Responsibility for work failures inspires honesty
Opportunities to be dishonest in business present themselves every day, and none of these executives claim immunity from the pressures. "There is so much pressure to perform," said Dave Checketts. "Shareholders demand a certain kind of performance. You take that pressure, internalize it, and pass it down to other employees that work for you. They feel it, and their job becomes 'How do we deliver to expectations?' instead of 'How do we do what is right?' "
Checketts acknowledged that part of this is structural. "In some companies, the entire management team has compensation incentives that are based on hitting the goals and expectations and achieving budgets," he said. "Thirty to forty percent of their livelihood is based on this. You get pressure from the top down to hit the mark."
Rule #3: Make no Excuses
The most important aspect of honesty in business is taking responsibility for one's own actions. In August of 2005, Dell Computers made an unusual announcement: It had fallen short of expectations and failed to meet its goals as well as the projections set by analysts during the second quarter of the year. Profits had gone up 28 percent that quarter. But overall Dell had expected revenues to rise by several hundred million dollars more.
Then Dell's CEO, Kevin Rollins, made an even more unusual announcement: He took personal responsibility for the shortfalls by blaming himself. In a conference call with reporters, Rollins said: "Frankly, we executed poorly on managing overall selling prices."
Following Rollins' announcement, the New York Times profiled his unusual management style, pointing out that "there's an established drill, or so it sometimes seems, when a publicly traded company disappoints Wall Street. The chief executive blames high oil prices. Or it's the fault of unforeseen happenings in Asia, or of a software upgrade that didn't go as planned."
The Times went on to say that Rollins "could have offered any number of excuses, not the least of which is Dell's own previous success. Its revenue grew 15 percent when compared with the same quarter last year — impressive for a company on target to bring in more than $50 billion in revenue over the next 12 months but still short of its own expectations for an increase of 16 to 18 percent."
This wasn't the first time Rollins did this. In 2001 he blamed himself and fellow executives for failing to set the right tone. He said that the corporate culture at Dell had been tainted by greed. And he developed a new protocol that subjected every Dell manager — including himself — to periodic peer evaluations by subordinates. This generated some negative feedback about himself.
From the book "THE MORMON WAY OF DOING BUSINESS: Leadership and Success Through Faith and Family" by Jeff Benedict. Copyright 2007 by Jeff Benedict. Reprinted by permission of Warner Business Books Inc., New York. All rights reserved. Cover price: $25.99.
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