How to Out-behave the Competition with Dov Seidman

It once wasn’t uncommon to hear a boss tell their employees “just get it done. I don’t care how.” However, in the last decade, organizations have evolved. Now, we often hear leaders priding themselves on encouraging their employees to speak up.

But, what if leaders created environments and cultures in which it didn’t take an act of courage for employees to speak their minds?  In this episode, we explore how leaders can create a framework and playbook for moral leadership at their organizations that allows employees to out-behave and consequently out-perform the competition.

Meet Dov

Dov Seidman is the founder and chairman of LRN, an ethics compliance training firm, as well as the founder and chairman of The HOW Institute for Society, which is dedicated to infusing ethics into corporate culture. He is also the author of the bestselling book “HOW: Why HOW We Do Anything Means Everything.”

In this episode, host Gautam Mukunda speaks with Dov about the framework for moral leadership and why organizations benefit from building a do-it-right culture.

Timestamps

[1:05] “After all, what is business? Business is human endeavor.”

[6:00] “There is undoubtedly a desire for moral leadership in the workplace. Employees are asking for it, and when employees are inspired by where they work, the results are remarkable.”

[10:30] “Your reputation precedes you before you arrive, and you leave it behind in digital footprints for everybody to Google.”

[14:20] “I think moral leaders have to show up. But when you show up, you don’t need to sit at the head of the table.”

Transcript

Gautam Mukunda (00:00):

When it seems like no one agrees on the right course of action, how can morals mean good leadership?

Dov Seidman (00:06):

And I felt that, why are we just outperforming and outproducing and outsmarting and outfoxing the competition, when we can out behave the competition. We can create value through how we do things.

Speaker 3(00:17):

World Reimagined with Gautam Mukunda, a leadership podcast for a changing world. An original podcast from Nasdaq.

Dov Seidman (00:27):

I've always felt that philosophy is practical and I've been passionately devoting my entire life to the practicality of philosophy, but I chose to do it in the capitalistic arena, in the rough and tumble world of business, in the gray world that needs to be navigated nonetheless, in a world where decisions are incredibly consequential but need to be made nonetheless. I felt that I was put on earth to be an entrepreneur and bring philosophy to the arena. Because after all, what is business? Business is human endeavor. It's human beings coming together to provide a valuable service or product. And if you are going to be in human endeavor, you need an ethic and an ethos that animates that endeavor.

Gautam Mukunda (01:16):

Dov Seidman's career has been driven by his fascination with moral leadership. He's the author of the bestselling book, How, and the Founder and chairman of LRN, an ethics and compliance training firm. He also founded and chairs the HOW Institute, which is dedicated to infusing ethics into corporate culture, by examining not just what leaders are doing, but how they're doing it.

(01:39):

In Dov's philosophy, moral leadership goes deeper than simple compliance with regulations. It's motivated by a nuanced and thoughtful understanding of right and wrong. And according to Dov's research, that's something there is both a strong want and a strong need for.

Dov Seidman (01:57):

I'm all for compliance, but when somebody goes offshore to money launder, they might have learned in the compliance program about why they're going to get caught onshore, about the perils of doing it onshore. I think it's more important to create a do it right culture where people internalize the spirit of these laws and rules so that they don't think to behave that way onshore or offshore. So I'm for compliance. The question is do you do compliance as a matter of process and managerial attention, or do you get compliance as an outcome of a do it right culture?

(02:30):

And to put this in simple terms, we live in a rule of law society, which I celebrate. And many laws are translated into amoral rules. They specify what you can and can't do. And then some corporate policies are amoral in that way. What you can and can't do. And I call those required behaviors. You do those because you must. And there are some required behaviors, lines you should not cross, that we just need to honor. And a compliance program that uses carrots and sticks to teach us about these lines and boundaries and incentivizes us to live within them, I think is really important.

(03:07):

But then there are inspired behaviors. Things we do because we're inspired. They're right, they're fair, they're innovative, they're collaborative, they're earnest, they're vulnerable. And I think those are the behaviors that make the world go around that usually are the source of whether we make it or break it, inspired conduct. And I've spent my whole life trying to create the right balance and harmony between the two. Just like some things you do to survive and other things you do to thrive.

(03:35):

But frankly it's because I had a compliance business as well, people were more open to the ethics thrive message. Because you want a goalkeeper or a strong safety by metaphor to not get scored on here. But why don't we keep the ball on offense? Because this is a dangerous world. So why don't we worry about how all 11 players play the game and keep the ball on offense? Because we often have a defensive posture when it comes to behavior. We tell a child to behave right after the child misbehaves. Or we talk about good behavior. He was let out of prison early for good behavior. And I felt that why are we just outperforming an outproducing and outsmarting and outfoxing the competition, when we can out behave the competition, we can create value through how we do things.

Gautam Mukunda (04:20):

I mean, intuitively, right? This is a story that both seems powerful and it's one you want to believe, that how you do things can mean that you act ethically and you also get people who are more engaged and you become a better business. So I both believe that and want to believe that. Both of those things are true.

(04:33):

But in the United States, every single study, for example of American employment, says that the single largest form of theft in the United States, swamping any other, is wage theft. It's companies who refuse to pay their worker what they're owed. So what's gone wrong?

Dov Seidman (04:47):

So isn't it funny, you just said to me how we do things is almost inherently and axiomatically true. But you and I came of age, Gautam, when bosses would say, "Just do it, I don't care how." The just do it era of efficiency where employees are not assets, they're costs in many ways.

(05:05):

So again, I promoted the idea that how matters against the backdrop of bosses saying, "Just do it, I don't care how," and that's what a good boss sounded like and they got a promotion. Okay, don't do something stupid like getting caught hiring child labor. But other than that, just do it. So I think there's been a big shift. Imagine saying, "Just do it, I don't care how," today. Would that resonate, Gautam?

Gautam Mukunda (05:27):

It wouldn't resonate with me, but I fear that that might still be the norm in too many places.

Dov Seidman (05:31):

Yes. We're going to talk about moral leadership and we studied it. There's a great demand for it. 88%. We did a large study on the state of moral leadership and business and 88% of respondents, by really trying to observe the behaviors and qualities that moral leaders embody and exhibit, their presence and absence, 88% said there's an urgent need for that kind of leadership. But the supply is low, only 16% observed those qualities.

Gautam Mukunda (06:00):

There is undoubtedly a desire for moral leadership in the workplace. Employees are asking for it, and when employees are inspired by where they work, the results are remarkable. In a study from earlier this year, the Gallup organization assessed engagement across 276 organizations in 54 industries and 96 countries, which covered a total of 2.7 million people. When Gallup compared organizations in the top and bottom quartile of employee engagement, they found that top quartile ones were vastly superior in everything from absenteeism, to safety, to productivity, to profitability. They grow earnings per share faster and recover more quickly from major economic downturns, like the 2008 financial crisis, than their competitors do.

(06:48):

Engaged employees, in other words, are one of the most powerful forces leaders can have in their arsenal.

Dov Seidman (06:54):

Unfortunately, we are now living at a time where one of the ways you're doing the right thing is it's inconvenient, it's unpopular, it might be unprofitable, at least in the short term. It didn't have to be that way. Principles and practicality do not philosophically point in opposite directions, but the way we've scaled things or maybe the systems we've created to make money. I mean, not enough people know that Adam Smith, the godfather of modern capitalism, was the chairman of the moral philosophy department at Glasgow University.

Gautam Mukunda (07:25):

Hang on, Dov. So at West Point, what they teach cadets is, give me the courage to do the hard right instead of the easy wrong. And what they're teaching them is a rule of thumb. The hard thing and the right thing are the same thing usually. So is that right?

Dov Seidman (07:38):

It didn't have to be. Listen, we sit in companies and we tell people to be courageous and speak up. Why don't we create cultures where it doesn't take courage to speak up? So we have it backwards. I know that that's what we're teaching people, but if you pause and reflect on it, something's wrong with that idea. Why does it have to be the hard right? We could have scaled different systems where it's harder to do the wrong thing.

(07:58):

But just think for a second how often we ask people to be courageous, speak up, take a risk. We won't retaliate against you. Why don't we create cultures where just being open about what's in your mind does not take an act of courage.

(08:11):

Chip Bergh, the CEO of Levi, is literally explicitly saying that what animates Levi's 170 year values-based tradition is always doing the hard right. But I know that Chip is hopeful that it won't be so hard to keep doing the right thing. It'll be more embraced and accepted that the more you do the right thing, it becomes harder not to do the right thing. You've taken the path of most resistance, and you've flipped it. You've made it your path of least resistance.

(08:36):

It's harder to break a promise than to keep it, and that's what it means to build moral muscle where Aristotle said that excellence is not a single act, it's a habit. If you do the right thing over and over and over again, it just becomes second nature. It's just how you roll, so to speak. And what I want people to really grapple with is that moral leadership is about frameworks. There's a playbook for it.

(08:56):

Look, people who make cost benefit analysis decisions as a way of guiding their decisions are guided by a framework called cost benefit analysis. That's a framework. Having a framework of values and principles is another framework. And I believe that the world is being profoundly, it's not just rapidly changing, it's being so profoundly reshaped that normative frameworks are the most potent framework to guide our affairs.

(09:22):

The world has never been this interdependent. We've never been in a world where the behavior or tweets or posts or plight of one person can affect so others so far away, and show up visually and viscerally in tiny screens in our hands on our phones. We've never lived in a world where corporate town halls and how companies conduct layoffs and how CEOs take responsibility or not or apologize authentically or performatively, is right there for all of us to see and judge and amplify. We're seeing into the innermost workings of organizations, not with x-ray vision, but MRI vision. We've never lived in a world where more people are making moral judgments. So we need leaders to help us navigate that.

Gautam Mukunda (10:06):

It used to be that the guide to doing the right thing that you would hear was act as if your actions will be on the front page of the New York Times tomorrow. That if you do that and you use that as your guidance, you'll be okay. And what you're saying is we now live in a world right where it's so transparent that that's not a hypothetical problem, that actually could happen to you in the blink of an eye.

Dov Seidman (10:23):

A quack doctor would just move to the next town and a politician could pander because they would say one thing to one audience and go to the next town and say another thing. And now, what you said, your reputation precedes you before you arrive. You leave it behind in digital footprints for everybody to Google.

Gautam Mukunda (10:42):

Conducting yourself as if everyone can see you, is generally wise counsel. But it doesn't mean failing to adapt to your circumstances. It means always pushing towards the same goal. One you can be proud of, even if your tactics change.

(10:56):

A case in point, if you read the Lincoln-Douglas debates, Lincoln sounds very different depending on where the debate was held. In northern Illinois, which was strongly anti-slavery, he condemned slavery freely and made no secret of his hatred for it. In southern Illinois on the other hand, he still opposed the spread of slavery, but he seemed sometimes to have been just barely on the right side of history.

(11:19): Lincoln didn't do this hoping no one would catch on. In fact, he personally arranged for the transcripts of these debates to be published nationwide. But the ugly truth is that southern Illinois was rabidly pro- slavery, and the rhetoric he used in the northern half of the state would've hurt his cause in the south.

(11:36):

This wasn't Lincoln being inauthentic. He was always pushing in the same direction, for the union and against slavery. But he used different approaches and tactics, because he recognized that leaders need to meet their followers where they are. In other words, Lincoln was always moving towards the same goal. And if his path shifted in response to the situation, he recognized that he would be judged on the direction he was going, not the method he used to get there.

Dov Seidman (12:04):

I often say that the more that comes at you and the faster things get, the more important it is to pause. There is no elevated, inspirational, or ethical conduct that is not proceeded by a pause. Because when we pause, we can ask important questions. How would I feel like if I were treated this way? Why did I end that meeting with sarcasm? What would the consequences of doing A over B or B over A B? And we are taught to run fast in the fast world, but it's a distinctly and uniquely human capacity, which is to pause. Emerson said, "In the pause, I hear the call." When you press the pause button on a machine, it stops. But when we pause, we begin. And we have a framework for that, I call it the four Rs.

(12:45):

But I'm going to start with the last R, because your show is the World Reimagined. You have to pause in order to reimagine the world, but before you do that, what leaders do is they reflect on the world trends, where's the world going? Where ought it to go? Or the challenge before them or the issue they've encountered. You have to reflect.

(13:03):

Then it's important to reconnect with your deepest beliefs, your values, your own conscience, others.

(13:08):

And after you reflect and reconnect, you rethink, your assumptions, how you've been making money. If you're a media property and you see people as consumers of news, then I'm going to get you to consume news by making it engaging, if not enraging. But if I rethink that operating principle and I go, wait a minute, I don't have consumers, I have citizens. Oh, citizens. I should give them truth and reliable information so they can practice citizenry.

(13:34):

What moral leaders really understand is that there's never just an employee or a resource or a user or a consumer or a football coach doesn't see just Xs and Os. Everything they do envisions the full person on the other side, and they create approaches to that person and models that put a full human being with hopes, aspirations, and challenges at the center.

(13:55):

So when you pause, you can continue to see the full human. So when you pause, you reflect, you reconnect, and you rethink important things, even your operating principles. And only then can you reimagine a better solution, a better path, or to name your show, you can reimagine a better world. So the hallmark of moral leadership is the pause. It's an incredible practice to scale with teams, and do it consciously.

Gautam Mukunda (14:19):

Okay, what next?

Dov Seidman (14:20):

I think moral leaders have to show up, but when you show up, you don't need to sit at the head of the table. You can ask a question and not give the answer.

(14:28):

So there are four kind of pillars to this. The first is having a purpose. But it's one thing to have a purpose, but too many people have an instrumental relationship with their purpose. They say, "Oh, because of this purpose, employees will be engaged. People will want to work here." But that's an instrumental relationship with a purpose. The only reason to live a purpose is to live the purpose.

(14:48):

J&J Credo says, "Our first responsibility is to the doctors and patients of the world," and it goes through all the things they want to do to make the world a healthier place. And this Credo helped them make a decision to get out of Russia, but stay in when it came to life-saving medicines. And at the end of this great document, it says, "If we live according to these principles, our shareholders should make a fair return, not will."

(15:10):

It's one thing to live your purpose and do the right thing in order to make money, and it's another thing to do it in order to do it because it's right and make money. Moral leaders understand how profoundly nuanced that distinction is, and they live their purpose to live the purpose. And they make money, but they don't do it in order to make money.

(15:27):

The other is they're inspirational. They really understand that coercion and motivation and carrots and sticks have a place, but they also have their limits. And they really try to do everything to inspire. Their conversations are two-way. They inspire by extending trust in that way.

(15:43):

Third, there are virtues and qualities of character that they cultivate. Let's take humility. Humility is not thinking less of yourself, but it's thinking of yourself less. It's thinking that the two of us can maybe solve a problem better than just me telling you what the solution is in that regard.

(15:59):

So it shows up and finally, moral leaders are constantly wrestling, and they're building moral muscle by asking the questions, is it fair? Is it right? And they're thinking out loud in inclusive ways.

Gautam Mukunda (16:15):

When we're part of a team, we'll often find ourselves debating with the people we work with, looking to arrive at the best solution. But as we advance in our careers and take on more responsibilities as a leader, those debates begin to happen within ourselves.

(16:31):

Leading a team ultimately means making the right choices. And one of the perils of power is that once you have it, you're in a position to convince yourself that something is the right thing, when in reality it's just the right thing for you.

(16:45):

We can all recite stories of leaders who have checked the boxes and are following the rules, at least on paper, but that doesn't mean they're acting morally, and it won't help them acquire the confidence of their customers, their superiors, or their teams.

(17:00):

Coupling the mission of your organization with a strong moral philosophy, however, can inspire motivation and loyalty, because the people working for you know that when the going gets tough, your principles will remain firmly in place, and that the right thing to do will always win out.

(17:18):

It isn't always easy, expedient, or the shortest way from point A to point B. In fact, it often isn't. But sticking to your moral compass is how great leaders truly win hearts and minds, both in their teams and their own own.

Speaker 3 (17:36):

World Reimagined with Gautam Mukunda, a leadership podcast for a changing world. An original podcast from Nasdaq.