to talk about. Core values define your corporate culture, and the culture clarifies the way people do things at work. Values, therefore, are an expression of who you are, what you stand for and how everyone behaves in your company.

To be a leader in a values-driven company requires being a model for each of the company’s core values. If integrity is one of your company’s core values, you cannot be out of integrity and still be an effective leader.

Kenneth Majer, PhD, is the author of “Values-Based Leadership” and his newest book, “Values in Action!” He is a speaker and consultant on corporate culture and alignment. He is also a Chair of TEC International, a member organization of CEOs and business leaders, and an advisor to the Business School at the University of San Diego.

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