Lisa Murton Beets

Friday, 24 November 2006 19:00

Ethics and values in leadership

Leadership and management go hand-in-hand. An effectively led company must also have an effective management team.

“A company that has strong leadership but weak management can survive — as can a company that has strong management and weak leadership — but the best companies excel in both areas,” says Jerry Hoag, executive director of The Leadership Center at UTD, which is part of The University of Texas at Dallas School of Management. The classic example of strong leadership and weak management is perhaps the entrepreneur who successfully starts and builds a company, but then risks failure as the company grows to some size and management becomes critical.

According to Hoag, seven principles of leadership are critical for effectively leading and managing any organization. And practicing these seven builds the eighth: trust.

Smart Business recently spoke to Hoag about what leaders can do to ensure their organizations have effective leadership and good ethical footing.

What does it take to be a great leader?

First, leaders must want to lead, and they must want it passionately. Leadership takes time, energy, intense focus and constant thought. It is hard work. You have to know yourself and be able to honestly assess your strengths and weaknesses.

The second principle is to assemble the right leadership/management team. You need to assess your own limitations and find others who are strong in those areas for the team.

Next, great leaders need to develop a clear vision and strategy. You have to know where the organization is headed, and the followers have to understand their role and how it fits specifically into the overall vision and strategy. This is a key leadership component.

Importantly, leaders must communicate effectively and excessively. This is the fourth key ingredient of leadership. Say what you mean and mean what you say. Say it clearly, over and over again. Many

CEOs suffer from isolation. Combat this by understanding the people you’re leading. Walk the halls and work alongside of them — relating with them goes a long way in building trust.

How do ethics and values fit in?

The fifth principle of leadership embodies ethics and values. Leaders need to clearly establish and embed ethics and values into their organizations. Ethics and values are the building blocks of an organization’s culture, and they require constant vigilance and commitment. The leader needs to keep a strong hold on what’s going on. This is hard work and doesn’t always make the leader popular, but it’s necessary. Even temporary lapses in ethics can destroy trust and bring an organization to its knees.

Companies that get into trouble seem to do so in small steps. Essentially, people want to do the right thing. But competitive pressures to meet quarterly projections, sales goals and other objectives can be so extreme that they overtake personal morals. People find themselves rationalizing, ‘moving something here ... moving something there,’ adapting a more liberal accounting methodology, for example.

The sixth important principle is execution. An effective leadership team manages and implements its strategy consistently and unrelentingly.

What is the most critical ingredient for long-term, effective leadership?

This is the seventh principle — humility. A leader is there to serve, just as the janitor serves. If your ego gets in front, you’re in trouble.

A humble leader hires ‘up’ — hence a better team. In addition, a humble leader is more open to learning.

Leaders who have their egos behind them tend to externalize criticism. By externalizing the criticism, they resist becoming defensive and evaluate the criticism objectively and fairly. They put the needs of the organization before their personal needs.

You mention the final ingredient is trust. Explain.

You cannot lead effectively, long term, without trust. Nothing is more devastating than having the senior team viewed as unethical.

Leaders build trust through their firm commitment to ethics and values, and living that commitment day in and day out. When people in a company have to ask, ‘Is this legal,’ that’s a red flag. And even if something is legal, the real question is, ‘Is it right?’ Doing the right thing in context with the company’s ethical values will go a long way in keeping trust intact.

How can leaders improve?

It takes courage to analyze one’s weaknesses and make a real commitment to improve upon them. Change doesn’t happen overnight. It takes time, and new behaviors require changing habits, internalizing change, and applying it. It’s a process that can take months, and — in many cases — years.

JERRY HOAG is executive director of The Leadership Center at The University of Texas at Dallas (UTD). Reach him at (972) 883-4785 or jhoag@utdallas.edu.

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