The How To Act Like CEO Series

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  • Why integrity is so important.
  • How to improve yours.
  • The test—a crisis.

My parents had always drummed into me that all you have in life is your reputation; you may be very rich but if you lose your good name, then you’ll never be happy.
— Richard Branson
CEO of Virgin Group, Ltd.

Most everyone says integrity is “rule number one” in acting like the best CEOs—more so than being a brilliant individual, a visionary, or a leader. Personal integrity is the cost of entry to this position.
That’s right: How you do your work is more important than what your work is.

Everyone can nod his or her head and claim, “Oh yeah, I’m definitely a good citizen.” But are we moral, upright, principled, honest, proper, decent, virtuous, straightforward, high-minded, noble,
kind, considerate, and fair all of the time with everyone? Pretty tough standard. Yet it is the standard to which you can aspire. If you can’t, who will? And if you do, you just might set a model of excellence for those around you. The least of it is you will “sleep like a baby” (that being a healthy baby, not a colicky baby!) feeling good about yourself. And it will get you some percents on that 1000 percent more a day goal!

One month after getting the CEO job I was the most popular guy in town. It takes some guys ten years to realize that everyone patting them on the back is because of their position, not themselves.
— Dan Amos
CEO, Aflac

Regardless of your job title, this good character stuff is for everyone at any level in the organization so people “pat you on the back” based on who you are not what you are. Obviously, the best CEOs
have the best “makeup” long before they get into the CEO position that’s partially how they got there. They practice it, not just praise it.

Good character is an evolving quality based on early values that you were exposed to along with what finally sticks in your consciousness. The result is an internal alarm system that goes off when
you are crossing the line between right and wrong. I’ve always tried to live by looking at “what is the right thing to do here?” It’s not right, no matter how attractive it appears in the short term, if it’s not the best thing to do.
— Nimish Mehta
CEO, Impresse

What’s “right” is relative to your own system of values—your own exposure. 
It’s perceptual. Other people’s character, although formed the same way yours was, may end up with different boundary lines to set off their “alarm” at different times. For instance, members of the Mob have different boundary lines than the Dalai Lama. Consequently, both are going to view issues differently and choose different actions. But in general, the Western perspective is fairly homogenized as to what is right and wrong.

(Several CEOs said to me, “I think, ‘How do I want to read about this on the front page of The Wall Street Journal’; that shapes right or wrong pretty quickly.”) You must have a tolerance for varying perspectives. But an intolerance for what is considered irreprehensible.
— Rev. Jim Forbes
Senior Minister, Riversi Cathedral

You set your own standard of behavior. 
Live it consistently. Teach it to those who want to follow the same standard. And understand that not everyone is exactly like you. In reality, their “view” can be
different from your “view” while both of you pledge you are acting “right or wrong.”
Sometimes people think the arena with the least ethics is politics.
I asked Rick O’Donnell, Director, Governors Office of Policy and Initiatives for Colorado Governor Bill Owens, about it. Politics is a microcosm of population. There is not a higher percent of bad people in politics. They are just exposed. If a CEO says he’s going to go in a certain direction then a year later it didn’t happen that way, no one knows unless it’s mentioned in the annual report. Whereas, if a politician says something the media is going to remember. The politician is scrutinized every time he changes his mind simply because people see it. The fact is people grow and change their mind regardless of their work.

Integrity is not as black and white as you’d like it to be. Particularly when you add the diversity of today’s workforce where different cultures, religions, history, and exposure all affect the makeup.
In other words, you can’t be judgmental about your “right” being more “right.” They just may feel the same about you. So you average it out: on balance, you act—and make—decisions not just for your good but for the common good. You sacrifice your own aspirations for the common good. You decide to act like integrity is nonnegotiable while, at the same time, tolerantly understand that
people view the same truth differently. You choose to be credible beyond reproach and accept that others try to also. You act this way not just to do things in a legal manner but because it’s your private code of behavior. And you consistently follow through on these beliefs all of the time even during times of crisis. You are the kind of person who will be a good CEO like these four have a reputation for being. Integrity is a supreme requirement. And I consider trust to be the greatest motivator.
— Bob Galvin
Chairman of Motorola’sexecutive committee

And trust takes a lot of moxie and commitment to build. It takes a long time, and you can lose it overnight.
— Max Depree
Former Chairman of Herman Miller

I think there are two essential things. The first is the value of people, the second is the importance of values.
— Bob Haas
CEO, Levi Strauss
Ethics are an invaluable intangible that each successful leader bases their actions on. One of the things that my firm prides itself on is the ethical values that run deep in our blood. It’s something that is worn on our sleeves. We look to our core values in hiring, client selection, and everyday decisions.
Even our firm by-line is: “ethics fed brainware.” Ethics is something that has been deeply seeded in all successful organizations and their leaders and will continue to be for as long as successful business will exist.
— Brian McCune
Managing Partner, e-merging technologies group

Although it might be obvious that integrity is rule number one, let me reinforce that conclusion with reasons why it is. It’s a basic requirement for leadership People follow you because of your character, not your job title. “A really good way to lose leadership is to be thought of as having lost integrity,” says Curt Carter, CEO of Gulbransen, Inc. and America, Inc. “CEOs jealously guard their good name. They’ll pay ransom for their good name—like paying a bill they don’t owe.” General Schwarzkoff says leadership boils down to competence and character, and more often the differentiator is character.
(Throughout this entire book you’ll read that every aspect of the CEO’s job is fundamentally guided by his or her character regardless of industry, size, or anything else.)

Ethical behavior turns out to be the easiest to do When you have an “unwavering constitution,” you can be yourself and not work so hard trying to be something you aren’t. You don’t run the risk of people discovering artifice. Like you’ve heard people say, it’s so much easier to tell the truth; then I don’t have to try to remember all my lies.

When you try to “do right,” it alleviates stress of decisions. It softens setbacks and disappointments. It takes care of ingratitude. And it turns out to be a good business strategy because nothing baffles someone full of tricks and lies more than simple, straightforward integrity. People sense when you are guided by deeply held values or when you aren’t and they sense when you aren’t but act like you are.
“The first things our parents taught us about right and wrong are true. They still work even in the complexity of today’s business,” says Nancy May, CEO of The Women’s Global Business Alliance.
Sets standard of expectation People mirror those around them. Your people are a reflection of you. If you dip your toes in the pool of nonethical behavior, even a little, it starts a whirlpool. “The CEO needs to be the personification of the company’s values to his organization, customers, suppliers,
and outside world,” says Daryl Brewster, President of Planters Specialty Foods. “It’s that simple.”
When the elephant sneezes, everybody catches a cold. (Gross expression, huh?) But you get it, everything gets passed around.

“The CEO is a role model, his major responsibility is to bring honesty and openness into it but it has to be his own personality. I had high standards and felt if I set the example people would live up
to them and the company would benefit greatly,” says Duane Pearsall, retired CEO of Columbine Venture Capital. “I had an individual that I wanted to promote. He was bright, energetic, a good
thinker, did an outstanding job but he had a character flaw he couldn’t get over. I tried to help and sometimes he did better. But he couldn’t quite make it. So I ended up not promoting him.”
You truly demonstrate and prove your integrity in your actions. One small example is that you have to do what you’d expect your people to do: “When I was visiting the field I’d schedule a flight
home at 6:00 p.m. so I could work with my people until 5:00 p.m. If I expect a full day from them they have to see me do the same. You either live by the rules or don’t live by the rules,” says Paul Schlossberg, CEO of D/FW Consulting. And sometimes you have to inconvenience yourself to remain that “person with integrity.” If your people can’t spend more than $150 a night for a hotel room than you can’t either. Play by the rules, whatever they are.
If you provide a constant example and application, that will run the company when you aren’t there to tell people what to do. That becomes part of your corporate culture.

“The person I believe is the executive secretary,” says Nancy Albertini, CEO of Taylor-Winfield. We had a phone call from a CEO who wanted us to do a search for him. I returned the call. His secretary
semisnarled, ‘who are you, what are you calling about, and he’s too busy to talk to you.’ I just said, ‘Fine. Just explain to him why he hasn’t heard back from me was because you explained he was too
busy to talk to me.’Well the man did call back and was overly pleasant to me because he needed me to do the search. When I started to work with him I discovered that his manner was to be nice when it
served him and not to be the rest of the time. It only reinforced my commitment to paying attention to the CEO’s secretary. If she is nice and helpful it tells me about his management style. If she isn’t, that
tells me something too. I make sure in my own office that everyone treats anyone who calls like they are the Queen of England.”

Create and leave a legacy
You can’t always bet on technology, can’t bet on the numbers, and can’t bet on the economy. What you can bet on at the end of the day is management. People track your performance.
It’s called your reputation while you’re here and your legacy when you’re gone.
The way to gain a reputation is to endeavor to be what you desire to appear.
— Socrates

People see through you when you aren’t honest and ethical— either right away or eventually. The truth will come out. You can’t misstate. You can’t shape the truth a little. You can’t even be coy.
There is no exit. Eventually, you’ll be faced with the facts. Again, that creates your legacy.
Pick your guiding principles and apply them religiously to hiring, building an organization, or dealing with customers. Even in the exploding technology world where anything goes, you can’t risk betraying other employees or businesses. It will come back to haunt you eventually.
Evidence over time creates your reputation and legacy. “Previous integrity. That’s your road map to follow when evaluating someone,” says Lawrence Land, attorney-at-law.

Talk about legacy! “I’d rather have a ‘handshake deal’ with a person of integrity, than a forty page document with a person who embraces a ‘Clintonesque’ personality,” says Dave Powelson, CEO of
TRI-R Systems.

It pays off financially
“I’ve always put principle before profit,” says John Bianchi, CEO of Frontier Gunleather. “Principles in the short term guarantee profits in the long term.”
Sure, I know it’s not always financially rewarding to do what’s right. It’s not easy to be the person you’d like to be or as one person put it, “the person my dog thinks I am.”
You will easily find ways to cut costs and increase the bottom line but you can also end up cutting into your principles. Perhaps the financial payoff is that you stay in business with a good reputation.
“We had consultants reviewing our business several times over the years and they’d always report that ‘You are overstaffed.’We did hire too much help and that costs us. But that followed our two
guiding principles: provide quality care and put what was best for our patients first. Our pay was self-satisfaction,” says Dr. Kelvin Kesler, Chief of Ft. Collins Women’s Clinic.

It keeps you out of jail
People choose to do the right thing because it fits their self-image or they fear temporal or spiritual punishment. It’s like the line in the old movie Rogue River, “Every man is a potential criminal, only
fear stops him.”
The fact is, the higher you go up, the more freedom and power you have. With that comes self-pride in accomplishment and feeling good about what you’ve done. That’s all good and normal. When taken to the extreme, it becomes bad. Extreme means “I’m special, I’m different, the same rules no longer apply to me. I have a right to get away  with more—just look at who I am.” This kind of look-down-yournose- superiority may work in Hollywood but not in the real world.
It is probably the nature of people to do what they can get away with. Comedienne Chris Rock puts it, “A man is basically as faithful as his options.” And at the top of the skyscraper, you can get away with more. But don’t. It’s back to your standard every day. You get more options (mental and monetary) as CEO. Be careful how you take them. You can go to jail.
Michael Wise, CEO for the former Silverado Banking who was sentenced to 3-years in a federal prison camp after pleading guilty to stealing $8.75 million from investors is quoted in the Denver
Post, “I’ve been blessed, with a lot of talent and people who trusted me…I misused both of them.”
Do not give yourself the permission to be even a little questionable– despite the option to do so. As some historian put it, “Empires cracked before they crumbled. Even when the first cracks seemed
easily mended.”

Good people will be willing to work with you
In business, we generally have options in terms of whom we choose to do business with. “If I’m dealing with someone I sense lacks integrity, I distance myself quickly. If they work for me they don’t last long. Integrity is fundamental to our corporate culture,” says Ted Wright, CEO of Ampersand.
Does it take longer than a second to answer whether, if given a choice, you’d work for someone who demonstrates integrity over someone questionable? Well, the same goes for who would work for you.
If the boss’ motive, character, and ability are something you don’t respect, quit. If you have a subordinate who has a motive, character, or ability you can’t accept, fire him or her.
— Curt Carter, ‘Carter’s Law’
CEO Gulbransen Inc. and America Inc.

There was a sign on one publisher’s wall for years, “We rip off the other guy and pass the savings on to you.” Now do you think that was a successful recruiting poster?
This is a biggee. If you don’t have good people working for you, you will fail despite your effort, intelligence, actions, etc. Good people don’t work for bad bosses (at least not for long). If you are
a boss who’s experienced recent success and you think you “hold a hot hand” and can therefore slip and slide a little because of your “power,” you will eventually find out differently.

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