Why Shoot Straight in a Crooked World?

Harvard Business Review

October 6, 2008

 

by Marshall Goldsmith

A lot of people are discouraged right now. Many people have lost, or are in fear of losing, their homes, their jobs, and their retirement funds. At the same time, it has been a challenge to work together toward a common solution due to a general lack of trust and a lot of finger pointing. I asked Dr. Tony Simons, professor and noted author of The Integrity Dividend, to share his answer to this question.

MG: Tony, you’ve been doing some interesting research about the global trust/deceit level. Would you share some of it with us?

TS: Of course, Marshall.

Recently, the Wall Street Journal commissioned a global survey on deceit. They surveyed more than 20,000 people in 19 countries, asking whether cheating in business transactions is more or less common that it was ten years ago. Sixty-five % of Americans said it is more common; 70% agreed it is “a real problem.” The majority of respondents across the globe said cheating is more common now than ten years ago.

MG: Why do you think that cheating is seen as so prevalent?

TS: The claim that cheating is more common came from one of two sources. Either:

1) It is true, or
2) It is not true, but people think it is because our media loves a good scandal.

Even if cheating is not more prevalent, the fact that people think it is makes us vulnerable to a self-fulfilling prophesy. “It seems pointless to keep your promises if no one else is keeping them,” said an ethics lecturer in the article. I have spoken with many executives who struggle to do the right thing, and they can become disheartened when they see others getting ahead by cutting corners.

MG: So, why shoot straight when it seems like nobody else is following the rules?

TS: Because it will make you more effective as a leader. I can prove it!

I ran employee surveys for 76 same-branded hotels, and collected more than 6,800 surveys. Rather than focus on employee satisfaction, I asked questions about how consistently their bosses keep their word and live by the values they espouse. I averaged the surveys for each hotel, and lined them up against bottom-line profitability–the percentage of each revenue dollar that goes to profit.

A difference between two hotels of ¼ point on a 10-point scale points to a difference in profitability of 2.5% of revenues, or roughly a quarter million dollars. Per hotel, per year. I call that difference the “Integrity Dividend.” It is not about being ethical. It is simply about living by your word.

MG: How does “living by your word” make such a difference?

TS: When people see you living by your word, they trust you more. Trusting relationships and clear communication allow you to engage your workers’ hearts. That is what leadership is all about.

MG: Why isn’t word-action alignment more common?

TS: Because it is hard to do. Managers sometimes make commitments too casually; emotions sometimes drive them to commit prematurely; communication is unclear. Employees tend to hear what they want to hear–wiggle phrases, like “I’ll try” get lost in translation.

Living by your word–and being seen as living by your word–are not all it takes to lead effectively, but effective leadership does not happen without them. This is not an easy challenge, but if you want to lead, conquering it is essential.

MG: Thank you for your insight Tony!