From Enron to Volkswagen, we’ve watched in horror as leaders who lack integrity have destroyed businesses time and again. But the real tragedy happens when regular leaders, who are otherwise great, sabotage themselves, day after day, with mistakes that they can’t see but are obvious to everyone else.
In most cases, it’s slight and often unintentional gaps in integrity that hold leaders, their employees, and their companies back. Despite their potential, these leaders harm their employees and themselves.
“Look for three things in a person: intelligence, energy, and integrity. If they don’t have the last one, don’t even bother.” –Warren Buffet
Dr. Fred Kiel did the difficult job of quantifying the value of a leader’s integrity for his book, Return On Character, and his findings are fascinating. Over a seven-year period, Kiel collected data on 84 CEOs and compared employee ratings of their behavior to company performance.
Kiel found that high-integrity CEOs had a multi-year return of 9.4%, while low integrity CEOs had a yield of just 1.9%. What’s more, employee engagement was 26% higher in organizations led by high-integrity CEOs.
Kiel describes high-integrity CEOs this way: “They were often humble. They appeared to have very little concern for their career success or their compensation. The funny point about that is they all did better than the self-focused CEOs with regard to compensation and career success. It’s sort of ironic.”
Kiel’s data is clear: companies perform better under the guidance of high-integrity leadership. “Companies who try to compete under the leadership of a skilled but self-focused CEO are setting themselves up to lose,” Kiel says.
Every leader has the responsibility to hone his or her integrity. Many times, there are integrity traps that have a tendency to catch well-meaning leaders off guard. By studying these traps, we can all sharpen the saw and keep our leadership integrity at its highest possible level.
- Fostering a cult of personality
- Dodging accountability
- Lacking self-awareness
- Forgetting that communication is a two-way street
- Not firing poor performers
- Succumbing to the tyranny of the urgent
The bad news is that these mistakes are as common as they are damaging. The good news is that they’re really easy to fix, once you’re aware of them.