To Be Honest, Lead with the Power of Truth, Justice and Purpose By Ron A. Carucci
Recommendation
Organizational and leadership development expert Ron Carucci believes truth, justice and accountability are in short supply. In response, he offers a simple but profound formula for boosting corporate credibility. He outlines how to mold a corporate culture of honesty, integrity and inclusiveness. Carucci concedes that the process is demanding, and it will require you to confront uncomfortable issues. However, if you execute it well, you’ll gain a purpose-driven, high-performing organization that prizes truth and accountability.
Take-Aways
- Everyone searches for purpose, meaning and truth.
- Purpose and meaning matter for corporations as well as individuals.
- Honesty is always the best policy.
- Your identity depends on your actions, not your rhetoric.
- Accountability is a precious commodity.
- Rooting out injustice requires personal commitment.
- Empathetic listening is a crucial element of leadership.
- Cultures that prioritize collective success honor candid feedback.
To Be Honest Book Summary
Everyone searches for purpose, meaning and truth.
In the summer of 2019, 181 members of the Business Roundtable, a group of CEOs from America’s leading organizations, amended its statement of purpose for corporations. In the new amendment, the CEOs agreed to:
- Strive for exceptional customer service.
- Support employees through monetary and training initiatives.
- Practice honesty and integrity with suppliers.
- Partner with surrounding communities.
- Deliver value for stakeholders.
Business Europe, an advocacy association representing 35 European countries, adopted a similar approach that year, emphasizing “prosperity, people and planet.” Recent dramatic events underscore the importance of these objectives. In response to the COVID-19 crisis, many businesses have demonstrated heightened empathy and understanding toward their workers, customers and communities.
In the United States, George Floyd’s murder and the civil unrest that followed prompted companies to pledge to address racial injustice. Whether they follow through is still an open question. Public skepticism continues to mount concerning the reliability and truthfulness of information from the media, politicians and other once-credible authority figures.
Purpose and meaning matter for corporations as well as individuals.
From 1999 to 2000, purpose-driven companies outperformed their counterparts on the NASDAQ and NYSE by 100%. According to an Insights 2020 study of roughly 60 countries, more than 83% of organizations that exceed revenue growth expectations connect their activities to their brands’ purpose. Employees who find their work meaningful are more productive and happier, less likely to change jobs, and prepared to sacrifice up to roughly 25% of their future income for meaningful employment. Around 75% of consumers feel a stronger bond to purpose-driven businesses.
“When it comes to purpose, you can’t ‘fake it ‘til you make it.’ You either mean it or you don’t, and if you don’t, people will see right through it.”
Purpose motivates employees to serve a greater good. Employees believe an organization with a reputation for justice will act responsibly and fairly. Truth requires candid communication, including addressing difficult or uncomfortable issues straightforwardly.
Honesty requires commitment, hard work and practice. You may have to change established organizational biases that favored certain individuals. Those who gained preferential treatment may rail against a new system, but a level playing field is essential for providing everyone opportunities to succeed. Explore the circumstances that create deception and discrimination in your company. Building trust among your workforce requires practicing transparency and acknowledging your shortcomings.
Honesty is always the best policy.
When it comes to mental and physical well-being, honesty is the best policy. Honest people experience less illness, less worry and less depression. They enjoy better relationships. The world’s healthiest countries are the most honest, according to the Bloomberg Health Index and university research. For example, Switzerland ranks first in honesty and sixth in health. Norway is second in both categories. China, India and Russia are the least honest and most depressed nations.
Essentially honest people will, over time, act dishonestly if they are exposed to conditions that foster such behavior. That kind of mistrust can damage profitability. Accenture, the global consulting firm, found that 54% of the 7,000 companies it sampled had experienced a trust crisis within the previous two years. Transgressions such as defective products, financial improprieties and data breaches cost these organizations $180 billion.
The Edelman Trust Barometer, the giant PR firm’s annual worldwide study of corporate trust, indicates growing skepticism concerning trust and fairness. The 2020 survey of roughly 34,000 employees and citizens shows that 56% believe capitalism is more destructive than it is helpful. Nearly 75% sense an increased level of injustice globally, while 57% are skeptical of information they receive from the media.
“As workplaces and communities, we must learn to treat one another and one another’s contributions with dignity and esteem.”
Yet approximately 75% of respondents feel that businesses can make money while serving their communities. Fully 73% of employees wish their companies would give them a chance to affect society’s future.
Hope is the bridge between aspiration and the disappointments of reality. Hope is the antidote for an estimated 100 million US employees who feel they are just going through the motions at work and who feel disengaged and uninspired. Hope is the vehicle for enabling organizations and leaders to deliver what they promise.
Passion, perseverance and faith are the components of hope, which people cling to during times of adversity. University of Florida researchers found that loss of hope can anger employees and motivate them to sabotage their employers. Organizations that dash their employees’ hope by reneging on their promises can expect to lose their best people.
Your identity depends on your actions, not your rhetoric.
People are three times more likely to be truthful and upright when they work for organizations whose actions match their principles and objectives. Saying one thing but doing another creates a dishonest environment. Vision statements and catchy slogans are meaningless without commitment and execution. A 2014 study of 500 Australian employees revealed that only 20% of employees found their firms’ values and purpose statements inspiring. Half couldn’t identify their companies’ values or missions.
In a Gallup study, fewer than one-third of employees believed in their companies’ values, while only 23% believed those values applied to their jobs.
Shortly after Indra Nooyi was named CEO of PepsiCo in 2006, she initiated changes that included making healthier products, improving access to clean water in underdeveloped nations, strengthening Pepsi’s environmental commitment and empowering females worldwide. She wanted the company to make a difference in the world while generating profit.
Nooyi hired Mayo Clinic endocrinologist Mehmood Khan as her chief science officer and head of research and development. He brought in scientists from various specialties to work on reducing sugar, fat and salt in Pepsi’s products. The company replaced its packaging with environmentally friendly materials, reduced waste and used more renewable energy.
“While transforming a global company to be more purpose-driven may be difficult, it is entirely possible.”
Consumers overwhelmingly prefer to support organizations that commit to improving quality of life. A study of 28 companies over 17 years found that mission-driven organizations grew by 1,681% in comparison with the S&P 500 average of 118%. Employees and consumers expect companies to honor their commitments and uphold the lofty standards to which they allegedly aspire. In 2015, Barron’s rated Wells Fargo seventh on its list of most-respected companies. But two years later, the banking giant paid $185 million in fines after roughly 5,000 employees opened fake accounts for unwitting customers. Wells Fargo exemplified misalignment between corporate professed values and actual behavior.
Accountability is a precious commodity.
Businesses need to define and implement real accountability. A 2015 study indicated that more than 80% of managers and employees believe accountability is problematic in their firms. Instead of improving performance, many accountability practices typically reinforce employees’ expectations of blame, shame and judgment. Few employees breathlessly anticipate performance evaluations or monthly check-ins with their supervisors.
“I honestly don’t know why I work as hard as I do. My boss doesn’t have a clue what I do or how hard I work. I fill out the stupid performance appraisal forms for him at the end of the year, he signs them and sends them on to HR. And then we start all over.”
In a 2017 Gallup report, only half of the respondents fully understood what their firms expected of them and only 26% believed their supervisors were clear about their priorities and reinforced them.
Accountability is necessary. But the employee evaluation processes that experts have designed for uniformity and consistency overlooked a critical component: each employee’s individuality and unique contribution. If your priority is fairness and dignity, your accountability system requires authentic, respectful relationships between leaders and employees.
Successful accountability systems can have a remarkable impact on self-esteem and productivity. Employees feel their employers value them more when their managers give them accurate assessments, choose their words carefully and empathetically, and acknowledge each employee’s individual traits. Managers have the power to build up or tear down their employees’ dignity.
Microsoft once focused its traditional performance evaluations on each person’s contribution, but it found that this approach perpetuated a culture of individualism and competitiveness. Now, the company’s evaluations account for employees’ collaborative abilities and their willingness to seek help from their colleagues and to support them.
Rooting out injustice requires personal commitment.
When Ed Townley made the transition from CFO of Cabot Creamery to CEO, he needed to satisfy the board’s mandate for honesty and integrity. He realized he would have to fire team members who hadn’t invested in the company’s culture. He discovered two pivotal leaders were stealing from the company by using fraudulent equipment-purchasing schemes. Though he could have only fired them, Townley made a strong statement by prosecuting them for their crimes. He also met with 300 angry farmers who did not understand why company leaders hadn’t known about the fraud.
“If something unjust is happening within your view, and you believe it’s unacceptable, then you have to act.”
Townley knew that shaping the environment he desired depended on a nonnegotiable ethical stance. For credibility, he had to demonstrate his commitment to this change. He realized that even a hint of employee misconduct would be unacceptable. For example, he fired a senior manager who gifted his family $300 worth of the company’s products for Christmas. Over time, Townley built Cabot into one of the dairy industry’s most respected companies.
Leaders must not be shy about applying the power of their positions. One reason newly promoted leaders fail is their reluctance to exert influence. They may not want to appear heavy-handed, but hesitating to make critical decisions harms organizations.
Leaders evaluating organizational injustice should determine:
- Do any team members feel deprived of the opportunity to demonstrate their talents or broaden their skills?
- Does any group feel disenfranchised or unheard?
- Do certain employees or teams complain about being “set up to fail”? If so, why?
- Does anyone use bullying tactics such as disrespect, criticism and manipulation?
Empathetic listening is a crucial element of leadership.
Leaders make many important decisions. They often have to deliver controversial or unpleasant news. If that task falls to you, make sure people fully comprehend exactly what you are saying. Listen to their feedback without judging or dismissing their concerns. Be empathetic, though you don’t have to concur or take action.
“Whether you lead a department of 20 or a company of 20,000, the spate of daily decisions and standing meetings you face can be exacting.”
If you conduct or take part in regularly scheduled meetings, soliciting anonymous feedback from attendees can help you evaluate your effectiveness. Do participants understand the scope of your authority and of theirs? Do they share opinions freely and disagree respectfully? Does everyone practice empathy? Are your meetings productive? If not, do you have too many participants, do you follow your agenda, and are you transparent with information, or do you intentionally hold back?
Cultures that prioritize collective success honor candid feedback.
Employees may be reluctant to speak up for fear of retaliation. They may doubt that saying their piece is worth the trouble. To counter their reluctance, leaders must foster a psychologically safe environment that encourages employees to speak their minds. Even so, people often won’t discuss obvious problems, even in workplaces that support candid exchanges. For example, an employee may observe an issue with a colleague in another department, but might feel it’s none of his or her business, or that an appropriate supervisor will address the problem.
“Your job as a leader is to de-risk truth telling so that people don’t fear the risk of doing it.”
In cultures that believe in collective effort, leaders encourage employees to be respectful, but to share their insights about others who may be struggling. Highly functional teams do this through a formal feedback process. One team member will raise a challenge. The others will ask questions to understand the issue. The group offers ideas and advice. This kind of system ensures cooperation and protects everyone’s feelings.
About the Author
Ron A. Carucci is co-founder and managing partner of the executive leadership consulting firm Navalent. He has written or co-written eight books, and contributes to Harvard Business Review and Forbes.