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The Alchemy of Leadership Blog

The Only Way Is Ethics

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Business ethics have been put under the microscope over the last few weeks.  Money-laundering.  Swiss bank accounts.  Offshore companies.  Tax avoidance / evasion.  Bonuses.  The press is full of greedy bosses, supine boards, rule-bending traders, and so on.

So let’s say you run a big business which wants to protect and improve its corporate reputation.  Once you’ve decided what your internal code of practice is, how do you make sure it’s carried out every day, everywhere?  After all, it’s not much use writing down fine words about values, motives and so on if, in practice, the people on the ground don’t live them day-to-day.

General Electric faced this problem under Jack Welch’s tenure.  Following a defence procurement scandal, he needed to get a 300,000-person organisation to behave more ethically.  Easier said than done, especially in a competitive, hard-driving, profit-focused culture like GE’s.  He wanted to address temptations like bribery, gifts, reporting and so on.

I know, boring stuff in the wrong hands.  But Jack made it compelling.  In fact, he made it compulsory.  His answer was to create a process he called ‘Integrity: The Spirit and the Letter of our Commitment’.  Carried on under his successor Jeff Immelt, it was summarised in a 30-page document covering the key topics.  Each employee had to sign this document to affirm his/her commitment to the process, not just once but every year.  Adherence was a non-negotiable “condition of employment”.

Jack believed GE’s brand was its greatest asset.  Protected by this locked-down Integrity process, the company’s reputation soared under his leadership.  The process survives, in an updated form, to this day.  Something for the rest of us, perhaps.

© Patrick Macdonald 2015

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