Authored by: Mike Coates
The expression “tone at the top” has become a major theme in corporate governance circles.
In essence, it is the behavioural example that a leader sets for his or her employees to follow. It’s not something that can be captured in a code of conduct that sits on a shelf or is pinned to an office bulletin board. It has to be lived by a leader on a daily basis, and it has to be apparent to employees so it can cascade throughout the organization. Despite this, it’s surprising how often leaders forget that their behaviour is scrutinized every day and that every action they take is measured against the standards they communicate.
As chairman and chief executive officer of a national public relations firm, I’ve chosen five key standards of tone against which to measure my behaviour. This is what works for me. Other leaders with different styles may value different – but equally valid – behavioural principles.
First, and most important, you must strive for consistency of behaviour. Employees pick up on inconsistency quickly, particularly if a leader plays favourites in the company and enforces different standards for some employees.
Nothing undermines a leader’s credibility more than saying one thing and doing another. It’s the repetition and predictability of a leader’s daily behaviour that inspires employees with confidence that they’re following someone on whom they can depend.
You must set a standard of integrity that you can live up to. Integrity goes far beyond compliance with the law – it includes how clients and suppliers are treated, the transparency and honesty of communication to staff, and the fairness of the processes used to solve problems.
Nothing will erode an institution’s confidence in a leader more than failure to maintain integrity and ethical standards. Publicly traded companies in particular are under relentless pressure each quarter – even each month – to show performance against their plan and too often have tried to take shortcuts in the name of short-term expediency at the cost of long-term integrity.
3. Work ethic
Work ethic can never be overemphasized. If you habitually arrive at the office late and leave early, you’re setting a standard for everyone else to follow. If you ask people to be thought leaders, you have to be a thought leader too. If you ask people to bring in new business, you must bring in new business as well. If you’re at the top, you’re paid to be the hardest-working, most engaged individual on the payroll. If you’re not, then you shouldn’t be in the job. I once had a boss say to me, “I don’t need the smartest people working for me, because hard-working beats smart every time.”
4. Take risks
You must encourage risk-taking. In today’s highly competitive world, hard work can only take you so far. A leader needs to not only encourage innovation and creativity but to make clear he’s willing to tolerate the risk of an idea failing. If employees believe they’ll be blamed for their ideas that don’t succeed, you will never be able to foster a creative culture, and indeed are more likely to have a company of “yes” men and women.
You should instill an atmosphere of collaboration. You can’t talk about the team if you make decisions in isolation of the views of your management and employees. The most difficult challenge a leader faces is to drive internal alignment around vision, compliance with processes, and execution of the business plan. You can’t default to communications about the team or “family” if you’re seen to be authoritarian. Today’s leader has to be inclusive, has to bring people into the decision-making process, and has to be prepared to alter his views if it helps build internal alignment.
At the end of the day, it’s the leader’s tone that drives the organizational culture, which in turn drives the excellence that produces financial results. If a leader isn’t setting the right tone, it’s just a matter of time, no matter how effective the business plan, before results begin to erode.