Sunday, August 24, 2014

Ethical Leadership: Pruning Off the Debris

As business practitioners grapple with the intangible yet potentially valuable notion of ethical leadership, it is left to scholars to assess whether those practitioners are “coloring within the lines.” It is admittedly all too easy to draw in exogenous material that is pleasing to the eye; it is all too easy to deem such material required for ethical leadership rather than ballast weighing it down, unnecessarily. One business practitioner characterizes ethical leadership as that which “inspires the behaviors in people necessary to create competitive advantage.”[1] As achieving a sustainable competitive advantage is the task of strategy, inspiration alone can be extracted as that which is particular to leadership. Strategy is what is left once one has extracted inspiration from the characterization.

As though to isolate the concept of ethical leadership on a petri dish, the practitioner adds that ethical leaders “distinguish themselves by doing that which is inconvenient, unpopular, and even temporarily unprofitable in the service of long-term health and value.” These stipulations may be dogmatic in the sense of being arbitrary, however, rather than intrinsic to the concept.

What is the nature of the inconvenience and unpopularity, given that the practitioner distinguishes them from being contrary to short-term financial interests? Does it even make sense to admit the existence of an inconvenience that does not register financially? Perhaps the inconvenience is to the leader who wants to retain power, or to others in the organization. Secondly, is the lack of popularity within the organization, or in society (or both)? Lest it not be forgotten, for something to be unpopular in society translates into a lack of congruence between organizational and societal norms or values. It should be noted that organizational-societal congruence lies at the heart of corporate social responsibility. Does doing the ethical thing necessarily entail an incongruence or unpopular measure? The only aggrieved may be the corrupt, while the overwhelming majority within the organization support the ethical leader’s principles and vision for what the organization can be.

Furthermore, sacrificing on short-term financial interests for long-term profitability is not in itself ethical; rather, long-term strategy can viably be at the expense of financial expediency. To essentially “monetize” an intangible asset such as ethical leadership is problematic because the specificity can easily eliminate alternative paths that are just as capable of being classified under ethical leadership.

Nevertheless, the practitioner narrows the purview of that which counts as ethical leadership even further. Ethical leaders “view the world as interconnected and develop multidisciplinary solutions to address complex problems that crop up every day.” The world as interconnected is a salient feature of the feminine template, whereas the hub-and-spokes framework is consistent with the masculine way of relating to the world. Were the feminine structure also that of ethical leadership, the hub-and-spoke framework of stakeholder management would not be ethical. Put another way, attending to the interests of individual stakeholders could not be considered a viable approach to ethical leadership.

Nor does ethical leadership connote “multidisciplinary,” or even being broad-minded. An ethical leader can legitimately be single-minded in preaching a particular ethical principle applied to herself or the organization. Similarly, nothing in the concept of ethical leadership requires that the problems to which it applies are complex. In fact, ethical leadership is not simply another name for effective problem-solving; rather, management is oriented to problem-solving. To reduce the vision of an organizational or society leader to particular solutions is essentially to micromanage leadership into management, and therefore to commit a category mistake.

The practitioner slips into his own domain (i.e., management) in projecting a content onto ethical leadership. For example, he claims that the “leadership team” at Ritz-Carlton “allows each employee to spend up to $2,000 to address customer issues at his or her own discretion.” While giving front-line employees more discretion with which to resolve customer complaints is a laudable policy, I’m not convinced it is ethical in nature. The statement, employees should be given the use of $2,000 each, does not feel like the trust of the claim. Rather, it seems like smart, even broad-minded management not to be so niggardly with one’s control over one’s budget.

Lastly, the practitioner’s own ideology has infused into his concept of ethical leadership, as evinced in his claim that “Ethical leaders extend trust to their workers, creating the conditions necessary to empower employees, suppliers, and even customers to take the risks necessary to create game-changing innovations.” The prescriptive tone is in the subtle must extend and must create. Furthermore, is top-down management really unethical? If so, the ethical principle of fiduciary duty, which extends downward from a corporation’s board, can only be an oxymoron. The interlarded ideological demands here may be nothing more than a power-grab by means of defining. The grab in this case pertains to not only the practitioner in defining ethical leadership, but also organized labor vicariously.

At the same time, common sense tells us that ethical leadership is not just integrity in the sense that a leader's actions are consistent with her words; ethical implies that the content of at least one basic ethical principle is involved. The problem is when an ideology quietly slips in and presumes to declare itself an ethical principle. Ethical leadership itself is artificially narrowed, and likely even distorted, in the process.

Behind my critique is the Nietzschean claim that the imposition of modern morality by ethicists is itself none other than a self-serving power-grab to get the strong to do their bidding.[2] That is, the moralist’s defining is actually an act to dominate out of weakness. The club used is Thou Shalt Not, and the ethicist’s pleasure is obtained by his or her ideology overcoming the external obstacles in practitioners who have other beliefs and values.

If Nietzsche is correct, ethical leadership itself may be severely and yet invisibly infected. At the very least, its definition would need to be severely pruned back—like a government’s bloated budget that has become distended from political pressure from various special-interests (i.e., ideologies). Rather than thinking about what you want ethical leadership to be, try asking yourself what it is.

1. Dov Seidman, “Ethical Leadership: An Operating Manual,” BloombergBusinessWeek, December 17, 2010.

2. Friedrich Nietzsche, a German philosopher, most of whose books were published in the 1870s and 1880s.  Key to his philosophy: pleasure from the power in overcoming obstacles (internal or external) is our main urge, or instinctual motive.

Toward a Theory of Ethical Leadership: Exculpating Interlarding Ideologies

Constructing an accurate ethical-leadership concept that is not over-extended by one’s ideological agenda ought to begin with defining leadership itself. That is to say, more attention should be paid to thinking about what leadership is. Beyond its attributes and any contextual artifacts, leadership itself must be identified as a distinct phenomenon before we can go on to highlight the ethical dimension that completes “ethical leadership.” Then what counts as the ethical dimension of leadership can be clipped back to that which is implied in the definition of leadership, which in turn is entailed in the essence of the phenomenon.

How we characterize the ethical dimension depends in large part on how we define leadership. For example, if leadership is defined as making sense of actual and desired social happenings, then ethical leadership is the obligation to satisfy followers’ need for meaning. On the other hand, if leadership is defined as distinguishing and favoring a desired value relative to actual values, ethical leadership is the obligation to instill the desired value in others. In his text, Leadership, James M. Burns claims that transformational (as distinct from transactional) leadership is geared to the followers’ development.[1] While doubtlessly salubrious, such an accretion is dogmatic, or arbitrary, if we are to base the ethical dimension of leadership on our definition of leadership itself. I suspect that the arbitrariness here comes from the scholar’s own values, which he intentionally or unintentionally “slips in” or superimposes as being necessary to ethical leadership itself.

To tease out the presence of ideology in the formulation of a practical concept like ethical leadership, I submit for your consideration the possibility that Hitler was a transformational leader even though he did not lead in order to develop all of his followers. I suspect at least some German Jews supported Hitler because of his job-creating success from re-militarizing Germany—at least until the Nazi regime broadened its anti-Communist mandate to go after the Jews. Rather than merely exclude some Germans from being his followers, Hitler went after some of his existing followers. It cannot be said, therefore, that Hitler’s leadership was in keeping with the development of his followers.

Even so, Hitler’s leadership was transformative in terms of meaning and values pertaining to Germany itself. In re-formulating it from “the vanquished” to the third German empire, or Reich, Hitler sought to transform Deutschland. He was not merely a transactional leader, micro-managing incremental change within a given social-political paradigm or framework.

So we have a case of transformational leadership in which the development of followers is not that which is necessarily being transformed. Burns might have used the term in that way, but actually transformation has to do with systemic as distinct from incremental change; paradigm change rather than reforming existing programs. Adding content or application to transformational beyond this likely comes out of someone’s personal ideology rather than what is entailed in the construct itself.

For example, the redistribution of wealth or power is not inherent in ethical leadership defined as “making” and “selling” meaning. Redistribution does not necessarily come to mind as a leader formulates and sells a particular social reality whose meaning is valued by followers. The particular prescription comes out of an ideological agenda superimposed on ethical leadership rather than being implied in sense-making or valuing itself. 

To be sure, one could get out of the straightjacket here by widening the definition of leadership beyond that which is intrinsic to the phenomenon itself. For instance, one could say that redistribution is part of fairness, which in turn is an ethical principle, so ethical leadership must entail redistribution. This is essentially cheating, however; a definition that goes beyond the nature of that which is being defined is not accurate. The ethical dimension of leadership is delimited by what leadership itself is, rather than what ethics may entail. As a methodology in coming up with a working definition of leadership, and then of ethical leadership, we should be as strict as possible so not to leave any fat on the bone. No freeloading ideological trappings allowed.

Rather than being excessively stark or hopelessly minimalist, this approach emphasizes essence or the nature of something as the basis for delimiting a concept. Thwarting any potentially interloping ideological agendas is gravy. I believe that ethical leadership can indeed be understood and explained in terms of its essence in spite of the encroaching nature of the interlarded opinions and ideological agendas that seek to monopolize the concept for their own purposes. Put another way, the development of knowledge on ethical leadership, I contend, is being held hostage by ideologues who seek to use the label to further their own agendas. The ethical dimension intrinsic to leadership itself may be much thinner than we suspect.

[1] James MacGregor Burns, Leadership (New York: Harper & Row, 1975).

Tuesday, August 19, 2014

Religion in Ethical Leadership in the Secular Context of Business

In Peter Berger's terms, the sacred and the profane are like oil and water. In Augustine's terms, the heavenly and earthly kingdoms are two distinct realms, a Christian being only a pilgrim passing through the latter, hence not to be "of it" while in it. I contend that such "white and black" dichotomies are artificial, and thus ill-fitting as paradigms in which to situate religion and ethical business leadership. Perhaps a devoutly religious CEO can unabashedly apply ethical elements of his or her religion without severing them from their theological underpinnings, and therefore without the need for subterfuge. I suspect that the legions of the CEO's subordinates would feel more, rather than less, respected. 

Sunday, August 10, 2014

Sun Tzu's Art of War: A Recipe for Leadership in Business

According to Master Sun in The Art of War, “Leadership is a matter of intelligence, trustworthiness, humaneness, courage, and sternness.”[1] Although Sun Tzu is referring mainly to military (and related political) leadership, lessons can be learned on exercising business leadership by means of a careful adaptation.

Following Master Sun’s thesis statement on leadership, Du Mu observes that intelligence “involves ability to plan and to know when to change effectively. Trustworthiness means to make people sure of punishment or reward. Humaneness means love and compassion for people, being aware of their toils. Courage means to seize opportunities to make certain of victory, without vacillation. Sternness means to establish discipline in the ranks by strict punishments.”[2] Crucially, as per Taoism more generally, these traits should be in balance. In fact, the management of balance, which includes reaching and sustaining an equilibrium state, is more important than the particular attributes themselves in a distinctly Taoist recipe for effective leadership. Accordingly, hypertrophy—an increase in any particular variable at the expense of the whole—is NOT the way of leaders in the Way.

In The Art of War, Jia Lin warns against hypertrophy. “Reliance on intelligence alone results in rebelliousness. Exercise of humaneness alone results in weakness. Fixation on trust results in folly. Dependence on the structure of courage results in violence. Excessive sternness of command results in cruelty. When one has all five virtues together, each appropriate to its function, then one can be a military leader.”[3] Although Master Sun then says, “Discipline means organization, chain of command, and logistics,” self-discipline is a vital resource that a leader of the Way must tap in order to keep each leadership virtue from encroaching on the others and thus compromising or enervating the person's leadership. [4]  Intelligence, humaneness, trust, and courage or sternness much all be given enough space to breath, or the resulting leadership will be lop-sided. Least of all should a leader informed by The Art of War go into battle or face competitors as though a bike whose tire-spokes have not been adjusted sufficiently that the wheels are true (i.e., straight rather than wobbly).

Intelligence—which involves ability to plan and to know when to change effectively—must not be emphasized to the point that the purported leadership is reduced to mere tactic. Moreover, strategic leadership must not be allowed to tip too far over, whether in the direction of strategy or leadership.[5]

Furthermore, exercising Sun Tzu's prescription for leadership does not involve so much courage or sternness that humaneness is left in the dirt. This is no capitulation to weakness; Zhang Yu points out that if “the people are treated with benevolence, faithfulness, and justice, then they will be of one mind, and will be glad to serve.”[6] Jia Ling adds that if “the leaders can be humane and just, sharing both the gains and the troubles of the people, then the troops will be loyal and naturally identify with the interests of the leadership”[7] 

Giving humaneness more than its due (i.e., beyond its optimal effectiveness in the exercise of leadership), such as in allowing compassion to eclipse self-confident (rather than shamed) courage, weakens the exercise of leadership. Astute readers will doubtless notice the rather odd omission of any moral argument here. Nietzsche's account of compassion as a weakness fits very well here and can thus add depth to Sun Tzu's conception of leadership.

Nietzsche maintains that Schopenhauer’s notion of compassion  is essentially weakness.[8] Rather than saying that compassion is a manifestation of weakness as Nietzsche contends, Master Sun posits that acting solely on compassion engenders weakness. Both Nietzsche and Sun dismiss the sort of strength that manifests as compassion of the most inconvenient sort. The Dali Lama, for instance, could be regarded as weak rather than strong for refusing compassion for the poor in order to make even more money from his workshops "on the road." The nature of strength, and thus weakness, may be said to differ in a religious or spiritual context from the moralistic compassion described by Shopenhauer. Indeed, Nietzsche and Sun Tzu may have bad news for the moralizing business ethicists.[9]


To be sure, Master Sun had in mind military leadership, which he maintains is a part of political leadership. We cannot assume, therefore, that his breed of leadership applies to spiritual strength, or even business acumen. 

For example, the sort of courage called for in business pales in comparison with that which comes into play on a REAL battlefield. The use of military jargon by CEOs such as Dick Fuld, former chair and CEO of Lehman Brothers, is thus sheer ego; a corporation's vice presidents are not "lieutenants" and competing is not "a battle." As the saying goes, boys will be boys.

It must be admitted, however, that power-aggrandizement is no stranger in either the religious or business domain. To this extent, the art of war applies.  Indeed, vision and charisma are useful qualities in religious and business leadership. Ironically, a military general is more apt to rely on decisiveness and raw force. 

More specifically, the virtues in Sun Tzu's theory of leadership can themselves be applied under the principle of balance in religious institutions and (other) businesses. For example, excessive sternness, as is involved in treating corporate policy as if it had the status of law, comes at the expense of trust as well as compassion. Too much courage in firing "lieutenants" who might otherwise become a viable threat eviscerates trust throughout a corporate headquarters and suffocates any sense of humaneness. 

Of course, a CEO who is so preoccupied with being humane (or wanting the company to be viewed in society and even internally as compassionate and trustworthy) that he or she depletes the corporate coffers on the company's corporate social responsibility programs is not exactly acting intelligently in terms of leading a viable concern. 

In conclusion, we need to be careful in how we apply Sun Tzu's Art of War to leading a business. The leadership attributes needed for victorious military exploits are not necessarily those that pertain to effective business leadership. That said, Sun Tzu's virtues, such as intelligence and trustworthiness, are not without value in a business setting, and balancing them is conducive to the notion of optimization in a business sense. For instance, going overboard in misappropriating military terminology can be sign of underlying weakness that wants so much to dominate (Nietzsche). In Sun Tsu's terms, the exaggerated verbal toughness (think of Fuld) can be read as a desire to be reckoned as more courageous than is deserved or warranted (at the expense of intelligence), or to be sterner than need be (at the expense of humaneness).[10]  Perhaps the lesson is to calibrate the intensity of Sun Tzu's virtues to fit the business setting as distinct from a theater of war and then assess whether the virtues are in balance (i.e., none is getting pushed aside by any of the others). Applying The Art of War need not imply that business is somehow a military operation. Ironically, studying Sun Tzu's text can afford us a useful opportunity to come up with a better sense in which business leadership is distinct even as it can benefit from theories stemming from leadership in other domains.

1. Sun Tzu, The Art of War: Complete Texts and Commentaries (Boston: Shambhala, 2003), p. 44.
2. Ibid.
3. Ibid.
4. A parallel can perhaps be made to Aristotle’s doctrine of the mean, wherein a given virtue becomes a vice when too little or too much is in one’s conduct relative to what is appropriate. This does not mean moderation. For example, the anger that is appropriate (and perhaps even necessary) in stopping a thug from beating up a homeless person far exceeds the amount or intensity of anger that is suitable or fitting in an argument over politics. For an application of Aristotle's doctrine to his notion of natural wealth in checking greed, see Skip Worden, "Aristotle's Natural Wealth: The Role of Limitation in Thwarting Misordered ConcupiscenceJournal of Business Ethics, Vol. 84, No. 2 (January 2009), pp. 209-219.
5.Skip Worden, "The Role of Integrity as a Mediator in Strategic Leadership: A Recipe for Reputational Capital," Journal of Business Ethics, Vol. 46, No. 1 (August 2003), pp. 31-44.
6. Sun Tzu, The Art of War, p. 42
7. Ibid, p. 43.
8. Schopenhauer posits that compassion naturally manifests from the metaphysical One, which pervades everything, and thus all people. He gets his notion of the One from Plotinus, a neoplatonist in the third century. Interested readers might want to compare Plotinus with Shankara, a monist in Hindu philosophy who lived in the eighth century.
9. Skip Worden, "A Genealogy of Business Ethics: A Nietzschean Perspective," Journal of Business Ethics, Vol. 84, No. 3 (February 2009), pp. 427-456.
10. I would emphasize the virtue of self-confidence being too low and thus manifesting as heady egotistical excesses, but this virtue and the related vice are exogenous, or outside of, Sun Tzu's version of leadership. This is not to disparage Sun Tzu's theory of effective military leadership, for no theory captures every conceivable variable.