A CEO in New York shared a conundrum with me a few weeks ago. It involved money – the CEO’s compensation, to be specific.
A Board member had approached him with a request. A major portion of this Leader’s compensation for the year would come in the form of a stock bonus tied to hitting annual budget targets. At the mid-year mark, it was clear to the Board that the company would not hit the targets. The Board wanted to reward the CEO with the bonus anyway, and they were asking him to provide new (i.e. ‘lower’) targets that he and the company would be sure to hit. The request did not sit well with the CEO.
What guides your significant leadership decisions?
My family has been enjoying the DVD release of HBO’s John Adams, based on David McCullough’s Pulitzer prize-winning book. The movie provides an intriguing portrait of our country’s first great Leaders at work.
It’s amazing to remember that the United States, arguably the most powerful nation in the world today, was brought into being through a bunch of words written on a piece of paper.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness . . . .
Where did these words, this Declaration, come from? What guided these early Leaders in the creation of a new country?
An early scene in the movie captures Thomas Jefferson, Benjamin Franklin and John Adams in a simply furnished, sunlit room. They are reading Jefferson’s first draft of the Declaration of Independence. Together, the men turn each word over, editing, agreeing, deleting, challenging. Words . . . from men . . . assembled . . . to create an entirely new form of government.
These Leaders were guided by what we now call the Character Ethic, a basis for living grounded in things like integrity, humility, patience, industry, The Golden Rule. My identity and behavior are guided from within — “inner direction.”
Fast-forward to today’s dominant formula for success — the Personality Ethic. This Ethic is generally considered to have kicked off in the 1930’s with Dale Carnegie’s How to Win Friends and Influence People. Who I am and how I behave is guided by what I want others to think of me – “outer direction.”
Do you lead from within? Or without?
Back to my CEO friend. He talked, I listened. As he had the conversation with himself over his Board’s request, I observed him going inward for guidance. And I watched as he confronted integrity.
One way of defining integrity is unity between beliefs (inner) and behavior (outer). Walking the talk.
He knew that when he set bonus targets for his own direct reports, he didn’t artificially adjust the targets just to make them happy with a bonus they hadn’t really earned. In the same way, with integrity, he wouldn’t take advantage of the Board’s favor to reward himself in spite of missing the goals.
How many stories (and photos of perp walks) have we seen in the last couple of years of CEOs who behaved differently – rewarding themselves with excessive bonuses or secretly re-priced stock options at shareholders’ expense? Is it possible they were guided by the need to appear more successful or wealthier – as part of their pursuit to win more friends . . . or influence more people?
Which direction do you go to guide your Leadership?