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How to Be a Fair Leader

Fair business practices are not about political correctness and mediocrity -- they're about competing and winning on your merits.

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Fairness is one of those concepts that you rarely think about until it's called into question. It really doesn't matter which side of the equation you're on. Whether you feel you've been treated unfairly or someone accuses you of the same, it can turn your world upside-down.

That's precisely why it's so important to understand what it means to practice business and management fairly.

In a business context, I think "fair" means honest, impartial, and transparent. But in these politically correct times, some extend the meaning too far. The result can be anything but fair.

For example, some leaders say all workers should be treated the same. They say that's fair. But is it really? Is it fair to treat an underperforming employee the same as a co-worker who is far better at her job? I don't think that's fair to either person.

Moreover, that scenario isn't fair to shareholders because organizations perform better when people are held accountable for their actions, for their actual performance.

Another example is free market capitalism. Some think that business shouldn't be about winning. Nobody should have to lose. Everybody should win. That way, everything is fair and equitable. And if we teach that to children in school, new generations entering the workforce might have that expectation.

While the "everybody wins" concept may work in Utopia, it doesn't work in the real world because that's not how competitive markets operate. Every sale has a customer, a winning supplier, and a bunch of losers. That's called competition. That's how consumers and businesses get the best value for their money. It's a good thing.

Since the concept of fairness is less black and white than any of us would like, I thought I'd take a stab at clearing up the confusion with five guiding principles for fair business behavior.

Tell it straight and walk the talk.

If you're open and genuine, if you say what you mean and mean what you say, then people will always know where you stand, what to expect from you, and where they stand with you. If you also consistently follow through with actions, then you're transparent, honest, and impartial. That, to me, means you're fair.

That also means you don't tell people what they want to hear, take the easy way out, sugarcoat, spin, BS, play political games, or behave passive aggressively.

Establish the rules of the game.

There's nothing worse than trying to play a game when you don't know the rules or they keep changing in some arbitrary way. Not only isn't it very fair, it can be extremely frustrating and a significant drain on employee morale and organizational performance. That's especially true of hiring, performance reviews, and promotions.

When it comes to anything organization or company-wide: goals, strategies, plans, processes, culture, rules--whatever--establish them, document them, and communicate them. Then be as even-handed in your execution as you reasonably can without becoming overly bureaucratic.

Don't let personal bias get in the way of good business and management decisions.

Let's face it; we all have personal bias. If you say you don't, that means you're either lying or not very self-aware. That, to me, is an even bigger problem. The fairest thing you can do about personal bias is to know yourself and don't let it get in the way of making smart business decisions on behalf of your stakeholders. That's all there is to it.

For example, when it comes to hiring people, signing vendors, and promoting employees, you should choose the most qualified candidates for the job. That's why it helps to have a specification. That's your guideline. Of course you should also trust your gut, but that should be about instincts, not personal bias.

Compete to win, fair and square.

Whatever business you're in or battle you're fighting, you should compete to win. That's how business works. As long as you fight fair and win on your merits, then you should be proud to win. Likewise, there's no shame in losing. Just learn from your mistakes and try to do better next time. Why anyone would think that isn't fair, I have no clue.

If, on the other hand, you subscribe to "the ends justify the means" or winning at any cost, that's a different story. When you cross legal, ethical, or moral boundaries, then fairness is pretty much off the table.

Negotiate in good faith.

Negotiating is different than competition for a job or business. Whether you're negotiating a sale, a partnership, or an employment agreement, it doesn't matter. If you negotiate in good faith and reach agreement, that, by definition, is probably fair. If one party isn't as savvy or well informed as they should be, that's on them. Live and learn.

There are all sorts of nuances and exceptions where one party perhaps could have been more forthcoming or terms aren't as well described or defined as they could have been. Generally speaking, every agreement has flaws and omissions. You don't usually find out about them until things are well underway. Again, live and learn--and come up with a more affective agreement next time.

Last updated: Mar 13, 2013

STEVE TOBAK is a management consultant, an executive coach, and a former senior executive of the technology industry. He's managing partner of Invisor Consulting, a Silicon Valley-based strategy consulting firm. Contact Tobak; follow him on Facebook, Twitter, or LinkedIn.
@SteveTobak




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