By Dr. Brian Engelland, Guest Contributer, The Catholic Gentleman
When I was asked to serve as interim dean of the business school at the Catholic University of America, I thought it prudent to attend a seminar for new deans sponsored by the leading business school accreditation organization, the Association for the Advancement of Collegiate Schools of Business (AACSB).
The seminar lasted two days and consisted of presentations by current and former educational leaders on what it takes to be successful as a business-school dean. One of the early presenters listed his top five keys to success, and the first key was “Never lie to your faculty.” Later that day, another of the presenters stated, “My first recommendation to new deans is always be truthful to your faculty.” The following day, a third dean repeated the same admonition about veracity and the probability that faculty will turn against you if you can’t be trusted to tell the truth.
The fact that one dean made such a comment was curious. Shouldn’t honesty go without saying? After all, it’s one of the Ten Commandments. But the fact that three deans felt it was important enough to rank as their number-one recommendation is a sad indictment of today’s society. Surprisingly, no one said anything about lying to administrators, staff, students, parents, donors, or alumni. Apparently, that’s perceived to be okay, as long as you don’t lie to faculty!
In order to be honest, one must be practiced in the cardinal virtues, which include prudence, justice, courage, and moderation. Prudence allows us to keep confidential information confidential; justice allows us to present information with sensitivity and respect for others affected; courage allows us to admit our failings and faults; and moderation allows us to rein in our excesses and provide balance in our discussions.
The army, the navy, the air force, and the marines conduct training camps with an eye toward character development so that recruits become schooled in the cardinal virtues. Recruits are put through physical and mental challenges in such a way that each learns prudence, justice, courage, and moderation while practicing teamwork and developing a high degree of trust in other team members. Individuals learn to do the right thing every time, even under stressful conditions. People of character make great business practitioners, and because veterans have undergone character training, they tend to be highly effective employees.
What happens when virtue is missing?
I remember my excitement a number of years back when I was invited to attend the quarterly marketing meeting for MCI/World-Com, which was then the largest telecommunications company in the world. The meetings were held in a large ballroom at a prominent Jackson, Mississippi, hotel not far from MCI/World-Com corporate headquarters in Clinton. One by one, marketing managers in charge of various divisions within the company were called to the front of the room. With elaborate PowerPoint presentations, they presented their divisions’ quarterly performance as related to assigned goals.
When performance exceeded the goal, applause ensued. When performance was short of the goal, the room became tension-filled and very uncomfortable. Someone, usually the underperforming marketing manager’s boss, would stand up and deliver a public tongue-lashing to the offending manager about the importance of achieving goals and reminding him or her that any further failures to achieve the assigned numbers would not be tolerated. There was no questioning whether conditions had changed or other factors had affected the outcome. It was all reduced to whether the numbers had been achieved or not. You were either a hero or a goat.
My host informed me that these public humiliations were an important means of promoting the virtue of goal orientation among managers. Anyone witnessing this spectacle would strongly desire to make sure that goals were achieved at all costs so that he or she would not be publicly embarrassed. I came away thinking that something was inherently wrong with this approach.
Performance Can’t Trump Character
What was wrong? Certainly goal orientation is important for any manager to learn, and many regard it as a virtue, but if goal orientation is held as the highest of virtues — the one that trumps all other virtues — then the emphasis is potentially dangerous.
We know from the ancient Greeks, together with Christian tradition, that prudence, justice, courage, and moderation form the foundation of natural morality. These four must always be at the forefront in a manager’s thinking, and all other virtues (except the theological virtues) should be secondary.
Fortunately, at least one manager didn’t forget to apply the cardinal virtues in the MCI/WorldCom situation. Cynthia Cooper was employed in the audit department and demonstrated all four cardinal virtues when she stepped forward to blow the whistle on what turned out to be the most significant case of financial reporting fraud ever perpetrated. Prudence was needed to uncover the problem, justice to make sure that investors’ rights were protected, moderation to keep her investigation hidden until it reached fruition, and courage to make the charges public in the face of company sanctions and personal threats.
As a result of Cynthia’s adherence to the cardinal virtues, her testimony was able to stop an insider group directed by CEO Bernie Ebbers that had been doctoring the books so that it appeared that the company’s financial goals were being met. Unfortunately, this group held goal orientation as their highest virtue. In 2005, Ebbers was convicted of fraud and sentenced to twenty-five years in prison. Cynthia Cooper wrote an outstanding book and today speaks to students and corporate groups about virtue.
The implications of Cynthia’s story go further than revealing the company’s fraud and ensuring that justice was achieved. Her story reveals to all of us that virtue is paramount to long-term success. As Aristotle once said, “Virtue makes us aim at the right mark, and practical wisdom makes us take the right means.”60 Had MCI/WorldCom aimed at the “right mark” of virtuous business rather than a win-at-any-cost mentality, perhaps they would not have found themselves in the situation that they did. If they had practiced the cardinal virtues, they might have achieved the long-run success that their CEO desired.
Which are the key virtues in business?
Social relationships can exist at three levels of goodness — pleasure, utility, and virtue.61 In a pleasure relationship, each party seeks enjoyment from the other, and in a utility relationship, each expects something useful. Most business relationships are modeled as one or the other. However, in a virtuous relationship, each individual not only receives some enjoyment and utility but also delights in the authentic character and basic goodness of the other.
Each individual comes to expect that the other will exercise virtue in all his or her dealings, and because each party sees the good in the other, each will correct the other if one ever makes a mistake. Virtues — and particularly the four cardinal virtues — allow the very best kind of relationships: the kind that are needed among coworkers to encourage beneficial change.
Business people have a desire for pleasure — to win sales, gain promotions, dine at expensive restaurants, and be perceived to be among the elite at what they do. Moderation helps us avoid excess. Although pleasure has an allure, moderation takes control. Moderation allows us to enjoy pleasures without harm to ourselves, to our firms, or to others.
Courage masters fear of pain. Businesspeople are sometimes reluctant to take a principled stand for fear of criticism from various stakeholders. But avoiding criticism or pain is not always the best course of action. We need a touch of bravery along with mental discipline to tough things out. Courage frees us and helps us overcome our aversion to pain by placing the potential pain in service of a genuine good.
Justice (sometimes referred to as fairness) governs our right relationships with others. Often the difficulty in being just is controlling our tendencies to seek advantage at the expense of others. Justice jolts businesspeople out of their desires for advantage and invites them to see things from the perspective of others. This virtue shows us that our standards should be measured not by material success but by moral success.
Prudence involves distinguishing ends from means, together with an ability to be attentive to the nature of things. Prudence gives businesspeople the grace to appreciate the true, the good, and the beautiful in their work. Without prudence they will lack insight and direction. Aristotle puts it this way: “Act in such a way that you treat humanity, whether in your own person or in the person of another, always at the same time as an end and never simply as a means.” And further, “If he have not virtue, he is the most unholy and savage of animals, and the most full of lust and gluttony.”62
One day I got a phone call from an executive search firm. The voice on the phone told me that the parent company of our leading competitor was impressed with what I had done and wanted to interview me for an executive vice president slot that was opening up in one of their noncompeting divisions. “Sure, I’d like to explore the opportunity,” I said. The next week, I traveled to the competitor’s location and met with the CEO of the parent company. I was prepared to talk about how my skills and experience could have an immediate impact in the new position. But the president’s first question related to the marketing initiatives I was implementing in my current position, so I outlined them in very broad terms without revealing anything confidential. He then asked for specific details, and I explained that I was not willing to divulge such details to a competitor.
He paused, leaned toward me, and said, “Your firm is outmaneuvering us in the marketplace, and it is imperative that I know how you are doing it.”
Suddenly I realized that this interview was a charade. There was no opening for a vice president. He was asking me questions with the hope that I would reveal something confidential, something that his staff couldn’t figure out.
“I wouldn’t expect your executives to divulge trade secrets to a competitor, so I hope you don’t expect me to do so either,” I said as I walked out of his office.
I later found out that dangling job opportunities in front of managers at competing firms was a standard practice for this CEO. Apparently, there were many people who were duped into divulging information in the hopes of getting a better job. This is how he gained competitive intelligence that he couldn’t get through legitimate means. But there is no virtue in this scheme. It is patently dishonest, unjust, and imprudent. If we are to develop integrity-infused organizations, we need to work with colleagues who have high moral character, and that requires an understanding of both virtue and ethics.
Dr. Brian Engelland is Associate Dean of the School of Business and Economics, the Edward J. Pryzbyla Chair of Business and Economics, and Ordinary Professor of Marketing. He teaches market research, market strategy and other marketing electives in support of the BSBA and MSBA degrees. Prior to becoming an academic, he was a product development executive and served in a series of leadership positions for two Fortune 500 corporations. Later, he became president of a marketing consultancy agency, Engelland and Associates, which helped clients successfully introduce new products and services. The above is an excerpt from his new book, Force for Good: The Catholic Guide to Business Integrity