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CHAPTER 6: COURAGE AND MORAL LEADERSHIP 165
of obstruction of justice for destroying tons of documents related to Enron.
Investors may also withdraw their support from the company—or even fi le suit
if they believe they’ve been lied to and cheated.
Leaders at all levels carry a tremendous responsibility for setting the ethical
climate and can act as role models for others. Dale Prows had such a role model
early in his career. Now serving as vice president of global purchasing for a leading
chemical company, Prows says he always considers the impact his decisions and
actions have on others because he admired that consistent quality in a previous
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supervisor. However, leaders face many pressures that challenge their ability to do
the right thing. The most dangerous obstacles for leaders are personal weakness
and self-interest rather than full-scale corruption. Pressures to cut costs, increase
9

profits, meet the demands of vendors or business partners, and look successful can
all contribute to ethical lapses. During the stock market bubble of the late 1990s,
for example, many leaders simply got caught up in the overriding emphasis on fast
profits and ever-growing stock prices. The practice of rewarding managers with

stock options, originally intended to align the interests of managers with those of
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shareholders, caused basic human greed to get out of hand during this period.
The New York Times represents another example of ethical lapses resulting from
subtle pressures. After reporter Jayson Blair was discovered to be fabricating
research on top stories such as the rescue of Jessica Lynch in Iraq, there were in-
dications that top executives knew something was wrong long before the scandal
broke. They ignored the signs because they didn’t want to either believe or admit
that a newspaper of the Times’ reputation could be associated with that kind of
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dishonesty and irresponsibility. Most people want to be liked, and they want
their organizations to appear successful. Leaders sometimes do the wrong thing
just so they will look good to others. The question for leaders is whether they can
summon the fortitude to do the right thing despite outside pressures. “Life is lived
on a slippery slope,” says Harvard Business School’s Richard Tedlow. “It takes a
person of character to know what lines you don’t cross.” 12

What Leaders Do to Make Things Go Wrong
What actions of leaders contribute to a dearth of integrity within the organiza-
tion? Recall from Chapter 2 that integrity means adhering to moral principles
and acting based on those beliefs. Leaders signal what matters through their be-

havior, and when leaders operate from principles of selfishness and greed, many
employees come to see unethical behavior as okay. At Enron, for example, senior
executives were openly arrogant and ambitious for personal successes, and they
blatantly flouted the rules and basic standards of fairness and honor to achieve

personal gain. As one young Enron employee said, “It was easy to get into, ‘Well,
everybody else is doing it, so maybe it isn’t so bad.’” 13
Exhibit 6.1 compares unethical and ethical leadership by looking at ten things
leaders do that make things go wrong for the organization from a moral standpoint.
The behaviors listed in column 1 contribute to an organizational climate ripe for
ethical and legal abuses. Column 2 lists the opposite behaviors,
which contribute to a climate of trust, fairness, and doing the
Go to Leader’s Self-Insight 6.1 on page 166
right thing. 14 Action Memo
As we discussed in Chapter 1, the leader as hero is an out- and complete the questions to learn your
dated notion, but some executives are preoccupied with their own Mach score and how you might fi t into an
importance and take every opportunity to feed their greed or nour- Enron-type environment.
ish their own egos. They focus on having a huge salary, a big offi ce,
and other symbols of status rather than on what is good for the