by Bob Vanourek

Embracing Ethical Leadership can be a game changer in your life, as it was for me. But just what is ethical leadership? And how does ethical leadership differ from ordinary leadership and management?

Management involves planning, budgeting, and administering. Management watches the bottom line of the organization, focusing on, for example, profitability for a business. Management has a problem-solving focus, organizing groups, staffing them, and largely directing and controlling people, often defining boundaries for people.

In management, relationships are based on one’s position power, title, and authority. Management is task-oriented, often telling people what to do or not do. The work is transactional: “You do this for me, and I’ll do that for you.” Management aligns people through policies, procedures, and systems using good “head skills” and relevant expertise. Management often keeps distance from subordinates, valuing stability, conformity, and efficiency.

Organizations need good management to keep the wheels of the organization moving in the desired direction.

Leadership overlaps with management but also has substantive differences. Good leadership has managerial skills; and good management has leadership skills.

Leadership is adept at creating a vision of where the organization should be going in the future as well as the strategy for how to get there. The eyes of leadership shift from the bottom line of management to the horizon, from the problem-solving focus of management to opportunities to be exploited or created. Leadership identifies an overall mission for a primary stakeholder, such as maximizing shareholder value in a for-profit business.

Leadership is often more people-oriented than management and helps to form a culture of “how we do things here,” which guides the behavior of the people. Leadership empowers people through policies and procedures, and by authorizing people to take certain actions, often reducing the boundaries by which people can act.

Leadership invokes personal as well as positional power, so people tend to follow the personality of the leader. Leadership entails listening more often to people and enlisting their ideas in the work. Leadership understands emotional intelligence, knowing how to connect with people and relate to them, engaging them and showing a healthy degree of self-confidence. Leadership honors what’s valuable in the past and inspires change to take the group to a better place.

Leadership of this kind has been defined as visionary, charismatic, empowering, transformational, or heroic. But leadership of this type can also be problematic because the leader was not ethical, i.e., what they achieved was morally wrong. Stalin, Hitler, and Mao were all leaders by many definitions, but they led their people, many of whom were willing followers, into tragedy because their leadership was not ethical. Steve Jobs was a genius CEO at Apple who led the firm to unprecedented success, but Jobs was abrasive and abusive to many people in my view and could have been even more successful with more ethical leadership qualities.

Ethical leadership goes beyond a mission statement and inspires people to a higher, better, and noble purpose, addressing why the organization exists. Ethical leadership focuses on creating value or positive impact for multiple stakeholders, not shortchanging some to the benefit of one. Ethical leadership builds an ethical culture, which has people doing the right things based on the shared values they have mutually defined and hold themselves accountable to. Invariably, one or more of those shared values includes integrity, honesty, truthfulness, or some synonym. Values violations are not tolerated. People are recruited, retained, and promoted based on the results they achieve and how they achieve them, i.e., in accordance with the organization’s shared values. The shared values cannot be changed arbitrarily.

Ethical leadership unleashes the talents of people by empowering them to act in accordance with the shared values. Committing to shared values can be transformational for people. Ethical leadership gives colleagues an irrevocable license to lead by the shared values, coaching people to develop their own unique talents and leadership skills. Ethical leadership listens deeply to people, facilitating the growth of others and seeing its primary role as serving others, not enriching or enhancing those at the top of the hierarchy.

Ethical leadership aligns through collaboration. The work is transformational for those involved. Ethical leadership inspires willing followers and unleashes latent leaders partly because the character of people shines through. Ethical leaders are deeply connected to their people and often let others lead while they willingly follow.

Ethical leadership is deeply in touch with people, learning where they should go, serving people, inspiring or even pushing them to move out of their comfort zones to journey to where they should be. People undertake that arduous journey in part because they trust and respect the ethical leaders, and they trust each other to travel together. The result is an organization that achieves extraordinary results ethically, because people are fully committed to their noble purpose and shared values.

Ethical leadership have been described as values-based, servant leadership, authentic, transformational, and “level 5” leadership (per Jim Collins). Gregg and I describe it as “triple crown leadership”: building excellent, ethical, and enduring organizations.

In summary, managerial skills are certainly needed for organizations to function effectively. Leadership skills are necessary too, but if the leadership is not ethical, the organization will struggle. Ethical leadership focuses on doing the right things and serving all stakeholders.

In my career, I transitioned from management to leadership to ethical leadership over a period of years. Right out of business school, I had some managerial skills. My work was acceptable to the bosses and mildly satisfying to me. As I learned more about leadership, I became more of a leader. I was growing as a whole person and operating more effectively. But the real breakthroughs came as I gradually learned to be an ethical leader, a values-based leader, a servant leader. Then people trusted me and committed to our work; our results started to soar; the satisfaction we derived from our work together skyrocketed. For all of us, ethical leadership was a game changer.

Practical Applications:
1.    Learn the basic management skills your organization needs.
2.    Learn the basics of good leadership too.
3.    Above all, commit to leading ethically and personally modeling ethical leadership.

I predict operating as an ethical leader will be the game changer for your life. It was for me.

Bob Vanourek is the former CEO of five companies, a frequent speaker on ethical leadership, and the co-author with his son, Gregg, of the award-winning book, Triple Crown Leadership. Bob’s new book is Leadership Wisdom: Lessons from Poetry, Prose, and Curious Verse.