“In a free market economy, there will always be excesses, but in recent years, rapacious bankers and unprincipled CEOs have seemed hell-bent on setting new records for egocentric irresponsibility. In a just world, they would be sued for slandering capitalism. Not surprisingly, large corporations are now among society’s least trusted institutions” – Gary Hamel
Values are important to individuals, nations and organisations. When organisations fail due to the failure of leadership, much focus is given to what the leader failed to do. The focus on the leader’s failures detracts from the breakdown of values in the heart of the leader and in the organisation. Many corporate failures in business history point to one major factor: the collapse of a company is preceded by a collapse of values in leadership.
Typical scenarios involve well known executives with positive track records of performance and favourable positioning with the generality of stakeholders. After all, top executives hardly get to the top without a decent measure of past performance pushing them along. It is not so much a shortage of leadership or technical expertise that causes corporate failure. Where it often breaks down is in the erosion of values in the minds of individuals.
Consider the landmark collapse of Enron in 2001. The company’s leaders neglected accounting rules so that higher revenues and profits could be reported immediately. The leaders colluded with other leaders, senior partners of the top accounting firm, Arthur Andersen in an unholy alliance that shut down both organisations. Pertinently, Fortune Magazine named Enron “America’s Most Innovative Company” for six consecutive years prior to the scandal.
More recently, giant question marks have been placed against leaders in institutions such as Volkswagen, the automobile company and FIFA, the global football body. In Nigeria, some financial institutions faltered when the values their founders once cherished became diminished. The demise or weakening of these organisations was based on a loss of values which in some cases leads to the loss of everything. Significantly, a shift in moral location does not occur suddenly. It proceeds gradually – a shift from formerly held values to new but less desirable values. The shift in values becomes like the foundation of a building which has been weakened by natural forces.
Capitalism has many benefits and it serves as a channel for productive wealth creation. However, the capitalist mentality that is not tempered by sound values ignites the erosion of values. The profit motive triggers bouts of individual and corporate greed. Previously humble leaders become proud, narcissistic and acquisitive. The perks of office combined with sycophancy foster detrimental conduct by placing mere humans on superhuman platforms. Leaders begin to re-label moral or ethical decisions as business decisions. Values that were once held sacrosanct are sacrificed on capitalism’s altar of profit.
As reports about flawed leadership and corporate indignities gain increased regularity, leaders need to solidify their values if they are to succeed in their roles. Leaders should perform leadership dipstick tests beginning with the question of whether they are values-ready for leadership. Let’s explore what leaders can do to be values-ready.
Leaders need to focus on the noble aspects of business. There are many current conversations about the destruction of previous moral values. Values like hard work, discipline, diligence, good neighbourliness and prudence sound somewhat ancient as time resets to a contemporary mode. The proverb that “a good name is rather to be chosen than great riches” may have to be reversed as riches are promoted above good names. Profit as an objective of business should not displace the core intentions of setting up business, which is to solve problems. The mantra of short-term results instead of long-term value promotes greed and an instant mentality. Returning to the values of times past would repair an era that has become thin on values.
Leaders should define their personal values as compasses for their actions. The leadership experts, James Kouzes and Barry Posner express it this way: “Values constitute your personal “bottom line.” They serve as guides to action. They inform the priorities you set and the decisions you make. They tell you when to say yes and when to say no. They also help you explain the choices you make and why you made them.”
Defined values should be communicated to constituents. Sharing values makes leaders more accountable for their actions. Knowing what a leader believes in enhances the quality of followership and reduces the unpredictability which complicates the practice of leadership.
The most important factor in being values-ready is to align values with actions. Unless values correspond with action, leadership failure is almost inevitable. Constituents want to see what you do as a leader more than hear what you say. If what a leader professes is not aligned with observable conduct, there will be no example to follow.
Leaders should celebrate values both at personal and corporate levels. Merely saying that something is important without demonstrating its importance might convey a message that that thing is not truly important.
Values are important in leadership. Leaders should be values-ready for leadership. Without the firm pillar of values, many more corporate entities and the reputations of their will surely go down the drain.
Jemide is a certified master coach and currently a doctoral candidate in applied leadership and coaching. He writes every Tuesday in BusinessDay
