Positive outcomes of ethical leadership

David Mayer, a professor of Management and Organizations at the University of Michigan, has reviewed hundreds of studies of employees and reports that in general, when employees believe that their leader is ethical, the employees are happier and more productive, more committed, and more ethical themselves, than employees who do not believe that their leader is ethical.

1. Ethical leadership leads to ethical followers

In his own studies, Mayer has found that leaders not only have to espouse ethical values, but have to role model ethical behaviour in order to spread ethical behaviour among their followers, and to reward or punish behaviour that agrees or disagrees with organizational values.

“Leaders set the ethical tone of an organization and are instrumental in encouraging ethical behavior and reducing interpersonal conflict from their subordinates.”

Therefore, reflecting on one’s core values and striving to be more ethical can have a positive impact on the working environment, and make the organization more successful.

2. Ethical leadership leads to followers’ commitment

In a study by Shukurat Bello from the University of Nigera, the author cites many studies in which organizations with ethical leadership was found to lead to higher levels of employee commitment than in organizations with less ethical leadership. Bello defines commitment as “as a state in which an employee identifies with a particular organisation and its goals and wishes to maintain membership in the organisation” and states that high levels of perceived ethical leadership lead: to employees being emotionally attached to the organization; to employees viewing staying with the organization as providing greater financial security than leaving; to employees have loyalty to the organization for moral or ethical reasons.

3. Ethical leadership generates greater profits

KRW International, a leadership consultancy company, conducted a survey of employees at 84 American organizations, to ascertain if the employees thought that the CEO of the organization possessed the following four qualities:

• integrity
• responsibility
• forgiveness
• compassion

These four qualities were chosen by the authors of the study because through numerous examples of anthropological literature, these four qualities were found to be universally positive traits of human character.

The employees’ opinions were then correlated to the profitability of the company by analyzing the average return on assets (ROA).  Interestingly, organizations with CEOs that possessed the above four traits in greater quantity had an average return on assets (ROA) of 9.35 percent. On the other hand, companies with CEOs that were rated low in these four qualities had a ROA of 1.93 percent.  This means that companies with CEOs who are viewed as being ethical are almost 5 times as profitable as companies with CEOs that are not!

CEOs in the negative group were characterized as ‘self-focused’, willing to lie for financial gain, willing to do damage to other people for their own success.  Employees at these firms reported that these CEOs “couldn’t be trusted to keep promises, often passed off blame to others, frequently punished well-intentioned people for making mistakes, and were especially bad at caring for people”.

An important take-away for leaders is that the CEOs in this study who needed to improve their character often did not know.  They did not perceive themselves in the same way that their employees saw them.  CEOs were asked to rate themselves, and those CEOs who were rated poor in the four qualities by their employees, rated themselves higher than their employees rated them.  Conversely, CEOs who were rated high in the four qualities rated themselves lower than the employees rated them.  Leaders must be honest with themselves in assessing their own qualities.

One method of getting to know yourself better is creating an environment where people can give you honest feedback, and taking that feedback seriously.  Someone that a leader might be receptive to might be a mentor.

The need for ethical leadership

There is a great need for ethical leadership.  After the Enron scandal, a great deal of attention was paid to ethical practices in corporate culture.  However, after several years had passed, a decline in ethical values was seen.  A report by the ‘Ethics Resource Center’ from 2007 entitled ‘An Inside View of Private Sector Ethics’ reported that:

• In the past year, half of employees surveyed had witnessed some sort of ethical misconduct
• Employees were usually afraid to report misconduct.  About 1 in 8 employees had experienced retaliation for reporting ethical misconduct.
• The number of companies making an effort to promote a more ethical culture was actually in decline.

In light of the various benefits of ethical leadership described above, the fact that ethical leadership is in decline should raise alarm bells in organizations.

References

https://hbr.org/2015/04/measuring-the-return-on-character?utm_campaign=Socialflow&utm_source=Socialflow&utm_medium=Tweet

http://webuser.bus.umich.edu/dmmayer/Published%20Articles/Mayer,%20Aquino,%20Greenbaum,%20%26%20Kuenzi,%20AMJ,%202012.pdf

http://ijbssnet.com/journals/Vol_3_No_11_June_2012/25.pdf

http://www.ethics.org/files/u5/The_2007_National_Business_Ethics_Survey.pdf

Models for Team Effectiveness

Many models have been proposed to better understand how teams work or don’t work.  Below, I describe 4 of these models:

• the GRPI model - 1977
• the Katzenbach and Smith model - 1993
• the Lafasto and Larson model - 2001
• the Lencioni model - 2005

The GRPI Model

This model is one of the oldest team effectiveness models, developed by Rubin, Plovnick, and Fry (1977).  The model consists of four elements: goals, roles, processes and interpersonal relationships.  The team should begin with a goal, define the roles, then the team members work together (processes), seeking to maintain harmonious interpersonal relationships.

• Goals:  The team must be clear about it’s purpose and the results that it desires to achieve.  Lack of goals can lead to conflict.  Considered the most important element of this model.
• Roles: Everyone on the team must know his or her responsibilities, authority, and accountability.  Lack of clarity about roles can also be a major source of conflict.
• Process:  Several processes must be in place for successful team functioning:  communication, methods for decision making, conflict management techniques, procedures and work flow,
• Interpersonal relationships: An environment must be fostered in which team members trust each other, care about each other.

Read more about the GRPI model here.

Katzenbach and Smith Model

The Katzenbach and Smith modelrecognizes the challenges of transitioning from an individualistic mode of working towards a teamwork manner of working. 

 The team can be assessed for 3 outcomes:

• collective work products
• personal growth
• performance results

which are located at the vertices of the triangle.  To achieve these outcomes, the team requires 3 elements:

• skills
• accountability
• committment

The functioning of the team may be assessed as being somewhere along this graph:

• Working group: Team members are functioning with individual accountability, not mutual accountability, and are aware that they are operating as individuals

• Pseudo-team:  Team members believe that they are functioning as a team, yet are still operating at the level of individual accountability.  Performance of a pseudo-team is worse than the performance of a working group.

• Potential Team:  The team members are beginning to function at a level of shared accountability, towards a common goal instead of individual goals.

• Real team:  The team has solidly achieved a common goal and shared accountability.

• High-performing team:  The team members are committed to each other’s personal growth and development.

LaFasto and Larson Model

Lafasto and Larson studied 600 teams and developed a set of five dynamics of teamwork and collaboration.

• team members: do team members have experience, problem-solving ability, openness, supportiveness, action orientation, and a positive personal style?
• team relationships: can team members give and receive feedback?
• team problem-solving:  how focused is the team?  is it a positive climate? is there open communication?
• team leader: does the team leader focus on the goal? ensure a collaborative climate? build confidence? demonstrate sufficient technical know-how? set priorities? manage performance?
• organizational environment: are there helpful management practices, structure and processes, systems?

Lencioni Model

Patrick Lencioni describes his model in a video lecture here.

Each of the 5 dysfunctions identified by Lencioni build upon each other.  The 5 dysfunctions of teams are:

• Absence of Trust - Team members do not possess vulnerability-based trust, cannot communicatet:  apologies, confessions of weakness/inadequacy, compliments, ask for help, accept criticism.  A leader must be able to accept that team members can be more skilled or more knowledgeable.  If a single member of the team does not possess trust, it can weaken to entire team.
• Fear of Conflict - Team members are not able to engage in debate, resulting in poor decisions.
• Lack of Commitment - An environment without open expression of ideas leads to team members not feeling invested in decisions.
• Avoidance of Accountability - Because there is no commitment to a plan of action, team members do not hold other team members to account.
• Inattention to Results - Because they are unaccountable to others, team members think only of themselves.

Summary of the four models

The four models have much in common.  All four models include mention of the relationships between team members, of open communication between them.  All of them make some mention of the clear definition of roles or accountability of team members to each other.

Interestingly, only the LaFasto and Larson model mentions the role of the team leader.  In this model, it is the team leader who clarifies the goal that the team is pursuing.  The team leader fosters a particular climate, which in other models is described as ‘fear of conflict’ or ‘process’, but only LaFasto and Larson’s model suggests that the primary inspiration for the environment rests with a single person.  Their model also suggests that it is the team leader who prioritizes for the team, choosing which actions are more important than others.  Finally, every member of the team is accountable to the team leader, because the leader manages performance.  It appears that the other models are missing the key role of the leader in the team environment.

References

Katzenbach, J. R. (1993). The wisdom of teams: Creating the high-performance organization. Harvard Business Press.

Lafasto, F. and Larson, C.  (2001). When teams work best. Retrieved from https://leadershiphq.files.wordpress.com/2011/02/when-teams-work-best1.pdf.

Quioxte Consulting.  (2011).  GRP Model: Introduction to the GRPI tool.  Retrieved from http://quixoteconsulting.com/News_articles/Topics/grpi.html.

Leaders in a Global context need to understand the impact of culture

Cross-cultural communication

Anthony Beckham is an American serving as a Professor in school of management at a university of South Korea.  He describes some of the challenges of cross-cultural leadership in this video:

https://www.youtube.com/watch?v=4phrLWxXq7A

Beckham highlights the importance of the leader-follower relationship, and suggests that a cultural difference between a leader and followers can complicate the leader’s mission to motivate or influence followers, and to create shared values amongst followers.

In this situation, Beckham believes that a leader must be adaptive and flexible: a leader must learn how to communicate respect to followers and how to communicate ideas with followers in ways that make sense to them.  Beckham emphasizes several tips for communication:

• listening is key, that a leader must
• pick up on non-verbal cues as these are also important means of communication
• asking for clarifcation
• asking good questions

A leader should never appear to value one culture’s values or methods of communication more than another’s.  Beckham suggests that a leader should go beyond tolerance of a culture, instead, he says that a leader should learn to celebrate the beauty and uniqueness of each culture.

Transparent motivations

Carlos Ghosn was born in Brazil but now heads Nissan Motor Corp. in Japan.  He is a celebrity in Japan, and one of the most respected business leaders worldwide.  In the following video, he describes the strategies that he has used in leading in a foreign culture:

http://www.wsj.com/video/leading-in-a-foreign-culture/0C82DC02-5CB3-4332-98D9-1DA297E00247.html

His key message is the following:  be simple and be objective.  He says that a leader in this situation must be unambiguously clear of which direction to take, and that each decision should be explicitly explained so that it is understood not as the product of one’s own culture, but as the most rational choice.

Ghosn’s ideas are relevant not only to leaders working in foreign cultures but also to leaders working with diverse cultures right here at home.  In the article “Ethical School Leadership”, Stefkovich and Begley briefly discuss effective leadership strategies for school leaders working in a climate of diversity:

http://ema.sagepub.com/content/35/2/205.full.pdf+html?ijkey=siZ4tualR4Icg&keytype=ref&siteid=spema

“in our increasingly culturally diverse schools and communities where administrators increasingly sense the need to be accountable for their decisions. As a practical consequence school administrators naturally gravitate towards values grounded in rational consequences and consensus as guides to action and decision making whenever that is possible.”

Leaders should not be seen as making decisions based on their own biases.  Instead, leaders should holdto positions that can be rationally justified to followers.  Logic can cut across cultural boundaries.

Cultural Differences

A comprehensive survey of leaders worldwide was conducted using INSEAD’s Global Executive Leadership Inventory (GELI), which evaluates leaders on 12 dimensions of leadership. 1748 middle and upper level executives were surveyed.  The authors assumed that all leaders would score highly in all 12 categories, however, leaders from Asian countries (termed ‘the East’) scored higher in 4 of the dimensions relative to their Western counterparts:

• Designing and Aligning - how well managers implement company strategy
• Outside Orientation - promote responsiveness to customers, stakeholders, and vendors
• Emotional Intelligence - foster respect and understanding in the workforce
• Resilience to Stress - handle the pressures of the managerial lifestyle

The full study is available here:

http://www.insead.edu/facultyresearch/research/doc.cfm?did=52985

Keeping in mind the leadership models that suggest that a leader must match the environment (Situational, Contingency), I’m drawn to a particular conclusion:  if leaders from the East possess these 4 characteristics in greater degree than their Western counterparts, then perhaps the working environment of the East demands these characteristics more than the West.  The results of this study indicate that Western leaders must be mindful to develop the above characteristics when working in a globalized environment.

Implications for Leadership Theory

Though few leadership theorists imagined the application of their theories in a cross-cultural settings, they all transfer easily into the globalized environment.

Trait theory - perhaps certain traits indicate that one will be a more successful leader in a foreign culture:  adaptability/flexibility, openness, communication skills, interpersonal skills, problem-solving skills

Situational approach - whether in a familiar culture or foreign culture, a leader should adjust his/her leadership style to match the competence and commitment of the followers

Contingency model - in a foreign culture, relational skills may take on a more significant importance

Transformational model - many of the elements of the transformational model are cross-cultural: idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration are all relevant in any culture

References

Agrawal, A. & Rook, C. (2013). Global Leaders in East and West: Do All Global Leaders Lead the Same Way?. Retrieved from http://www.insead.edu/facultyresearch/research/doc.cfm?did=52985.

Ghosn, C. (2011) . Leading in a foreign culture. Retrieved from http://www.wsj.com/video/leading-in-a-foreign-culture/0C82DC02-5CB3-4332-98D9-1DA297E00247.html.

Stefkovich, J., & Begley, P. T. (2007). Ethical School Leadership Defining the Best Interests of Students. Educational Management Administration & Leadership, 35(2), 205-224.  Retrieved from http://ema.sagepub.com/content/35/2/205.full.pdf+html?ijkey=siZ4tualR4Icg&keytype=ref&siteid=spema.

This leadership is vital in 2015 because . . .

Great leadership impacts the moral focus of those who follow, it also inspires a new vision, stimulates intellectual capacity, and supports every individual in the Organization. This leadership is vital in 2015 because . . .

The practice of leadership over the 20th century showed an ugly side to world leaders:  the genocidal actions of Hitler and Stalin in World War II, the actions of US presidents during the Vietnam War and Watergate affair, the actions of Bill Clinton while in office, and the stand of George W. Bush that motivated the Iraq war.

Elie Wiesel was recently asked what type of leadership is necessary in a world that has changed a great deal since he survived the holocaust 70 years ago.  His answer was in the form of wrote an opinion piece for Forbes magazine entitled, “What kind of leaders do we need now.”:  http://www.forbes.com/sites/dovseidman/2014/09/18/what-kind-of-leaders-do-we-need-now-elie-wiesels-answer/

He states that we need ethical leadership, and his justification for this was fascinating:

“some tend to believe that ethics or morality belongs to the “personal” sphere, cordoned off from the “professional” sphere (recalling The Godfather’s famous line “it’s not personal, it’s just business”), the fact is that these two spheres can be no longer kept separate in a world that has gone from connected to interconnected to interdependent.”

He outlines that the increasing interdependence of the world necessitates that a leader’s actions can have a wide-ranging impact, therefore he makes the case for ethical leadership, which in his mind, consists of three components:

• pausing - taking the time to reflect on the consequences of potential actions
• moral reasoning - understanding a situation with empathy
• leading by inspiration, instead of coercion

Wiesel is not a leadership theorist, but a political activist and a professor of the Humanities, yet his ideas are echoed in more formal writings about leadership theory.

Rosabeth Moss Kanter, a professor of Business Administration at Harvard Business School, echoes Wiesel’s idea about the interconnectedness of the world generating challenges for leadership.  She says that globalization has not resulted in a more similar world, as expected in the 1990s, instead, it has resulted in a more complex world for leaders to navigate.

To lead an organization that operates in different contexts and different cultures, a leader cannot have all the answers.  Instead, the leader can set direction, allowing others to lead in the field.   A leader has to live with uncertainty, and has to be willing to make mistakes.

Transformational Leadership

The tenets of transformational leadership:

• idealized influence
• inspirational motivation
• intellectual stimulation
• individual consideration

“Transformational leadership involves attempts by leaders to move followers to higher standards of moral responsibility.... it clearly states that leadership has a moral dimension.” (Northouse, p. 429)  In transformational leadership, part of the leader’s role is to help followers resolve difficult moral situations.

While transformational leadership is perhaps the most well-known leadership theory with an ethical concern as a theme, other leadership theories also place ethics in a even central role.

Servant Leadership

“Servant leaders put followers first… servant leaders are ethical.” (Northouse, 2013, p. 219)

The core of servant leadership is altruism.  This is quite a departure from prior leadership theories that focused on the person with the best characteristics (trait theory), or the most suitable person for the environment (situational theory), or the person who could move people to meet goals (path-goal theory).

The main function of servant leadership is ethical. Robert Greenleaf, saw the leader as someone who fostered equity in an unjust social environment by transferring power to followers.  The end goal of servant leadership is seen to be a better organization, and a better community or society outside of the organization.

Authentic Leadership

Rosabeth Moss Kanter states the importance of authenticity:

“Authenticity definitely matters. Employees, customers, and the public can see very quickly if leaders are not being authentic. It’s not the words that leaders say. It’s not even the words on statements of values. What matters is the kind of conversation that goes on throughout the company.”

A recent leadership theory that posits a strong ethical focus is authentic leadership.  The focus of this approach is trust.  Fostered in an era after all of the leadership let-downs of the 20th century, authentic leadership is seen to exist on an intrapersonal level (a leader who possesses self-knowledge and self-regulation) and interpersonal level (a particular dynamic between the leader and the followers).

Though authentic leadership does not hold the same highly ethical goals as servant leadership, authentic leadership requires an ethical core at its practice.  

Conclusion

The response to a series of leadership crises in the 20th century has been the development of ethically-based leadership theories.  Authentic leadership, in which a leader’s essential quality is trustworthiness, and servant leadership, in which a leader’s goal is to help others, are strategies to improve a world that is seen as increasingly unpredictable and frightening.

“Obstacles are a natural part of accomplishing significant outcomes. A leader deals with obstacles by …”

In my experience, one of the greatest obstacles to leadership is one’s self.  Any number of frailties can get in the way of being an effective leader.  In fact, this way of looking at leadership, that there are certain characteristics that prevent one from being an effective leader, remind me very much of trait theory.

Trait theory

A basic description of trait theory is here:  https://www.youtube.com/watch?v=BoMFwXyg-Dg

While some trait theories are among the oldest leadership theories (e.g. the Great Man theory) and could be discounted in light of more recent leadership theories, other trait theories continue to be relevant in analysis of leadership.  The Five Factor model consists of five traits, comprising the acronym OCEAN:

• Openness to experience
• Conscientiousness
• Extraversion
• Agreeableness
• Neuroticism

Let’s take the Five Factor model as our working example of trait theories.  Four of the five factors are strongly correlated to people’s perceptions of a leader:

Factor	Degree of Correlation to Emergence of a Leader
Openness to experience	.24
Conscientiousness	.33
Extraversion	.33
Agreeableness	.05
Neuroticism	-.24

Judge, Bono, Ilies & Gerhardt, 2002

All five factors are strongly correlated to a leader’s effectiveness:

Factor	Degree of Correlation to Effectiveness of a Leader
Openness to experience	.24
Conscientiousness	.16
Extraversion	.24
Agreeableness	.21
Neuroticism	-.22

Judge, Bono, Ilies & Gerhardt, 2002

A leader can still become a leader without these qualities, and can completely ignore his or her shortcomings, muddling through with difficulty.  Assuming, however, that you want to be the most effective leader you can be, how does one constructively deal with a lack of one or more of the essential qualities of being a leader?

Context Matters

Matching the leader to the environment is one way to deal with a lack of particular leadership skills.  Judge’s 2002 study indicates that not all leadership skills are required for all environments:

Factor	Business	Military	Students
Openness to experience	.23	.06	.28
Conscientiousness	.05	.17	.36
Extraversion	.25	.16	.40
Agreeableness	-.04	-.04	.18
Neuroticism	-.15	-.23	-.27

For example, if you lack openness to experience, you may yet to well in the military, where this does not impact your leadership effectiveness.  If you lack agreeableness, you may be fine in business or military, but not in the classroom.

I have worked with principals who function poorly in community schools, alienating parents or being overly harsh with students, but in the context of being principal of a special program (e-Learning, for example), they have done well.

This is well-described by situational leadership theory, the matching of a leader’s style to the employee’s developmental level plays a great role in that leader’s success.  If the situation requires high-task orientation, but does not require relational skills, such as the military, a leader who lacks agreeableness will do fine.  If, however, a situation requires high relational skills, but less task-orientation, such as a special education classroom, a leader who lacks agreeableness will do poorly.

Being able to put yourself in the right context is important, but not always possible.  What do you do when you find yourself in a leadership situation and you are in over your head?

I’m a leader… Now what? The importance of mentorship.

Many leaders are promoted based on their skill level in a particular area, not necessarily leadership!  For example, a school principal may have an extensive background as a teacher, but no experience or skill as a manager.  These two roles require completely different skill sets.  Obstacles encountered in the new role may have no relation to obstacles in the former role.  An essential component of improving one’s leadership practice may be seeking the services of a mentor.  The following video describes the benefits of mentorship:

https://www.youtube.com/watch?v=VIqSGMxIQKg

Most people do not have a mentor, and upon introspection, realize that they would like one.  However, to accept a mentor, you must admit that you don’t have all the answers.  And for people in leadership roles, that may not be an easy thing to admit!

There may be somebody within your organization who can coach you.  It requires a time commitment (a set appointment every month, for example) and a focused agenda.  However, if this is not available, a more formal mentorship can occur using a leadership consultant.  Many successful leaders are willing to pay high rates for the services of leadership consultants.  Leaders report that consultants help them to improve themselves, help them to keep themselves accountable, and help them develop ideas that they can take back to their organization.

What can a mentor give you?  According to this video, https://www.youtube.com/watch?v=egIFpFLNKdw, a coach or mentor can provide a leader with self-awareness.

Self-awareness: A key aspect of Emotional Intelligence

When you faces obstacles, you may need to change your approach, but changing the way you do things requires being aware of yourself. Self-awareness is essential in improving practice. In the following video, Daniel Goleman describes the components of emotional intelligence:

https://www.youtube.com/watch?v=Y7m9eNoB3NU

Emotional intelligence has four components:

• self-awareness - knowing what we feel and why we’re feeling it
• self-management - handling distressing emotions in an effective way
• empathy - knowing what someone else is feeling
• relationship - putting the above together.

The cornerstone of emotional intelligence that makes the other competencies possible, is self-awareness.  Being able to look in the mirror for an honest appraisal of one’s self is essential in changing the way you do things, and overcoming obstacles.

As Einstein said, “Insanity: doing the same thing over and over again and expecting different results.”