I say that it does. After all, if an individual professes something and fails to put it into practice you impugn their integrity and call them a hypocrite. And you would be very careful as to how much trust you place in them. So by the same token you could say that an organisation that does not live up to its principles has no organisational integrity. And you probably wouldn’t want to do business with an organisation that lacked organisational integrity. Would you?
But, then I hear you cynically ask whether there is any organisation today that has that has organisational integrity. You just have to think of BP and their “safety is our first priority” message and the Deep Horizons disaster to realise what a tall order it is. Yet ever since then it has been an issue that has grabbed my attention. (See my earlier blog on the subject here.)
But even I was shocked when I read recently that the very day that Lehman Brothers filed for bankruptcy in 2008, three top credit rating agencies had rated the firm as an above average investment. Even allowing for the caution that prevents the spread of bad news in case it fuels more bad news, this suggests a remarkable lack of organisational integrity. Clearer this is an important issue, and not just for investors, given the fallout of that collapse.
So it was perhaps not surprising that an article on Greg’s Smith’s very public resignation from Goldman Sach’s had me thinking further on these lines. Two things in particular struck me.
First was the statement that “CEO Dick Fuld ran Lehman in an authoritarian manner which created the kind of competitive culture that led to the bank’s ultimate demise.” You have to ask yourself if any kind of authoritarian governance can lead to organisational integrity. It is simply incompatible with command and control because the two concepts are ultimately mutually exclusive. It doesn’t matter how been the management is, people will not necessarily behave as they should just because they are told to.
Second was the question, “How can this culture have changed so drastically during one man’s career?” and the explanation “The shift could be partly attributed to Goldman Sach’s move from the unlisted public domain, (where the employees owned almost all the capital, to the public domain, (the stock market).” This sends a very clear message that the market is not the panacea that it is so widely held up to be. However, it also sends a very clear message that there is a lot more to be said for employee ownership than we generally give it credence for.
So perhaps, if you want the kind of employee engagement that creates true organisational integrity you best bet is to create greater employee ownership. Maybe it won’t be perfect, but it is more than just human capital measurement and it certainly promises to close the gap between reality and rhetoric better than anything else we currently have. What do you think? Are you willing to give it a try?