One of the things my mother used to say was, “life is full
of choices and trade-offs” and “making a good decision in those situations is
hard”. This motherly advice is still true today, especially for leaders,
whether they are guiding a business or a nation. Unfortunately, over the last
couple of years we’ve seen a dramatic increase in questionable decisions being
made by leaders facing situations that involve difficult choices and
trade-offs. Let me give you a few international examples that have occurred
just in the last couple of years.
On August 25, 2017, Jay Y Lee (aka Lee Jae-Yong), was
sentenced to five years in prison after being found guilty of bribery,
embezzlement, capital flight and perjury charges (his sentence was later
reduced to 2.5 years and he was released from prison in February 2018). Lee is
the vice chairman of Samsung Group and widely considered to be the heir
apparent to his father as chairman. He has been described as a serious business
man but less autocratic than his father. What values did Lee surrender when he
broke the laws of South Korea by embezzling money to bribe government
officials?
Another recent example is Martin Winterkorn, the former CEO
of Volkswagen (VW). In September 2015, US authorities charged VW with
manipulating engine emissions tests and reporting false data. The charge
affected a total of 11 million VW cars globally. When the charges were made
public, VW’s share price plummeted immediately, and the stock continued to lose
value in the following months. Winterkorn resigned within a month after
acknowledging he had known about the manipulation and has since been charged
with being part of a conspiracy that feigned compliance with federal
regulations. Prior to the scandal, Winterkorn was known as an unforgiving boss
who loudly berated subordinates who failed to meet his high standards of
performance. By covering up the emissions test issue, did Winterkorn surrender
the standards that were important to him?
A final example is Richard Smith, former CEO of the USA
credit rating agency, Equifax. Smith abruptly stepped down as CEO in 2017, when
it became public knowledge that there had been a significant cyber security
breach at Equifax. Compounding the complexity of the situation were revelations
that Equifax was made aware, months before it happened, that its’ cybersecurity
system had flaws that hackers could use to their advantage. When the hack
occurred, Equifax waited close to 40 days before acknowledging it publicly.
Even then, the company initially under-reported the extent of the date breach,
which ultimately impacted 145.5 million people. With 22 years’ experience at GE
and 12 years at Equifax, Smith was viewed as a solid business leader with a
high level of integrity. In this situation, did Smith surrender the values that
helped him be a solid business leader?
Let’s be fair and acknowledge that all leaders face
situations where they have to make a decision that requires them to assess
possibilities and make choices and trade-offs. Periodically the choices and
trade-offs are between great options, where no matter which option is selected,
everything works out well. More frequently, however, the circumstances involve
trade-offs where all options are bad. In these situations, all the analysis,
Excel spreadsheets, and logical thinking a leader can consider, does not make
the decision any easier. To use a colloquial phrase, in these circumstances,
the leader is caught between a “rock and a hard place”. Regardless of what
choice the leader makes, someone is going criticize the decision.
So, what’s the solution in these situations where there is
no good choice? Clarity of values, specifically of one’s core values! In the
leadership classes I teach at the Iclif Leadership and Governance Centre, I am
constantly surprised by the lack of clarity senior leaders have when it comes
to their own core values and how important they are for effective leadership
decision making.
What are core values? Core values are the foundation for how
we conduct ourselves. Core values represent what we stand for and what we
believe is most important. They are the three-to-five ideas that guide how we
live, approach work, and lead others. It’s important to note that our core
values can’t be based on what others think they should be, or what we THINK
they should be. Core values come from the heart. If you don’t know what your
core values are, it’s time to invest in quiet reflection about what is most
important to you and then work to infuse those values into your everyday
leadership behaviour.
Core values are non-negotiable. Great leaders don’t
surrender their core values for convenience, regardless of the circumstances or
pressures they face. They are willing to take an emotional and physical
beating, if necessary, to stay true to their values. Great leaders do not
surrender their values in order to curry favour with others, hide mistakes, or
avoid responsibility.
Core values guide the decision-making process. Great leaders
take time to define their core values because they know it helps them make
decisions faster, with greater ease, and with increased confidence, because
they know that the decisions they make are in alignment with what is important
to them. This is especially true for leaders who find themselves facing
difficult decisions where none of the choices and trade-offs are appealing.
Core values are ranked in priority order. It’s not
sufficient to simply identify core values; effective leaders rank order them. A
case in point is the decision Google CEO, Sundar Pichai, made when he fired
engineer, James Damore, in August 2017, over a controversial internal memo on
workplace diversity. The response to Mr. Pichai’s decision was mixed.
Detractors say the decision violated one of Google’s core values, freedom of
expression. Supporters say the Mr Pichai’s decision reflects a prioritisation
of one of Google’s other core values … workplace diversity. The point here is,
it is not enough to simply identify your core values. Effective leaders rank
their core values in order of importance.
So, the next time you find yourself facing equally
undesirable choices and trade-offs, ask yourself the following question, “Which
option best aligns with my core values?” By asking yourself this question, you
will not run the risk of surrendering your values.
