What Working at Enron Taught Me About Corporate Ethics
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I had the most incredible job out of college for a budding macroeconomist with a global lens. Creating markets in everything from natural gas to dark fiber to weather derivatives. At a Fortune 10 company. The darling of Wall Street. Until it wasn't. And my bosses went to jail.
To say I was shocked and disillusioned by the experience is an understatement. There's nothing quite like having to speak to the FBI and SEC as a 25-year-old about what you thought was business innovation -- which, in some cases, was fraud -- to make you rethink your career path.
I'd had enough of a bad taste of corporate America, so I packed a backpack and headed to the South Pacific for several months. After starting to write a book about my experience, I came to the realization that I could make the most impact by working to change the business world for the positive -- starting with its leadership. Today, I'm adamant that integrity and trust must be at the core of any company for it to succeed, and more importantly, to make a significant impact in the market for investors and for those whose lives it affects.
From Uber's culture crisis to United Airlines's PR troubles and the Cambridge Analytica data privacy scandal, corporate ethics has undeniably taken center stage in today's headlines. We've been reminded time and again of the consequences of companies behaving badly. At the other end of the spectrum, companies love to tout their corporate social responsibility programs and do-gooding to the public. But, rarely do they take a look inside their own organizations to consider what corporate ethics really looks like or how to approach the issue, not just externally, but from the inside out.
While some Fortune 100 executives have gone to jail trying to deliver financial results at all costs, others have pushed their businesses forward with decisions rooted in integrity and a commitment to employees, customers and shareholders. The fact is, it's not a trade-off. Having honest business practices is only the baseline -- it's about building trustworthy leaders. If leaders do not operate from a place of integrity, it sets the tone for everything and everyone else and directly and negatively impacts the bottom line.
So, what does ethical leadership look like in the wild? I believe in the three "E"s that leaders must grasp to create the trust necessary to build a high-performing organization:
1. Enthusiasm is about embracing excitement and passion for the vision of company. Although leaders have different styles, you must exude a core belief in and elation for the company's opportunity in the market. If leaders do not enthusiastically embrace the company vision, how can you expect employees to do the same?
2. Empowerment starts with a belief in the power of your employees to drive results and the ability to relinquish control to let others make decisions. The best leaders are those who support and guide employees in taking ownership to drive change, finding creative solutions to meet corporate and personal goals, and executing even beyond what they believe they can do.
3. Empathy (or emotional intelligence) means understanding the drivers and motivations behind your team to help them do the best work of their lives. Don't worry if this skill is not innate, it just means you need to ask your employees questions and listen -- really listen -- to know what makes them tick. And, since we are all human, uncovering commonalities can go a long way toward instilling loyalty and company pride.
These three "E"s are a good place for leaders to start. But, to ensure your company stays on ethical ground, there are also a few must-haves:
Align core leadership.
It's one thing for the penultimate leader to lead ethically, but it won't matter unless key leaders follow suit. You must set a holistic example of how you are running the company, as even one bad apple can ruin a company's reputation and call your leadership into question. Take a look at what happened recently at Nike. Bad behavior went on for far too long -- first with one executive, then several others who stepped down or were asked to leave. This could have been avoided if the entire leadership team was aligned to respect and integrity -- and held accountable.
Make tough people decisions, quickly.
Back to the Nike example, once this behavior came to light, leaders needed to act quickly to remove bad actors, not turn the other way or encourage it. Not only do these situations cause bad PR, but they also affect the talent pool and revenues, as more and more consumers make purchase decisions based on brand reputation. Sadly, at Enron, there were so many bad actors that were not only left in place, but also rewarded and promoted -- ultimately landing several in jail.
Establish the ethics of your board.
Your board must reflect the company's high ethical values. On top of this, have vocal participants who ensure you run your company in an ethical fashion. In Uber's case, it took one very vocal board member -- Arianna Huffington -- to convince the rest that the CEO's behavior was so caustic that changes needed to be made. Sadly, bad behavior is often overlooked when company performance is strong, as was the case with Enron. But, no number of quarters of aggressive stock growth outweigh a bankruptcy that not only ruins fortunes, but also lives and legacy.
I lived through one of the worst examples of corporate greed and hubris and learned the importance of transforming those learnings into net benefits. The great news is that leaders are the creators of mission and culture and have an incredible platform to make a lasting, positive impact. As Delta CEO Ed Bastion said when explaining why the airline would end its discount for NRA members, "Our company's values are not for sale."
Don't waste your opportunity as a leader. Embrace it and use your platform to create a positive legacy. For you. For your workforce. Humanity. And the bottom line.