Ben was a lumberjack who swung his ax with great power and could fell a tree in 20 strokes. In the first few days of a new job he produced twice as much lumber as anyone else. By week’s end, he was working even harder, but his lead was dwindling.

One friend told him he had to swing harder. Another said he had to work longer. Neither idea worked. Finally, an old fellow asked Ben how often he sharpened his ax. He said he had no time; there was too much to do.

The lesson of this parable contains the remedy to ineffectiveness in today’s workplace.

Dedicated executives may work enormous hours not realizing how much their failure to sharpen their ax by taking time off reduces their effectiveness. As one exceeds the limits of intellectual and physical stamina, both the quantity and quality of work suffer. Fatigue affects judgment and mental acuity, and the time and energy needed to fix errors can offset the extra time devoted to the task.

Organizations fail to sharpen their ax when they give short shrift to screening job applicants and training new hires. Burdened with heavy workloads, managers consumed by urgency to fill positions often succumb to the “warm body” fallacy: anyone is better than no one.

You need three things in a good employee: competence, commitment, and character. Shortcomings in any area can be costly, consume time and resources, and damage morale. Sharpening your ax in this setting means taking the time to be more diligent in background checks, more selective in hiring, more serious in training, and more demanding during probation.

Without the right tools, hard work isn’t enough.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:14 AM | Permalink | Leave a Comment (1)

Roy, a service rep, is told one of the salesmen forgot to send an order for window blinds to the factory and, as a result, they won’t be available for another ten days. Roy is asked to call Jenny, the customer, and tell her the blinds won’t be delivered on the date promised.

Roy has a decision to make: What should he tell the customer?

Telling Jenny the real reason will likely infuriate her and cause her to demand a refund or deep discount. This isn’t a good result, so he devises a plausible but false excuse that shifts the blame onto Jenny’s credit-card company. He even makes himself a hero by convincing her he did everything possible to solve the problem and, though his company wasn’t at fault, he convinced his manager to give Jenny a 10 percent discount for her inconvenience.

Jenny is angry at the credit-card company and upset about not getting her blinds, but she’s impressed with the professional way Roy handled the situation. Her loyalty to the company is actually strengthened.

Should Roy be praised or penalized?

The case for praise is that he took a lemon and made lemonade. He turned a bad situation into a good one, and no one was hurt (except, maybe, the credit-card company – and who cares about them?). His little white lie yielded great dividends and was well within the norms of business.

The case for reprimanding or firing Roy is that a good decision must be ethical as well as effective. He was dishonest and, whether his solution worked or not, a company that values trust should not permit dishonesty to be used as a problem-solving tactic.

If you were Roy’s boss, what would you do?

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:35 AM | Permalink | Leave a Comment (6)

As I watched nearly five dozen eager graduates of the Los Angeles Police Academy throw their hats in the air celebrating their achievement, I knew they were the survivors of a rigorous training, but their journey wasn’t over.

Ahead of them was a full year of supervised field training, and it was unlikely all of them would make it through their probation.

It’s difficult to cut hard-working and hopeful probationers, but if an organization wants to create a culture of excellence, its gatekeepers (those in charge of hiring, training, retention, and promotion) must exercise clear-eyed objectivity and demonstrate unflinching courage by weeding out those who are unwilling or unable to be excellent.

In policing as in many other fields, the stakes are simply too high to knowingly accept less. No one wants a surgeon, teacher, or peace officer with marginal skills or a shaky character.

Yet everywhere we see signs of declining standards. Public and private organizations regularly lower their expectations due to political expediency, misplaced loyalty, forced diversity, or perceived necessity. Adequacy has become the shifting standard defined as “the best we can get.”

Two results are inevitable when we lower standards: The quality of service sinks as fewer people strive for the best within them, and mediocrity becomes the norm as good people move up and out, leaving behind a growing proportion of so-so performers.

Two results are inevitable when we insist on excellence: Performance increases as everyone does better than they otherwise would, and some people are asked to leave.

Management can avoid its responsibility, but it can’t dodge the consequences of shirking it. Excellence is achievable, but not without sacrifice and discipline.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:49 AM | Permalink | Leave a Comment (8)

Frank is a new supervisor who wants to do well. Maria consistently comes in late. When he confronts her, she jokes about it. Hoping to win friendship and loyalty, Frank is painfully patient, though Pat, a conscientious employee, urges him to do more. Soon others begin to come in late, and Pat quits. Frank feels victimized by disloyal employees, but he has no one to blame but himself.

A frequent workplace complaint is waiting for the boss to make a decision or take needed action. It might be about a pending promotion, filling an open position, giving an overdue performance review, pricing a new product, or dealing with a sticky customer complaint. Whatever the issue, failure to make a decision can make big problems out of little ones. What’s more, indecisiveness can generate resentment and undermine confidence in the manager’s ability.

It was Frank’s responsibility to set the tone of the work environment. In management (or parenting, for that matter), what you allow, you encourage. As Frank learned the hard way, indecision and inaction can cause as much harm as a poor decision.

Sure, it’s important to be careful, and it’s sometimes wise to put off a decision or delay action – for instance, to get more information or buy-in, to let things cool off, or for other strategic reasons – but failing to make a needed decision is not acceptable because a manager is too busy, is avoiding an unpleasant confrontation, is hoping things will work themselves out, or is just procrastinating.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:27 AM | Permalink | Leave a Comment (2)

Racing dogs are trained to chase a mechanical rabbit that always goes a little faster than the fleetest dog. This causes them to run faster than they otherwise would.

Companies that annually set overly ambitious performance objectives for their employees employ this greyhound principle. To a point, it works. Most people achieve more when expectations are set high.

The strategy turns negative, however, when firms chasing Wall Street’s rabbit continually set “no-excuses” double-digit growth goals without regard to market realities (including multiple competitors driving toward the same goals) or systemic understaffing (part of the “do more with less” philosophy). Consequently, many corporate leaders are caught up in a ceaseless upward spiral of stress.

Yes, the financial rewards for such success are ample, but the driving motivation is usually not greed, and certainly not job satisfaction. It’s fear. This can often morph into desperation, a dangerous mindset that in turn can spawn imprudent short-term decisions and outright cheating.

It’s unwise and unethical to ignore the business and moral implications of aggressive growth strategies that put executives under unprecedented, unrelenting, and unreasonable pressure.

On one level, it’s a matter of values. Work-life balance should be more than a rhetorical ideal. A good company cares about its people. The path to career success should not be littered with the ruins of failed marriages and neglected children.

On another level, it’s long-term self interest. Without an abundant and replenishing pool of talented and committed leaders, no company will succeed for long. The organizations that will pull away in the next decades are those that can attract and retain the best talent because they’re places where those people want to work – and that will take a lot more than money.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 10:45 AM | Permalink | Leave a Comment (4)

Character Is An Essential Competence.mp3

If you were hiring a new CEO, what are the most important qualities you’d look for?

Surely you’d want a high level of demonstrated competence – knowledge, experience, intelligence, vision, communication, and relationship skills and the ability to motivate, manage, and solve problems. But what about qualities such as honesty, moral courage, accountability, and fairness?

Despite bold rhetoric about the indispensability of good character, many hard-driving organizations are willing to be flexible on character to get an exceptionally competent person.

Thus, many current scandals – in business, the church, and sports – have occurred because organizations compromised their principles by recruiting, retaining, or tolerating leaders with serious character flaws who generated costly accusations of wrongdoing and undermined trust, morale, teamwork, and loyalty.

I used to tell clients that competence and character were two separate aspects of intelligent employment decisions. Now I think it’s a mistake to disconnect them. Good character is an essential aspect of competence.

Long ago, Samuel Johnson said, “Integrity without knowledge is weak and useless, but knowledge without integrity is dangerous and dreadful.” Warren Buffet updated that notion: “In looking for people to hire, look for three qualities: integrity, intelligence, and energy. But if they don’t have the first, the other two will kill you.”

Since it’s easier to train a person of good character to do a job well than to develop character in a skilled but unprincipled employee, if you have to choose, hire for character and train for skills.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:23 AM | Permalink | Leave a Comment (4)

Why are so many corporations and government agencies spending time and money on ethics surveys and training? What’s the ROI – return on investment? Is it about doing the right thing because virtue is its own reward, or is it about doing the smart thing because good ethics pays and bad ethics costs?

Although I wish it were otherwise, appeals to self-interest are more compelling than appeals to conscience. The best way to get the attention of executives is to talk in terms of risk management.

It’s easy to make the case that dishonest, irresponsible, or illegal actions can be enormously costly. Thus, responsible leaders understand the value of creating and sustaining an ethical workplace culture.

Meaningful efforts, however, need to go beyond codes and classes.

Codes of conduct are important to provide a framework for compliance. And training courses can teach legal requirements, raise ethical consciousness, and encourage employees to do the right thing. But unless ethical values are advocated and enforced in everyday decision-making, the risk of reputation-damaging and resource-draining misconduct will remain high.

In an ethical culture, values and character play a prominent role in recruitment, employment, orientation, in-service training, performance reviews, and discipline.

In an ethical culture, formal and informal incentive systems promote honesty, moral courage, responsibility, and fairness. Contrary behavior is risky, not simply because it harms the organization, but because it endangers the careers of those who take moral shortcuts.

In the workplace, you get the behavior you reward. Character counts – if you count it.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:32 AM | Permalink | Leave a Comment (3)

A former successful college coach and athletic director once wrote me a note about the state of college sports.

The pressure to win in high-profile schools is so great, he said, it's almost impossible to resist rationalizing. When competitors cheat or engage in other unethical conduct, the tendency is to redefine the ground rules for competition rather than be at a disadvantage.

He compared the way win-hungry boosters blur the vision and undermine the integrity of coaches and administrators with the way money-hungry shareholders stress stock prices, which promotes accounting manipulation and other ethical shortcuts.

In sports, outsiders who aren't concerned with a college's educational mission or notions of sportsmanship and character-building promote a “no excuses” demand on coaches that can transform an athletic program into a business driven by the pursuit of money and glory.

In business, shareholders (from day traders to money managers of mutual and pension funds) who aren't concerned with the ethics or long-term viability of a company create pressures and incentives that can promote short-term decision-making and undermine the economic and moral health of their firm.

We need people to act as guardians who will understand and protect the soul of their enterprise. Coaches should be allowed to think about more than winning, and business executives should be given the opportunity to consider more than stock prices and short-term profits.

If we don't recalibrate our incentive systems and insulate coaches and managers from unhealthy influences, things will only get worse.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 10:03 AM | Permalink | Leave a Comment (3)

Here are seven truths I’ve discovered in my struggles to be an effective boss:

1. It’s not what you say that matters, it’s what people hear. Just because you said it doesn't mean they heard it. Just because you wrote it doesn’t mean they read it. Be sure your message is received and understood.

2. There are lots of things you don’t know and lots of people who hope you don’t find out. The boss rarely hears the truth, the whole truth, and nothing but the truth. You’ve got to walk around, look around, listen, and ask direct questions.

3. Hire for character, train for skills. Integrity, responsibility, and the ability to work with others are vital competencies. You’ve got to screen out or weed out people you can’t believe or rely on or who are toxic to the team.

4. Settling for warm bodies turns one problem into two. You still have to get someone who’s right for the job, but first you have to deal with and remove the wrong person. If you can’t find the time to do it right, when will you find the time to do it over?

5. What you allow, you encourage. If you don’t enforce your values and rules, they’re not really your values and they’re not really rules.

6. Doing nothing is doing something. Indecision and inaction cause as much harm as poor decisions. Indecisiveness is incompetence.

7. It’s all about relationships. Your most important job is to get the most out of the people who work with you. You’ve got to be ready to be a boss, motivator, mentor, counselor, disciplinarian, or friend.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:30 AM | Permalink | Leave a Comment (3)

One problem with talking about business ethics is there’s often a wide gap between rhetoric and reality. The reality is that business isn’t nearly as bad as some critics make it out to be or nearly as good as its apologists contend. By the same token, ethics may not be as crucial to success as moralists make it.

Yes, trust has been badly eroded by too much lying and cheating, even by basically decent people. Yet every day, people of character successfully overcome pressures and resist temptations to sacrifice ethics for expediency.

At the same time, well-meaning reformers often oversell the role of ethics in success. Asserting platitudes like "good ethics is good business" as if it were moral truth makes the case for ethics more vulnerable to cynics anxious to disprove the generality with a host of examples.

The truth is, good ethics sometimes is good business, but sometimes it’s not. It depends on one’s goals and how one defines good business. Sometimes good ethics can end in bankruptcy. Of course, so can bad ethics.

A fairer statement is that good ethics can be a very powerful business asset. Good things tend to happen to companies and individuals who consistently do the right thing, and bad things tend to happen to those who even occasionally do the wrong thing.

But the crucial point is that the moral obligation to live according to ethical principles is not dependent on whether it’s advantageous. People of character do the right thing in the pursuit of virtue, not self-interest.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:57 AM | Permalink | Leave a Comment (1)

After a workshop, Paul (not his real name) told me he still has a 10-year-old scar from the time he quit a good job rather than lie.

When his boss asked him to issue a press release containing patently false statements, he refused, putting his employee badge on the table. His boss calmly handed the badge back, saying, "Think this over. Why throw away a good job and a promising career?"

Paul walked out so frustrated and frightened, he had to find a private place to cry. What’s worse, he said his act of moral courage was a meaningless waste.

Someone else issued the press release, and his boss’s career flourished. "It took me years to find a job as good as that one, and my family suffered," he added. "So what good did my integrity do for anyone?"

Paul was looking for validation of his principled stance in the wrong place. We exercise integrity not to get what we want, but to be what we want. Integrity isn’t about winning. It’s about staying whole and being worthy of self-respect and the esteem of loved ones. It’s about being honorable, not as a success strategy but a life choice.

Although Paul suffered because of his moral courage, he would have suffered far worse had he betrayed his values. While he didn’t appreciate it at the time, he preserved for himself and his family something far more valuable than his job – his honor.

It’s no accident that he now has a better job and a better boss with no pressures to cheat or lie.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:58 AM | Permalink | Leave a Comment (8)

During a seminar on ethics in the workplace, participants spoke about a wide array of unethical conduct they'd recently witnessed. They talked about high-level employees who lied on internal reports or blatantly took credit for the work of others and the intimidation or abuse of subordinates. These were clear-cut violations of organizational policy. Yet, in most cases the perpetrator escaped any serious sanction.

Executives, who have the responsibility to uphold organizational standards, seem to find an endless array of excuses to look the other way. And so the culture of many private and public institutions reflects a don't-rock-the-boat, avoid-confrontation-at-any-cost philosophy that undermines institutional integrity and morale.

When managers systematically allow employees to get away with forbidden behavior, they make a mockery of organizational policies and ethical rhetoric. What's worse, they cultivate seeds of inefficiency and corruption and demoralize employees who would willingly live up to higher standards of personal conduct. Every time we let a bad guy win, we weaken the resolve of dozens of ordinary folks who need to know that playing by the rules is not just for suckers.

How many organizations are mired in the quicksand of hypocrisy because they're led by executives who are too timid or ambitious to demand honorable behavior? Good organizations need good people — men and women of principle who can resist the seductions of short-term political expediency and overcome fears of litigation or unpopularity.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 10:01 AM | Permalink | Leave a Comment (11)

Why are negative management practices so prevalent?

They include yelling, cursing, insulting (sometimes masked in sarcasm or masquerading as jokes), criticizing subordinates in front of others, threatening demotion or termination, and talking to adults as if they were children.

Why are so many managers insensitive to the demotivating impact of focusing almost exclusively on weaknesses and shortcomings without properly acknowledging successes and accomplishments?

Do they really believe that causing resentment, fear, or insecurity will produce better results than pride, self-confidence, and enthusiasm?

Some managers intentionally use negative tactics because they think it’s an effective way to get people to do what they’re told, but most managers characterized by the people who work for them as rude, inconsiderate, or abusive are totally unaware of how inappropriate or counterproductive their attempts to motivate are. They think they’re just being tough. The people under them think they’re just being jerks.

Many good people act badly when they become the boss because they’re under pressure from their own boss to get results. Maybe they’re simply mimicking the management styles of people they worked for. Or maybe they want to distinguish themselves from ineffective managers on the other extreme who try so hard to be everyone’s friend that they don’t set or achieve high goals or hold people accountable.

Whatever the reason, a far better approach is to treat everyone with respect by engaging and empowering others through inspiration and example. The best leaders bring out the best in people by making them feel good about themselves and their capabilities.

Inspiration is much more powerful than intimidation.

By the way, the same thing is true for parents and coaches.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:42 AM | Permalink | Leave a Comment (4)

Modern managers often utter clichés about wanting employees to "think outside the box," take risks, and be creative.

While I’m sure companies appreciate breakthrough innovative ideas that increase profits, productivity, or quality, the fact is that most organizations are inhospitable to those who challenge old ways of doing things, even practices that are inefficient, useless, or counterproductive.

I’ve talked before about the obligation of employees to pursue excellence. Well, managers have an equal, if not larger, duty to establish an atmosphere where employees are truly expected and willing to think and act in the best interests of the company and its customers.

According to Josephson Institute surveys, between one-fourth and one-third of all employees say there’s a "kill the messenger" tradition where they work and that it’s common to distort or conceal negative information or tailor data to give managers what they want to hear.

A sure sign that management hasn’t done enough to promote candor is when a manager asks, "Why didn’t someone tell me?" Companies must find ways to more effectively send the message that mission-oriented employees who produce and demand quality are to be prized, not penalized.

I’ve come to believe that there’s never just one incompetent or unaccountable employee. There are at least two: the employee and the manager who keeps him or her employed.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:56 AM | Permalink | Leave a Comment (3)

I’ve been spending a lot of time lately consulting with large companies concerned with strengthening their ethical culture.

Although I’m sure the leaders I work with care about ethics and virtue for their own sake, I know the driving force to seek outside assistance is self-interest. The risk of reputation-damaging and resource-draining charges resulting from improper conduct is so high that it’s a matter of prudence and responsible stewardship to stress ethical values and moral principles.

Yet changing or strengthening an organization’s culture is no simple task. We start with a questionnaire to identify vulnerabilities – attitudes and behaviors that could jeopardize the company.

The most common vulnerability we find is a management style that represses frank and open discussions about ethical concerns and discourages revelation of bad news.

Invariably, we discover that at least one in five employees admit they lied to their superior about something significant within the past year and at least one-third concealed or distorted negative information to avoid harmful career repercussions. Often, half or more employees say they remain silent rather than risk their boss’s anger, abuse, or disapproval. Thus, many questionable or improper actions go unreported and uncorrected – each one a scandal waiting to happen.

The antidote is explicit and credible corporate policies that promote accountability by making it clear that repressive management styles will not be tolerated and that every employee is encouraged and expected to muster the moral courage to report unwelcome facts and to voice dissenting opinions.

Meaningful improvement in business ethical culture requires persistent and pervasive efforts to create an environment that values and protects honesty, personal responsibility, and corporate integrity.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:22 AM | Permalink | Leave a Comment (9)

Every company says it’s committed to customer service, knowing it can’t survive, let alone flourish, if it doesn’t satisfy the people who provide the revenue and referrals required for success.

Many firms don’t seem to believe, however, that employee satisfaction is equally vital. In fact, nothing is more important to sustainable success than a competent and committed workforce.

So how come some companies that demand uncompromising customer service permit and perpetuate management styles and policies that alienate many employees and generate resentment, fear, frustration, and emotional and intellectual disengagement?

Yes, unhappy employees are more likely to stay attached to a company than unhappy customers, but if the organization cares about customer service, that’s a liability, not an asset.

Quality, price, and convenience are important, but the kind of customer satisfaction that builds loyalty requires listening and responding to customer needs and expectations, friendly and respectful service, and authentic caring.

How can one expect employees who think they’re not treated well to treat customers well? Why would one think employees will treat customers better than the company treats them?

Josephson Institute’s surveys have consistently revealed that a high proportion of employees are not satisfied and don’t think their company is trying hard to satisfy them. Many are unwilling to report improper conduct or even to respectfully express disagreement or alternative ideas to their bosses because they fear harmful repercussions. They say they conceal or distort negative information, ignore company policies, and distrust their leaders.

These toxic attitudes destroy morale, increase turnover and, most certainly, undermine customer service.

The antidote: Managers at every level should be hired, trained, and held accountable to treat their subordinates as if they were their customers. How? By listening and responding to their needs and expectations and by assuring that the people who represent the company are proud of their affiliation and feel valued and appreciated.

Customer satisfaction starts with employee satisfaction.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:41 AM | Permalink | Leave a Comment (4)

Reach for the stars. Pursue goals beyond your grasp. These are good life strategies. We never know how much we can accomplish until we try. But what happens when we’re told we must actually reach the stars or suffer consequences?

A common workplace strategy to spur employee achievement is to set aggressive productivity objectives that, like the mechanical rabbit that goads and paces racing greyhounds, are usually beyond reach. Benignly called “stretch goals” by those who set them, the idea is to generate maximum effort. A salesperson who is told he’s expected to increase sales by 10 percent may only achieve six, but that’s still pretty good.

There’s a downside to this clever management technique. For one thing, it generates unhealthy stress and low morale as employees catch on to the game and resent being manipulated like racing dogs. For another, unrealistic stretch goals overemphasize short-term performance and encourage employees to conceal, ignore, and defer problems. Finally, some employees will simply cheat.

Organizational audits conducted by Josephson Institute reveal that a high percentage of employees who are constantly pressured to achieve ever-escalating numerical goals manipulate numbers and distort reports. A significant number outright lie.

Pressure is no excuse for cheating, but it’s a frequent cause. Those who play the stretch goal game are accountable for the predictable side effects of the relentless pursuit of numbers, especially if they don’t place greater emphasis on honesty and integrity.

This is Michael Josephson reminding you that character counts.

Posted by Webmaster at 9:53 AM | Permalink | Leave a Comment (5)

Lots of companies are focusing serious attention on the issues of ethics and values -- and lots of people think it’s a waste of time.

The skeptics argue that you can’t teach ethics to adults. By the time they’re in the workplace, they’re either ethical or not.

It’s a plausible argument, but it misses the point.

The purpose of a corporate ethics program is not to make people ethical but to increase the likelihood that they’ll act ethically. This is definitely achievable. In today’s environment, failing to do what can be done to protect a company from employee misconduct is irresponsible.

The objective of a corporate ethics program is to establish a business culture in which it’s easier to do the right thing than the wrong thing and where concerned coworkers and vigilant supervisors repress illegal or improper conduct that can potentially endanger or embarrass the company.

An organization can further improve its ethical track record by assuring it has clear and credible statements of values and standards of conduct. When supplemented with quality training, those values and standards can clarify expectations and reduce misconduct resulting from ignorance or misinterpretations of laws or company policies.

A firm that wants to strengthen its ethical culture hires for character and trains for skills. It takes background checks seriously, screening out employees who lack the moral compass or strength to resist temptations and weeding out those who lack moral commitment or judgment during probation. And during performance reviews and promotions, it assesses ethical attributes like trustworthiness, responsibility, and respectfulness. Only people who are comfortable living up to high ethical standards are retained or promoted.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 10:00 AM | Permalink | Leave a Comment (10)

A man in a hot-air balloon, realizing he was lost, lowered it to shout to a fellow on the ground. "The wind’s blown me off course! Can you tell me where I am?"

The man replied, "Sure. You’re about 60 feet over this wheat field."

"You must be an engineer," the balloonist yelled back.

"I am. How’d you know?" the man said.

"Everything you told me is technically correct but of absolutely no use."

The engineer retorted, "You’re an executive, right?"

"How did you know?" the balloonist responded.

"You were drifting in no particular direction before you asked for my help, you’re still lost, and now it’s my fault."

The tale is a good metaphor for our lives. At first, all we want to do is rise as high as we can in terms of money, position, and prestige. Yet as we ascend, wind currents push us sideways. Eventually, many of us discover we’re on a very different course than we intended, a long way from the spot we took off from, and nowhere near where we hoped to end up at. So we blame the wind -- or anything else.

What we must realize is our power of choice is a steering mechanism that lets us respond to each breeze and gust. We can drift with the current or go against it. Like haphazard wind drafts, unplanned events beyond our control can affect the direction of our lives. But in the end, what we do and become is determined by our choices.

The key is to be attentive, look around, and ensure we’re going where we want to go.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 11:48 AM | Permalink | Leave a Comment (4)

I read somewhere that a person who has a positive restaurant experience is likely to tell three friends, but if he has a bad experience he’ll tell ten. Thus, there are two sides to the customer-satisfaction equation: Good service generates more customers, and bad service keeps new customers away and sends current ones elsewhere.

This compelling case for treating excellent customer service as an indispensible cost of doing business, however, runs headlong into a conflicting two-sided equation: Executives succeed only if they increase profitability, and a simple way to increase profits is to cut costs. This translates into mean and lean personnel strategies -- reduce the number of employees and keep compensation and training expenses as low as possible.

This year, Circuit City, a national electronics retailer, fired 3,400 of its highest-paid hourly workers so it could replace them with lower-paid employees. By doing so, it expects to reduce its costs by $110 million annually.

Since management had to know that letting go of its most experienced line-level employees – the ones who answer customer questions -- would both damage morale and reduce the quality of customer service, it must have concluded that employee and customer satisfaction aren’t critical.

In the next eight months, its stock price dropped from $25 to $6. Sure, other factors were probably at work there, but cutting customer service is an irrational strategy, especially in a business where customers want and need help.

Home Depot made a similar decision to trim its workforce and replace full-time workers with part-timers. This year its stock price plummeted from $40 to $27.

The long-term costs of failing to invest whatever it takes to create a workforce capable of producing positive customer experiences will always exceed the short-term savings.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:29 AM | Permalink | Leave a Comment (11)

Every major company I’ve worked with recognizes that the key to sustainable success is the ability to please its customers. In fact, identifying and exceeding customers’ expectations is often a core value.

Yet I’ve had so many disappointing and distressing customer experiences lately that even satisfactory customer service exceeds my expectations.

It seems the gap between rhetoric and reality is getting wider as legions of companies, focused so intensely on increasing short-term results, are failing to create the required infrastructure needed to deliver the customer service they say is so important.

Lots of factors go into exceptional customer service. Most can be compressed into what I call The Four Ps: -- products, processes, policies, and people.

First, a company should deliver high-quality products (or services) that meet or surpass customers’ needs at a reasonable price (usually referred to as value).

Second, the processes that govern the sale and delivery of products should make the transaction pleasant, convenient, and efficient.

Third, company policies affecting transactions should be fair and sensible in customers’ eyes.

Fourth, the most important element of customer satisfaction is the people delivering the service.

Exasperating experiences with premier companies convince me that many corporate leaders don’t truly understand the primacy of customer service and the indispensability of acquiring, training, and retaining knowledgeable, engaged, and friendly people.

This isn’t easy and it isn’t cheap. But just as prudent companies would not jeopardize their relationships or reputation by substituting inferior materials, they must not shortchange their customers by inflicting them with unqualified or indifferent people.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 9:18 AM | Permalink | Leave a Comment (9)

As a former law professor, I know all about loopholes. I trained young attorneys to find omissions and ambiguities in wording to find legal ways to evade the clear intent of contracts and laws. Although I’m not any more, I used to be comfortable with this technique. After all, that’s what lawyers are paid to do. And despite public disdain for lawyers, it’s precisely what most clients want and expect when they hire one.

The fact is, long-standing traditional assumptions about the adversary system do justify the search for and use of legal loopholes. But strategies to evade the spirit of promises and laws put our integrity on a slippery slope.

Farther down that slope is the willingness to fabricate facts, lie about true intent, or falsely deny knowing or remembering things. These are fundamentally lies. They are dishonest and unethical in litigation, business transactions, and personal relations.

For example, a common ploy to evade limits on campaign contributions is to donate funds in the name of minor children. But falsely representing that the children actually exercised control and independent judgment isn’t just being clever, it’s fraud. The same is true for workers who falsely claim to be sick to take a day off work or to evade no-strike laws, parents who misrepresent their address to get their child in a better school or fudge their child’s age to qualify for a discount, and executives who backdate documents.

Exploiting loopholes is bad enough, but lying crosses the line.

This is Michael Josephson reminding you that character counts.

Posted by Webmaster at 12:30 PM | Permalink | Leave a Comment (2)

A company founder needed to choose his successor. He studied resumes and talked to references, but he asked only one question during the final interview: "How much is 2 + 2?"

Ann, the first candidate, worried that there was a trick but answered straightforwardly. "There’s only one correct answer: four."

Terry, who had an engineering background, was more creative. "Depending on whether you’re dealing with positive or negative numbers," he said, "the answer could be plus four, zero, or minus four."

Chuck, the last candidate, looked the questioner in the eye and whispered, "How much do you want it to be?"

While Ann and Terry took different approaches, they both provided an honest answer. Chuck, on the other hand, wanted the questioner to know he was willing to say or do whatever it took to succeed. Some employers may find this combination of creativity and moral flexibility highly attractive. I’d show him the door.

You see, Chuck is a manipulator and rationalizer, and they don’t make good employees. They search for excuses rather than solutions and are more concerned with looking good than doing things right.

People like Chuck who are adept at inventing justifications that sound good but aren’t true are simply clever liars. Eventually they will be found out. Remember, an employee who will lie for you will lie to you.

Without conscience, there is no credibility. Without credibility, there is no trust. And without trust, there is no future.

This is Michael Josephson reminding you that character counts.

Posted by Webmaster at 12:43 PM | Permalink | Leave a Comment (0)

A master carpenter who worked for the same builder for nearly 50 years announced he wanted to retire. The builder told him how much he appreciated his work. He gave the carpenter a $5,000 bonus and asked him if he would build just one more house. The builder owned a magnificent lot with a spectacular view and he wanted to build a dream home.

The carpenter was bitterly disappointed at the small bonus, but his last building fee would help him buy a small cottage, so he agreed to build the dream house.

The carpenter prided himself on his uncompromising commitment to quality, but his resentment caused him to cut corners, ignore details, and accept shoddy workmanship from other workers. He even looked the other way when some of them substituted cheaper materials and pocketed the difference.

When the house was finished the builder shook the carpenter’s hand and with a huge smile he gave him an envelope with a thank-you card and a folded piece of paper. The carpenter was disdainful -- until he unfolded the paper and found the deed to the house he had just built.

The carpenter was ashamed that he had misjudged his old friend and betrayed his own values, and he was remorseful that the house he would live in for the rest of his life was made so carelessly.

Our character is the house we live in and it’s built piece by piece by our daily choices. Deceit, irresponsibility, and disrespect are just like shoddy workmanship. Whenever we put in less than our best and ignore our potential for excellence, we create a future full of creaky floors, leaky roofs, and crumbling foundations.

This is Michael Josephson reminding you that character counts.

Posted by Webmaster at 1:13 PM | Permalink | Leave a Comment (0)

Can a job applicant properly withhold information about a criminal record or being fired from a previous job? Can a woman who has just started dating say nothing about a previous marriage or abortion? These are problems of candor. When does an ethical person have a duty to reveal negative information about his past?

First, let's reinforce a basic premise that all dimensions of honesty -- truthfulness, lack of deception, and candor -- are important to establishing and sustaining relationships of trust. Intimacy flourishes in an atmosphere of openness and vulnerability. While knowledge of negative information can damage some relationships, secrets discovered later are often fatal.

Second, there is a much higher expectation of full disclosure in personal relationships than in business relationships.

But, to paraphrase Jack Nicholson, not everyone can really handle the truth. So why should someone sabotage himself by telling a new boss, friend, or potential life partner things that could impede the relationship?

As tempting as it is, keeping such matters secret is like burying landmines within the relationship. Undisclosed truths build fault lines under the foundation of important relationships and, in a person of conscience, they create guilt, fear, and insecurity.

Trust is just a state of mind and maintaining trust is about meeting the expectations of people who trust us. So here's an easy test: upon finding out the whole truth, will the person who was denied knowledge feel betrayed? If so, the honorable thing is to fess up.

This is Michael Josephson reminding you that character counts.

Posted by Webmaster at 1:05 PM | Permalink | Leave a Comment (0)

Why are so many companies taking ethics so seriously these days?

The obvious answer is to stay out or get out of trouble.

After all, lots of bad things happen when an ethics-based scandal hits.

They start with substantial legal, accounting, PR, and consulting costs. But these are nothing compared to the costs associated with damages to reputation, customer relations, internal morale, difficulties recruiting new employees, and increased scrutiny and cynicism of regulators.

Then there is the enormous diversion of the company’s top leaders. Instead of tending to business, the CEO and other key executives often are consumed with strategizing defenses and responses to accusations of wrongdoing.

Finally, there’s the possibility of huge fines, prolonged litigation with major verdicts, debarment from future business, and even long prison sentences.

So, though I prefer to emphasize all the good things resulting from a sustainable ethical business culture, when I consult with corporations in the midst of or recovering from an ethics scandal, I know the immediate and pressing incentive is to avoid or minimize the likelihood of real or perceived improprieties.

Thus, ethics has become a critical risk-management strategy.

The problem is that the traditional focus on legal compliance -- written ethics codes or standards of conduct and mandatory ethics training -- has proved to be wholly inadequate. There’s simply no evidence that these efforts significantly deter wrongdoing or bad judgment.

A deeper and wider approach is needed, and this requires a move from a rules-based compliance mentality to a values-based ethical culture.

In essence, a truly effective ethics initiative must teach, enforce, advocate, and model (we use the acronym “T.E.A.M.”) core ethical values in recruiting, hiring, training, compensation, promotion, and discipline. It’s more difficult than codes and courses, but in the end, it’s a lot cheaper.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 2:56 PM | Permalink | Leave a Comment (0)

What we do to make a living plays such a critical role in our lives that it’s worthwhile to ask ourselves now and again whether we’re in the right job.

There are four dimensions of job satisfaction: what you do, who you work for, who you work with, and what you’re paid. If there’s a big deficiency in any one of these, you should consider changing your job by fixing what’s broke or changing your job by finding another one.

Remember, you have a choice. Sure, you need a job, but it’s a trap to believe you need the job you have. Like it or not, you could lose your job at any time for a whole lot of reasons. And if you do, you’ll get a new job – often a better one.

To have a good life, you need a good job, one where you can feel a sense of achievement in what you do, where you can be proud of whom you work for, and where you like and respect the people with whom you work.

As Disraeli said, "Life is too short to be little." Don’t belittle your life by demeaning work.

No job is inherently demeaning. Physical labor can be as rewarding and meaningful as management. Every job can be performed in a manner that is significant and worthwhile. What is demeaning is a job where you are pressured to compromise your values or where you work for or with people or a company you aren’t proud to associate with – a boss who’s dishonest, disrespectful, irresponsible, or unfair or coworkers who don’t care about quality and excellence.

John Ruskin said, "The highest reward for your toil is not what you get for it, but what you become by it." Your job should make you a better as well as a happier person.

This is Michael Josephson reminding you that

Posted by Josephson Institute Editor at 1:18 PM | Permalink | Leave a Comment (0)

Sam, a supervisor, was dumbfounded as he watched Bill diligently dig holes while Chuck, after waiting a short interval, filled them. When Sam demanded an explanation, Bill was indignant: "We’ve been doing this job for more than 10 years. What’s your problem?"

"Are you telling me that for 10 years you’ve been digging and filling empty holes?" Sam replied.

"Well, not exactly," Bill said. "Until a few months ago, another fellow put a bush in the hole before Chuck filled it. But he retired and was never replaced."

"Why didn’t you tell somebody?" Sam sputtered.

"My gosh," Bill answered. "You’re management. We figured you knew."

While management is ultimately to blame when employees systematically waste time and money in thoughtless unproductive activity, we can’t let Bill and Chuck off the hook. Sure, it’s easy to hide behind the assumption that the stupidity of management has no bounds, but responsibility is a personal burden everyone carries.

Too many organizations are weighed down by practices equivalent to digging and filling holes because too many workers and managers engage in or ignore inefficient and ineffective activities.

Whether unaccountability is fed by laziness, ignorance, or fear, employees who surrender to the negative momentum of the workplace not only demean the value of their work, but they increase the likelihood that they will someday be out of work.

We can avoid our responsibilities, but we can’t avoid the consequences of avoiding our responsibilities. All of us are accountable for what we allow as well as what we do. If we want to make our lives more meaningful, we should ensure our work is meaningful.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 10:52 AM | Permalink | Leave a Comment (0)

Racing dogs are trained to chase a mechanical rabbit that always goes a little faster than the fleetest dog. Presumably this causes them to run faster than they otherwise would.

Companies that annually set overly ambitious performance objectives for employees employ this greyhound principle. To a point, it works. Most people achieve more when expectations are set high.

The strategy turns negative, however, when firms chasing Wall Street’s rabbit continually set “no-excuses” double-digit growth goals without regard to market realities (multiple competitors driving toward the same goals) or systemic understaffing (the “do more with less” philosophy). Consequently, many corporate leaders are caught up in a ceaseless upward spiral of stress.

Yes, the financial rewards for such success are ample, but the driving motivation is usually not greed, and certainly not job satisfaction -- it’s toxic fear. This can often morph into desperation, a dangerous mindset that in turn can spawn imprudent short-term decisions and outright cheating.

It’s unwise and unethical to ignore the business and moral implications of aggressive growth strategies that put executives under unprecedented, unrelenting, and unreasonable pressure.

On one level, it’s a matter of values. Work-life balance should be more than a rhetorical ideal. A good company cares about its people. The path to career success should not be littered with the ruins of failed marriages and neglected children.

On another level, it’s long-term self interest. Without an abundant and replenishing pool of talented and committed leaders, no company can succeed for long. The organizations that will pull away in the next decades are those that can attract and retain the best talent because the firms are places where those people want to work -- and that’s going to take a lot more than money.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 2:16 PM | Permalink | Leave a Comment (0)

When it comes to sports, every coach and athlete should pursue victory. When it comes to business, every executive should pursue maximum performance.

Victory in sports is easy to measure – it’s about winning games and championships. Maximum performance in business is usually measured in terms of growth in profitability, revenues, and market share.

I understand and strongly identify with a passion for victory in sports and growth in business. Committed coaches and dedicated executives usually perform better than counterparts who are satisfied with smaller goals.

The problem is, many sports and business organizations push the success principle to irrational extremes. It’s one thing to expect leaders to strive mightily for victory and continuous growth; it’s quite another to define success solely in terms of these goals.

Even if a “no-excuses” policy that treats coaches and executives who fall short of performance objectives as failures gets better results, it does so at a huge cost.

Morale – a positive attitude about one’s work and organization – is crucial to stability and sustainable success.

When the pressure to perform creates ceaseless stress and fear, even good and great people get worn down and worn out.

Because most people excel best when they enjoy what they do and derive a sense of worth and achievement from their work, excellence and improvement are much better standards of success than championships or “hitting one’s numbers.”

Greyhounds may run faster chasing an uncatchable mechanical rabbit, but smart people withdraw from any race that’s rigged against them.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 2:13 PM | Permalink | Leave a Comment (0)

In the wake of a continual parade of scandals, there has been talk about codes of ethics. I’ve written dozens of codes and have a healthy respect for their value as an element of a corporate culture, but I wince at the unreasonable expectations attached to these documents.

Ethics codes don’t make people ethical. They don’t make bad people good. They don't make people with bad judgment wise. Ethics codes would not have prevented most of the shocking behavior we’ve seen in recent years.

There are two aspects to ethics: discernment (knowing right from wrong) and discipline (having the moral willpower to do what’s right). A code can help define what’s right and acceptable and provide a basis for imposing sanctions on those who don’t follow it, but unless it reinforces an established ethical culture, it won’t do much to assure that people will do what’s right.

It’s proper and prudent to clarify existing laws and establish standards of conduct in areas not governed by them. Ethics codes transform moral obligations into binding rules. For example, it’s helpful to set clear parameters for using e-mail, private information, and company property; hiring or doing business with relatives; and accepting gratuities. In more complex cases, codes can mandate disclosure or certification and forbid or restrict transactions such as loans and reimbursements that could create real or apparent conflicts of interest.

To the extent we need more clarity, we need more codes. To the extent we need more character, we need a lot more.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 1:56 PM | Permalink | Leave a Comment (0)

If you were hiring a new CEO, what are the most important qualities you’d look for? Surely you’d want a high level of demonstrated competence – knowledge, experience, intelligence, vision, communication, and relationship skills and the ability to motivate, manage, and solve problems. But what about honesty, moral courage, accountability, and fairness?

Despite bold rhetoric about the indispensability of good character, many hard-driving organizations are willing to be flexible on character to get an exceptionally competent person.

Thus, many current scandals -- in business, the church, and sports – have occurred because organizations compromised their principles by recruiting, retaining, or tolerating leaders with serious character flaws who generated costly accusations of wrongdoing and undermined trust, morale, teamwork, and loyalty.

I used to tell clients that competence and character were two separate aspects of intelligent employment decisions. Now I think it’s a mistake to disconnect them. Good character is an essential aspect of competence.

Long ago, Samuel Johnson said, "Integrity without knowledge is weak and useless, but knowledge without integrity is dangerous and dreadful." Warren Buffet updated that notion: "In looking for people to hire, look for three qualities: integrity, intelligence, and energy. But if they don’t have the first, the other two will kill you."

Since it’s easier to train a person of good character to do a job well than to develop character in a skilled but unprincipled employee, if you have to choose, hire for character and train for skills.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 11:36 AM | Permalink | Leave a Comment (0)

In the early nineties I was asked to spend a full day talking about ethics with the entire California Senate. I was their punishment. Three senators had been convicted the previous year and voters had passed an ethics initiative requiring legislators to receive education on ethical principles.

This was a high-profile, high-prestige program, and I didn’t want to be naïve about the political realities and rationalizations in Sacramento, so I spent days interviewing senators and staffers.

During one interview a senior staffer confided, "We need this program. People lie a lot up here." I wondered if I should act surprised. ("Lying in politics? I’m shocked!") But before I could respond, the staffer added, "I hardly ever lie."

"Gee," I thought to myself, "do you hardly ever take bribes?"

Although his statement sounded like a confession, he wasn’t embarrassed at all. In fact, he was proud. "Hardly ever lying" made him morally superior. In a culture where lying is common, the occasional liar feels like a saint. In the land of the blind, the one-eyed man is king.

I’ve heard variations of this justification -- "I’m not so bad as long as others are worse" -- so many times I’ve given it a name: The Doctrine of Relative Filth.

It’s a rationalization used by cheating athletes and coaches, dishonest businessmen, and others who minimize their moral shortcomings by comparing themselves to those who have even lower standards.

What a pathetic defense! People of character aren’t satisfied being better than someone else. They strive to be the best they can be.

This is Michael Josephson reminding you that character counts.

Posted by Josephson Institute Editor at 11:23 AM | Permalink | Leave a Comment (0)