06 Jun 2011  Research & Ideas

Why Leaders Lose Their Way

Dominique Strauss-Kahn is just the latest in a string of high-profile leaders making the perp walk. What went wrong, and how can we learn from it? Professor Bill George discusses how powerful people lose their moral bearings. To stay grounded executives must prepare themselves to confront enormous complexities and pressures.

 

In recent months several high-level leaders have mysteriously lost their way. Dominique Strauss-Kahn, former head of the International Monetary Fund and a leading French politician, was arraigned on charges of sexual assault. Before that David Sokol, rumored to be Warren Buffett's successor, was forced to resign for trading in Lubrizol stock prior to recommending that Berkshire Hathaway purchase the company. Examples abound of other recent failures:

  • Hewlett-Packard CEO Mark Hurd resigned for submitting false expense reports concerning his relationship with a contractor.
  • US Senator John Ensign (R-NV) resigned after covering up an extramarital affair with monetary payoffs.
  • Lee B. Farkas, former chairman of giant mortgage lender Taylor, Bean & Whitaker, in April was found guilty for his role in one of the largest bank fraud schemes in American history.

These talented leaders were highly successful in their respective fields and at the peak of their careers. This makes their behavior especially perplexing, raising questions about what caused them to lose their way:

  • Why do leaders known for integrity and leadership engage in unethical activities?
  • Why do they risk great careers and unblemished reputations for such ephemeral gains?
  • Do they think they won't get caught or believe their elevated status puts them above the law?
  • Was this the first time they did something inappropriate, or have they been on the slippery slope for years?

In these ongoing revelations, the media, politicians, and the general public frequently characterize these leaders as bad people, even calling them evil. Simplistic notions of good and bad only cloud our understanding of why good leaders lose their way, and how this could happen to any of us.

Leaders who lose their way are not necessarily bad people; rather, they lose their moral bearings, often yielding to seductions in their paths. Very few people go into leadership roles to cheat or do evil, yet we all have the capacity for actions we deeply regret unless we stay grounded.

Self-reflection: a path to leadership development

Before anyone takes on a leadership role, they should ask themselves, "Why do I want to lead?" and "What's the purpose of my leadership?" These questions are simple to ask, but finding the real answers may take decades. If the honest answers are power, prestige, and money, leaders are at risk of relying on external gratification for fulfillment. There is nothing wrong with desiring these outward symbols as long as they are combined with a deeper desire to serve something greater than oneself.

Leaders whose goal is the quest for power over others, unlimited wealth, or the fame that comes with success tend to look to others to gain satisfaction, and often appear self-centered and egotistical. They start to believe their own press. As leaders of institutions, they eventually believe the institution cannot succeed without them.

The leadership trap

While most people value fair compensation for their accomplishments, few leaders start out seeking only money, power, and prestige. Along the way, the rewards—bonus checks, newspaper articles, perks, and stock appreciation—fuel increasing desires for more.

This creates a deep desire to keep it going, often driven by desires to overcome narcissistic wounds from childhood. Many times, this desire is so strong that leaders breach the ethical standards that previously governed their conduct, which can be bizarre and even illegal.

Very few people go into leadership to cheat or do evil.

As Novartis chairman Daniel Vasella (HBS PMD 57) told Fortune magazine, "for many of us the idea of being a successful manager—leading the company from peak to peak, delivering the goods quarter by quarter—is an intoxicating one. It is a pattern of celebration leading to belief, leading to distortion. When you achieve good results… you are typically celebrated, and you begin to believe that the figure at the center of all that champagne-toasting is yourself."

When leaders focus on external gratification instead of inner satisfaction, they lose their grounding. Often they reject the honest critic who speaks truth to power. Instead, they surround themselves with sycophants who tell them what they want to hear. Over time, they are unable to engage in honest dialogue; others learn not to confront them with reality.

The dark side of leadership

Many leaders get to the top by imposing their will on others, even destroying people standing in their way. When they reach the top, they may be paranoid that others are trying to knock them off their pedestal. Sometimes they develop an impostor complex, caused by deep insecurities that they aren't good enough and may be unmasked.

To prove they aren't impostors, they drive so hard for perfection that they are incapable of acknowledging their failures. When confronted by them, they convince themselves and others that these problems are neither their fault nor their responsibility. Or they look for scapegoats to blame for their problems. Using their power, charisma, and communications skills, they force people to accept these distortions, causing entire organizations to lose touch with reality.

At this stage leaders are vulnerable to making big mistakes, such as violating the law or putting their organizations' existence at risk. Their distortions convince them they are doing nothing wrong, or they rationalize that their deviations are acceptable to achieve a greater good.

During the financial crisis, Lehman CEO Richard Fuld refused to recognize that Lehman was undercapitalized. His denial turned balance sheet misjudgments into catastrophe for the entire financial system. Fuld persistently rejected advice to seek added capital, deluding himself into thinking the federal government would bail him out. When the crisis hit, he had run out of options other than bankruptcy.

It's lonely at the top, because leaders know they are ultimately responsible for the lives and fortunes of people. If they fail, many get deeply hurt. They often deny the burdens and loneliness, becoming incapable of facing reality. They shut down their inner voice, because it is too painful to confront or even acknowledge; it may, however, appear in their dreams as they try to resolve conflicts rustling around inside their heads.

Meanwhile, their work lives and personal lives get out of balance. They lose touch with those closest to them̬their spouses, children, and best friends—or co-opt them with their points of view. Eventually, they lose their capacity to think logically about important issues.

Values-centered leadership

Leading is high stress work. There is no way to avoid the constant challenges of being responsible for people, organizations, outcomes, and uncertainties in the environment. Leaders who move up have greater freedom to control their destinies, but also experience increased pressure and seduction.

Leaders can avoid these pitfalls by devoting themselves to personal development that cultivates their inner compass, or True North. This requires reframing their leadership from being heroes to beingservants of the people they lead. This process requires thought and introspection because many people get into leadership roles in response to their ego needs. It enables them to transition from seeking external gratification to finding internal satisfaction by making meaningful contributions through their leadership.

Maintaining their equilibrium amid this stress requires discipline. Some people practice meditation or yoga to relieve stress, while others find solace in prayer or taking long runs or walks. Still others find relief through laughter, music, television, sporting events, and reading. Their choices don't matter, as long as they relieve stress and enable them to think clearly about work and personal issues.

A system to support values-centered leadership

The reality is that people cannot stay grounded by themselves. Leaders depend on people closest to them to stay centered. They should seek out people who influence them in profound ways and stay connected to them. Often their spouse or partner knows them best. They aren't impressed by titles, prestige, or wealth accumulation; instead, they worry that these outward symbols may be causing the loss of authenticity.

Spouses and partners can't carry this entire burden though. We need mentors to advise us when facing difficult decisions. Reliable mentors are entirely honest and straight with us, defining reality and developing action plans.

In addition, intimate support groups like the True North Groups, with whom people can share their life experiences, hopes, fears, and challenges, are invaluable. Members of our True North Group aren't impressed by external success, but care enough about us as human beings and as leaders to confront us when we aren't being honest with ourselves.

As Senator Ensign told his fellow senators in a farewell speech in May, "When one takes a position of leadership, there is a very real danger of getting caught up in the hype surrounding that status … Surround yourselves with people who will be honest with you about how you really are and what you are becoming, and then make them promise to not hold backů from telling you the truth."

Comments

    • Anonymous

    Sage advice for any in a position of leadership. In particular the concept that those who lead are naught but the servants of those who they lead is a concept that should be very grouding to high-flying egos. If but a few more lead in this fashion, our press would find it far more challenging to find and report bad news for there would be compartively little of it.

     
     
     
    • Elmer Rich III
    • Principal, Rich and Co.

    The model and premises of this article seem unsupported by brain and social science.

    Instead of a failure of morality, conscious control/will power, leadership or other external structural conditions, these behaviors can be seen as symptomatic. Symptoms of brain-based medical problems -- impaired impulse control, anti-social and compulsive/addictive behavior.

    There are both inherited/family brain impairments and those accumulating in later life that drive both impulsive and compulsive behaviors. These same impairments drive some to seek positions of power and celebrity as ways to further the "self-medicating" and externalizing behavior driven by the impairments.

    Some of this can be quite destructive. Brain science is teaching us more daily.

     
     
     
    • Shafeen Charania
    • CEO, 21K12

    Leaders (like other, more mainstream "superstars") bask in a world of adoration and adulation. They are revered and made iconic.

    When everyone defers to you, when the room quietens as you walk in, you begin to believe that you're just that good, but more than this, that you're infallible. Humble you are not.

    It is this last, this sense of invincibility that provokes bad decisions and bad decision-making.

    People in this position, by definition will ignore offers of "help," or disdain the "need" to join support groups.

    Perhaps truly great and sustained leaders must routinely be humbled in order to maintain their greatness... Sometimes this comes from non-work sources like personal or family health issues -- you can't "fix" an autistic child by putting in more hours and outperforming everyone else. How you embrace this (and your child) is a truer judge of you than your company's quarterly performance.

    I wonder how often corporate Boards look at a prospective CEO's track record in terms of how they handled failure and yet maintained employee trust and support, and through that rebuilt their company. This, I think is a better measure of a prospective leader than a constant string of successes.

     
     
     
    • Peter Vajda
    • Co-founder, SpiritHeart

    There's a phenomenon permeating lots of leaders' lives - folks in politics, sports, arts and entertainment, business, education, law - just about every profession you can name.

    There seems to be an increase in the number of folks who possess the requisite social skills to create workplace, professional relationships - replete with all the aplomb and niceties that one's needs to master the "rank-related workplace ladder."

    These folks are great at relating to their peers, their bosses, their clients, their mentors, their coaches, their followers, their "groupies", and their stakeholders, for example, but when it comes to their relationships outside their professional arena - spouses, partners, friends, etc. -- there is no "there" there.

    These same folks fail deeply when it comes to creating and maintaining truly healthy, conscious, and loving and intimate relationships.

    Many of these folks have all the "right stuff." They come from "good stock,' attended the "right" schools, played all the "in" sports, engaged in the "acceptable" and revered extracurricular activities, pledged the "right" sororities and fraternities, and received the degree-du-jour and perhaps the post-graduate accolades that now line their walls.

    On the way up, they learned how to be egotistical, narcissistic and arrogant. They wear their successes as coats of arms on their sleeves. In their chosen professional field, they paid their dues, moved up the ranks, and climbed the ladder of success -- creating and cultivating the necessary relationships that would support them to achieve whatever it is their ego-driven desires needed to achieve: power, rank, status, control, recognition. And, to be honest, they knew their stuff; they knew their craft.

    Being adept at relationships, they used all their tools: false modesty, false intimacy, false trust, cloudy transparency, fake vulnerability, fake charisma, insincere charm, forced gracefulness and the like.

    The downside - or perhaps, their dark side - is their narcissism -- their consistent need to be "on", to play the role, to always be in the limelight, to wield their power, to be in control and be the center of the Universe.

    Then, it hits. Sometimes in a subtle way; more often, in a not-so-subtle way. One day they wake up and they feel alone. They experience feelings of loneliness and deficiency that accompany the stark realization that "the game is up" -- their mask has worn thin and is disintegrating. Their personality costume covers but a skeleton -- no meat -- and, alas, they begin to experience sadness, depression, self-hate, self-loathing and self-pity.

    They discover they really don't know who they are. At home with their partners, at play with their friends, in their life (outside of work) in relationship, they stumble, feel disoriented, disconnected and ungrounded; they feel like a stranger -- emotionally distant, incapable of forging deeper, heart-felt and loving intimacy. They experience estrangement from their spouses or partners, distance from their loved ones, and often end up engaging in superficial affairs, one-night stands, and uncomfortable and clunky liaisons -- all in an effort to find and feel a deeper self that has alluded them.

    In reality, they're searching for, longing for, their soul -- long lost, covered over and abandoned. Along the way, they jettisoned their need for true and real friendship, for true and real relationship, for true and real connection -- jettisoned for the sake of ego-driven needs for control, recognition, power and security. They created, then lived out their fictional stories that shored up their egos, but never their deeper relationships. They created and lived their fictional stories, focused on a superficial and immortal "me," but never on true and real friendships and relationships, never on "we."

    So now, lost, lonely and unhappy, they don't know where to turn.

    Turn inside. That's where they can find their True and Real Self -- the Self that engages in honest, conscious, sincere, healthy and self-responsible relationships. . (c) 2011, Peter Vajda, Ph.D. and SpiritHeart

     
     
     
    • Susan
    • Research, University

    Thank you - I especially value servant leadership and mentoring! The tough love my mentors have shown me has helped me in positions of influence without authority over and over again. I look forward to more of your thoughts.

     
     
     
    • Joe Seydl
    • Analyst, Wells Fargo

    I respect the view that leaders who lose their way aren't bad people but rather "morally lost" people. Everyone deserves a second chance. But, for those on the sidelines, it is nevertheless frustrating to see such leadership potential wasted because of poor decision-making. What's equally frustrating is that such poor decisions are, more often than not, unrelated to a leader's ability to lead. For example, just today, Congressman Anthony Weiner admitted to lying about his questionable actions on Twitter. Congressman Anthony Weiner is a great political leader. His wrongdoings on Twitter have nothing to do with his ability to lead politically. The shame, however, is that this event will likely ruin his political career. Point is, in every unethical predicament, the costs vastly exceed the benefits.

     
     
     
    • Edward Marek
    • Owner-operator, Marek Enterprise

    Superbly done. "Reframing leadership from being heroes to being servants of the people they lead" is so well stated I'm jumping up and down. We could sure use a few tons of those kinds of leaders.

     
     
     
    • Gurbachan Singh
    • Retiree, www.art-of-stategy.com

    This analysis could have shed much more light if Prof George had read Immanuel Kant.

    When it is in return from anything within or without but essentially for self satisfaction or gratification, then leaders will still ultimately falter, and it only depend on whether the price is right.

    Only humans who morally do good only because it is human to do good and not for any self satisfaction, will they not falter. Ironically there are few and far in between and maybe almost non existent except for some saints who largely remain unidentified because of their humility.

    So stop asking for the impossible.

    Ultimate it is the price (not necessarily money) that drives human instinct

     
     
     
    • Elena D.
    • student, Oil and gas service company

    Before anyone takes on a leadership role, they should ask themselves, "Why do I want to lead?" and "What's the purpose of my leadership?"... These questions are the most important before any decsion making process, which can be relevant to their future role. But it is also would be important these questions to be asked by someone else. In most cases leaders loose their genuine way doe to some reasons which has their own impact on the current life and activity. The most important for a leader to develop in himself such qualities as modesty and kindness, meanwhile they should have chilly mind. strickness and have strong wish to do best for the people they manage. To avoid such failures with leaders it is important to writer in all Management Manuals, that pridefullness leads to the negative side of human being. Frankly speaking, serving to people is one of the noble activity of a person, and even for those who ma de their mistake, there must have a chance and support in their consideration about the activity which promoted them to do this mistake. Thus, learning on the experience of lost leaders, we could understand the real phenomena of such a problem and to create our further steps on developing people in the right way...

     
     
     
    • Anonymous

    I think leaders who do not have clarity of thought and Vision usually fall into the trap of "moral loss" . World has seen leaders like Mahatma Gandhi , Mandella with "simple living high thinking" practice. I think that is why , humbleness is one of the criticle elements of good leadership which eventually make people work for you and in turn helps the leader to stay grounded.

     
     
     
    • Lee Nadler
    • Founder, SherpaMarketing.net

    Great piece and equally insightful comments. Thanks for sharing!

    About a dozen years ago I trekked in Nepal and was introduced to the leadership style of the Sherpa. Sherpas have a quiet confidence that allowed me (the "follower") to both feel secure that I was on the right path and to feel free to explore. As several of the comments and the article confirm, these two things don't typically come together in the workplace. I find that it takes a combination of the right "servant" leader, a healthy environment and your own self awareness/confidence.

    I have interviewed numerous Sherpas over the years and plan to publish a book to shed more light on this perspective. I welcome your comments.

    Onward and upward, Lee Nadler lee@sherpamarketing.net

     
     
     
    • Rebecca Mott
    • Project Manager, Tennessee Valley Authority

    I think this article points to a deeper and systemic problem within our corporations and governments. How can leaders rise to such a position with such deep-seated character flaws? Each of the examples used in this article required complicit behavior from enablers that surrounded the leader. I am certain that there were others, labeled as "critics," outside of the leader's circle of influence that attempted to raise the issue. What in our system is not allowing real issues to be heard? What within our systems is permitting such behavior to go for years unchallenged? Are we in the age of the "yes man"?

     
     
     
    • Kern Lewis
    • Director, Bovo-Tighe

    The corrosive effect of power on human 'psyche' is as ancient as we are. The jesters who served to remind Kings of their imperfections and the old tale of the Emperor who had no clothes remind us that those leaders who consistently succeed probably have great supporters and advisers who are willing to tell the truth, at risk of losing favor. The enduring leaders are wise enough to recognize the value that others offer, and respond to truth-telling constructively rather than destructively. The moment you, as a leader, start believing the pablum that goes into your press releases is the moment you need a reality check on your professional mindset. Will someone you trust be there to help with that? Enduring leaders keep such people around them.

     
     
     
    • Paul Page

    I think it is unfair to conflate these various events under the same premise. The accusation against Dominique Strauss-Kahn, for instance, is rape. At the danger of oversimplifying, I would not classify rape - understanding in this case that it is only alleged at this point - as a failure of leadership. The Ensign example also is a poor one, I think. He is a politician and the quote from him regarding leadership is self-serving. He is blaming it on 'getting caught up in the hype.' Newt Gingrich said at least one of his infidelities was the result of his hard work caring so deeply about the direction of the country. So if we take him at face value, perhaps we should examine failed patriotism.

     
     
     
    • Anonymous

    Dr. Vajda hit the nail on the head and did so eloquently.

     
     
     
    • Dan Heck
    • Principal, Bluefuse

    Thank you for your thoughtful words, and your books on challenging leaders to be authentic.

    I completely agree with you that leaders who lose their way are not necessarily bad people. For every leader that is caught, many others inflict pain and turmoil on employees and families behind closed doors. I don't think they lose their way any more or less than the general population; their behaviors are simply public for all to see and judge. As you mention in Authentic Leadership, we all have a shadow side to which we must be reckoned.

    And for every leader that gets caught, there are many others that live solid lives of service and integrity. We do count on leadership to help navigate our families, our communities and our economy and, because of their influence, they are held to account more publically for both their sins of commission as well as sins of omission. Speaking of sins of omission, where are the CEO's influenced by Peter Drucker? Drucker was very vocal against increasing wage disparity within public corporations. (Drucker thought 40 to 1 was reasonable; we are now averaging around 500 to 1 pay disparity).

    My main comment: thank you, leaders, for stepping up to lead. You are fallible, prideful, compassionate, self serving and servant to others, fearless and fearful, risk takers and reckless, rational and emotional. Your ups and downs are some of the most circulated stories in the world; look to the scores of leaders chronicled in the Old Testament.

    Just like the rest of us, you need others beside you to hold you to account and to be there when you suffer consequences and when you are ready to seek forgiveness. I am a Christian and grateful that there is a saving God to pull us out of our mess!

    As Ed Marek commented about the value of servant leadership, I am challenged to be a better servant leader to my family.

    It is sad, Joe, to see talent wasted, but I think the tragedy is permeating our entire society; all walks of life are having a tough time making the epic transition from depending on our labor to depending on our brain power. I think many leaders do not know how to control the incredible resource of corporate individualism on the potential scale it could erupt.

    Susan, have you read Authority: The Most Misunderstood Idea in America by Eugene Kennedy and Sara Charles? Powerful model of true authority.

    Peter, I certainly relate to the spiritual component. I do think spiritual practices can effectively slow down and help a fast paced person who has forgotten to check their world view lately. But it also has the danger of becoming one more prescription to "getting it right." So when we don't then it's, of course, our fault.

    Shafeen, I totally agree with you. I listened to a major league baseball player who had determined he was above others since he was pampered and praised from ten years old! Fortunately, for him, he had humbling experiences to pull him back to earth.

    Will brain science ever teach us enough to avoid bad behaviors, Elmer? I think not.

    I think the press will ALWAYS find some outlier with whom to titillate us; it sells. It is our fault to conclude sensational stories are representative of our country.

    Thank you for your compassion and authenticity, Bill.

    Dan Heck Evanston, IL

     
     
     
    • ajit
    • none, none

    Scriptures have addressed these, or very similar, issues. The Bhagavad Gita, if indeed it can be summarized in two statements, says do the right thing and do it without regard to self benefit. I think it was Jesus who said that a rising tide raises all ships, including mine, and so I ought to try and increase wealth for all first, and then I shall also be included. How does this translate into action? Gandhi, who stood for assisting the poorest, said, 'My next action, whatever it might be, I think of the lowliest person I know, and ask how this next action will benefit that person'. The motive for the action is then the key. We might still make a mistake in our decision making but we will have done our best, as is also one of the four agreements of Manuel Ruiz?

     
     
     
    • Anonymous

    You wouldn't know from this essay that Strass-Kahn has been charged with a violent crime. How unfortunate that he's been connected to those "yielding to seductions in their paths." There's a crystal clear distinction to be made between his behavior and bad leadership.

     
     
     
    • Anonymous

    I loved this article, very true and insightful. I have had the blessing of working close to a few great leaders throughtout my career and, they are very hard to find. I hardly believe the cause of this is because of "brain chemistry" but because these days integrity seems to be less important than power, personal ambition often replaces the whole concept of true leadership and unhealthy egos take over TEAM.

     
     
     
    • Anonymous

    Until the world changes its view of money as a sign of greatness, all in positions that lead -- whether that is a CEO, a sports figure, a Hollywood profile -- will fall prey to the morality trap. Root cause is a 50/50 relationship with self and the environment. Media hype, ego and more drive morale lapses. Until one can look in a mirror and be honest about what they see in return, this problem will exist in all aspects of business, sports, and more. Should we not start by developing, coaching and grooming our children -- to view themselves honestly (i.e., the good, the bad and the ugly) to build the character and resolve that will sustain them and those around them in their lives and the way in which they live it?

     
     
     
    • Reuben Kisigwa
    • Banker, Kenya

    Very true! So many times noble minded leaders suddenly see imaginary threats sometimes even through the honesty displayed their own peers - something to do with vulnerability of the ego. Having a strong willed confidant to courageously take you on even when at your lowest while steering an organization helps bring you back to focus on the real/big picture. This article says it very well.

     
     
     
    • Paul Nicholas
    • Director, Soul-Chaplain Consultancy

    This is a very interesting and thought-provoking item - thank you.

    It is not uncommon for people to adopt a degree of flexibility in their ethics and behaviour, and leadership roles can demand this flexibility more than most - hence we talk of "masks of leadership" and "leadership as theatre".

    Therefore some leaders can become very familiar with adjusting their standards - and creating narratives to justify this to themselves and to others.

    So not only do leadership positions - with all their associated power and influence - provide opportunities for dishonest or unethical behaviours - they also, in a sense, provide familiarization, facility, practice and "justification" of such behaviours.

    Leaders in consequence may invent their own contingent standards - seldom "bad", nor seeing themselves as such - they simply measure themselves by new and alternative sets of standards.

     
     
     
    • Desiree D.
    • Student

    I personally feel that if we continue to redefine the term "good" and "bad", excusing people's behavior, that we are in essence, changing the very definition of what is acceptable in society and what is not. No matter what light this is put in nor what excuses we try to give these people, ultimately it is their responsibility to maintain their integrity and they obviously failed to do so. I hold with the simple principle that if one does something that is not morally acceptable that they have not "lost their way" rather they made a choice and are morally bad. All I hear today is why people who make bad choices should be excused for their actions while the rest of us get hit with the repercussions. If companies find a good, morally responsible person to lead their company (and I know it's hard) then they would not have these problems. There is no sense in being servants to those you lead because th at is negating the fact that you are leading. In life, there has to be leaders and there has to be followers and both positions are equally as important. I appreciate another person's point-of-view, unfortunately, this is not a point-of-view that I can praise.

     
     
     
    • Anonymous

    This article starts with the premise that the individuals mentioned (Strauss-Kahn, Ensign, Hurd, et al) are guilty, which has not been determined in all cases. It would seem more appropriate to wait until that has been determined. However, if the assumption that the individuals are guilty is accepted, only Harvard University could describe people that rape and steal as having "lost their way". Being rich or powerful does not give someone the right to break the law, physically assault other people or pay bribes. Obfuscation like this from an "institution of higher learning" partially explains why some people in high positions act like they do.

    Dictionary.com's word of the day, pecksniffian, is particularly appropriate today:

    The men who do things in the world, the men worthy of admiration and imitation, are men constitutionally incapable of any such pecksniffian stupidity. -- H. L. Mencken, Damn! A Book of Calumny

     
     
     
    • Anonymous

    Excellent reminder to all of us who serve. I am constantly aware that my responsibility as company CEO lies in my staff being proud and confident they can come to work and be assured their jobs are safe for them to pay their mortgages and look after their families. Every morning I remind myself how privileged I am to serve these skilled, and competent people who have made this company so successful. I owe it to them to 'keep our ship in safe waters'. I also owe it to those who know me so well and keep me humble!

     
     
     
    • Kamal Gupta
    • CEO, Edseva

    We in India have just seen a religious leader- Baba Ramdev - losing his way by trying to become politician. That has unmasked him and shown him to be a power-maniac.

     
     
     
    • Narendar Singh
    • Professor and Author, Free Lancer

    Leaders are humans, they have also desire to (a) Look to their followers that they know all answers. (b) Are capable of taking decisions. (c) Do not panic. (d) Lastly immortalized. These are some but many can be added, this personal glorification and to be recorded in history as the ultimate leader, forces them to have dark sides as they donot want to be contradicted and are not keen to see their failures. The success in leadership will be there as long as the leader learns to accept failures, disent and lastly has kee observation, learning ability and uncanny reasoning to acccept mistakes for larger good

     
     
     
    • shadreck saili
    • UCT

    Firstly we should acknowledge that any human being is as weak and evil as the situation around him/her presents.

    With that understanding, there is something about leadership,power, authority etc that just derails the custodian of it arising from the "human being" perspective.

    Humans have an ego which if unchecked builds into "know it all attitude" and "I am the best asset and smart guy attitude" thus can do anything that satisfies oneself in short term with no remorse, which is myopic.

    In my view this is a great disadvantage of leadership that society does not seem to put much emphasis to .In other words leadership builds blindness in people to the extent that you only want hear want to hear and only want to behave in manner that you want to behave until an external force cuts your wings off.

     
     
     
    • Sanjay Viswanathan
    • Chairman & CEO, Adi Corporation

    Wow, another masterpiece from Bill.

    Your program on True North was the most impactful on the AMP, and gave me and fellow-leaders with a framework we could take back and execute on. This piece on "Why Leaders Lose their Way" takes it to the next level. Like always, you hit the nail on the head and say it like it is.

    Being a "servant leader" no doubt holds the key. We need to test its portability across cultures, especially in the East, where leadership through servility may be misconstrued as weak leadership. In my view, we need to balance humility with iron-will and the ability to take decisions based on fairness, transparency and trust. Many of us from eastern cultures have a strong religious anchor where we believe most positive outcomes are because of a higher power, and negative outcomes are due to our "karma" or past actions, and therefore has to be accepted as is.

    Leaders of today will do well to suffuse your framework of "servant leadership" with a blend of value-based leadership that's underpinned by a belief there's a higher power leading us to fulfill our destinies.

     
     
     
    • Gary Root
    • Technical Manager, Ecosystems

    I have believed in "manager as servant", since my early organizational behaviour course when I earned my MBA. Our customers pay our wages. They are our ultimate employers, and we are ultimately obligated to make sure that we respect our promises to our customers. If we do this as honest agents of our legal employers, the company that we work for, then we can always justify our actions legally and morally. We owe our obligations to the community as a whole, but in the end we must prove to our customers that we are always acting in their interest.

     
     
     
    • C.Niane
    • Government Contractor

    This is a great article and one I've often discussed both at home and at work. I sometimes think it's human nature to lose one's moral compass and become ungrounded. It is very easy. It is absolutely essential that you surround yourself with people who mentor you or who are not afraid to call you out when they believe you aren't acting morally. If you don't have this support group, it's very easy to lose your way and forget the consequences of your decisions, and reasons that you do what you do.

    I've discussed this a lot with people in Africa who believe that corruption is insurmountable. It's a very interesting topic and extremely relevant in the world today. I always say this is not isolated to any group of people. Anyone, anywhere, can experience these symptoms if they aren't careful and ask for feedback. I do believe that people aren't inherently immoral, they just lose their way and need to come back down to earth.

     
     
     
    • Anonymous

    There is a defect in the thinking the the trappings of success cause leaders to fail morally. The defect is simple to see because moral and ethical mis-judgements appear to strike all levels and cadre of humanity.

    We would love, and it would make us feel better, if the ones who made it to the top proved to be super humans, not only in their mental, intellectual and sometimes physical, capacities, but also flawless ethically, not susceptible to the same problems that ail mere mortals like we the servants they lead.

    ... and then pigs would fly.

    +

     
     
     
    • david olatunji
    • CEO, skillsfuture consult

    leaders are also human and therefore fallible. there is something about the human nature that is selfish( only seeking self gratification at the expense of others including their spouses and children) and fear driven: indeed selfishness and fear drive virtually every action of a human, leader or not; and the way out which the whole world is still running away from is for the lhuman to rediscover him/herself in the Creator of the universe. there is a craving inside everyone which sex, alcohol, big position/ perquisites of office, glamour of cars, cannot satisfy until such a time every human aligns genuinely with the original plan of the sovereign Lord. Sound religious? perhaps yes but that is the truth and you cannot do anything against the truth but for the truth---let everyone reading or writing about the fallen ones beware lest they fall

     
     
     
    • Anonymous

    "Congressman Anthony Weiner is a great political leader. His wrongdoings on Twitter have nothing to do with his ability to lead politically. The shame, however, is that this event will likely ruin his political career. Point is, in every unethical predicament, the costs vastly exceed the benefits."

    Mr. Seydl,

    I must emphatically disagree with you. Anthony Weiner's wrongdoings speak to his character. If he can not exercise loyalty to his wife, how can his constituents expect him to exercise loyalty to them? What separates good people from bad ones are the morals by which they live, so indeed, leaders who lose their way (especially their moral way) are bad people. I am tired of the "ask forgiveness later" approach to leadership in business, politics, etc. Lives and futures are at stake, and these consequences are far greater than a political career such as Anthony Weiner's.

     
     
     
    • Martin Dawes
    • Chief of Communication, UNICEF West Africa and Leadership student

    Great article and an interesting chain of thoughts. I wonder if this is about how we define ourselves, and if this would be a good question to be asked of anyone going for responsibility. It was a standing joke apparently in French political circles that Dominic Strauss Khan was known as the 'great seducer'. If that was how he defined himself -and if it were evident in his style- then that should have been a red flag. Similarly a trader or business leader who defines him or herself in one dimensional terms may also lack empathy with teams or customers.

     
     
     
    • Gayle Lemmon

    Mr. Strauss Kahn is accused of a criminal act of violence, not 'mere' immorality. This should not be mixed in with other offenses. It is not unethical. It is, if true, criminal and perpetrated against one of the most powerless members of society. This should not be discussed in the same strand of conversation as a consensual, if extramarital, relationship.

     
     
     
    • Tim Oei
    • CEO, AWWA

    The concept of a leader being a "servant-leader" first is critical to staying to the "True North". Leaders who have tasted success soon may come to a realisation that they made it all happened and without them the organisation is lost. Once leaders think they know it all and no one can do it better, its time they remembering why they started in the first place. Going back to basics is necessary to stay true to the cause.When close allies (be it family or close associates) start drifting away or the leader start to distance from those who have the ability to advice them, its when its the beginning of the end.

     
     
     
    • Joe Seydl
    • Analyst, Wells Fargo

    @34

    Thanks for your comment. I'm sort of playing devil's advocate here as I agree with much of what you say, but here goes.

    First of all, Anthony Weiner has been doing a lot to improve the lives and futures of his constituents. He has consistently stuck up for the working class in NYC, supporting tax cuts for small business owners and middle-income families and increasing funding for public schools in his district. In addition, he has helped clean up teenage crime in and around NYC in a way that helped crime-doers learn from the mistakes they made and become better people--as opposed to just using juvenile punishment. He has also worked hard to improve public housing facilities in his district, including helping public-housing users receive affordable health-care treatment. Contrary to your comment, Anthony Weiner's constituents had a lot of faith in his loyalty as a politician.

    Where I think we disagree is: Whether Congressman Weiner's social media blunder should negate his aforementioned political accomplishments. You'd probably say yes; whereas, I'm a little bit on the fence, because, again, IMO everyone deserves a second chance. But, you're right in that there are no excuses for Congressman Weiner's immoral actions.

    All in all, it's a dicey case study, but not dissimilar to previous political blunders (think Clinton, Spitzer, etc...). My only point was that Congressman Weiner must have known his inappropriate actions could ruin his political career, which leads to the question: What was he thinking given the enormous costs at stake relative to whatever benefits he foresaw...

     
     
     
    • Atul Guglani
    • Director, Mantex Technologies

    A Very thought provoking article.

    The leaders who ethically fail are generally those who have been on the slippery slope for many years and have got away with their fallacies. It is only that, one fine day, a bigger fall happens.

    In case of Strauss Khan, his misadventure with the chambermaid will be his courage to break the law stemming out of his rich experience with other women in the past and getting away without notice.

    Madoff, successfully fooled the world with his Ponzi scheme, but before being blown out was much an admired leader in his business.

    Kerry cooked Enron`s books for years.

    Technically, it is not seduction and ephemeral gains, but a continued practice of exploitation of unseen weaknesses of the system and environment, till it becomes too big to hide.

    The conduct of leaders on Sex, Money and Abuse of Power are not those factored in the corporate audit and don`t get reflected in the Balance Sheets of any company. Glossy magazines talks about jet set lifestyles and Top Management considers these obscenities as the invisible perks of the Leaders. These leaders then believe that they are "God's Gift to Mankind"

    Corporate misdoings are only the extension of personal misconduct of the Leaders. How many cases of Price fixing gets caught each year in the Industry, how many bribes are routinely paid to secure contracts in the Third World by Multinational companies and this can go on and on.

    Leadership failure has to be value driven and unless value audit for person to person takes place within the company , the dark side of human beings will continue to abuse the power vested onto them by the shareholders.

    Lastly, I would not agree on Leaders being servant of people they lead. Servants don't lead anyone, they only take orders. This would be a total contradiction of the profile of a leader. Leader is the one leads from the front. He may serve the best interest of the employees, shareholders and the community at large, but serves by conviction and ingenuity and not by power and prestige. As for trappings, it is the same, whether you are a leader manager or supervisor or a professor. Everyone believes that he has his own small empire and its unique power related to his position. Some big and some small, but all of us are in the same boat.

     
     
     
    • JOHN DOLLAY ADIGIZEY
    • CEO, FIRST TRINITY INTEGRATED SERVICES LIMITED, JOS, NIGERIA.

    This article by Prof Bill George has been well articulated. Now, when these scandals are committed in places like the US, UK, France and other developed countries, the culprits do resign, and sometimes face consequences of their actions or inactions. My heart bleads so profusely when I bring the scenario back to Africa. In Nigeria, the affected persons are rather given heroic praises to the extent that chieftaincy titles are bestowed ceremoniously on them. This has made corruption to be treated as an acceptable norm among leaders, and this is driving the economy deep down. We are even despised by many in foreign countries. Prof, can we have some kind of appeal, so to say, to the world leaders to properly legislate against corrupt tendencies the world over, and enforce such legislations so that we can have best practices in international businesses, or are we all swimming in the same water?

     
     
     
    • Philip A Birch
    • Founder/Writer, Eticonomics

    I have recently been puvlished on personal values, authenticity and ethics. Leadership is about service not just reward but there are too many cases where the ego dominates and the feeling of being "above the law" soon follows. There are no excuses, just an understanding of the principles - the temptations if you will. The fact that some leaders "do" and some leaders "dont" means that it is a matter of personal behaviour and choice. Ethiconomics deals with getting back to basic personal values - looking in the mirror - and in creating a moral code for econimics and business. The code starts with the individual. No excuses. An A-Z Introduction to Ethiconomics can be found on Amazon. When leaders realise that service and community are as (if not more) important as personal gain and wealth then we may actually start to see a change from these attricious, self-angrandising acts of betrayal.

     
     
     
    • Anonymous

    I do agree on the aritcle, the leaders are expected to demonstrate certain values which society respects and look forward from a leader. The values which hold the leader from doing wrong and unethical things. A top leader is sum total of lots of moral stuff, which the down level people try to copy it and demonstrate it to become one like that in some point in life. The people are brave and intelligent enough to see thru the leader and if the leader lacks moral values, its a matter of time to pull him down by anybody. The fall from such a position would be defenitly devastating.

     
     
     
    • Itamar Rogel
    • Founder, Briox

    Amazing article, weaving business, psychology and spirituality into one coherent argument.

    Thanks for writing this - it takes a certain amount of courage to publish this; this is not taken for granted.

     
     
     
    • John Heinrich
    • President, The American School of Entrepreneurship

    Good article, good comments. I have a succinct clipping that I keep in my desk drawer: never completely believe your press clippings!

     
     
     
    • Ann Ulrich
    • Owner, The BOLD! Factor

    Bill, Your great gift is in bringing critical leadership issues in a way that compels us to take a fresh look and inspires us to admit that yes, losing our way/falling from grace could be any of us. Thank you for reminders to surround ourselves with great people who care enough to keep us real, and rather than being heroes, to focus on serving the people we lead.

     
     
     
    • Anonymous

    As a materialistic society we have deeply ingrained metrics for success that are derived from the external manifestations of a distorted self. When our value as a leader is gauged by our "doing" metrics rather than from our inner self, it creates a great deal of conflict. As long as there is a conflict with our "doing" and our inner self, we will continue to have these situations arise. Ultimately we are all leaders leading our lives and dealing with these conflicts on a daily basis. Great article!

     
     
     
    • Bruce Lloyd
    • Emeritus Professor of Strategic Management, London South Bank University

    I believe a values approach to leadership is essential and these issues are explored in greater detail in the paper below ....

    http://www.valuesbasedleadershipjournal.com/issues/vol2issue2/powerresponsibilitywisdom.php

     
     
     
    • Tim Johns
    • Partner, Change-Agency

    Two quick points on your excellent analysis. Firstly, the Strauss-Kahn case is less to do with corrupted power per se and more to do with endemic predatory behaviour across whole tranches of French society. In other words, it is not seen as wrong if everyone is seemingly behaving that way.

    Secondly, you mentioned how lonely leadership can be. One of the solutions to this is often to come to rely on an ever smaller group of true believers who support you. This can lead to sycophancy and isolation from the real world where the leader becomes detached from the lives of ordinary people. Ex-British senior politician and former Doctor, David Owen, has written an important book on the subject called The Hubris Syndrome. Anyone who has worked closely with senior leaders will recognise many attiubutes of hubristic behaviours that Owen highlights. I commend it to you.

     
     
     
    • Frank Riganelli
    • Author, http://www.freado.com/users/28684/frank-riganelli, Former Fortune management, consultant, trainer

    Another provocative topic worthy of serious consideration. I won't comment on the personality or psyche of the leader, it's too serious a subject which requires the discretion of conditions conducive to effectively talking about it.

    However, having lived abroad for over 10 years, and in different cultures with their own perspectives on subjects like leadership, I suggest that there is one universal idea of leadership. And that is that when a leader takes actions which harm their organization, and by extension the people in it, it is considered to be undesirable.

    I see this topic as supporting an earlier topic here about poor ethics in organizations. Considering the dark side of leadership, it serves my previous comments about putting ethical people in positions higher and higher in an organization. And value centered leadership reinforces the idea that leaders must have the right traits when chosen for a leadership position. That will include their ways of dealing with aspects of the position which push or try to compromise them. The, it's lonely at the top, notion shows to have different interpretations of it. Some of them being, the buck stops here; the person at the top has no friends; you must distance yourself from your friends in an organization; and that when you have reached the highest position possible you feel a sense of loneliness for the end of the challenge, which offers nothing higher to strive for. However, the article's idea about it, that the pressure of responsibility on a leader creates feelings of loneliness, ser ves to show that a leader who does not posses the right traits can in fact be lonely at the top.

    The idea of being lonely at the top focuses on the notion that a leader must make difficult decisions, which at times can make them unpopular with people in the organization. Hence, either having lost the sense of camaraderie or possibly the public display of friendships by people in the organization, it is said the leader is lonely in their position at the top. This leader makes decisions which are in the best interest of the organization and the people in it, but they are not always popular decisions. Those who put this leader in their position must accept the responsibility to support the leader in the face of a loss of popularity at times. Without such support this leader risks becoming vulnerable to the traps of popularity, and become at risk of losing their way. That is if they are not taken out of their position for all the wrong reasons, in which case the organization has shown to have a flawed idea of leadership. The leader whose popularity takes a back seat to decis ions that are good for an organization, is in contrast to the leader who seeks popularity at the expense of the organization's best interests in their decisions -- who, as I suggest in terms of a universal idea, is not a desired leader.

    If the questions to be answered from this article answered are, "Why do I want to lead?" and "What's the purpose of my leadership?" -- it is the reply to these questions by those selecting the leader for a position, or their understanding of the answers given by the prospective leader, that offer the chance to put the best possible person into a leadership position. Of course a leader must be introspective, but to avoid a leader losing their way it must be ensured initially that the leader has the right traits.

     
     
     
    • Bill hartman
    • Entrepreneur in Residence, Flyweel Ventures

    Values-based/ethical/etc leadership is a very hot topic now. Leadership based on strong, servant values works and is very much in need. I love the article and comments, but fear it may be a truism that "values-based leadership" and leading by knowing our True North are good things. Unfortunately, one's values are not achieved from articles, MBA classes, and such. Somehow we've got the values we've got "right now," and for many of us, they are not the right ones to properly lead. Even thought we may buy the books or go to the webinars, very few of us are going to change something so fundamental as our values--even if values are the latest business trend and flavor of the month. To sound suitable for an HBS blog, how do we at the margin really, I mean really, get to more people having more servant/customer/shareholder values that will serve them if and when they have leadership opportunities? Please point m e in the right direction(s).

     
     
     
    • Nick Chipman
    • Partner, PwC

    The leader as servant of the people is an interesting perspective.In one recent interview with a newly elected prime minister he made the comment that not only had he been elected to lead the country by people who voted for him,he also had to govern for the large minority who did not vote for him.This higher recognition of duty to the people was an impressive response-time will tell how well this PM executes on his message.

    The other theme worth framing up relates to the primal instincts when humans are under duress.There is a view about why good people do bad things that relates to the role the primitive instincts and hindbrain play in going astray. After interviewing a mutiple of leadership team members following major failures or malfeasance one insight I have gained is their response to the question "how have you dealt with failure before-cover up or hands up approach?".We need to consider in any executive or leadership selection an important legacy-what events in the past have triggered the "fight/flight" reflexes and especially what happened next.Blindness to these reflexes by both the individual and those overseeing this individual can be a sleeping giant,or a more obvious source of risk to any organisation

     
     
     
    • Anonymous

    My undergrad degree in Philosophy deepened my understanding of morals and ethics; however, it did not make me a moral and/or ethical person. My B-School introduced a Business Ethics course into the MBA program in 2002, around the time of the Dennis Kozlowski Tyco scandal, in order to battle the "increase shareholder value" - at all costs - environment. You can't teach adults to be moral, this is formed at a young age. As morals are the basics of ethics, you can't teach an adult to be ethical (you can teach them rules yes, but in the broad sense, no).

    By the author stating that "...this desire [for more rewards] is so strong that leaders breach the ethical standards that previously governed their conduct," he is taking a a strong position that these individuals were at some point in the past ethical. While this may be the case in a very small minority of instances, I respectfully disagree with Mr. George in that I believe the majority of these leaders were never ethical people with a strong set of morals guiding their decisions. A rat is a rat.

     
     
     
    • Peter Kapcio
    • Director, Reputation Management Services, Eric Mower And Associates

    Speaking strictly from a pragmatic viewpoint, and admittedly ignoring the full implications of ethics and morality, it's common human behavior that highly successful people will go to great -- and often very dangerous -- lengths to avoid being embarrassed.

    We see it all the time in our work. And the more successful, the more accomplished, the more highly placed the individual, the greater the drive to prevent the exposure of their imperfections. This drive is so powerful it can completely warp the behavior of Type-A high achievers.

    One way of addressing this behavior may be to help the leader understand the most critical component of personal, professional and organizational reputations -- credibility. Loss of credibility almost always presages a drastic diminishment of an individual's or a company's reputation.

    In our culture, we have something we all recognize as "a stand up guy". [Please excuse my gender imbalance here.] A "stand up guy", when he [or she] makes a mistake, typically reveals it himself, before others discover it, then says without wavering or making excuses: "I'm sorry," "I screwed up," and "I will fix the problem I have caused."

    When we describe this behavior model to organizational leaders facing the reveal of some kind of negative news, most understand that following this behavior actually increases their own credibility, thus transforming "embarrassment" into "taking responsibility".

    Being the first to take responsibility for a misstep you have created defuses anger, hostility and much of the cynicism regarding your observed behavior.

    None of this, however, causes people who lack a moral or ethical compass to behave differently.

    But it does give many leaders who are fundamentally right-minded the courage they need to just do the right thing. But first, they must surmount that troublesome "embarrassment hurdle."

     
     
     
    • Anonymous

    My boss had a very good observation - leaders are generally risk-takers. That's mostly how they got to their leadership position. And in turn, that means that they tend to be one step closer to making unethical decisions than non leaders. The line they tread is much finer than for a non risk-taker. But by taking risks, they get things done. Mostly they succeed, sometimes they fail. So, do you want a leader who will take risks and get things done, and might in the process make some unethical decisions, or one who will not dare, remain competely moral, and get nothing done.

    This is where I particularly appreciate the argument of having an inner moral compass, to combat the increased chance of unethical decisions. It helps the risk-taking leader to also remain ethical.

     
     
     
    • Frank Riganelli
    • Author, http://www.freado.com/users/28684/frank-riganelli

    With regard to comment 50, I received a comment about my earlier post here and it challenged my comment, suggesting I proposed that a popular leader is not a good leader. They missed the point being made, which is when popularity is given priority to what is best for an organization, a problem will soon be waiting to show itself. A popular leader whose actions keep the best interest of their organization in mind is an ideal, I would suggest, to work toward. However, I say this to serve comment 50 in its point about learning values from articles and other educational material. If people cannot properly understand what is posted here, and incorrectly read into comments, what are the chances they will learn something as profound as values?

    I think the attention given to the topics of leadership/ethics/values is an indication of there being a problem in these areas. Too many people no longer posses good traits in these areas. What also is a truism, or should be, is the idea that if leaders must be reminded of the pitfalls in the article, and are not already aware of them, they are questionable leaders. Think about it, how can a leader give advice about staying true to one's position and the company if they need to be reminded in a blatant manner as this? It's always helpful to review a topic, but one can easily feel patronized by this presentation of it. And to be positive about it, this information should be focused toward discussions around getting more people to have the values in question. Perhaps a look at hiring or promoting practices, or employee development, as the second part of this topic. If it is true, as comment 50 suggests, that values are already in us and cannot be taught (to adults), I'd say the next article on this should look at hiring and or promoting practices. The paramount priority becomes what to look for, because it's been conceded that it cannot be taught. I think the worth of good people out there just shot way up.

     
     
     
    • Kapil Kumar Sopory
    • Company Secretary, SMEC(India) Private Limited

    A leader is one from amongst those who are thus far being lead. He is one amongst many and gains the leadership position by working hard to imbibe the qualities expected of a leader. Once he gets the leadership position, he has to shoulder higher responsibilities and has to be accountable for the overall success of the organisation. Generally, his financial and other powers are unlimited and he is made to believe he is at the apex and there is none keeping a watchdog's eye on his actions. Once this happens a slight hike in ego leads to autocracy and a 'do not care/bother' approach. And if he is developing business - by hook or by crook - his seniors shower appreciations without going in depth on the ethicality of the steps taken to derive the results. Very often Board members become moot yes men and thereby lead the organisation to its doom.. There has to be a constant vigil on the actions of leaders and no misdemeanour can be tolerated. Once the reaction of the Board is not firm, a chain repetitive process will follow. Leadership is not everybody's cup of tea. The leader is the super boss who can set good or bad precedents and so needs to be above all human failings. In my view a good boss is one who listens,shares, decides,notices,coaches,stands up (fights for what is right), tells the truth, has a life (serves as a role model) and leaves a long-lasting impact. Over all, integrity and honesty of purpose are important. Let no leader get too unbridled to fail/fall and hurt himself as also the organisation!

     
     
     
    • Mark O'Connor
    • CEO, Monadnock Research

    Deloitte's Timothy Lupfer makes a distinction between habitual amoral actors and occasional amoral actors in his 2010 report, "Managing Bad Apples and Protecting the Barrel." In that paper, Lupfer explains why the two groups need to be considered separately to deal with unethical behavior. To use Lupfer's framework, executives falling into the category of occasional amoral actors would likely be the only ones to potentially benefit from values-centered leadership support.

    A little over a month ago at the Berkshire Hathaway annual meeting I had an opportunity to hear Warren Buffett and Charlie Munger talk about the Sokol affair at length. It is certainly a great example, as you note above. I'll provide a few interesting points from my notes. Buffett said that Sokol's actions were inexcusable, since he violated Berkshire's code of ethics, possibly insider trading rules, and the principles laid out to all of the company's managers. But it was also inexplicable for a number of reasons.

    First, Sokol made no attempt to hide his purchase of the Lubrizol shares. Finra routinely lets Berkshire management know of anyone involved in trading of shares ahead of transactions, and Sokol had to know that his trades would show up in those reports. Sokol is also a very rich man, and to take such a step for a few million dollars is perplexing in context. And it also didn't appear consistent with the past behavior Sokol had demonstrated.

    On the last point, Buffet offered as an example the incentive program tied to the 1999 Mid American deal, where Sokol was CEO at the time and Gregory Abel was President and COO. Walter Scott, who was Mid American's largest shareholder, suggested a variable compensation program tied to future results. Buffett and Scott agreed that there should be a payout of $75 million based on the 5-year compounded earnings gain.

    When the plan was presented to Sokol, and before it was presented to Abel, Sokol's share of the $75 million was to be $50 million. Sokol said the split should be equal, transferring $12.5 million of potential up-side from Sokol to Abel. Buffett could not explain or understand how a very affluent man that would do something so selfless, would less than 10 years later make such an obvious error of judgment. It was as if Sokol thought he was doing nothing wrong in this case. But to not know, or to know and do what he did, was inexplicable.

    That, I believe, is the challenge of effectively addressing the problem of occasional amoral actors. They have somehow convinced themselves that the rules do not apply to them.

     
     
     
    • Sabrina Hanan
    • Co-Founder, 3 Rivers Safety

    Thank you for opening this difficult and perplexing subject to dialogue. Certainly, there are significantly painful impacts for both the perpetrators and those they lead.

    When asked to analyze these difficult situations to provide strategies to prevent them in the future, the first question I ask is, "What was the perceived pay off?" When I discover what are the perceived desirable outcomes for both the central figure and those who enable them, I can then begin to help heal the parties involved. There are always many extrinsic and intrinsic motivating factors.

    This article focuses on the responsibilities of the offending leaders. This is integral. However, always there are many individuals who enable these offenders. Their participation is the means by which these offenders put their agendas in motion.

    While the distinction between serving one's self and serving others is powerful and viable, it requires a leader to have the courage to be transparent. Those without this kind of courage and who get caught, end up in the headlines. Therein lies the core issue.

    I perceive the foundational problem exemplified in this dilemma to be one not of loss of moral compass, personality disorder or medical issues. Does the leader have the intrinsically sustained strength to be accountable to those they lead? If not, the results of this lack of courage could be any number of the inter-related diagnoses delineated in the article and comments.

    What develops and sustains the intrinsic courage to hold one's self accountable for the impacts on others? Fortunately, there is a preponderance of information on empathy. When one has become so powerful as to be "at the top," the only gate keeper is empathy. Empathy is integral to social and emotional intelligence.

    When leaders like Ensign and the others mentioned are finally caught, it is certain over a long period of time, their empathy has been degrading with the inappropriateness of their behavior inversely proportional to their level of empathy for others. Their misdeeds have been increasing in severity and frequency over long periods of time.

    What if everyone in a system were given opportunity based not upon their ability to generate money, power and status but upon their level of empathy matched with their ability to motivate and bring out the highest potential in others?

    Would these leaders' transgressions have been possible?

    If the system were accountable instead of just the leader, would these organizations have allowed these transgressions?

     
     
     
    • Anonymous

    Seems like much of the news on this issue surrounds the different principles taken in Europe vs. USA. In Europe they seem to prefer "privacy" for their public figures and in the USA we go for total transparency. While the charges in the Dominique Strauss-Kahn situation are most serious & should not be over-looked, perhaps there might be a better middle ground between public figure privacy and total transparency?

     
     
     
    • Harlyn Sianturi MM
    • Manager Risk & Asset, PT Kaltim Prima Coal

    I believe we all agree that all leaders want to be appreciated, even to be praised some time, by people they lead. And, on the other hand, the people they lead want to be lead with honesty, integrity and all other "saintly" capability that are stated in this article by Professor Bill George. These two wants are in the same equation. This is a reality check for me. What seems impossible to me is how to get enough such leaders. We want a better world to live, don't we? Thanks.

     
     
     
    • Anonymous

    when a leader seeks to be self serving rather than a servant of the people, he opens up himself to error.every leader should have someone to whom he is accountable and that requires humility.Humility is key in leadership. we all need to learn this as leaders. the bible admonishes us to "take heed. if any man thinks he stands, let him take heed let's he falls."

     
     
     
    • Ogunbowale Damola
    • Manager, Society for Family Health

    A business leader should delight in the success of his reports and subordinates while political leaders should have the uplifting of the population as their goal. Achieving the above is where most leaders have failed, once someone attains this leadership position, they are shut out of reality and are cocooned in the feeling of grandeur and invincibility that spirals to failure. This is the bane of leadership from biblical times.

     
     
     
    • Abhishek Syal
    • Founder, Secretary, Act to Rise for Innovation in Special Education ( A R I S E )

    I appreciate that the article has raised a very important point - Leaders need to stay in touch with correct people - people who guide him constantly and rightly.

    This is especially needed when one is at the top. Some need to stay put the leader onto ground reality - however great we may become, we are human beings. And as an intelligent human being, we are more responsible for our actions than others - and more responsible to create shared value with others.

     
     
     
    • Robert Flaherty
    • Retired CEO

    Hubris, arrogance and a sense of entitlement can grow in the minds of the leader who allows no challenge. I was struck by the front page WSJ article on June 16 entitiled "Corporate Jet Set:Leisure vs. Business" which could be a "today" example of this phenomenon. It cites all the personal use of corporate aircraft apparently to take corporate execs to their vacations homes--sometimes scores or hundreds of times per year--and much of it allegedly not disclosed in corporate filings. One can only hope that such trips are paid for by the execs using the planes.

     
     
     
    • Avinash Sankhe
    • Group IT Head, Karvy Computershare

    This is indeed a thought provoking article and will surely force those fence-sitters to weigh 'cost of reputation damage' to 'benefits/gratifications' by virtue of actions that could be termed as unethical or those tantamount to loss of moral bearings.

    I would like to draw reference of Eckhart Tolle's book 'A new Earth - Awakening to Your Life's Purpose' when dealing with sensible balance for practicing leaders between 'being a super-power' to being a 'Human Being'.

    Human relates to 'form' (what can be seen, possessed, compared and is corruptible) whereas 'being' relates to 'formless' (inner spirit & morals that give ability to withstand tremors of life events and stand upright). If leaders can appreciate that it's 'human' part of them that elevated them to their current leadership position and only 'being' facet that can retain them to that elevation or take them up further, I think the problem could be largely addressed. Playing with children to liven up innocence, keeping free and candid communications open with spouse and trusted friends& learning from failures of others are sure shot ways of avoiding the free fall.

     
     
     
    • Rose
    • CFO, Confidential

    We can talk about this subject by years, but in my experience, it's mostly because they can ...that s why, we can blame brain, we can blame childhood , but seriously, how much ethics require not to submit an expense report with personal expenses marked as corporate? not to use your c suite title to impress people?... I don t think all leaders are like that, but it's not because you get a leadership position that you change your mind, probably was the same when you were in a non leadership position. Also, we have to consider that when you are going up into the corporate ladder, the more you climb the most people praise you, you get used to be consider brilliant, excellent, smart,etc. , and that could be addictive for some people. Then at some point you lose contact with the reality and unless you have people who can get you back down to earth is difficult to keep centered when all you hear is how good you are, how well company is performing under your guidance, etc. and becomes worst when you are at the higher levels, because then basically there are just a few people who will be brave enough to tell you that you are loosing your scope. As a final point, there is nothing new with these failures, centuries ago there were more excess, more self praising, arogance, etc. it's the way we perceive them and what can we do about it , if not then think about roman emperors ....

     
     
     
    • Christine Teopiz

    I am taking up B.S Entrepreneurship here in the University of San Carlos, Cebu City Philippines. I like the article because it makes me realize the importance of leadership and what are the risks and rewards of being a leader. I just hope that someday, if i will manage my own business, I won't be too selfish in wanting only prestige and wealth

     
     
     
    • Ben Sutorius
    • Owner/artist, raw function

    I believe we focus almost entirely on facts in decision making. We elect or choose leaders based on a successful fact based record . Facts are simply statistics based on what is relative at the moment . Facts are subject to change. We must start making decisions that are rooted in truth. Truth is the way things were, are and will be. Facts can be used to suport truth but truth is not subject to the facts of the day. I would dare say all of the immoral acts commited were not a first offense. All based the decision to engage in more poor behavior based on the fact they had been successful in that behavior on a prior occasion. Truly great leaders are truth based. They side with truth even when the facts at hand would point to that being unwise. If those in power would ask if their actions were contrary to principals they knew to be true they then would only be subject to the will to act acordingly.

     
     
     
    • M. RAKEN
    • MBA PROGRAM LECTURER, PUTRA INTELEK INTERNATIONAL COLLEGE

    Intellectual, financial, political and leadership power devoid of holistic spiritual foundations and a lack of consciousness on the purpose of life and short of self accountability to moral self conscience are basically the important reasons for leadership crisis.

     
     
     
    • Juan Aguirre
    • Chair for Entrepreneurship, Universiadad Latina Costa Rica

    In Latin America leaders usually loose their way because of the frills of power: money, capacity for clientelism and power and all the social perks that power brings, The reason for this is simple: lack of moral and ethical teachings. In toady latins business shcools money and power is place over social responsability, but the develop countrie example is not helping much.!!

     
     
     
    • Anonymous

    Intersting article.

    One particularly effective technique is to count the number of times in a day, a week, a month or even within a conversation that a subordinate disagrees with you or provides a different perspective for you, the leader, without prompting or without the leader creating a very special circumstance in which the subordinates or team members can disagree.

    A proven leading indicator of leadership heading in the wrong direction when the count stays low.

     
     
     
    • G S Singh
    • Advisor Education Grading, CRISIL

    A very thought provoking article indeed. But leader behaving the way the article is exemplifying, is rather more a rule than exception. Some get caught or noticed where as others are able to "manage" better with the resources at their command. A good leader is a concept worth emulating but this is lot of hard work which should start from childhood. Family values, transparency in our dealings - encouraged and learned right at home, introspection and admission of failure and learning from it, to be taken as strength rather than weakness and failure as part of upbringing and schooling. Empathizing with others and learning to listen are two important ingredient of humility. All this can not be part of any formal education but are essential to inclusive growth. Family, friends, mentors your loved ones can play an important role in keeping a person on the right track, for that matter a leader or leader to be should listen to peo ple who have no ax to grind vis-a-vis her situation in the organisation. All these "learnings" will help in making most of the leaders as good leaders. However the work place environment, profits at almost any cost, and subordinates around taking that as the main focus of their life are the issues which need a strong and ethical leader to re-articulate differently. That the good beyond these will bring greater good for the business. But alas we live from quarter to quarter results and try to better each quarter more by expediency than vision. This expedient way of doing things, compromising and bending the values, spreads across the organisation. Embarrassments are covered, failures get explained by surreptitiousness. Ultimately we may not have institutions which can produce real leaders and institution builders!

     
     
     
    • Suman Patra

    Leaders are also a human being, so they do will have desire for MONEY, POWER and FAME. But as long as they place their ETHICS, VALUES and VISION before those (MONEY, POWER and FAME) and remains grounded in all times, which seems to be very easy, but difficult to maintain in today's times, will be successful leaders.

     
     
     
    • Anonymous

    This is all about the "leadership fallacy". Truth is for years people have been making money by flogging pseudo intellectual middle class nonsense, designed to make senior people in organisations feel more worthwhile. The Leadership proselytisers look at amazing success or enduring influence and identify a list of characteristics that they announce to be "leadership". Trouble is, if you're an agnostic and take a look at catastrophic failure or sad dwindling decline into obscurity, guess what you find .. the same list of characteristics.

    It's all nonsense designed to make people who can't actually do the work that is the primary purpose of their organisation, feel better about themselves. In the end it's all about them (despite the rhetoric eg ethic, values) and this is incongruent with the notion of human organisations that are essentially socially mechanisms.

    The more enduring principle of being "in charge" is much more useful and not merely semantic. A 'charge' in its original sense is your burden or responsibility. Someone "in charge" still does the primary work of the organisation and is seen by the rest of the organisation as the most valuable ... not the best at ... not the most important ... not the richest ... not the loudest ... not the most persuasive ... not the most powerful ... but a complex intuitive notion of being the same as me but somehow more valuable to our social goal.

    Let's make 'leadership' a derogatory phrase, perhaps exchange the 'p' for a 't'.

     
     
     
    • Anonymous

    Ref: 73 - You made me laugh out loud! Brilliant! I've been itching to say something like that for ages!

    There is a fairly reliable method of finding out who is actually "in charge" of your organisation. Look who the good people turn to when the 'ship(t) hits the fan'.

    If you can still do the primary work of your organisation you are not a leader by this new definition, but you could well be in-charge. It's like a Professor who's very clever but can't teach and therefore, of limited use to even the most novice student who will recognise it from day one.

     
     
     
    • be positive
    • Author, Pusitiboo.som

    I started a blog: Pusitiboo.com about taking things positively in life. I constantly try to find inspiration on these types of articles.

    If I may comment on Leadership - I live in the Philippines, where government leadership is **it right now. The current president, Aquino tries do hard to rid of corruption but there are just people who can't seem to see that they are the villains. It is like that here - Moral bearing is keeping the leaders away, greed has taken so much toll on the leaders.

     
     
     
    • Anonymous

    All elected leaders need input from the population only. Special interest groups don't have the United States within their interests, only their own specific needs, which often conflicts with the needs of the masses. Elected Officials represent the masses, and only the good of the masses, which are the United States of America. Elected officials should be considered 2nd class citizens, like Governmental employees. Governmental employees have less rights than US Citizens.