Speaking of Leadership®, Vol. 2, No. 3
Phil Holberton

Corporate leaders are often charged with maintaining the steady growth and prosperity of a company. As leaders, it is our job to ensure the company delivers its products and services in a way that generates a profit. However, this is actually only one objective and just the beginning of our responsibility. Our greater effort is to maintain a healthy, viable business for employees, customers, and stockholders—a business that, as an entity, acts resourcefully and with integrity.

The importance of integrity as a core business value has never been so obvious as it is currently with the Enron debacle. While the details of Enron's collapse will continue to bubble to the surface for months or even years to come, it is evident that large and small decisions were made that, in aggregate, reported immediate profit (at least on one set of books), but also caused the company to implode. From inaccurate, sweeping profit statements to a single e-mail encouraging the destruction of documents, Enron's decisions were rife with untruths and inaccuracies.

Any business, but particularly large corporations, has a widespread effect when it fails. At the first level, employees lose jobs. Next, investors, customers, and vendors take a hit. But, the third level—the cumulative effect of the first two—is most damaging. This third level could go by many names, but perhaps the words “permanent and lasting pain” would sum it up best. Some of the leaders of Enron and Arthur Andersen made such poor decisions that a multi-billion dollar, well-established corporation fell to its knees in just over several months. Profitability aside, we must not forget the lasting impact such irresponsibility has for thousands of people. Employees and vendors are out of work. Many employee retirement funds are suddenly worthless. Investors are stinging from the false values of their portfolios. And, most importantly, the emotional toll whose extent is so hard to measure has just manifested itself with the suicide of a former Enron executive.  And, unfortunately, I don't think it's over yet. There may very well be additional casualties resulting from the widespread investigations.

As leaders, we must look closely at Enron and learn from its mistakes. Those who were charged with leading the company failed to consider the overall health of the organization. Consequently, thousands of people's lives have been shaken—many beyond repair. As we make decisions, small or large, we obviously must consider profitability, but we also must assess the ramifications on all the company's stakeholders. We are in business to make a profit, but we must never forget how profit is generated. True profit and accomplishment are created by people who deserve to be treated with integrity. As leaders, we must continually ensure that integrity is a continual companion in all our decisions. It's our responsibility to customers, investors, employees, and ourselves. 

Now ask yourself... Am I a Leader?