Trust Me! Insights into

Ethical Leadership

Frank C. Bucaro, CSP,CPAE

www.frankbucaro.com

800-784-4476

Norman R. Augustine: Former Norman R. Augustine: Former CEO of Lockheed Martin CEO of Lockheed Martin

CorporationCorporation

““I can think of no commitment more important toI can think of no commitment more important to

a corporation or its survival than its commitment to a corporation or its survival than its commitment to

ethics.ethics.

That means not only conducting our business That means not only conducting our business

affairs within the letter of the law, but also in the affairs within the letter of the law, but also in the

spirit of the law.”spirit of the law.”

“ “ Business is a partnership Business is a partnership of people creating, of people creating,

in many ways, in many ways,

a better life for others as a better life for others as well as ourselves. well as ourselves.

If Aristotle Ran General MotorsIf Aristotle Ran General Motors

-Tom Morris-Tom Morris

Negative EthicsNegative Ethics

Tell us what not to do.

Prevent harm.

Imply the obligation to not do harm.

-Marvin T. Brown

Positive EthicsPositive Ethics Give guidelines for what we should do.Give guidelines for what we should do.

Promote a good.Promote a good.

Imply a responsibility to do good.Imply a responsibility to do good.

Rely on the power of the organization to Rely on the power of the organization to be responsive, and to love the ability to be responsive, and to love the ability to respond.respond.

-Marvin T. Brown-Marvin T. Brown

EthicsEthics Focus on action not behavior.Focus on action not behavior.

Justify action not behavior.Justify action not behavior.

Acknowledge the gap between Acknowledge the gap between “ought” and “is.”“ought” and “is.”

““We are not disturbed by things, but We are not disturbed by things, but

by the view we take of them….by the view we take of them….

When we meet with troubles, become When we meet with troubles, become

anxious or depressed, let us neveranxious or depressed, let us never

blame anyone but…..our opinion aboutblame anyone but…..our opinion about

things.”things.”

Epictetus - 60 A.D.Epictetus - 60 A.D.

Americans’ outlook for U.S. Morality Americans’ outlook for U.S. Morality remains bleakremains bleak

Gallup Poll on 5/1/2010 found:Gallup Poll on 5/1/2010 found:

76% of Americans say moral values in76% of Americans say moral values in

the U.S. are getting worse.the U.S. are getting worse.

14% of Americans say moral values are14% of Americans say moral values are

getting better.getting better.

Five top reasons for the moral decline: Five top reasons for the moral decline:

-Gallup poll--Gallup poll- May 17, 2010 May 17, 2010

1.1. Declining moral valuesDeclining moral values

2.2. Disrespect of othersDisrespect of others

3.3. Parents not instilling values in their Parents not instilling values in their childrenchildren

4.4. Dishonesty in government/businessDishonesty in government/business

5.5. Rising crime/violenceRising crime/violence

There are only four dilemmas for There are only four dilemmas for humanityhumanity

1.1. Truth vs. LoyaltyTruth vs. Loyalty

2.2. Individual vs. CommunityIndividual vs. Community

3.3. Short Term vs. Long TermShort Term vs. Long Term

4.4. Justice vs. MercyJustice vs. Mercy

-Institute for Global Ethics-Institute for Global Ethics

Myths That Our Myths That Our Culture Teaches…Culture Teaches…

1. PAINMust be avoided at all costs.

2. HAPPINESS“Go For It!” “If it feels good, do it!”

3. “ME” ORIENTED SOCIETY Money and materialism

4. COMPETITION Winning isn’t the only thing, it is everything!

Decision Making ProcessDecision Making Process

EXPERIENCE

DECISION

REFLECTION

Three Psychological PersonsThree Psychological Persons

ADULT

Go Slow!

PARENT

No! No! No!

CHILD

Go For It!

Five EmotionsFive Emotions

1.1. SadSad

2.2. MadMad

3.3. GladGlad

4.4. Scared Scared

5.5. HurtHurt

Four “C”s of getting it rightFour “C”s of getting it right

Conscience = intuition, moral code, “gut”Conscience = intuition, moral code, “gut”

Choice = pros and cons of choosingChoice = pros and cons of choosing

Culture = beliefs and practices Culture = beliefs and practices

Compliance = What does the law sayCompliance = What does the law say

Relationship BuildersRelationship Builders

TRUST TIME

TALKTOUCH

Effective Leaders Need To:Effective Leaders Need To:

1.1. Deal with direction.Deal with direction.

2.2. Deal with vision.Deal with vision.

3.3. Focus on the top line.Focus on the top line.

4.4. Derive power from values and correct Derive power from values and correct principles.principles.

5.5. Foster mutual respect and build a Foster mutual respect and build a complimentary team.complimentary team.

--Steven CoveySteven Covey

8 Great Leadership Habits8 Great Leadership Habits

1. Find every opportunity to practice the virtues of 1. Find every opportunity to practice the virtues of integrity, trustworthiness, honesty and integrity, trustworthiness, honesty and compassion.compassion.

2. Ask yourself: How is my organization better 2. Ask yourself: How is my organization better today because I am in it?today because I am in it?

3. Weigh your actions toward creating more good 3. Weigh your actions toward creating more good than harm.than harm.

4. Ask yourself: How am I a better person because 4. Ask yourself: How am I a better person because I am part of this organization.I am part of this organization.

Leadership Habits-2Leadership Habits-2

5. Remember to treat each person with the 5. Remember to treat each person with the dignity and respect that every human being dignity and respect that every human being deserves.deserves.

6. Find and name strengths of the organization 6. Find and name strengths of the organization that can help you become more human.that can help you become more human.

7. Be aware of whom you benefit, whom you 7. Be aware of whom you benefit, whom you burden and how that decision is made.burden and how that decision is made.

8. Practice getting beyond your own interests to 8. Practice getting beyond your own interests to make the organization stronger.make the organization stronger.

Leadership ValuesLeadership Values

1.1. TrustworthinessTrustworthiness

2.2. UnityUnity

3.3. RespectRespect

4.4. JusticeJustice

5.5. Service and HumilityService and Humility

Four questions to measure Four questions to measure my trustworthinessmy trustworthiness

1.Is my behavior predictable or erratic?1.Is my behavior predictable or erratic?

2. Do I communicate clearly or carelessly2. Do I communicate clearly or carelessly

3. Do I treat promises seriously or lightly3. Do I treat promises seriously or lightly

4. Am I forthright or dishonest?4. Am I forthright or dishonest?

To be trustworthy requires:To be trustworthy requires:

1. Discerning right from wrong.1. Discerning right from wrong.

2. Acting on your discernment even at personal 2. Acting on your discernment even at personal cost.cost.

3. Saying openly that you are acting on your 3. Saying openly that you are acting on your understanding of right and wrong.understanding of right and wrong.

Siemens CEO Peter LoescherSiemens CEO Peter Loescher

““You have to have your personal valuesYou have to have your personal values

and then you build from there. Ethicaland then you build from there. Ethical

people are guided by a moral compass.people are guided by a moral compass.

My father taught me that there is noMy father taught me that there is no

conflict between success and ethics,conflict between success and ethics,

indeed the only guarantee for a good lifeindeed the only guarantee for a good life

is to live as a good person.”is to live as a good person.”

USA Today – 2/15/2010USA Today – 2/15/2010

Decisions are Based on …Decisions are Based on …

1.1. IntuitionIntuition

2.2. ExperienceExperience

3.3. FeelingsFeelings

4.4. External AuthorityExternal Authority

Cowboy EthicsCowboy Ethics

1. Live each day with courage.1. Live each day with courage.

2. Take pride in your work.2. Take pride in your work.

3. Always finish what you start.3. Always finish what you start.

4. Do what has to be done.4. Do what has to be done.

Cowboy Ethics- 2Cowboy Ethics- 2

5. Be tough, but fair.5. Be tough, but fair.

6. When you make a promise, keep it.6. When you make a promise, keep it.

7. Ride for the Brand.7. Ride for the Brand.

8. Talk less and say more.8. Talk less and say more.

Cowboy Ethics -3Cowboy Ethics -3

9. Remember that some things are not for sale.9. Remember that some things are not for sale.

10. Know where to draw the line.10. Know where to draw the line.

MindfulnessMindfulness

Consider all implications of every Consider all implications of every decision you make!decision you make!

You Must Consider:You Must Consider:

The ActThe Act

CircumstancesCircumstances

Criteria for JudgmentCriteria for Judgment

Communal WisdomCommunal Wisdom

Kolberg & PiagetKolberg & Piaget

1.1. PunishmentPunishment

2.2. RewardReward

3.3. ““Good”Good”

4.4. Rules and RegulationsRules and Regulations

5.5. Choice and CommitmentChoice and Commitment

6.6. InternalizationInternalization

PowerPowerAuthoritarianAuthoritarian

Empowers oneself at the Empowers oneself at the cost of the other.cost of the other.

Self serving as one uses Self serving as one uses fear to get obedience. fear to get obedience. Must have power over Must have power over others.others.

Commands, does not Commands, does not invite. To command is to invite. To command is to settle for behavior settle for behavior change. NO value change. NO value change or change or understanding.understanding.

AuthoritativeAuthoritative Empowers the other Empowers the other

through service for the through service for the other.other.

They are chosen by their They are chosen by their peers, They don’t force peers, They don’t force themselves, but gain our themselves, but gain our trust.trust.

Invites, does not Invites, does not command. To invite is to command. To invite is to recognize the value of recognize the value of the otherthe other..

Leaders Must Ask:Leaders Must Ask:

How Will This Help Them…How Will This Help Them…

Feel that they belong?Feel that they belong?

Develop an unique identity?Develop an unique identity?

Feel significant?Feel significant?

Social Significance Question

How Do I Fit In Here?

Ethical ConsiderationsEthical Considerations

On what foundation do we base our On what foundation do we base our ethical decisions?ethical decisions?

People make decisions based on the People make decisions based on the values they hold dear.values they hold dear.

Ethical principles are not concerned with Ethical principles are not concerned with how things how things dodo operate, but with how they operate, but with how they shouldshould operate! operate!

Ethical ConsiderationsEthical Considerations (continued)(continued)

The most difficult decisions to make, are The most difficult decisions to make, are those in which there is a conflict between those in which there is a conflict between two or more principles of which you deeply two or more principles of which you deeply believe in.believe in.

It is important that we determine in It is important that we determine in advance what our priorities are, realizing advance what our priorities are, realizing that a lot will depend on the situation.that a lot will depend on the situation.

Factors in Making a DecisionFactors in Making a Decision

1. Is this in line with our company’s 1. Is this in line with our company’s objectives?objectives?

2. Will this decision result in the right 2. Will this decision result in the right thing being done for the client?thing being done for the client?

Challenges for LeadersChallenges for Leaders

1. Become involved in the culture, i.e. 1. Become involved in the culture, i.e. managing the culture and assess if it managing the culture and assess if it is properly serving the long term is properly serving the long term goals.goals.

2. Stop asking “2. Stop asking “CANCAN we do this” but we do this” but rather “rather “SHOULDSHOULD we do this?” we do this?”

Challenges, Challenges, cont’d 2cont’d 2

3. Focus on how your organization 3. Focus on how your organization does business, not just what it does.does business, not just what it does.

““The high standards and values embedded in how The high standards and values embedded in how

you do business are more powerful differentiators you do business are more powerful differentiators

to distinguish you in the marketplace.”to distinguish you in the marketplace.”

““Corporate Culture: The Ultimate Driver of Business Performance” Corporate Culture: The Ultimate Driver of Business Performance”

by Dov L. Seidmanby Dov L. Seidman

Challenges, Challenges, cont’d 4cont’d 4

5. Make your decision in the light of the 5. Make your decision in the light of the broader ecosystem. broader ecosystem.

Do the right thing, any time and all the time.Do the right thing, any time and all the time.

Challenges, Challenges, cont’d 3cont’d 3

4. Reward ethical leadership, even when it hurts and 4. Reward ethical leadership, even when it hurts and punish unethical behavior whenever you see it.punish unethical behavior whenever you see it.

““If you lose dollars for the firm, I will be understanding; If you lose dollars for the firm, I will be understanding;

if you lose reputation, I will be ruthless.” if you lose reputation, I will be ruthless.”

-Warren Buffet-Warren Buffet

GIFTGIFT

Each Each DayDay

Each Each PersonPerson