High Performance, High Integrity
When he served as general counsel and senior vice president for law and public affairs at General Electric Co., Ben W. Heineman Jr. was one of the top officers responsible for ensuring compliance 
with the law and rules set by the company. So why does Heineman’s new book, “High Performance with Integrity” (Harvard Business School Press, 2008), put so much emphasis on why values are vital in today’s marketplace?
In the debut of our “First Person” series, where leaders give us their firsthand knowledge and experience on various issues, HOW Online’s Dov Seidman asks HOW contributor Heineman: Is it counter-intuitive for a lawyer to advocate for what some consider the “softer” issues of business — to encourage the concept of high performance with high integrity and not merely high performance within the bounds of the law or high performance in compliance?
- Part 1 of the series
- Read Part 2 of the series
- Read Part 3 of the series
Heineman
Ben W. Heineman Jr.: “The job of the chief financial officer and the HR leader, as well as the general counsel, is obviously functional expertise, but it’s also to take into account what is in the broad, enlightened self-interest of the company. People in those jobs should be concerned about law, about ethics, about reputation, about governance, about citizenship and about the public policy that serve the public good as well as the private interest.
Their job descriptions should be capacious - about broad issues of business’ role in society — not narrow and highly technical. I do not think this broad definition, which I followed in my [general counsel] job and was fortunate in being able to execute, is a reversal of roles. I think it is harkening back to a lawyer-statesman ideal, which has a long history in our country.
In my book, the fundamental argument is that there are two foundational goals of a contemporary corporation, and indeed of global capitalism: the fusion of high performance with high integrity.
Obviously, high performance is a sustainable provision of high-quality goods and services that benefit all stakeholders, and not just shareholders but employees, pensioners, suppliers, customers, communities, regulators, the media - all stakeholders. Within this performance there also must be a balance between risk-taking and risk management. That’s high performance, but it must be fused with high integrity
High integrity has three elements: One is the robust adherence to the spirit and letter of the formal rules, legal and financial; a second element is basically the global ethical standards that bind the company and its employees that are adopted in the enlightened self-interest of the company; and the third, and maybe the most important element, is the values exemplified by the employees — the values of honesty, fairness, candor, reliability and trustworthiness.
One cannot have a powerful, productive, unselfish organization unless employees have those values, and they will not have those values unless the company has the first two elements of integrity: a robust adherence to the spirit and letter of the rules and the adoption of global ethical standards.
The reason the values are so important is that bad organizations are all about turf-fighting and back-biting and selfishness. Great organizations are about empowerment and openness, where people work together to actually accomplish the mission. I believe that the values that I’ve just emphasized — honesty, fairness, candor, reliability and trustworthiness — are at the core of a great, empowered employee workforce.
And I do not believe the paramount task of fusing high performance with high integrity is a trade-off. I do not believe that it is something that is off-boarded to the staff. I do not believe that the costs are greater than the benefits.
‘High performance with high integrity’ is the foundational goal of a sustainable, durable corporation. In this day and age, there is benefit to avoiding catastrophic risk, and the failures of either can have catastrophic impact on companies big and small. Penalties, fines and settlements are now in the billions as opposed to the tens of millions as they were 15 years ago.
When the reputation of a company is shredded — because, for example, it imports poor-quality or death-dealing components or ingredients from overseas sourcing — it can have a devastating impact on the company. High performance with high integrity avoids that kind of impact. But there is another reason this fusion is foundational: I deeply believe — and I think we tried at GE, but we didn’t always succeed — that there are affirmative benefits attained from choosing high performance along with integrity. There are benefits in the company, in the marketplace and in the global society.
In the company, for example, I believe that to motivate and retain people, you need to have high integrity. You need to have an HR system that is based on honesty and fairness, and not on corrupt cronyism. You need to have the kind of open dialogue between employees where there’s not naked self-interest but instead genuine trust and cooperation — and you need to have fair and good processes for producing products that motivate, even inspire, employees. And there’s not a question in my mind that performance with integrity has a powerful benefit in the marketplace: People who are viewed as honest and fair do better with customers and suppliers than those who are double-dealing and try to gouge the last nickel out of commercial relations.
In this era of globalization where there are fundamental questions about the benefits of capitalism - questions that are especially pertinent after the financial meltdown — the credibility of global capitalism depends on operating with a uniform culture around the world based on high performance and high integrity. Values cannot be delegated; they must suffuse the company from bottom to top.
The very essence of corporate global citizenship is high performance with high integrity. It creates the fundamental trust upon which the tremendous power and freedom of capitalism ultimately rests. The current global economic crisis shows that when that trust is eroded, corporate power and freedom become constrained.”
Last 5 posts by Ben W. Heineman Jr.
• The Leadership Failure That Led to Salary Caps - March 4th, 2009
• Beyond What the Rules Require - December 15th, 2008
• Engaging Company Leaders - December 8th, 2008
December 8th, 2008 at 11:41 am
[...] Read Part 1 of the series Heineman [...]
December 15th, 2008 at 6:39 pm
[...] Read Part 1 of the series [...]