Servant Leadership: Character and the Ethics of Business

[1] In my book, Ethics in Business: Faith at Work, I included a chapter on servant leadership. It was essentially about how the character of leadership is foundational to the ethics of business in any corporation, company, or firm.[1] In the brief comments that follow I want to look back on that discussion of character and leadership and provide a bit of an update.

[2] I began that chapter on leadership with the rather wistful reflections of a retired former executive of a nationally known company. He spoke of how the Christian values of the company founder had created a sustained culture of high minded business ethics. People who worked there had a sense that this was key to their identity; people took ownership of the founder’s tradition. Persons of faith in the workforce felt a sense of confidence in the compatibility of their own moral convictions and the ethos of the company. Things changed, however. The company was bought by a larger and more diversified corporation. The new management brought a different perspective and little sense of the past values. Memory of the founder and his tradition faded fast. The real sense of loss in the wake of change that my friend reported serves to underscore the importance of the character of leadership to the company’s culture of ethical commitment. While this may be a rather obvious observation, it needs constant reiteration for it is easily lost in the pressure and cynicism generated by the demands of competition.

[3] The fact of the matter is that, more often than not, good business ethics and success go hand in hand. One example I chose to make this point is Max Depree, former CEO of Herman Miller, a Fortune 500 furniture company, consistently voted among the most admired companies. At the time I wrote my book, Depree’s book, Leadership Is an Art, was among the hottest leadership books (far outselling mine!). DePree wrote and acted in management in the style of a true businessman but openly connected his leadership style with his Christian convictions. His recognition that all are created in the image of God became for him a guiding principle in his understanding of what leadership entailed. It meant that all deserve to be valued and respected. This means that persons in the workforce should be empowered to do their best in the most humane way possible, enabled to participate in and contribute to company decision making and included in decisions made affecting their careers. People need be a part of their evaluative process. Honesty must mark relations in the workplace and promises must be kept. According workers these rights demonstrates the sort of servant leadership that shares power, has the courage of honesty, and rejoices in the success of others.[2] The atmosphere of an organization run by those who embrace such servant leadership is one congenial to a desire for high standards of practice.

[4] DePree is now Chairman Emeritus of Herman Miller, Inc. and a member of Fortune magazine’s Business Hall of Fame. Two of his other books bear titles suggestive of his approach, Leading without Power and Called to Serve. There is now a DePree Leadership Center dedicated to his principles of leadership. The most recent publication of Fortune’s “most admired companies” once again places Herman Miller among the top ten in the category of social consciousness, a testimony to the durability of his legacy of servant leadership.

[5] It is important to lift up examples like DePree and Herman Miller to remind ourselves that bringing Christian values into the business environment is not without precedent or possibility. It is the defeatist conviction that this is the pipe dream of the naïve that can easily frustrate Christians in their resolve to work at the important tasks of ethics in business.

[6] Nonetheless, realism dictates attention to contrasting evidence, if only to underscore the urgency of promoting ethically sensitive leadership. The following is an excerpt from a review of Marianne Jennings’ book, The Seven Signs of Ethical Collapse: How To Spot Moral Meltdowns in Companies -Before It’s too Late (New York: St. Martin’s Press, 2006).[3]

When business conditions get tough, as they inevitably do, the CEO demands that the organization “make the numbers” at all costs (to validate the “genius” of their initial success). Double digit growth itself can be a danger sign.

The CEO allows no discontent or dissent to challenge his or her status as a genius. This message flows down to create a culture of fear and silence. Employees at all levels stop questioning and stop bringing forward solutions.

The CEO promotes young executives (in some cases relatives) beyond their competency into an inner circle and lavishes them with high salaries and perks, creating dependency and allegiance. They, too, may be tagged by the media as “geniuses.” The “young ‘uns” lap it up. When questioned, their response is that the rest of the world doesn’t “get” what they’re doing.

The CEO does everything possible to create a weak board that will not probe or interfere. These include such steps as ensuring the numbers always look good, waiving (and even encouraging) conflicts of interests of board members, finding board members who lack the necessary skills and expertise, and ensuring that

board members are paid very well.

The CEO also ignores, waives, or encourages conflicts of interest of executives. The possible conflicting arrangements are myriad, but all have the effect of squelching oversight and dissent. Examples include loans by the CEO or the company to executives, causing the company to do business with company executives,

and employment of relatives.

The CEO spreads plenty of wealth around–to employees and to charities. Nobody (including the board) wants to look under the rock when the money is flowing. The CEO’s generosity (whether personal wealth or company wealth is being given) acts as an effective shield against inquiry. It also salves the conscience and feeds the ego of the CEO. Rationalization for wrongdoing sets in.

[7] Recent high profile corporate scandals provide prime examples for Jennings’ analysis. In each of her cases the egocentric character flaws of the CEO changed the outcome from success to tragedy. One can quickly recognize the dramatic contrast between the “seven signs” and the traits of servant leadership identified in our brief sketch of DePree’s philosophy.

[8] DePree’s legacy is, of course, but one example of how character formed by Christian faith shapes leadership in business and the moral climate of the organization. There are many others known and unknown. DePree himself emphasized that leadership happens throughout the organization, not just with top management. Christians from the shop floor to the top floor have opportunity to provide leadership by their treatment of co-workers and the integrity with which they approach their work even if they feel they have little influence in company matters. In that regard, William Diehl’s article, “The Forum for Ethics in the Workplace,” published in the January 2007 issue of JLE details a great idea for helping people live their faith in the face of ethical challenges at work.

[9] It hardly needs detailing in this forum how solid are the biblical foundations of neighbor love on which to build the character of servant leadership. Moreover, it is central to our vocation, our calling to the ministry of the whole people of God, to seek ways in the various occupations of our life to give expression to that which casts light on the manifold promise of God in Christ. Our vocation provides a vision of life’s structures as existing in the service of God’s purposes for humanity and for all creation. Thus, Christians in positions of leadership in business organizations can make an important contribution to a business culture that emphasizes its purpose as creating values for all stakeholders, not just stockholders. Such a vision of organizational purpose is the corollary to servant leadership. Profitability is essential for a business to survive but not a sufficient reason to exist.

[10] Some would argue that the church should keep its nose out of business and stick to what it understands. It may be true that the church has no particular expertise when it comes to understanding the intricacies of business ethics in the “real world” of business. However, what the church does understand is the formation of character in the community gathered around Word and Sacrament. It is in that context that we are shaped in the mind of Christ, the premier servant.

End Notes

[1]
James M. Childs, Jr. Ethics in Business: Faith at Work ( Minneapolis: Fortress Press, 1995), 71-85.

[2]
Ibid., 74-75.

[3]
Review by LeRoy Johnston in the online newsletter Ethical Leadership, 1, 4 (March 2007), 7, 11-13. Johnston is Associate Vice President for Ethics and Internal Investigations at Nationwide Insurance.