Entrepreneurial Ego

The behavior of the people at the top--not their insincere pronouncements--has the biggest impact on the attitudes of the nation

Not long ago, the chairman of a large company hired me to help the president of one of his company's entrepreneurial units. The parent company was siphoning millions every year from the young business unit, and the chairman was convinced that the guy running the show was a genius. But the company was facing a sexual-harassment suit as a result of the genius's behavior. My job was to help stop this fellow from continuing to sexually harass women in his employ.

"Look," the genius said to me during our first meeting, "I don't need your help. I'm going to trial on these sexual-harassment charges, and I'm going to lie. What's more, my two top executives have agreed to lie for me. Hell, I could tell all my workers that I'm intending to lie under oath, and it wouldn't make a damn bit of difference. Cash, stock in the company, they're what matter today. What makes you think integrity matters? President Clinton dances around the truth daily. If integrity mattered, Dole would be president."

The genius reasoned that if the president could get away with his alleged bad behavior, then why couldn't he? But the genius missed the point. A chief executive may adhere to the mandate "Do as I say, not as I do," but most people behave according to the principle that actions speak louder than words. Psychologists call that social-influence theory. You want to know how leadership works? Throw out the mission statements; don't bother with values statements; just look at how the company leader behaves and you'll know with 100% certainty how the employees will act and feel about their employer and their employment status.

If your employees know you to be corrupt, their attitude toward work will be shaped by what you do, your mission or values statement be damned. When people at the top of an institution behave in a self-centered, narcissistic way, their "screw the rules" attitude is likely to be emulated by all they come in contact with.

There are psychological consequences for living the life of a hypocrite, and there are business consequences as well. Consider the number of start-ups that soar to initial-public-offering viability, only to crash and burn when key employees pocket their stock and seek greener pastures. Or worse, they stay put, parading around in "Screw you, I'm vested" T-shirts, thumbing their noses at company loyalty.

When you lie and believe there will be no consequences for your leadership status or your bottom line, if your key workers are spineless and mercenary too, then you may be correct. Lawyers will tell you that the courts are so full of pathological prevaricators that judges and arbitrators have come to believe that everyone who stands before them is at least mildly disingenuous. The CEO who lies and cheats, however, should remember this: the liar's punishment is not that he is not believed, but that he can believe no one else. That's the true consequence of amoral leadership.

Can You Be A Liar and A Leader At the Same Time?
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Steven Berglas is a management consultant and a psychologist on the faculty of Harvard Medical School.