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What Recent Events Teach Us About Ethics & Leadership

By Matt Kelly

Presidential transitions are always poignant moments in the United States, and the arrival of the Biden Administration is no exception to that rule. They are often times where ethics and leadership are on full display.

The circumstances of that transition, however—the insurrection on January 6th, and the acrimony that has riven the country really since the November 3rd election—most definitely are an exception to what the United States has seen at least since the Civil War, if not the founding of the country. 

So as Joseph Biden assumes the presidency with enormous challenges all around, I can’t help but wonder: What lessons about ethics and leadership matter most at times like this? What have recent events taught us about success (or the lack thereof) at leading large organizations?

First: Leadership Is About Principles and Objectives

When I think about ethics and leadership, I often recall the insights from management consulting guru Jim Collins in his book Good to Great, first published in 2001. Collins explored the role that CEOs play in businesses that rise to become the best in their respective industries. He identified five levels of leadership, and called the best CEOs “level 5 leaders.” 

Level 5 leaders are tenacious, driven, and hard-working—but their most important attribute, Collins said, was humility in pursuit of a larger cause. Level 5 leaders spend their time defining the organization’s fundamental objectives, and the traits most important to organizational culture. That’s all. 

Level 5 leaders aren’t consumed with seeking credit as the organization pursues those objectives, according to the standards of conduct the CEO defined. If anything, level 5 leaders are consumed with assuring that others in the organization get credit for victory, so everyone else will be further inspired. For level 5 leaders, organizational success is the reward. 

You see examples of that leadership in President Biden’s inaugural address. He talked about fundamental objectives: ending the pandemic, fighting climate change, restoring economic prosperity, defeating right-wing extremism. He also defined the organizational traits he wants for America’s political culture: unity against common adversity, respect for difference of opinion, and resolve in the face of daunting odds. 

That’s not a bad way to start your first day as CEO.

Second: Build a Strong Team and Empower Them

The more a leader works on broad objectives and organizational culture, and then hiring others who understand those points clearly, the more that leader can trust those people to exercise good judgment and to advance the organization’s goals skillfully.

In this case, I recall lessons from a now-deceased U.S. Air Force pilot named John Boyd. Boyd revolutionized military strategy in the 1970s with an approach he called the OODA Loop: observe, orient, decide, act. The quicker military leaders could cycle through that loop, the more responsive they could be to changing battlefield conditions and prevail over the enemy.

For that approach to work, however, senior officers at headquarters must place immense trust in the junior officers in the battlefield, giving those junior officers the freedom to act as necessary during the fog of war. Which means senior officers should focus only on setting broad objectives and on training junior officers in how to make snap decisions according to the army’s standards of conduct.

Well, that principle is just as true in politics and in business. The best CEOs don’t meddle in the tasks of their lieutenants. The best CEOs define the organization’s objectives and how the organization should try to achieve those objectives—something more commonly known as “corporate culture.” 

Sure, part of the CEO’s job is also to equip those lieutenants with the budget, technology, and other tools to pursue those objectives, but the most important item for the CEO to supply is a sense of the organization’s purpose and values. That’s how junior executives gain insights about how to act and act quickly—in order to prevail. 

Third: Hold People Accountable

Leaders can define ethical priorities and expectations for good conduct all they want. If leaders don’t also hold people accountable for violating those standards, people will quickly see that those lofty words carry no real meaning and can be ignored. Kiss your hopes for success goodbye once that perception takes root.

Another way to think of accountability is this. Ethical standards are statements from leadership about what’s important. When leaders then fail to hold people accountable for misconduct, they’re telegraphing to employees that those standards aren’t really important. From there, it’s only a short jump for employees to substitute their own judgments about acceptable ethical behavior—because management was never serious about those standards in the first place. 

That’s how failure to enforce accountability breeds ever more misconduct, plus all sorts of other disorder within an organization. Conversely, holding people accountable to ethical conduct conveys the message that employees are beholden to a higher set of values. That’s how you nudge people to put organizational purpose above personal gain.

Fourth: Cultivate Organizational Trust

One of the most important assets a CEO has is the trust that various stakeholder groups place in his or her leadership. The good news for CEOs these days is that, according to the Edelman Trust Barometer, people trust their own employer more than any other institution, and they trust it a lot—a score of 72, on a scale of 0 to 100. 

That’s far higher than trust in government, the media, and non-governmental organizations, which all polled in the mid-50s or worse. Even better: most people perceive businesses as both competent and ethical; other institutions are seen to be one or the other, but not both.

This is an excellent position for CEOs to find themselves in. When employees trust the CEO, they’re more likely to obey policy or speak up about violations they see. Trust makes compliance programs easier to run because employees will follow the rules you put forth. 

So how can a CEO protect and cultivate that trust? By demonstrating predictable behavior; by staying true to the core principles and objectives the CEO articulated, and then communicating how the company’s specific actions derive from those principles and objectives. That consistency is what brings trust.

When you have the trust of people—a team, a workforce, a political party, a nation—you can ask those people to make sacrifices. You can ask them to subordinate their own desires and interests to the ethical priorities and strategic objectives of the whole organization. That’s how large organizations can succeed, even in today’s complicated and volatile business landscape. 

It’s a lesson worth pondering as we shake off the travails of the last several months and move into the Biden Administration. Let’s hope our new president continues to embrace ethics and leadership.

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