Leading with Integrity

Creating Positive Change in Organizations

Michael Smith

• Publisher: Routledge
• Year: 2019
• ISBN:
  9780429535123
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Thanks to global news and social media, we are the most informed and socially conscious generation in history. But what are the sources of inner inspiration that guide our daily conduct and motivations in the workplace?

Far from the old Machiavellian dictum that "the ends justify the means", the reverse is often the case: the means determine the ends. This book presents the stories of business leaders who have aimed to build trust in the economy, and have delivered value through integrity, cooperation, stewardship, purpose and sustainability. It proposes the eight Cs of trust which can define the culture of organizations: contracts, covenants, competences, character, conscience, conviction, courage and change.

The book makes the clear link between personal decision-making and global outcomes and demonstrates how positive decision-making can lead to change inside organizations and beyond.

1    Why this book?

The purpose of this book is to highlight the human motivations that lead to positive change in organizations in the context of the great global challenges—human, environmental, social, cultural and political—and how such motivations can be incubated, encouraged and nurtured at the individual and organizational levels. The book addresses the role played by a leadership of integrity in business and, by extension, the global economy.

Integrity builds trust, which was seriously damaged by the banking crash of 2007–2008, and which, according to the authoritative Edelman Trust Barometer is only now, a decade later, beginning to be restored.¹

The book contains some 60 case stories of ethical best practice, stories of inspiring people and organizations, which I hope the reader will find engaging and from which lessons can be drawn.

A golden thread running through all these stories is a leadership of integrity, based on individuals’ character, displayed by all those in positions of influence. Indeed, we all influence those around us by our practices and behaviours, whatever our positions.

The book looks at the effect of people’s inner motivations which affect outcomes. Far from the old Machiavellian and Leninist dictum that “the ends justify the means”, the reverse is often the case: the means determine the ends. This was dramatically shown, to devastating effect, in the human drives combined with deregulation in the financial services industry which led to the crash of 2007–2008. Equally, organizations that are shown to be led by a leadership and character of integrity have positive outcomes, as we shall see throughout this book.

The way we do things is as important as what we do. Our aims—those of business leaders and all of us—are all important. They can be driven solely by a spirit of acquisition, often interpreted as a materialistic motivation of greed. Or they can be driven by contribution, in service to society and the wider good.

Critical to this choice are, firstly, the moral, ethical and spiritual dynamics that lie deep in the heart of a person, which affect behaviours. The people quoted in this book draw on an inner inspiration which encourages correction, direction and best practice for themselves and their organizations, especially through times of self-reflection and silence. They often make this a regular or daily habit. Secondly, this encourages a sense of purpose for themselves and their organizations towards the wider good. Thirdly, none of them claim to be paragons of virtue, though they have an intention, a willingness, towards best practice. We shall see at the end of the book how such best practice can be encouraged at the organizational and personal levels.

1    The 2018 Edelman Trust Barometer reported a “recovering belief in CEOs”—up from 37 per cent to 44 per cent year on year—as they are rewarded for speaking out on global issues.

Business leaders and all those engaged in shaping the global economy have particular skills sets. But in other respects they are just like the rest of us with all the combination of human emotions: fear, greed, hate, lust, revenge, power and self-interest; or love, selflessness, a desire to serve, integrity and a mutual interest in the welfare of others, in providing the goods, services and jobs the world needs. The choice runs through every human heart and the book touches on this aspect.

Why is the issue of a leadership of integrity in business and the economy important to me? I don’t have a business degree or an MBA. I am essentially a journalist rather than a businessman, as reflected in the stories in this book, though I was on the board of a small, independent publishing house, Grosvenor Books, in London for several years in the 1990s. As I listened to the stories captured in this book, I was more and more intrigued and inspired by them. I wanted to gather them together and write about them in the press.

My late father, Neville Smith, and his brother Basil were the fourth generation running a family wool textile mill in Bradford, Yorkshire. It was founded in 1840 by their great-grandfather, John Smith, a dalesman who started washing and combing sheep’s wool for cloth manufacture where there was a plentiful supply of water on the banks of the river Aire. His son, Isaac, became the Mayor of Bradford, twice elected by his fellow aldermen, in the 1890s. (I presented to a recent Lord Mayor of Bradford a large silver platter, inscribed to Isaac Smith by his fellow aldermen, for the City Hall’s splendid silver collection, after I inherited it from my father.)

Isaac, my great-grandfather, was one of four Bradford business leaders who, in 1893, bought and took over the running of the world renowned Salts Mill in the village of Saltaire. Its founder, Sir Titus Salt, had died in 1876 but his sons had not been able to stem the company’s debts. Isaac chaired the new consortium owning the company.² Sir Titus Salt had famously introduced alpaca wool into the British textile industry. In the village next to the huge mill, Salt had provided housing, a library and a chapel for his workforce in the paternalistic culture of Victorian businessmen. Salts Mill and Saltaire village are now World Heritage sites and the mill has been turned into a splendid arts and crafts centre famed for exhibiting paintings by the Bradford-born artist David Hockney.

Isaac Smith’s Fieldhead mills in Bradford were said to produce the finest manufactured wool tops (long fibres) anywhere in the world. My grandfather, Harold, expanded John Smith and Sons (Fieldhead Mills) in the 1930s till it employed 1,100 people. At the outbreak of World War II, my father and uncle were deemed to be in a “reserve occupation”, producing the wool needed to make uniforms for the armed forces and, it was said, the wool for King George VI’s shirts and pyjamas. So Neville and Basil were never called up into active war service.

2    Salts Mill, Maggie Smith and Colin Coates, Amberley Publishing, 2016; Salt and Saltaire, Dr Gary Firth, The History Press, 2009.

Shortly after I was born, after World War II, the family, including my two elder brothers, moved to Bank Top House, one half of an old stone farm building at the top of a bluebell wood overlooking Salts Mill. We lived there till I was 14, loving the ample garden—lawn, apple orchard, paddock and kitchen garden. After we moved from there the garden was sold and turned into a modern housing estate.

Sad to say, there were management misjudgments in running the family owned business. Harold, in the anti-Semitic culture of his times, refused to do business with the men’s clothing retailer Montague Burton, simply because he was Jewish. I have no idea if Harold was overtly anti-Semitic or if he simply feared the good opinion of his peers. But it was a costly decision. Burton bought his wool elsewhere and expanded his retail outlets into a national chain, eventually taken over by the Arcadia group. A contract with him might have secured our family’s textile mill.

Harold also borrowed money from the company in order to buy a splendid family home, Ranby Hall, in the village of Ranby, Nottinghamshire, on the edge of Sherwood Forest. It had 50 acres of estate and 11 paid staff: cook, butler, housemaids and gardeners. This was where my father grew up as a teenager. This was all very well but the good trading, which Harold expected would cover the cost of this grandeur, never came, not least due to competition from the rise of artificial fibres and rival textile businesses in southern Europe. The family business failed to invest in new technology to keep up with the competition. My grandfather had to sell Randy Hall and rent Moor Park, a country house outside Harrogate, which was, nonetheless, on a grand scale with an enormous, sweeping staircase from the entrance hall. This was where my parents got engaged. (The building has long since been converted into flats.)

The company floated on the stock market to raise capital. But it was all too late and in a sale of shares, not anticipated by my father and uncle, the company was taken over in the 1950s by a competitor group. From one day to the next, my father and uncle were told that they were out of a job. The mill was soon closed down by the new owners and the only evidence of its existence now is the name of Smith Street in the centre of Bradford, on one side of the site where the mill once stood.

Having lost everything, my parents moved to a small bungalow in the seaside village of Selsey in West Sussex, where I spent my teenage years. My tiny bedroom had to be built into the loft. For my father, it was a far cry from the splendour of Ranby Hall. Yet he remained remarkably free of any sense of bitterness over his loss.

My mother, Joan, the daughter of a tartan cloth and gabardine manufacturer from Ilkley, called it “the rise and fall of the Smith empire”. Her ancestor in Lancashire, great-uncle Samuel Turner, had been the inventor of the use of asbestos as a heat insulator. Children would play in piles of asbestos dust outside the factory as if it was snow. No one in those days had the slightest knowledge of the appalling health hazards to lungs and life that asbestos dust posed. Having this in my family history makes me all the more aware of the environmental damage that industrial processes can cause.

My elder brother, Nigel, spent most of his working life in the Bradford textile company which had taken over our family’s business, becoming its training and personnel manager, before he too retired with his wife to live in Selsey.

For myself, I had to carve out a different identity, called to serve the international network of Initiatives of Change through writing and journalism. But I could never wholly divorce myself from our family history and have retained a certain fascination with the world of business and industry, its core motivations and its impact on the world.

My baptism into the world of trade unionism came when my colleagues and I at the publishing house where we worked joined one of the print trade unions and became active London branch members for several years. We had to be union members or the artwork we generated would have been boycotted by the printing press operators in an era that militantly defended the closed shop which barred non-union labour. I was the father-of-the-chapel, the printers’ term for a shop steward, and at one time we put forward a motion to the London district council of the erstwhile National Graphical Association print trade union, in support of the international development issues raised by the Brandt Commission Report, published in 1980.³ The motion was carried almost unanimously and was opposed, surprisingly, by only one person in the packed hall: a left-wing member of the Trotskyite Militant Tendency.

I hope the stories in this book, highlighting core motivations, are a source of inspiration and enlightenment to young and seasoned entrepreneurs alike. The challenge is to raise and encourage a generation of young entrepreneurs, the world’s next business leaders, who are prepared to put into practice the highest moral and ethical standards they know.

Michael Smith, April 2019

References

Smith, Maggie and Colin Coates, Salts Mill, Amberley Publishing, 2016

Firth, Dr Garry, Salt and Saltaire, The History Press, 2009

3    https://www.sharing.org/information-centre/reports/brandt-report-summary

Part 1

The global context

2 Skin in the game

The global economy is all pervasive. It affects the daily lives of everyone on the planet—from the largest urban conurbations to the remotest villages.¹

1 The economic prospects of families in the remotest villages of African countries, for instance, can be transformed by a simple piece of intermediate technology: a bicycle. See Hans Rosling’s talk “Don’t panic” at: https://youtu.be/FACK2knC08E

• The global economy provides all the goods and services for our daily lives. It includes the jobs, incomes, education, skills, housing, health care, economic wellbeing—or otherwise—and a degree of human and social security for the billions of people around the world.
• It includes all those employed in, and supplying, the big corporations, small and medium sized enterprises, and public sector organizations which service the global economy.
• The global economy includes the purchasing choices we make about our food and clothing and their origins; the road, rail and air transport we use; our carbon footprint and our energy use.
• The global economy affects the quality of the air we breathe, the water we drink, the diseases we suffer—and the plastic we throw away, polluting rivers and oceans and killing wildlife. It dramatically impacts on climate change.
• It includes the information technology and social media we use, provided by some of the world’s biggest corporations.
• And it includes the taxes we pay—or fail to pay—to provide for our public services.
• The global economy encourages the conditions for peace, such as the Schuman Plan which integrated coal and steel production in France and Germany after World War II, laying the foundation for the European Economic Community.
• Or it exacerbates the conditions for war and conflict over natural resources, from oil in the Middle East to blood diamonds in Africa.

Anyone who says they don’t have an interest in the global economy needs to understand that the global economy has a great deal of interest in them. We all have a financial stake, whether we are owners, employees, investors or simply purchasers. We all have skin in the game.

Capital and social market economies have lifted millions out of poverty in the last three decades, not least in the BRIC countries (Brazil, Russia, India and China). Yet the capitalist economy has also led to enormous economic disparities between the world’s richest and poorest, as well as within organizations—the gap between boardroom pay and average wages. Such injustices all too easily fuel the humiliations and anger that lead to extremism and violence.

It is arguable that a consequence of the financial crash of 2007–2008 was the backlash against...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• About the author
• Preface
• 1. Why this book?
• PART 1: The global context
• PART 2: So what works? Leading with integrity
• Index