Integrity—we all have it don’t we, or do we?

naughty stepTime to go easy on the banks, argues the head of the CBI. Let’s take bankers “off the naughty step.”

 

How persuasive is this plea in behalf of a much tainted profession? No too convincing say some: “A little longer on the naughty step will benefit the banks” went one recent FT headline.

What one commentator in 2012 graphically dubbed as “a pile up of corporate disgrace” remains a persistent stain on financial services. Remedies continue to be work in progress.

Some years back the Chairman of Lloyds of London demanded “the city must get rid of the banking top brass”. Similarly, admired economist David Blanchflower declared “No British banker is fit to take over Threadneedle Street—and indeed none was, and we acquired a Canadian.

And a succession of new heads of banks, including Barclays and HSBC publicly vowed to “bring back integrity” to the heart of their respective organisations.

Yet integrity or lack of it, remains a key issue in our current era, for both financial services and non-financial organisations. Like “culture” and “ethics”, “integrity” is an elusive aspiration for many leaders and their companies. To put this in perspective, Finance Watch an independent advocate for sound financial reforms has a list of banking misdeeds and the number of entries has just topped 100.

What is it?

There have been numerous attempts to nail down precisely what it means in business to espouse integrity. For example, Hank Paulson, then Chairman and CEO of Goldman Sachs, explained: “I think of a man or woman of integrity as someone who is balanced and complete, with high character. A person of principle.”

What is integrity

 

We also have KPMG’s Integrity surveys from 2000 onwards. These have helped gauge the progress of organisations towards KPMG Integrity surveyembracing integrity in a work setting. Pursuing an ethical approach or “Doing the right thing” at work has tended to focus on a narrow definition of doing right – avoiding corruption and complying with the law. This continues to be the obsession for many in the compliance field.

Metrics handbookFor example, Convercent’s latest publication Compliance Metrics Handbook suggests over two dozen measurable KPIs–Key performance Indicators.

While there’s nothing wrong with these, they divert attention from the more expansive view of workplace integrity. This is one driven not by measurement, important though that is. It’s one that includes universal ethical principles such as respect, fairness, honesty, openness, transparency and so on. 

We might see this as the multi-faceted view of ethics, which is more important that the more narrow legal and regulatory interpretation.  Laws and regulations often lag behind innovative new products. “Is it legal?” as therefore not a reliable indicator as to whether or not something is ethical.

This challenges all those used to working with more explicit compliance rules. To achieve high standards beyond the narrow confines of pure metrics, demands a focus on something more nebulous, such as creating an ethical culture.

Many company leaders claim their organisations have already developed a strong ethical culture. This is particularly so for previous backsliders, such as the banks and other financial institutions such as the insurance industry, still recovering from the PPI rip-offs, or pharma firms re-positioning themselves as servants of society.

Yet most organisations have scope to improve their ethical culture.

For example, not only is ethics seldom actually talked about in companies, but the whole concept of integrity remains stuck in a time warp. For many it simply means being honest. Such an interpretation of integrity was perhaps sufficient for the last century, but not now.

For all their wooliness, integrity and culture are now central to how both organisations and individuals should behave. As the Chartered Insurance Institute explained in a 2014 report “integrity must be in the DNA of each reputable individual and firm operating in the market place.”

Making Sense of Integrity

Two major tasks stand out as central to pursuing integrity in business: leadership and culture.

Ethics-diamondLeadership

Leadership integrity is ultimately about character. In this sense it’s a commitment to specific forms of action—doing what’s right rather than doing things the right way. So for a leader the essential question is: Does integrity show up in your entire performance at work?

For example, do employees see you demonstrating authenticity, honesty, open communications, respect for individuals, building relationships, gaining trust, supporting core values, and walking the talk?

Huntsman

Leadership integrity may mean making a special effort to explore personal behaviour such as:

  • Am I willing to say what I think and risk being wrong?
  • Does this conduct make me a better person?
  • Would I want someone I love to do that?
  • Am I leading by example by taking 100% personal responsibility?
  • Do I tackle crises with integrity?

personal integrity2

Culture                                                         

The second task in pursuing integrity in business concerns the need to create and maintain an ethical business culture—one based on integrity.

Why should an organisation care about integrity and an ethical culture? Ignore the long answer, the short one is: “Because it makes good business sense.” There’s ample evidence confirming that organisations espousing integrity and building a culture to deliver it, perform better than ones that don’t—whether in terms of profits, share value, staff retention, customer satisfaction, or raising capital.

Integrity in an organisation is different to ethical behavior. There are many reasons for acting ethically, including threat of punishment, a promise of rewards, and gaining approval. People with integrity tend to behave ethically even when it’s not always in their own interests.

This applies equally to organisations, which is why so many companies around the world have been re-thinking their ultimate purpose—see for example statement from Novartis CEO on the company’s new mission.

A focus on integrity, rather than just ethical conduct, encourages people to act on principle, and take other people’s interests into account.  This is “doing what’s right even when no one is looking.”

Answering certain questions can guide organisations towards an ethical culture driven by integrity

Integrity QuestionsFor more questions and a fuller review of this issue see: Integrity—are your leaders up to it?

The bottom line about integrity

When asked, almost everyone says they have integrity. Similarly, countless companies use stock phrases such as:

Integrity Matters3

It’s not that these are meaningless. It’s just that who would want to deal with a company without integrity? Why bother? Is this a case of protesting too much? After all, few people want to buy from or work for a company that lies, cheats and acts in unethical ways? As one executive has put it:

“Integrity is a threshold characteristic for our people — if they don’t have it, they aren’t here.”

But reality is less simple. Four common forces may combine to push integrity onto the back burner: the tendency to rationalise; differing definitions of integrity; the need to stay employed; and pressures to deliver

Rationalise

Many people and organisations seem able to convince themselves that almost any actions are based on integrity. Rationalisation occurs when a person or a company does something wrong, yet they manage to convince themselves the action is “not really cheating”, “no big deal”, “part of the price of doing business”. This ability to rationalise undermines the power of integrity to make a real difference to the work scene.

Differing definitions of integrity

Everyone defines integrity differently. Falsifying information to one person for example, might be acceptable business practice to another. Then there are differences in culture. For example in some business cultures people are expected to openly do favours for each other. While in other cultures such favours would be considered bribes.

Economic pressures

People need jobs and have families to support. While reporting misconduct on help lines for example has increased, employee willingness to look the other way and do nothing has also risen.

Sports Direct4

 “Pressure to deliver

Finally there are the pressure to meet business goals, and to “do whatever it takes” to reach them.  The demand for results can lead to “ethical fading”—where a lack of integrity is over-ridden by demands to deliver.

The future of integrity

It’s easy to take integrity for granted. Many otherwise competent leaders, managers and supervisors “dare not speak its name” for fear they’ll be seen as flaky, or insufficiently serious about achieving results.

Like talking about “ethics”, mention the word integrity in many organisations and see the eyes glaze over.  Yet talk to customers and suppliers and others who must do business with the organisation and both ethics and integrity matter a great deal.

While Integrity and innate honesty are critical to business success, there are at least three other essential ingredients according to research by KRW International: 

  • Responsibility
  • Forgiveness
    • Compassion 

The business environment is now evolving faster than ever. A multi-generational workforce is challenging existing workplace structures. Collaboration and transparency are high on many corporate agendas.  These means making sure everyone views and understands integrity in the same way.

There is no short cut to either professionalism or integrity. Both demand constant vigilance and everyone needs to watch out for the dangers ofQuick fix and short termism

Many actions in business are negotiable, integrity is not. For the foreseeable future, integrity will be the lifeblood of the successful organisation–everywhere.

 

SOURCES CLICK HERE

P.Jenkins, CBI head wants UK banks ‘off the naughty step’ , FT August 29, 2016
R. Jenkins, A little longer on then naughty step will benefit banks, FT, 7th September 2016

Harris, John, Politics has to respond to this pile-up of corporate disgrace, Guardian 23rd July 2012

Nelson, John, The City must get rid of the baking top brass, FT, 11th July 2012

Blanchflower, David “No British banker is fit to take over Threadneedle Street, Guardian 18th July 2008.

Covey, The Speed of Trust: The One Thing that Changes Everything, Simon & Schuster, 2008

KPMG, Integrity Survey 2013

Ethical Culture: Building a culture of integrity, CCI 2014

Integrity: Are your leaders up to it, Maynard Leigh Associates, Way Ahead Series, 2009

Ashkenas, Why Integrity Is Never Easy , Harvard Business Review, February 2011

Goodley, Mike Ashley running Sports Direct like Victorian workhouse, Guardian, 22 July 2016

The 4 Leadership Traits that translate to Business Sucess, Fast Company, 2015 

 

 

 

 

Other posts you may like:

Leigh, Andrew, Integrity: How to butter the parsnips and move to real action, December 1st 2015, in www.ethical-leadership.co.uk

Integrity: Are your leaders up to it, Maynard Leigh Associates, Way Ahead Series, 2009

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