My Moral Compass

One of my goals in life is to become an effective business leader.  An effective leader is someone with vision, intelligence, integrity, and the ability to motivate others to do good work.  Leaders are responsible for making tough decisions every day, and must consider the needs of employees, board members, other stakeholders, customers, and members of their communities.  Therefore, it is essential for leaders to have a set of personal rules to help guide their actions.  They must understand their own moral and ethical values and be able to apply them in their work.  This set of values can serve as a compass to guide their decision-making and behavior, especially when they deal with pressure and competing priorities.

In this paper I will present my Moral Compass that I plan to use throughout my business career.  I will describe how my Moral Compass aligns with my Wisdom Tradition and the ethical strategies I plan to adopt as a business leader.  I will also present some ethical challenges I have faced, and evaluate the characteristics of one effective and one ineffective business leader.  Analyzing my Moral Compass should help me to succeed in business while also being an ethical person.

My Moral Compass

I believe the foundation for my Moral Compass comes from my family.  I was raised by an oceanographer and a psychologist in a culturally diverse suburb of the nation’s capital.  This upbringing helped me to establish my core values, which include the importance of honesty, respect for others, fairness, responsibility, kindness, and stewardship of the environment. Growing up as an only child, I also learned the value of friendship and helping others who didn’t have the advantages I had.  My parents helped me to learn the satisfaction of volunteering, and I enjoyed working with children who were being treated for cancer at NIH and regularly cleaning up litter on the Anacostia River.  I was fortunate to make friends from many different backgrounds, teaching me to value hearing the ideas and interests of people who came from different cultural, religious, and other groups. My family was also involved in many sports and outdoor activities so I now value good health and being physically fit.

Although I am not strongly religious, I spent many years going to Sunday School and consider myself a spiritual person.  I believe in following the Ten Commandments, and most importantly, I regularly use the Golden Rule in making my decisions.  I have a strong sense of family and make every effort to support family members.  My parents also contributed to my sense of optimism and desire to make positive social change.  Many of my idols growing up were political activists and environmental leaders. I also had a strong interest in being an entrepreneur and I dreamed of creating businesses that would improve the environment.  After working for non-profits and the U.S. Senate, I decided that business was the area where I could make the biggest impact.  However, I was also very aware of the many business scandals and knew it was essential for me to develop and follow a code of personal ethics.

I have developed and refined my moral values as I’ve gained more experience and responsibility in my work and personal life. In my adult years, I have tried to evaluate my actions and check them against my moral values.  I do this not only to gain peace of mind, but also to make sure that the image I portray to others reflects who I think I am.  I’m lucky to have very blunt friends who will let me know when I am acting out of character and an honest wife who lets me know when my behavior does not match my ideals.  I also engage in conversations with my bosses and co-workers to gauge how my actions are perceived by them.

In order to stay true to my Moral Compass, I have begun keeping a record of my moral challenges. This journal helps me to identify and express my values and to examine the ways in which they guide my judgments.  In the future, this journal will also help me to analyze the short and long term implications of my decisions, especially as they relate to being a good corporate citizen.

Moral Purpose and Duties of Leadership

The Wisdom Tradition honors what is good and right in humanity and the world.  I believe that ethical principles should support a wisdom tradition, and that business leaders should try to make changes that benefit both their companies and the larger society.  Albert Einstein said, “The ideals which have always shone before me and filled me with the joy of living are goodness, beauty, and truth. To make a goal of comfort or happiness has never appealed to me; a system of ethics built on this basis would be sufficient only for a herd of cattle.” I agree with Einstein. Ethical business leaders should not be focused only on wealth and profit, but should also focus on treating their employees and customers well, making environmentally wise business decisions, and contributing to their communities.  Corporate citizenship and social responsibility are important and should be considered in all business decisions.  A company is not ethical if it sells a product with obvious defects and then attempts to make up for it by making a large gift to a hospital.

As an ethical business leader, my Moral Compass would direct me to take the following steps in running my business.  First, it is important to always be honest and tell the truth in any business situation. Honesty is essential to have the trust of employees, investors, stakeholders, and customers. I could not feel good about myself if I cheated, lied, or hurt other people to get ahead.  I also believe that you lose your reputation and good employees if you are not honest and truthful.

Second, I believe that if a leader is going to have any followers, it is important to treat employees well.  My Moral Compass would direct me to encourage and respect the ideas of my employees, and to insure that they received good benefits when they worked for me.  My own strong family values have made me understand that employees should have time for their families, as well as work.  I also understand that companies benefit from hiring people from different backgrounds who have different ideas.  Good leaders listen to these ideas and evaluate their employees’ performance fairly, showing no favoritism.  They should also provide opportunities for their employees to grow and take on more challenging work.

Third, I think good business leaders must be responsible for all of the decisions they make and be accountable for their mistakes.  Even when leaders follow all the laws, they will face some situations where there are competing priorities and they make poor decisions.  Then my Moral Compass would direct me to admit my mistake, review how it happened, and try to correct it. My goal would be to move forward and not make the same mistake again.

Fourth, I believe good business leaders should be inspiring.  I would apply my value of optimism to creating a positive vision for my company.  I think it is important for leaders to recognize the achievements of others and to value experimentation and change. My Moral Compass would guide me to recognize the achievements of others and not take credit for other people’s work.

Fifth, I think that good business leaders should make environmentally sound business decisions and contribute benefits to their surrounding communities.  My Moral Compass would direct me to consider the environmental and social impacts of the actions taken by my company.  My values motivate me to develop products and services with low environmental impacts.  I also recognize the value of connecting with the community by having my business contribute education, technology assistance, and volunteer services to schools and community projects.  By demonstrating social responsibility, my work would align with the values of my Wisdom Tradition.

Application of My Moral Compass to Ethical Challenges

In my current job working for a small company, I have had opportunities to use and reflect on my Moral Compass.  Two situations presented ethical challenges.  The first came early in my career after I had just joined my market research company.  Moving from a large firm to a company where I was the seventh employee, I was unfamiliar with some issues that entrepreneurs may overlook as they are growing their businesses.  In this situation, I was eager to update one of the company’s current tabulation software packages with a more recent version on the market.  When I called the software developer, I was surprised to discover that he had no licensing information for our company.  I understood that my company could have continued to use software that they never paid for to create revenue-generating reports.  Being new to the company, I was unfamiliar with the budget and did not even know if the business was breaking even.

Ethically I knew it was wrong to be profiting from a product that you have not legally acquired.  I made a recommendation to my boss that we be honest in telling the software company that we did not have a license and then attempt to purchase one.  My suggestion was not well received by the partners, and they seemed mildly irritated that I had put them in a situation where the company’s ethics might be questioned.  As a new employee, I wanted them to think I was a valuable worker so this situation also caused me to feel uncomfortable.  Still, I felt that we should be honest and responsible in our dealings, so I stressed that buying the license would not only be the right thing to do, but would also enable them to create more state-of-the-art reports.  The partners did make the purchase and eventually everyone was pleased with the new and more efficient version of the software. This challenge helped me affirm the importance of following my Moral Compass, even in the face of initial opposition from company leaders.

While I took a strong ethical position in this situation involving my employers, I must admit that there was another case where I compromised my values.  I was working on a pro-bono project involving 25 nonprofits that had submitted lists of donors to receive email surveys. One of those nonprofits had submitted a list, but then asked us to hold it back for their further review. Unfortunately, an error was made and I sent out the survey to donors from all 25 groups. I caught the error immediately after it occurred, but I did not volunteer this information to my boss or the nonprofit. I was embarrassed about my mistake, and I thought the nonprofit would approve their list later in the day so no harm would be done.

However, throughout the afternoon, my Moral Compass was alerting me that I was not being honest and truthful.  I knew it was unethical to withhold information that could possibly hurt our relationship with our client.  Here I was in a situation where my actions could not only harm my own credibility but also the reputation of my company as a whole.  As I was trying to figure out the best way to report my error, the client discovered that the survey had been sent and expressed their disappointment.  This situation taught me the importance of sticking with my ethical values and being open, honest, and accountable for my mistakes. I worked many extra hours during the following month to try to restore my reputation and convince others that I deserved their trust.

Analysis of Morally Effective and Ineffective Leaders

In working to become an effective business leader, I know I can learn from the examples of others.  One business leader who I greatly admire, and who is widely recognized for ethical business practices, is Yvon Chouinard.  Chouinard is the founder of Patagonia and Chouinard Equipment (now Black Diamond).  Chouinard began his business to produce high quality climbing equipment that he was using himself.  As demand for his products grew, Chouinard hired his friends to help him carry out his vision.  I respect him for the management and environmental principles that he has made the core of Patagonia.

Chouinard understands the importance of valuing and respecting his employees.  Rather than leading in a hierarchical system, he encourages his employees’ growth, development, and freedom.  At times, he practices “management by absence,” taking trips to test his products so that his employees will develop as leaders in their own right.  This management style has also allowed him to create the famous policy of “let my people go surfing,” which allows employees to go surfing, play volleyball or enjoy other outdoor activities during their lunch break.  This policy encourages his employees to be independent thinkers and to enjoy working for Patagonia.  These leadership behaviors earn him respect and loyalty.

Chouinard is a leader who is passionate about promoting environmental stewardship. For example, his business uses recycled materials that cut down the energy required for production by 75%. He also recognizes the importance of giving back to the community.  Chouinard developed the “1% for the Planet” campaign which is an alliance of companies that donate 1% of annual sales to nonprofit environmental organizations.  Throughout his career, Chouinard has been guided by his moral compass and wisdom tradition.  Many of his values are summarized on his website, including:  lead an examined life, clean up our own act, do our penance, support civil democracy, and influence other companies.  His example has taught me the importance of inspiring leadership, treating employees well, making environmentally sound business decisions, and being a generous corporate citizen.

In contrast to Yvon Chouinard, other business leaders fail because they do not follow ethical principles.  One example of a morally ineffective leader is Katsuhiko Kawasoe, the former President of Mitsubishi Motors.  After working his way up the Mitsubishi corporate ladder, he was appointed president of the company in 1997.  Prior to his appointment, Mitsubishi had been found guilty of many fraudulent and cover-up practices in its automotive divisions. These cover-ups were life-threatening because they involved withholding information about automobile defects from customers.  Although Kawasoe promised to clean things up, Mitsubishi failed to clean up the fraud between 1997 and 2000, and the cover-ups spread further into the truck division.  Kawasoe resigned in disgrace in 2000.  He and other former executives were arrested and charged with professional negligence related to a fatal accident caused by a known defect in one of the Mitsubishi models.

Mitsubishi is a giant conglomerate in Japan with many industries and holdings.  It would be a tough job for any leader to take control over such a large company.  Some reports said that Kawasoe’s insider status made it difficult for him to develop and carry out his vision. However, because the problems were clear when he began his appointment, he should have used his moral compass to insist on change.  He should have taken strong, firm action to protect his customers and the reputation of the company.  Instead, he apparently conspired with other executives in several cover-ups and made profit more important than ethical behavior. Kawasoe’s case shows the importance of being open, honest, truthful, and accountable in every business situation. Business leaders should do what they know is right to protect their customers and to maintain their good reputation.

In my future business career, I know that I can learn from my own ethical challenges and the examples of other leaders.  I recognize the importance of developing and maintaining my Moral Compass, and using that compass to guide my business decisions.  With this tool, I will work to become a morally effective business leader.