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OEC Consultant's Corner

Leadership, Values, and Corporate Responsibility        print page

By: Robert Krenza

When Enron imploded, the hope was that this was an isolated incident. As subsequent scandals have made apparent, it was the harbinger of a crisis in leadership responsibility—a crisis that has been building over time as business leaders have lost sight of certain fundamental principles.

Values, purpose, and vision serve as the underpinning of our actions and how we are held accountable for them. Without clarifying and committing to these principles, a leader lacks the foundation to lead with personal power—through self-awareness, knowledge, clarity of purpose and vision, and the strength of people skills—and must rely solely on positional power conferred by an outside authority.

The first step toward becoming a leader requires knowing what your core empowering beliefs are and what you stand for. That "personal work" involves the following:

• Clearly defining values. Values are guiding principles that transcend specific situations and belong to your essential nature.
  
  
• Clearly articulating a purpose/mission. At the core of life purpose is your reason for being. Articulating it involves being clear about what you are committed to contributing to people and the world in your lifetime.
  
  
• Defining a clear, compelling vision. This is the reality you, as a leader, intend to create.

Leaders must take the time and have the courage to do this work. Think of it as the time required to master anything. We admire the practice, perseverance, and sacrifice it takes for great athletes to become the best at what they do. It is the same for a leader, and it is intensely personal.

Leadership is ultimately about self-mastery, which begins with the understanding that all we can control are our beliefs and actions. Faced with challenges and opportunities, we have the choice of reacting or responding. Reactions come from a disempowering, fear-based belief set; responses come from the confidence of an empowering belief set. When leaders try to control what they truly only influence, their attempts to motivate and inspire followers collapse. This is at the core of the crisis of responsibility we are now experiencing.

THE FAILURE OF SELF-MASTERY

The hard work of a leader in a business setting is to:

• align his or her personal values, purpose, and vision with those of the organization;
  
  
• inspire and motivate others to do the same by communicating the organization's mission and vision—its reason for being and collective goals—out loud, authentically, passionately, and consistently; and
  
  
• continuously hold people accountable for their actions as they work toward fulfilling the mission and achieving the vision.

When those charged with leadership have not mastered their own values, purpose, and vision, they cannot define these things for the organization. They act and make decisions without reference to a clearly-defined value system. Authentic communication is compromised. Far from inspiring and motivating, they create a sense of betrayal, rejection, and abandonment in followership and other stakeholders.

Enron and WorldCom are but two examples of executives acting in their own self-interest. These were "leaders" operating and making decisions based on entitlement and ego—disempowering beliefs—not values and character.

These events are having a real-life impact on employees and shareholders. Tens of thousands of employees are losing their jobs. Others, along with shareholders, have lost their retirement savings as the markets continue to react. With share-holders, employees, and the nation’s economy and financial markets still reeling under the impact—and with public confidence in corporate leadership at a new low—government is looking at ways to legislate and regulate corporate responsibility.

While increasing the number of outside directors, making CEOs sign off on numbers, changing accounting rules for stock options, creating new oversight bodies, and other proposed measures may help in this effort, there are fundamental measures that begin closer to home.

CORPORATE SOUL-SEARCHING

When confidence is undermined, HR departments face their own crisis. Employee recruitment, retention, and motivation—along with the future and profitability of the organization—are all affected by a leadership crisis. The pressure is on to recruit "better, more reliable" candidates. At the same time, these candidates are assessing potential employers' ethics to determine compatibility with their own values and commitments.

Companies need to engage in some soul searching, taking a hard look at the alignment between leadership and corporate values. Leaders at every level of the organization need to ask themselves questions such as: "What will create a breakthrough in my leadership at this time? How do I respond to these challenges in a way that empowers myself, our employees, and our organization?" As the December 2001 special issue of the Harvard Business Review so aptly observed in the title of its lead article, "Breakthrough Leadership: It's Personal."

Values are intrinsic to human beings and, by extension, to organizations. Defining and aligning personal and organizational values, purpose, and vision is a continuous process, like teambuilding and alignment. It requires willingness on the part of executives and the organization to do the hard work and then create a structure to support it.

The Ayers Group partners with clients to assess current culture, challenges, and opportunities with regard to leadership-development needs and custom designs programs and processes to address those needs. Our programs include the following:

• Leadership Mastery - helping individual senior executives clarify their personal values, purpose, and vision.
  
  
• Relationship Mastery - helping the senior management team develop the interpersonal leadership competencies necessary to inspire and motivate others.
  
  
• Organizational Leadership - helping senior management define organizational values, mission, and vision; develop critical objectives and a leadership accountability model aligned with these; and develop strategic plans for achieving the objectives and communicating them effectively to the organization.
  
  
• Executive Coaching - providing leaders with coaching and counseling to assist them in achieving their full potential within the organization.

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For more information, please contact Joan Caruso, Managing Director of Organizational Effectiveness Consulting at The Ayers Group — (212) 889-7788.

Robert Krenza is an Ayers Group consultant. He has more than 20 years’ experience as an OD consultant and executive coach working with Fortune 500 companies.