Some people are scrupulously honest, a few are compulsive liars, and most are somewhere in between.

What's more, your business can't do anything to change that.

However, what you can do is to create a culture that promotes growth -- based on values including integrity. Indeed, when I wrote my 2003 book, Value Leadership, after the Enron and WorldCom scandals, I was thinking about how important it is for a business to act based on values that make employees, customers, and communities better off -- which ultimately benefits a company's investors.

Not surprisingly that book did not change human nature. Indeed in my February 2017 book, Disciplined Growth Strategies, I highlighted how a lack of integrity can severely damage a small company. A case in point is benefits software supplier Zenefits -- which hit a peak private market valuation of $4.5 billion valuation in 2016 -- but after word surfaced that it was using software to enable employees to cheat on a licensing exam, that valuation plunged 56% and its employee count fell 45% to 525.

As I pointed out in Value Leadership, my definition of integrity hinges on the principle: Fulfill Your Commitments -- meaning people should tell others what they intend to do and then do the thing they promised. If you fulfill your first commitment to someone, you will build trust. And if you keep fulfilling your commitments to that person, your reservoir of trust will build up even more.

Sadly the world is not a perfect place. Sometimes, you promise another person to complete a task by a specific time and a more important priority intervenes. If that happens and you miss the deadline without communicating what happened and offering a new deadline, you will quickly drain that reservoir of trust. Therefore, a corollary to the Fulfill Your Commitments principle is to communicate quickly when you must replace your earlier commitment with a new one.

Here's how integrity can boost your bottom line. Most companies operate in fear of the economic consequences of employees, suppliers, and customers who lack integrity. Such companies build processes and systems to verify the assertions of those stakeholders and to block them from getting access to the company's valuable resources until their integrity can be verified.

The more frequently such verification systems are used, the more slowly the company can respond to signals from the market place -- such as processing orders, delivering goods to customers, or purchasing supplies. More broadly, such systems create an atmosphere of distrust and fear which stifles the creativity and initiative of a company's employees.

A company that fulfills its commitments can cut way back on the use of systems and processes designed to block the negative economic consequences of distrust. Simply put, integrity lowers costs and speeds up your company's ability to respond and adapt to change.

And that's good for a company's bottom line.

SailPoint, a $130 million (2016 revenue) provider of identity management software, has incorporated integrity into its operations. As CEO Mark McClain explained to me on April 28, "When we started the company we had the luxury of thinking about what values we wanted in our culture. We realized that honesty and trust were table stakes. We needed to go beyond that and deliver on the commitments we make."

In so doing, SailPoint believes it sets itself apart from many high technology companies. "Technology companies tend to over-promise and under-deliver. We try to be aggressive about where we're heading. We have product road-maps. Our finance department will promise to process expense reports within a specific number of days. And we work hard to meet those commitments and communicate when things change," he said.

Integrity drives hiring decisions and even how SailPoint interacts with customers. As McClain said, "We talk a lot about values during the hiring process. If someone we are interviewing tends to do whatever it takes to meet goals, they may listen to that talk and decide to self-select out of the interview process. If we hire someone who does not fulfill a commitment, we remind them of our values the first time, and on the second time we tell them 'one more and you're out.' We want to interact with individuals who have integrity at our customers and we will raise [the lack of integrity in one of their employees] as an issue with customers. We tell them this is a two way partnership."

Integrity helps SailPoint to tap new talent pools. As McClain said, "If we hire from a new organization and that person fits our values, he will tell his best buddies to apply here. The right kind of people attract more of the right kind of people."

If integrity is a cornerstone of your business, then you should already be enjoying its benefits. If not, your employees, customers, and investors are missing out.

Published on: May 3, 2017