Front Page Failure vs. Inside Page Success

In Friday’s Wall Street Journal two leaders were featured. Across the top of the front-page headlines, American Express CEO John Thain's ousted from Bank of America was emblazoned. On page B3 lower left hand corner, Howard Schultz, CEO of Starbucks, was forgoing the annual bonus along with other executives. What a contrast with Thain’s recent demand for $10 million bonus and spending $1.22 million for his office renovation. Schultz not only did not earn a bonus based on recent performance, he has not had a salary increase in five years. Certainly, Schultz is well paid. However, his pay incentives are based on his ability to perform. Why wasn’t the news of Schultz’s accountability emblazoned across the front of the Wall Street Journal? Accountability and responsibility are character traits that Americans want to see.

If we want to change our thinking and attitudes, the positive character traits and ethical behaviors of CEOs, Members of Congress, and other leaders need to be hailed. I know, bad news and personal moral shortcomings make news and sell papers. However, there appears to be a sense of aurora of fame, glamour for being unethical and demonstrating hubris. Thain has demonstrated no shame in asking for what he perceived he deserved for failure of ethical leadership and critical thinking.

Where is the sacrifice? Where is accountability? Abuse of power and of the people’s money isn’t only in corporate America. A lack of sacrifice is pervasive in small towns, small businesses, and non-profits. The small private Beaufort Academy, Beaufort, South Carolina is laying off teachers based on personalities and keeping the top heavy administration in tact without any salary reductions while simultaneously telling parents that their children’s education will be better than ever. Not only was administration drinking the Kool-Aid, they were trying to dispense it to the parents. Why is it that administration, executive management, and other leadership positions do not take care of those for whom they are responsible? These people are more concerned about their image and short-term personal ambitions than the long-term progress of Beaufort Academy's vision and the needs of students, parents, and teachers. The moral objective should focus on what we can do to save as many jobs as possible, personal sacrifices included. Where is authentic leadership? Why not hail leaders who do what is right?

The Ethics of Selfishness: Egoism

The History Channel began 2009 with the showing of Seven Deadly Sins – pride, envy, lust, anger, gluttony, sloth, and greed . Perhaps the History Channel is reminding us of past excesses in 2008 and gives warning for 2009. Most poignant for our times in the series was the sin of greed. I am reminded of a Cumming, GA housing development company, Wellstone Communities, with whom I did consulting work for in 2006. My role was to provide quality of life initiatives for families in the new Bluffton, South Carolina community. Wellstone Communities was selling new homes like hotcakes to qualified and unqualified buyers. After briefing the new Wellstone chief executive officer about the initiatives to improve people’s quality of life, he quipped to me, “I don’t give a damn about people. We are here to make as much money as possible.” At that moment, my role in helping people ended. This proclaimed Christian company’s tagline of building community and families had ceased and money had become their god. It is January 2009 and Wellstone has completed bankruptcy hearings. First United Bank and Trust Company in Texas is suing the Wellstone corporate officers for $50,000,000.00. Perhaps, Earl’s law of karma, from the TV show My Name is Earl, has come full circle for them.

We have seen the greed of homeowners lying about their income and assets to buy homes. Mortgage lenders have approved loans for unqualified people and people with no income. Investment banks bought bundled mortgage loan packages (good and many bad loans). Congress thwarted lending restrictions on Fannie Mae and Freddie Mac loans for poor applicants. Now there is the expectation that government will bailout many debtors such as banks, auto industry, foreign companies, etc., with little consequence and hardly any accountability. Even pornography publisher Larry Flynt and Girls Gone Wild founder Joe Francis have asked Congress for a 5 billion dollar bailout saying they feel the financial pinch. For this epoch, the prevailing zeitgeist is egoism, acting in one’s own self-interest.

Some argue that bailouts are necessary to save our economy. But does it enable the irresponsible behavior of poor financial management? Others argue to allow the free market economy to run its course regardless of the consequences. The strongest and most innovative will survive like pruning a tree. Both strategies, which are polar opposites, could be devastating to the American quality of life. This is a complex high-risk financial venture. It appears that the focus is how the government can ease the financial pain of Americans, thus escaping our ethic of responsibility. Is the problem about money or is it about moral values? Should our national, corporate, and local leaders be reflective on moral accountability instead of pointing the finger? Do financiers have the courage to examine their motives? Regardless of the financial fix to our current economic problems, who is heralding the moral fix to the root causes of this debacle or will we just continue down the primrose path?

Tom Creely, Ph.D.
Assistant Professor of Leadership