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Integrity - Are you for sale?

In today's episode, we're continuing our Leading with Character & Competence series with a discussion about integrity. Integrity is the first cornerstone of character and is about being honest, trustworthy, and reliable. It's about doing the right thing even when it's difficult. Integrity is key to building trust and credibility, which are essential for effective leadership.

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Episode Show Notes

In today's episode, we're continuing our Leading with Character & Competence series with a discussion about integrity. Integrity is the first cornerstone of character and is about being honest, trustworthy, and reliable. It's about doing the right thing even when it's difficult. Integrity is key to building trust and credibility, which are essential for effective leadership.

(0:01:27) Integrity is the first cornerstone of character. Tim and Junior use some famous quotes and concepts to define integrity. It's basic honesty. It's consistency and uprightness. It's squaring up to who you are and what you believe. It's adhering to strong moral values even or especially in the face of challenges.


(0:08:43) Are you for sale? Tim tells a story that he mentions in his book, The 4 Stages of Psychological Safety, and explains that without integrity, business ethics go out the window.


(0:17:44) Ethical dilemmas and moral muscle memory. How do you build a moral muscle memory even if bribery or temptation come into play? Tim and Junior share childhood and personal examples of integrity (or the lack thereof) in their own lives.


(0:28:05) The pressure of the disproportionate misfortune. How does Jean Valjean from Les Miserables play into the concept of integrity? Junior shares his philosophy on why some situations make it more difficult to make ethical decisions than others.


(0:34:27) What could integrity cost you? Often this conversation about integrity happens at a pretty surface level, and you think about it just out of principle. But what happens when you really weigh the cost of it all?


(0:44:05) Recommendation: Take responsibility. You're responsible for your values, your attitudes, your beliefs, your desires, your actions, your influence, and the consequences of all of those things. You can't detach those. You have to take responsibility for all of those things. But how do you do it?


(0:51:19) The steel plant and the walkabout. Tim shares a story from his days as plant manager at Geneva Steel where he learned that people are governed from the inside out, through their own restraints, through their own accountability.

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Leading with Character and Competence

Episode Transcript

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0:00:02.6 Producer: Welcome back, Culture by Design listeners. It's Freddy, the producer of the podcast. In today's episode, we're continuing our Leading with Character & Competence series, with the discussion surrounding integrity. If you didn't listen to our previous overview episode, don't worry, you can start here. This week, we're talking about the first cornerstone of character, integrity. Integrity is about being honest, trustworthy and reliable. It's about doing the right thing even when it's difficult. Integrity is key for building trust and credibility, which are essential for effective leadership. Don't worry, this episode is not just about theory, but practical application of this leadership principle. This includes frameworks and principles that you can turn around and begin using today. As always, you can find this episode show notes at leaderfactor.com/podcast. Enjoy today's episode on integrity. Are you for sale? 

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0:01:11.0 Junior: Welcome back everyone to Culture by Design. My name is Junior, and I'm here with Dr. Tim Clark. And today, we'll be discussing the first cornerstone of character, integrity. Tim, how are you? 

0:01:22.2 Tim: Doing great, Junior. How are you doing today? 

0:01:23.9 Junior: I'm doing very well. We're getting an early start today.

0:01:26.1 Tim: Yes, we are.

0:01:27.4 Junior: So, integrity, as I mentioned, the first cornerstone of character. James Q. Wilson said, "We've amputated our public discourse on morality at the knees," and it's an interesting statement, and we hope to do our small part today to reverse that and talk about something that's our minds truly foundational, something that remains when everything else goes away. Journalist and politician, Horace Greeley said, "Fame is a vapor, popularity an accident, riches take wings." I've been thinking about this quote, it's in the book.

0:02:01.5 Tim: It's a good one, isn't it? 

0:02:02.7 Junior: Oh, it's amazing. So when fame vaporizes, which is almost an inevitability, popularity doesn't repeat and your riches fly away, what are you left with? Hopefully, your integrity and your good name. So for all listeners, if you missed last week's episode, you may wanna start there for context. If you prefer to start here, no problem at all. But as a short recap on last week's episode, we talked about character and competence as the two components of leadership. Character is the core, competence as the crust. Both character and competence have four cornerstones. The cornerstones of character are integrity, humility, accountability and courage. Integrity is where it all starts. It's fundamental. If we don't get this right, not much else can go right, especially in the long term. Tim, how important is integrity to you? 

0:02:51.9 Tim: Well, it's foundational. I wanna come back to that quote by Greeley. Fame is a vapor, popularity an accident, riches take wings, and yet isn't that what popular society teaches us? Pursue fame, pursue popularity, pursue riches? So we have what I call a spray-on-tan culture of YOLO narcissism. That's what we're taught to pursue. But in the end, it's very empty. But I want you to think, all the listeners, I want you to think about how dangerous it is if we pursue these things, and in that pursuit, we try to clear the decks of the concepts of right and wrong. Let's disavow those concepts, let's repudiate those concepts. So if we can clear those away, then what are we doing? We're giving ourselves permission to do whatever we want. And maybe at first blush, it sounds pretty good.

0:03:56.2 Tim: Okay, I can go do what I want, but then the fame goes away and the popularity goes away, and the riches take wings, and you're left with what? You're left with yourself. And in the end, that's exactly what happens to all of us in life, we're left with ourselves. And we have to, hopefully, we enjoy our own company, but maybe we don't. If we don't have the integrity, we're gonna have a problem. So what is integrity? Well, I guess one way of saying it, it is being accountable to the unenforceable, which is yourself. It's inside out. It means that you're going to regulate yourself and you're going to live your life according to principle, according to morality, and you're acknowledging that there really is a difference between right and wrong. So there's a bit of a start Junior, but we're gonna go deep into this, aren't we? 

0:04:54.0 Junior: We sure are. So here are a few more angles regarding the definition, what is integrity? It's basic honesty. It's consistency and uprightness. It's squaring up to who you are and what you believe. It's adhering to strong moral values even or especially in the face of challenges. People who have integrity are trustworthy, they're reliable, responsible, they commit to doing the right thing. And as it relates to integrity, one of the things we have to remember is that the most powerful piece of our modeling behavior, and the basis for true and sustained collaboration is integrity. If we don't have integrity as part of our modeling behavior, that becomes very dangerous as a leader for many, many reasons. But you mentioned that it's accountability to the unenforceable, and I think that that's a theme that we're going to pull throughout today's conversation.

0:05:54.3 Junior: Is that it's not a matter of accountability mechanisms. It doesn't matter whether or not you're held accountable. You have to be the accountability mechanism for yourself, and until that transfer of ownership happens, we are not there. And so I think that that's the journey that we all go on as it relates to integrity, is taking more and more and more ownership, relying less and less on the environment and the infrastructure around us, which may exist to a high degree or it may not. And so it's choice by choice, small thing by small thing, taking accountability over time, because at the end of the day, you are left with yourself. So that's really about today's episode, is how do you live, how do you make decisions in a way that you are comfortable with yourself when you are alone in silence? 

0:06:45.8 Tim: Junior, I wanna state a premise that I think it's very important. It's kind of the original position, and that is that human beings come into the world with a pre-installed moral sense. It comes with you. It's original equipment. And now, beyond that, you're going to still have to learn more about integrity, and that's going to require skill, it's going to require vigilance, it's going to require the ability to assess situations. But you come with a pre-installed moral sense and then you have to develop that and you have to apply it. And that's where it becomes a choice. And you'll have choice after choice, after choice as you go through life. As you face ethical conflicts and ethical dilemmas along the way, you will have the opportunity to apply integrity, to apply your sense of morality or not. But I just wanted to state that premise that I strongly believe that you come with that pre-installed equipment. You do have a fundamental sense of what is right and wrong.

0:08:00.0 Junior: And there are forks in the road throughout life all the time, as we progress over time, where we can develop and continue to hone that pre-installed moral sense, or we can beat it down enough times that it stops bothering us as much. And so whether or not we make those decisions to the right or to the left will determine the outcome. And all of these things add up. So the compounding of integrity and the decisions related to integrity, I think is really interesting. It's not this linear path. They compound, I think, for better or for worse. Tim, in the book, there's a story that you mentioned about a 'For Sale' sign. Would you mind sharing that? I really love the story.

0:08:43.3 Tim: Right. So I think it was a few years ago, I was teaching a bunch of Fortune 500 leaders, and I actually brought in a 'For Sale' sign, the kind of sign that you would plant in your front yard if you were gonna sell your home. A big, big sign, and I brought that in. And it was an object lesson obviously, and I asked all of the participants, these were senior leaders at Fortune 500 companies, "Are you for sale?" And I asked it rhetorically, and I wanted them to think about that, reflect on that. And then I said, "Look, if you don't have an ethical creed that goes to your marrow and says some things are not for sale at any price, then you are for sale. You will go to the highest bidder. Think about that. Ponder that. Reflect on that. Do some soul searching about that." And that really hushed the room, and I think people went into some deep reflection over that.

0:09:53.8 Tim: And then we had a wonderful discussion about that, and we talked about the realities of how hard it is, especially when you're in a senior leadership role, to maintain your integrity because it's being challenged, and there's this steady flow of challenges to your integrity. And so unless you're actively applying your sense of right and wrong, you will go to the highest bidder. So that was something that was a powerful lesson.

0:10:27.9 Junior: No, I love that visual of you walking in with a big 'For Sale' sign. But I've been thinking about that and the question, do you have an ethical creed that goes to your marrow? So that's not a soft question. A creed isn't something that you just stumble upon or half-heartedly embrace. A creed is something that you believe deeply. A creed is something by which you live your life, it's a decision-making lens that goes to your marrow. I love that part of the comment. It has to be deep. It can't be surface or fleeting. And so it's not a half-hearted ethical opinion that goes to the skin. An ethical creed that goes to your marrow. So is that something that we think takes a little work or a lot of work? I think it takes a lot of work to really ask ourselves, "How do we wanna live our lives and by what set of principles?" And if you don't go through that work of being really explicit about what you believe, what your creed is, almost by default, that 'For Sale' sign exists.

0:11:37.2 Junior: If you aren't tested, which you will be, if you don't go through that work of creating an ethical creed for yourself, and I'm not saying that you have to write it down, although that probably would be very helpful. If you don't do that, I think you put yourself at a disadvantage, and I think you become more vulnerable, because these tests, as you mentioned, will come. There will be incentive to lie, to cheat, to steal, extort, bribe, indulge, silence, swindle, defraud, scam, evade, exploit. These are the words that you use, and all of those things will be true. The stakes will only get higher. As you progress through your career, as you become more competent, the risks become bigger. And so if you don't have that ethical creed to lean on, I think it becomes much more difficult.

0:12:32.8 Tim: The reality is that you'll be tested in very intense circumstances. The situation is pressurized. Negotiators call it deal heat. You're going to experience a lot of deal heat where there's dial-up intensity and your integrity will be put on the line. That's when the test happens.

0:12:57.8 Junior: That's when the test happens.

0:12:58.2 Tim: It doesn't happen when things are going well and there's no pressure and there's no deal heat, and it's not dialed up intensity. That's not the test. But the test will come and those conditions, you can expect, they're going to come. So that's when everything is put to the test, and that's when you realize how deep your ethical creed goes, your personal Magna Carta, is it really there? That's what's gonna happen. There will be those testing points.

0:13:28.7 Junior: Can I share a couple of my testing points with you, Tim? 

0:13:31.0 Tim: Yeah.

0:13:31.5 Junior: I've learned a lot over time. I've had my own test, we've all had our own tests, and there are a few that stand out to me as I was thinking about this topic. And one of them happened at a burger joint when I was probably very low double digits. Maybe I was 10 or 11. And I remember going to this burger joint with a bunch of my friends, and at this point, we weren't going to burger joints by ourselves, we were accompanied. We had chaperones. So one of my friend's dad was there, he had taken us to this place. And we were all ordering, we ordered together. And, I don't know, there are five or six of us, and he asked for five or six water cups. And I don't remember what happened, but I think they were out of water cups, and so they just gave us the normal cups. So if you've been to places that distinguish between the water cups and the soda cups, often the water cups are white or blue and the soda cups are red.

0:14:22.1 Junior: So handed us a bunch of red cups. And I thought, well, this is a soda cup. So it's not a big deal. They gave it to us anyway. I knew that we had got water though, so I go over to the soda fountain and I get some lemonade or something, and I don't think too much about it. And I go sit down and we start eating and my buddy's dad looks over at me and he says, "Is that water?" And that's all he said. And then we just kept eating. And that was a really impactful thing for me. I remember feeling so bad about that. I felt horrible. And it was really interesting to me, I'm so grateful that he took that approach. He didn't reprimand me, he didn't even say anything, he just asked a question and he knew that that would be enough to prick my conscience. Because when you're 10 years old or 11 years old, you haven't had a lot of opportunity to beat that down very much, and so it'll yell at you if you cross over the line. And I had crossed over the line with just a little thing, and that helped set me up for the future for when the stakes became even higher.

0:15:27.7 Junior: There's another instance that I remember. Here's another one for you. IPod had just come out. And mp3 wasn't really a thing before this, and we had, at this point, CDs and there was very little digital music. And I remember it was either the first or maybe the second generation iPod, and these things started popping up on the internet for peer-to-peer file sharing, and you had LimeWire and Napster.

0:15:55.6 Tim: That's right.

0:15:56.2 Junior: All these pirating sites. And I remember going over to a buddy's house and he had some exorbitant amount of music at the time. Streaming didn't exist. He had like 10,000 songs or something. Like how in the world did you get all this music? Oh my word, I'd never seen a music collection like that. And he said, "Oh, there's this thing that you can use and you can go download all this music, and you're welcome to have all of this." And so I download, and end up over time having these conversations about, "Where did this music actually come from? Is that a legal thing? Did the artists out of the goodness of their heart just decided that they were gonna do charity work and put all their internet up for free on the internet?"

0:16:37.8 Tim: That's right.

0:16:38.8 Junior: But at the time, you look at the alternative, and again, I'm very young, but the alternative was a fortune. At the time, a song was like $1, $2, and so that was the equivalent of $10,000, $20,000, which for me, at the time, may have been a billion dollars. It's an incomprehensible amount of money when you're a young teenager or whatever it was. And so, those things, over time, have been just little turning points where you cross the line or you learn and you shape up and you start deciding, "Okay, at what point am I willing to compromise my ethics? At what point?" Is it for a cup of lemonade, or maybe it's for 10,000 songs, or maybe it becomes a big deal. Maybe it becomes a massive real estate transaction or an equities exchange, maybe... And that continues to compound. So I wanted to call out those two as just little examples in my own life that were opportunities for me to reflect even though I was very young.

0:17:44.3 Tim: And Junior, the little things become the big things. What we're trying to do is we're trying to build moral muscle memory to do the right thing every time, and it doesn't matter if it's a small thing or a big thing, because over time, the small things, you get on a slippery slope and pretty soon you're in trouble with something that's even bigger. I'll give you an example. I'll do a couple of examples. First one takes me back to high school. I had a friend that worked at a ski shop. They sold skis and ski boots and ski equipment, and all of the winter equipment for recreating. And on a weekend once, I was in the car with my friends. Wasn't driving. And they said... They went over... He said he had to get something at the store. They went over to the store where he worked, and it was a Friday night or a Saturday night, and they had vans that would go deliver the equipment to customers.

0:18:46.2 Tim: He had the keys to those vans. And he went and opened one of those vans and the three other guys that I were with, they went and helped themselves to new skis, new boots, new poles, new bindings, new jackets, whatever. They took whatever they wanted out of this van that was full of equipment. And I just sat there, I thought, "You've got to be kidding." And I just decided, and I was thrust... Sometimes you're thrust into a situation and you're not expecting it. I thought we were gonna go over there and he had to take care of something at work or whatever. I've had no idea what was happening. And so here I am in this situation, and I just... I went my own way and said, "I'm not gonna be a part of this." So that was high school.

0:19:40.7 Tim: Now, let's scale up to something a little bit bigger. So one of the ethical dilemmas that I face today in my work and have faced for many years now, is that when I work for a public company, or enter into a contract with a public company that's publicly traded, I become aware of and have access to material information, insider information. And I can see if a company... I can project if a company is going to do well over the next year or so based on their projections, based on their priorities, based on the allocation of their capital, based on what's going on in the market, based on what the competition is doing, I become aware of this information. It would be very easy for me to go into the public markets and to trade in the stock or the equity of some of these companies and no one would ever know it. No one would ever know it if I were to do that as a private citizen.

0:20:48.6 Tim: But I know that once I become aware of material information for a public company, I'm restricted and I can't do that. I look back on several of the organizations that we've worked with over the years, I could have made a lot of money if I would have done a little bit of trading on my own based on my access to and exposure to that material information. And there would be no external control system that would prevent me from doing that, and it would be really nearly impossible to figure that out. So the organs of restraint, what am I being governed by? Rules, laws, the control system? No, it has to come from within. It's inside out. The organ of restraint comes from the inside. It's not the external control environment. Again, it's accountability to the unenforceable. So today, that's just an illustration of what I face, well, pretty much every year, that's a temptation, but it's not a very big temptation because I made the decision long ago that I would never do that.

0:22:07.0 Junior: I appreciate you sharing that, because those are bigger stakes, bigger than a glass of lemonade. So do you feel that... You mentioned that it's not hard, and I wanna drill down on that for a second. So it would seem then that your ability to withstand that increases over time as you reinforce that decision with small decisions. So your ability to resist that today may, to some degree, be dependent on that decision that you made to leave the ski shop all those years ago.

0:22:40.4 Tim: Exactly, it comes back to, it's the lemonade principle, Junior, that you just shared with us. If you can resist the lemonade, if you can make the right choice when the stakes are low, and it becomes your habit, it becomes your way of doing business, it becomes the way you apply your morality, then you'll be able to do that when the stakes are high. I remember in college, I took a class, in a semester class, just on Alexis de Tocqueville, the French noble man that came over to study American democracy in the late 1800s. I took an entire class on this, and he wrote this big book called Democracy in America, and he was a very astute observer of society. And one of the things that he observed in some people is that he said they were untroubled, untroubled by those muddled and incoherent concepts of good and evil.

0:23:48.0 Tim: That's a problem if you're untroubled by that. And he just noticed that some people were untroubled, other people were very troubled, and as a consequence, they were very circumspect about trying to do the right thing. And that got my attention back in college, that some people would be troubled, some people would be untroubled by right and wrong, and so that needs to trouble you. It needs to trouble you and govern your behavior, and govern your choices, even though you're surrounded by a demoralizing society. It needs to trouble you because you have to sweat the small stuff in order to maintain your integrity over time.

0:24:33.1 Junior: You mentioned earlier in the conversation that it's like a muscle, and I've been thinking about that in the last few seconds as you've been talking about Tocqueville, and the difference between looking at integrity as a muscle and looking at it as a creed, and I think that there is something to be said about both. But creed seems to me to be kind of set in stone, and I think that the permanence of that is important. But I love the idea of muscle atrophy, that if you leave a muscle to itself, with no stimulus, what does it do? It atrophies, it goes away, it withers, it dies. And so I think about integrity that way, in that, sweating the small stuff is the stimulus to be able to continually train that muscle over time, so that when the big things come, you can absorb those and you have enough strength in that muscle to withstand, otherwise, you get crushed. And so if you don't sweat the small stuff and you say, "Oh well, when the big stuff comes along, I'll deal with it then," you won't be prepared to deal with it then, and it will likely crush you when the stakes get higher and bigger.

0:25:44.1 Tim: That's really true. Junior, a distinction that I think is important to make based on the conversation that we're having today is we're talking about integrity and having integrity. We're not talking about ethics in the traditional sense. And the reason that I say that is that ethics is a branch of philosophy that likes to ruminate about right and wrong, but here's the interesting part about ethics, as a sub-branch of philosophy, it steadfastly refuses to tell you what is right and wrong. It just gives you different theories about how to think about it. Well, that's not gonna get it done in real life. Do you see the difference? So we have integrity. At some point, you have to put a stake in the ground and you have to say, "This is what I believe and this is what I stand for."

0:26:42.8 Tim: We're not here to just ruminate about notions of what is ethical or not ethical. That's not gonna get it done. At some point, we have to go from theory to practice. We have to go from thinking about things to doing things. We have to apply it. So integrity is an applied discipline. It's not just conceptual. You actually have to go do it and you're gonna be thrust into situations where you have to make a choice, and that's what we're talking about, and that's what makes it difficult and challenging, and you will have, at some point, some crucible experiences in your life where you are forced to make these difficult ethical decisions.

0:27:32.0 Junior: I like the word situation because it is largely situational, and the first thing that we need to do is recognize that we're in a situation. That's the test of integrity. Howard Winkler, who is a manager of ethics and compliance at Southern Company said this, "When an ethical issue arises," or an issue of integrity, you could put that in there, "it does not come gift wrapped with the note that says, 'This is an ethical issue. Prepare to make an ethical decision.' It just comes across as another business problem that needs to be solved."

0:28:05.2 Tim: I like that.

0:28:05.4 Junior: I love that. And then to talk more about situation, some situations make it more difficult to make these decisions than others. And you point out Jean Valjean in the book, and in Les Misérables, he says that he's subject to what he calls "The pressure of disproportionate misfortune," and for those of you who know the story, you know why that's so interesting, and the pressure of his misfortune was heavy, which resulted in a lot of his behavior and ended up in a place that he didn't expect to be. Sir. Walter Scott, the Scottish writer, experienced that same type of pressure. In a part of his life when his publishing house failed, he was buried with debt, and he wrote in his personal journal, "Yet, God knows, I am at sea in the dark, and the vessel leaky." That was one of my favorite quotes from the chapter. I really spent time thinking about this, 'and the vessel leaky'. So picture that, the imagery is amazing to me.

0:29:15.9 Tim: It is.

0:29:16.0 Junior: I'm at sea in the dark, and the vessel leaky, that is the last place you wanna be, in a vessel that leaks at sea in the dark.

0:29:22.5 Tim: Now, can you imagine this, Junior, Sir. Walter Scott is perhaps the greatest Scottish writer of all time. His contributions to literature are staggering, and yet he finds himself later in life in this situation because his publishing houses failing? It's incredible. And he's under this crushing debt, as you say? You can picture yourself in that situation, and it's a tragic situation. Isn't it? 

0:29:55.3 Junior: Absolutely. And I think we can all point to times that were more difficult than others, and we've pointed out some very small things and some big things as well, where things were pressurized and it was more difficult than ever to make the moral choice. So let's talk about integrity on a spectrum. We love to talk about things on spectrums here on the podcast. Don't we? 

0:30:18.2 Tim: Yeah.

0:30:18.5 Junior: And integrity is, like many others, where you get it and you lose it, and I wanted to pull in a tool from some of our other content that I think is relevant here that has really helped me over time, this tool we call the three patterns of deflection, and this is where I think a lot of people go wrong, and a lot of people mess up as it relates to integrity. So there are three patterns of deflection that if you can weed them out of yourself, then I think you'll become a person of higher integrity, and two, if you can identify them in other people, you can spot issues of integrity. The first pattern is blame, or just it's someone else's fault. It's something else's fault. It's the environment's fault. It's just not my fault. Blame. Two is denial. It's not an issue to begin with, or I didn't do it. It's straight up denial. It's not even...

0:31:22.2 Tim: You're not acknowledging.

0:31:24.2 Junior: Exactly, and this is where you talk about the idea of ethics, and I think about cognitive dissonance. We have behavior and we have belief. We can change both of those things, and the easier one to change is beliefs. And so if I just deny that it's an ethical issue to start, then I absolve myself of all subsequent responsibility, and so that one becomes really interesting. Denial, most people think about denial and they think about it in a very harsh way. Like it's so blatant. I wouldn't just deny this thing. Well, maybe you're not denying your behavior, you're denying the principles behind the behavior, whether or not those are right. So I think denial can be especially pernicious even though it seems so blatant and something that we wouldn't deal with often.

0:32:07.2 Junior: And then the third is excuse. There was some extenuating circumstance that led here. So those three, I think, are important to look out for; blame, denial and excuse, and how adept you are at catching yourself in these patterns of deflection, I think, will determine how quickly you can get back on track if you do get off track, and I think it will help you stay on track when you're seeing other people use those three.

0:32:32.9 Tim: With the integrity, Junior, I think it goes back to principle. Integrity is based on the principle of right and wrong, and doing right and wrong. And so I wanna go back to... I wanna point out a statement from Harvey Mansfield, who was a professor at Harvard. He said, "When a choice is without any principle to guide it, those who must make a choice look around for something to replace principle." There has to be some basis, some set of criteria by which we make a choice. Normally, we use a principle. If we can't find a principle, then we'll often just go back to the pursuit of selfish interest, self-interest. Now, think about where that takes you. So if you don't stand for principle, there's simply nothing left to stand on except your own self-interest. And you'll accept...

0:33:38.1 Tim: So this is the way I like to frame it. You will accept the unprincipled gain and reject the principled loss. So let me say that again, you will accept the unprincipled gain and reject the principled loss. Well, that raises the issue that sometimes integrity is going to cost something. It's not going to be free. Are you prepared for that? Are you prepared to pay the cost of integrity if it costs you something? Sometimes it's going to cost something. But if you take the unprincipled gain, then you're not gonna worry about it, but if you want a principled gain instead of an unprincipled gain, then you're going to pay for it, and sometimes it's going to cost something. I just wanna point that out.

0:34:27.5 Junior: Well, let's talk about that for a second. I think it's poignant. What could it cost you? Well, if I look at my own life, it could cost you relationships even. It could cost you grades. You're a student for a lot of years, definitely could cost you grades.

0:34:45.9 Tim: Grades for sure.

0:34:46.3 Junior: It could cost you deals. It could cost you social status and acceptance. It could cost you a whole host of things, and I'm glad that you brought this up because it seems to me that often this conversation about integrity happens at a pretty surface level, and you think about it just out of principle. Oh yeah, that's nice. That's really cute. Yeah, we all wanna have integrity, but you don't understand this situation, what it's gonna cost me. You don't understand what it's like to be in dire straits. And I don't wanna disregard those situations, because as you say, there's a price to be paid for integrity, and sometimes that price is very high, sometimes that price is incredibly high, and we need to be very candid with ourselves about the stakes, and we're not saying that, "Oh yeah, you just do the right thing every time and everything will work out and it will be rosy." Not saying that at all.

0:35:48.8 Tim: Yeah, sometimes it can be very expensive and the situation can be almost dire. What if you get laid off from your job? When you get laid off from your job and you've got a family to provide for, at some point, your integrity is put on trial, and you get desperate and you're trying to figure out what to do. I've been in that situation. I was laid off from my first job when my wife was expecting our first child. It was very, very difficult and we lost our insurance. It was a very difficult situation. So you're put on trial in some of these situations. It goes back to the deal heat, the intensity, the pressure that you feel, it's pretty intense and it's very real. What are you going to do? And some of these situations, the integrity is, it doesn't just cost you something, it's actually very expensive.

0:36:44.7 Junior: Yeah. You talk about the principled choice and what we use in its absence, and you'd mentioned the four moral navigators in the book, and these are four filters or influences we use to make choices. One of them is principles, but there are three others that we often use in its absence. The first is just straight up consequences, gain or pain. If we're using this, we think through a course of action and its subsequent consequences. We try to project, okay, here's the pain, here's the gain associated with this choice. And if the reward is high and the risk is low, we move toward that reward, or maybe the reward is so high and the risk is high, we still move toward that reward. Next, we have rules and laws. We look for rules and laws to apply to a given course of action, and then we allow ourselves to be governed by them.

0:37:40.4 Junior: Well, let me do the third and then make a comment here. The third is peer influence and social norms. So this we use as guidance from those around us. We look at the social norms and the expectations of society or the organization we belong to, and we ask, "Would this be okay? Would this align with the influence of the organization or the norms of the organization?" And the fourth, as we mentioned, is principles and values. We follow principles implanted in us. We act out of a conviction of what's right and wrong, regardless of the pressure. And these things are often at odds. So principles would often conflict with consequences because you may have high reward, low risk, but then it doesn't pass the principle filter. You may be legal, but you run it through the principle filter and it doesn't pass, or you run it through social norms, and you get the green lights and the check marks, but you try to pass that through principles and it doesn't pass. So what does that mean? It means that you could, in theory, pass all of the other three. It's low risk, high reward, it's legal, and everybody's okay with it.

0:38:53.8 Tim: That's right.

0:38:54.4 Junior: Right? 

0:38:55.2 Tim: Yeah, you've gone through all three filters, all three navigators, and you're good to go. You got thumbs up, thumbs up, thumbs up, you're ready to go. It's fine.

0:39:03.0 Junior: So if you just bypass the fourth filter, you're good to go. But that's the most important one. And what also may be true is that it passes principles and morals as a filter and then gets fat red X's across the other three where it's low reward, high risk, and yeah, maybe not red on legal, but red on peer influence and social norms, and everyone's like, "Absolutely not. This is not the way we do things around here." But that's the principle of choice. And so the principle to gain that phrase, the way that you said that before, that, I'm gonna have to think about that a little bit more. I'm gonna have to think about that a little bit more and unpack it for myself. I think that's worthy of some serious introspection.

0:39:57.6 Tim: Junior, it makes me, think about this statement from the great Russian novelist, Aleksandr Solzhenitsyn. He said that, in many of our societies, we've created an atmosphere of moral mediocrity, that really gets my attention, moral mediocrity, paralyzing man's noblest impulses. Well, that's number three. That's the third filter. The pure influence and the social norm. So if you live and breathe in a society that's demoralized, or at least that's been... That has moved to an atmosphere of moral mediocrity, and that's the society that you inhabit, that you live in, that you interact with others in every day, that has an influence on you. It's influencing you every day. It's hard to counteract that constantly when it's beating on you and it's influencing you, and you're marinating in that kind of environment. So I just want to acknowledge the reality and the difficulty of living and working in a moral environment of demoralization, mediocrity, where we see those patterns of deflection, denial, blame, and excuse going on constantly. It's not easy to live and work in that environment.

0:41:25.7 Junior: Yeah. So moral mediocrity is an interesting thing to think about because when we often talk about average or we talk about mediocre, what are we talking about as it relates to people? We're often talking about skills. We're often talking about competence. And so thinking about performance along a moral spectrum is something that I think needs to be talked about more, and something we need to weigh more heavily. Because in our evaluation of people and their performance, when we're looking to hire, fire and promote, it's often too little of the equation. It's not as quantifiable. It may not be as obvious, but when I think about that for myself, like what's my aspiration? Like wow, my aspiration is to be highly skilled. My aspiration is to be a high performer. I want to have a lot of contribution.

0:42:18.8 Junior: And it makes me think that in that same breath, I need to remind myself that I want to be a high performer as it pertains to character and competence. That both of those things need to be part of the aspiration. Because you could be, as we've talked about previously, highly skilled and morally unskilled, which can be a dangerous combination. So developing that through similar intention, I think, is something worth thinking about. And then the next thing I wanted to say is just a revision on what I said previously about getting three red Xs and that you might not get three red X's and the second being legal. I need to revise that because it's plausible that the rule itself or the law itself is a breach of integrity. And there may be times in life where a rule, like rule following in itself is not an act of integrity. That sometimes the basis of those rules needs to be challenged.

0:43:21.0 Junior: So I'm not preaching anarchy here. But I do want to just revise that because it is a plausible scenario in which maybe the social norms have developed to a point where they've instituted some rules. It could be just a little social group, it could be a small community or what have you. But integrity is integrity regardless of the infrastructure that's surrounding it. So I just wanted to call that out.

0:43:48.2 Tim: That's very true, Junior. If you look at the history of even like Civil Rights in this nation, some of the laws that have been on the books and some of the laws that we enacted and imposed and enforced, unbelievable, as you look back. That's very true.

0:44:05.6 Junior: Okay. So this section has been encouragement to build a choice making system based on principles and moral values. So our next recommendation is to take responsibility. So this is antithetical to blame, denial, an excuse. This is, I reject those things and I am absorbing responsibility. It has to come from you at some point, as we talked about in the beginning. We need to transfer that ownership, and we can't delegate that. You can't do that. You have a quote in the book from Peggy Noonan. I love this. You can't rent a strong moral sense. You can't rent one. It's not something that you can go and just grab for a few days and then take back. You are responsible. You're responsible for your values, your attitudes, your beliefs, your desires, your actions, your influence, and the consequences of all of those things. You can't detach those. You have to take responsibility for all of those things. And if you don't do it, no one's gonna do that for you. That's certainly true. No one will take the responsibility for integrity for you or on your behalf, and you can't go and rent it. What do you think about that, Tim? 

0:45:18.6 Tim: I feel very strongly about that. In fact, I wanna read a paragraph about that because I tried to frame this in a compelling way. So this is the way that I would frame it. Because we look for excuses, but ultimately, we have to take responsibility and we can't delegate or abdicate this responsibility to make moral choices. So here's the quote. "Maybe your parents did not inculcate in you the importance of values, maybe. Maybe you've had role models who taught you to subcontract your moral reflections. Maybe you had a boss whose only permanent loyalty was to himself. Maybe the mass media taught you to gorge on power and prophets. Maybe greed doled your senses. Maybe you had a philosophy professor who taught you there are no fixed principles. Maybe you know people who cheat and prosper. Maybe you are disoriented by the morally malignant air you breathe. Maybe you hold your nose as you look at a Rogues' Gallery of retrograde characters and the long freak show that was the 20th century's world leadership, you look around at who leads the nations of the world. Maybe."

0:46:44.4 Tim: But you cannot be neutral. Rocks and trees are neutral, not people. You can't wash your hands and be a philosopher. As writer, activist and Holocaust survivor, Elie Wiesel insisted, we must take sides. So we have to take sides. It may be a small little ethical decision that you have to do this or that in the privacy of your own life, but you have to take sides. You have to make a choice, and then you have to carry out your choice. That's just the reality for you and me in this world. Sometimes our choices are public. Most of the time they're private. But nevertheless, we have to make those choices.

0:47:27.8 Junior: Taking sides, you have to do it. And I think about that quote from Elie Wiesel, I can't remember the name of his most famous book is called The Night? 

0:47:38.7 Tim: Night. Night.

0:47:39.4 Junior: Night.

0:47:40.2 Tim: Yeah.

0:47:41.2 Junior: Man, you think about...

0:47:42.6 Tim: You remember that? 

0:47:43.7 Junior: Yeah, you think about that book and that context, and you think about taking sides, and wow. If anyone can take a position and say that you need to take sides, gotta be up there. Okay. So next, there's this principle that we want to go into for a second, that what's predictable is preventable. And so we wanna share some time series data from law enforcement that I think this is an interesting citation, no pun intended, that documents officer wrongdoing over the last 50 years, and there's a pattern. So with that as kind of the lens, do we feel like law enforcement officers begin with low or high commitment to their professional ethics? What do you think? When you're first starting out, you're with all this, you're bright-eyed, you're bushy-tailed, I'm gonna go in, and do law enforcement. And you think most of them think about professional ethics, high commitment, high commitment.

0:48:48.0 Tim: Extremely high.

0:48:49.8 Junior: That's the fundamental premise of my association with this whole enterprise. Like, yeah, that's what I wanna do. I wanna uphold that in myself. I wanna uphold that in the community, right? 

0:49:02.2 Tim: Yeah.

0:49:02.5 Junior: But what we find is that commitment to professional ethics often declines over time. Then often, we gotta be careful, we're gonna make some generalizations, but there are certainly some standout pieces of data from that time series data of 50 years. And there are three, what you call the three scorpions. And they are first, lying, stealing, or cheating, two, substance abuse, and three, sexual misconduct. So I want you to dive into this for a second, Tim, and with the principle being that what's predictable is preventable. So if we look at the time series data here and we see that these are the three scorpions, it's some very practical data that we can use to say, well, if I don't wanna find myself in a compromised situation, then I should probably stay away from these three things if they are the dominant pattern.

0:50:03.7 Tim: Exactly. Well, as you say, Junior, we're talking about time series data over a 50 year period of time that documents officer wrongdoing across the nation. And the empirical patterns are very clear in these three areas. Year after year after year, the three scorpions are the three scorpions. The patterns of misconduct in these three areas are the same year after year, 50 years worth of data. And so to your point, what's predictable is preventable, this is totally predictable. These three categories, these three scorpions, the likelihood that you'll be stung for ethical misconduct, where is it? Is it somewhere that I can't predict? No, we know exactly where it is. The three areas where you are likely to be stung are these three areas; lying, stealing, and cheating, number one, substance abuse, number two, sexual misconduct, number three. So you are fully aware of this every day, every week, every month, every year. It's all right in front of us. That's pretty good to know.

0:51:19.2 Junior: It's very good to know. You can know that you stay away from those things and your risk goes down pretty significantly. So that is exactly the principle. Prevent what's predictable. And then lastly, never make the first justification. And to illustrate this story, Tim, I'm wondering if you would share the story about the steel plant and your walkabout.

0:51:46.9 Tim: My walkabout? 

0:51:47.6 Junior: If you remember that story.

[laughter]

0:51:51.4 Tim: Years ago, when I was the plant manager at Geneva Steel, I would go out on walkabouts. We ran 24/7, 365 days a year except for plant downturns. And so I would go out on walkabouts throughout the plant on a regular basis during swing shift and during graveyard shift and at night. And one night I was out, it was in the middle of the night, I think it was about 2:00 in the morning, and I was at what we call the hot end, which is the part of the plant where you have the coke ovens, and then you have the blast furnaces, and then you have the steel making operations. And I wandered over to the central maintenance break room at 2:00 in the morning. I'm doing my rounds. I've got this big mag flashlight in my hands, you know those big metal flashlights that are like 2 feet long.

0:52:48.0 Tim: And I'm just going around saying hello to people, interacting, chatting. And I walk into the break room and it's dark, no lights on. And I thought "Oh, this is funny." This is a big break room, central maintenance area. So I feel around for the light switch. I find it, I flip on the light. What do you think I see? Spread out before me are at least 30 workers on cots sound asleep. Now these are workers that are being paid. They are on graveyard shift. They're being paid and they are sleeping on the job. And so I still remember thinking, "Man, what end of the flashlight do I use?" No, I'm kidding. But I was just not happy. And so woke them all up. They were all reprimanded. They were all given time off without pay. And I think that the most interesting thing about it, Junior, was that out of those 30 or so employees that were written up and reprimanded and given time off without pay, I received several letters back, and emails back from some of those workers.

0:54:12.3 Tim: And some of them wrote back and said, "Hey, I'm really sorry. I shouldn't have done that. I was on the clock, on the job. I'm supposed to be working. I understand that. I'm really sorry." Others filed grievances and wanted to go through the grievance procedure and fight it. No acknowledgement, no attempt to take personal responsibility. So there was this interesting division among the employees that were caught sleeping. Very few took responsibility. Others were in denial, would not take responsibility, wanted to fight it. I just found that very interesting. It's an experience that has stayed with me, a formative experience to see how people's brains work and how that pre-installed moral sense works, and how they are governed from the inside out, through their own restraints, through their own accountability or not. So that was the experience, Junior.

0:55:23.3 Junior: I love that story. Is I'm thinking about that story, I'm trying to reverse engineer all the way back and think about how they got there, because it seems very unlikely to me that they all looked around and said, "Hey, all 30 of you guys, you wanna just lie down and sleep?" I don't think that that's how it happened. I think that probably one person kind of leaned against the wall, started snoozing and okay, that's fine. And then after a little while, maybe he lied down. Okay. And then maybe someone else decided to take a seat too. And slowly but surely, the tolerance increased. Slowly but surely, that became normalized. Then there was the first person that went and made a makeshift cot, and then the second person, and before you know it, over time, you have the entire shift there asleep. And so these things don't happen all at once. It's nipping it in the bud when we see, okay, we're starting to veer.

0:56:30.7 Junior: And that first justification is often what is so dangerous. It's at that point where it's most easy to get back on track. And so implementing our own restraint system, implementing our own accountability mechanisms, is so important for those things that seem justifiable, that are so small. And so there are several things about this story that are interesting to me. People taking accountability and some people still shirking even after being caught is really interesting. The fact that the first person made the first justification is interesting, and then just how quickly that behavior became normalized. And so such a fascinating case study to me that I think we can learn so much from. So those are some of the things that we can do.

0:57:19.2 Junior: So to conclude integrity, it's foundational. If we don't have it, we're ungrounded, we're unpredictable. It's essential that we develop integrity to have a strong foundation on which to build everything else. So to do that, we have those three recommendations. One, build a decision making system based on principles and morals. Two, take personal responsibility for your choices in their consequences. And three, don't make the first justification and sweat the small stuff, I would say, in the same breath. If we do those three things, I think that we have a much higher likelihood of developing integrity over time. Really building that muscle so that when the time comes, because it will come, when the situation is pressurized, the deal heat is high, you can withstand the heat, you can take the heat, and you can make the ethical, the moral decision and improve your integrity over time. Tim, what do you think? Last thoughts.

0:58:23.1 Tim: Do you remember the company Enron and how they just collapsed, they imploded? 

0:58:28.8 Junior: Yeah.

0:58:29.3 Tim: I remember reading that at one point, they said that they had temporarily suspended their ethical policy. And I thought, what does that mean, a temporary suspension of your ethical policy? So today, if you're to think about an epitaph for Enron, what would that epitaph say? It would say died of self-inflicted wounds. That's what it would say.

0:58:57.8 Junior: Died of suspended ethics.

0:59:00.6 Tim: Yeah, suspended ethics and self-inflicted wounds. Now, that applies to us at a personal level too. We can see the collapse at an organizational level when something like that happens and there are multiple points of failure and it becomes collusive and it's a conspiracy internally. Pretty amazing how that works. Pretty amazing how other members of an organization will fall in and adopt the moral stance of others. That's alarming in and of itself, and we could do another episode about that. But just think about that. Think about how many organizations, think about how many individuals die, so to speak, of self-inflicted wounds. That's what we want to avoid. And the good news is that it's totally avoidable, going back to the fundamental concept of integrity, that it comes from the inside out. It is restraint. The organs of restraint come from the inside. It's accountability to the unenforceable.

1:00:06.8 Tim: And when you live that way, you really have peace of conscience and you really can look yourself in the mirror, and you really have the credibility to just lead by example, a quiet example. And when it comes down to a junior, if you think about what people and organizations do, what do we do? We make and we keep promises. This is what we do. It all comes back to making and keeping promises, personal and organizational. You think about the strength of a brand and the strength of a brand promise that an organization communicates to the public, it all comes back...

1:00:51.3 Junior: I love that.

1:00:51.8 Tim: To making and keeping promises.

1:00:54.4 Junior: Well, to us and to everyone, be careful about the promises you make, and when you make one, keep it. So thanks for listening. Thanks for your time. Thanks for your attention. We appreciate you very much. We appreciate the work that you do in the world. The world needs this. The world needs integrity. The world needs people like you to go out and make the next best decision. We're excited for next week's episode on humility, so please tune in. You can always reach out to us at leaderfactor.com. We appreciate your likes, your reviews, and your shares. If you found value in today's episode, leave us a review and share it with someone you feel might find it valuable.

[music]

1:01:36.6 Producer: Hey, culture by Design listeners, this is the end of today's episode. You can find all the important links from today's episode at leaderfactor.com/podcast. And if you've found today's episode helpful and useful in any way, please share with a friend and leave a review. If you'd like to learn more about Leader Factor and what we do, then please visit us at leaderfactor.com. Lastly, if you'd like to give any feedback to the Culture by Design Podcast or even request a topic from Tim and Junior, then reach out to us at info@leaderfactor.com, or find and tag us on LinkedIn. Thanks again for listening and making culture something you do by design, not by default.

[music]

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