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March 2012
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Are organisations today losing their moral fibre?

Posted by: Reena Jamnadas


The resignation of a top executive at the world’s most powerful investment bank, Goldman Sachs, hit headlines across every mainstream newspaper last week. Greg Smith said he quit the Wall Street giant due to a collapse of its “moral fibre”. He described how leadership used to be about ideas, setting an example and doing the right thing. But now, all that is left of the culture is a rigorous focus on money-making, even if adverse to the best interests of their clients and customers.


The pressure is exacerbated by this issue for the government to focus on how to tighten regulations and ensure the investment banking industries of the City and Wall Street are focused appropriately on their customers and treating them fairly.


However, is the real issue here about the urgent need for good leadership?


Business researchers, Naumann and Bennett, described leaders as being ‘climate engineers’; what they convey through their personality, values, beliefs, preferences, and behaviours leaves an imprint on the character of those they lead. Events such as those seen at Goldman Sachs speak not only of the need for effective leadership, but more so, the need for effective and wise leadership where leaders are guided by doing what is right.


At Capp, we have interviewed dozens of top executive leaders from blue-chip companies such as Microsoft, Sony, and O2 that were nominated as being “wise” in their organisations.  Here are some of the characteristics that these wise leaders demonstrated:


Characteristics of Wise Leaders in Blue-Chip Companies


  • Guided by a strong ethical code: No matter how tough the decision, wise leaders are always guided by ‘doing the right thing’ and moreover, they have the integrity and courage to do so. They are by no means evangelical about their ethics, but a strong moral fibre guides their outlook on their vision, strategy and approach which earns them respect in the eyes of their followers.


  • Optimise positive outcomes: Despite their complex environments and pressures, wise leaders ensure that they make decisions that optimise outcomes for themselves, their stakeholders, and external circumstances. If these three are not in alignment,  they are likely to think twice before committing to any action in order to avoid catastrophe.


  • Strong judgement: Wise leaders have an acute sense of judgement. They combine tacit knowledge with experience and insight to make strategic judgements and act accordingly.


  • Leave a legacy: Creating a powerful, long-lasting and positive impact is greatly important to wise leaders, no matter how small the task. Wise leaders create a legacy for their organisations through their vision and decisions that they make, relationships with internal and external stakeholders, and the way that they solve complex problems.


  • Act with purpose: Wise leaders have a deep sense of purpose that underlies everything that they do. For wise leaders, this purpose is related to contributing towards the greater good such as enabling their customers/clients to have a greater quality of life, or realising the best of people across their organisation.


  • Humility: Wise leaders are not ego-centric, but neither are they meek or mild. Often their characters are robust and consistent, but wise leaders always see their contributions as part of a bigger picture. They are always willing to learn from others, accept and learn from their mistakes, and give others credit where credit is due.


  • High self-awareness: A strong awareness of their strengths and weaknesses enables these wise leaders to lead where they need to, and work alongside others to compensate for their weaknesses. Wise leaders are acutely aware of the implications of their behaviour on others, their organisation, and their external environments which enables them to take multiple perspectives.


  • Comfortable with managing uncertainty : Especially in today’s climate of financial pressure, global competition, governmental initiatives, and an evolving economic and ethical climate, wise leaders recognise and effectively manage uncertainty and ambiguity. They are centred in their approach and recognise the need to remain focused no matter what the challenge.


How can we cultivate wise leadership?


As leaders, how can we develop these characteristics in ourselves? A good starting place would be to ask yourself the following questions:


1.       How would you describe your values and ethics? Take time out yourself and with your team to answer this question. Ask yourself how these values and ethics can be embedded in the ways that you work together and with your customers/clients.


2.       What do you pay attention to when making complex decisions? Pay attention to the holistic picture and consider the consequences of decisions on yourself, your stakeholders and external circumstances. Use your networks to develop relationships with other people that can offer you multiple perspectives.


3.       What do you want to be known for? Ask others for feedback on the legacy that you have left so far in your organisation. Are things heading in the right direction? Consider your purpose and assess what opportunities you have to create a powerful legacy through your vision, strategy, relationships with others, and contributions to your organisation.


4.        What are your strengths and weaknesses? Don’t underestimate the power of your strengths. Explore what strengths you can use to help you achieve your goals through your role. Do you have people around you that could help compensate for your weaknesses? To help use your self-awareness, draw a network map and consider how your actions could impact positively or negatively on others.


5.       How do you feel about uncertainty? Reflect on which strengths have helped you to remain centred in uncertain or ambiguous situations in the past, and what decisions you can make in the here and now that will help safeguard your future.


So, developing these characteristics of wise leaders may not be peculiar to just what Goldman Sachs need, but what every organisation is calling out for in today’s complex and challenging environments.

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One Response to Are organisations today losing their moral fibre?

  • USS UNITED STATES Foundation says:

    Yes, they are loosing their moral obligations, and it is all because of greed. THe objective of a business is to serve its customers. This objective has been put on the back shelve if it exists at all. The order of business was Customers, Employees and then the business would take care of itself. Now businesses are more concerned about keeping their stockholders.
    Customers have become expendable along with employees. If we could only get the public to stop supporting those companies that hurt the American public. Lower prices creates demand, creats more jobs, creats more employees, creats more profits, creats a much better healthier productive environment.
    Companies should return to, and practice, the basic Virtues. Codes of ethics, Pride Dignity Respect, work as a team, not just capitalize on strengths but find and strengthen weaknesses and not just get rid of them. Getting rid of weaknesses only makes the company weaker and not stronger. And usually this is due to poor leadership within the company. Companies have too many Bosses and not enough Leaders. Bosses are useless and worthless. They only get in the way of growth and progress of the team. Managements need to practice Leadership and not just make their resume look good or paper their walls with diploma. What sense is learning anything if you cannot apply what you have learned? Let’s get back to basice and share the blame, then we can share the fruits of our labors together.
    I am Ed. Zimmerman, Jr.; Founder President, CEO of the USS UNITED STATES Foundation; First Ship of the United States Navy

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