I’ve been talking about the morality and ethics of being a corporate executive and manager for quite a few years, and have blogged about it on my different sites more than once too (most recently addressing the topic office romances). So when I heard about the upcoming book Moral Intelligence: Enhancing Business Performance and Leadership Success I promptly called Wharton Business Press and arranged for a review copy.
Here’s the good news: this is a really good book! The authors have done an admirable job of discussing contemporary executive moral lapses (the book starts with George Kline, a VC convicted of insider trading and fined $5.25 million by the courts, for example) without getting righteous or preachy.
The main thing I didn’t like about the book, frankly, is that the authors felt the need to identify yet another type of intelligence. First we had IQ, the ostensibly objective intelligence quotient, then emotional intelligence, and now we have to worry about moral intelligence? Next we’ll be measuring empathy, as suggested in Blade Runner.
I’ll let the authors explain though. Here’s their definition:
Moral intelligence is “the mental capacity to determine how universal human principles should be applied to our values, goals and actions.” In the simplest terms, moral intelligence is the ability to differentiate right from wrong as defined by universal principles. Universal principles are those beliefs about human conduct that are common to all cultures around the world. Thus, we believe they apply to all people, regardless of gender, ethnicity, religious belief, or location on the globe.
You can see the challenge of writing a book of this nature, as summarized in that paragraph. How do you avoid being idealistic? How can you talk about “universal human principles” when we’re all far too aware of the never-ending stream of atrocities and crimes groups impose on each other?
Further, corporations have two masters too: the primary requirement that they make money for their shareholders (which, in a capitalistic system, is job #1) and the requirement that they act in a manner that’s congruent with the values and beliefs of their particular marketplace. For example, the manager of a gift shop in a historic church cannot use the same value system and make the same moral decisions as the manager of a pagan bookstore. Or can they?
Authors Doug Lennick and Fred Kiel address this by talking about the need for leaders to have a strong moral compass, something that I strongly resonate with personally. As they say: “We offer this book as a roadmap for leaders to find and follow their moral compasses… We are convinced that leaders who follow their moral compasses will find that it is the right thing for their business as well. This book is not about telling you what is right or wrong.”
For this book, the authors interviewed an interesting array of leaders, a group that I haven’t seen mentioned in other leadership and business books. Out of the over 100 execs, the names that stand out to me are Paul Clayton, CEO of Jamba Juice, Douglas Baker, CEO of Ecolab, Inc., David Risher, former SVP at Amazon.com and Tom Schinke, Managing VP at Thrivent Financial for Lutherans. Interestingly, there was zero overlap with the celebrity executives who are frequently profiled in business publications. Maybe there’s a lesson there, too…
The chapter on Moral Intelligence for Entrepreneurs might be the most interesting in the book. They propose the rather startling position that “Entrepreneurs who want to succeed must master not only their business challenges, but must align their businesses with the principles of integrity, responsibility, compassion and forgiveness.”
I can’t think of a better way to wrap up this review. This is a thoughtful, engaging book on a topic upon which far too few business leaders are mindful. To the detriment of their companies and, most importantly, to our society overall.
Moral Intelligence: Enhancing Business Performance and Leadership Success, by Doug Lennick and Fred Kiel, Wharton Business Press, 2005.
The purpose of business is only to first and always serve a customer and nothing else. Any business that follows that credo will always be plenty moral and ethical and whatever. Fortune 500 companies, and their emulators, and their enablers, will always have silly “ethical” problems because in practice they exist to perpetuate themselves first and not serve their customers first. It’s the easily identifiable pattern that repeats in all these big and small business scandals.
Well, I can tell you that in business school, we didn’t learn that the purpose of a business is to serve the customer. In fact, following that logic, Tom, I could imagine quite immoral companies and executives – for example, a company that supplied outfits to a local Klan organization. By your logic, if their customers are happy, they’re doing well and are perforce moral and ethical. But obviously, they wouldn’t be…
Well, I can tell you that nobody learns anything in business school – except maybe bribery and nitpicking, and only someone who thinks they have would seriously attempt to use “the Klan” as an example. The KLAN! Geez that’s pathetic, Dave. Besides… the Klan has a right to buy costumes just like anyone else. It’s a legal organization – such as it is, just like the NAACP – would you refuse to sell the NAACP sheets because YOU didn’t like them? Is it more ethical to sell these legal groups goods or refuse them? The courts decided long ago. Try again but use an outlawed organization as an ex.. Obviously, I meant a normal individual as your customer and not some off the wall political-wacko-group. Sheesh.
Ah, well, Tom, how do you really feel about it? Btw, we studied Harley-Davidson in business school, but not the Klan, you’re right. 🙂
But Tom, you’re ignoring that some of the CEOs listed run businesses where part of “serv[ing] the customer and nothing else” is holding to a high moral and ethical standard, e.g. Jamba Juice and Thrivent. I think it’s telling that the authors didn’t include WalMart’s senior leadership, for example; they certainly try to “serve a customer and nothing else”, but not everyone would consider them either moral or ethical.
Paul, examination of specific instances usually reveals that the action taken wasn’t honestly in the interest of the customer. They will always claim it was but it’s not so. It will have been for the bottom line – or the CEO’s ego, or branding or positioning, or share price or that new corporate jet or some football metaphor someone decided was a great strategy. Actually, what usually happens is they develop the idea that “what’s good for GM is good for America.” When it’s the opposite that’s true.
Interesting exchange on this topic. I don’t completely agree with either of you (Dave or Tom), but that’s okay, too.
BTW, have you seen the recent piece comparing Costco and Wal-Mart by Steven Greenhouse in the July 17 NYT? Interesting perspective in which Costco CEO bucks Wall Street analysts’ take that he pays his people too much. He argues that it’s actually financially beneficial for the company (and shareholders, too) in the long run by reducing turnover and increasing quality of service. Your thoughts?
Provided Costco is consistent and it demonstrably works for them – generously compensating employees is as effective a way as any to deal with them. Besides, happy employees means return customers. Especially when they are in direct contact with customers and they have decision making capacity that reflects on the overall corporation.
The opposite approach, paying them minimum for a minimal service job that doesn’t require initiative, works too.
As long as the employee clearly knows policy in either company they can stay or go as it suits their individual talents and career goals.