Values, leadership principles and ethical boundaries

Values derive from beliefs and convictions. In defining your values, you must decide what is most important in your life. Is it maintaining your integrity, making a difference, helping other people, or devoting yourself to your family? There is no one right set of values. Only you can decide the question of your values. When you do, you will be better positioned to align with people and organisations that share similar values.

When you have a clear understanding of your values and their relative importance, you can establish the principles by which you intend to lead. Leadership principles are values translated into action. They are like navigational instruments sailors use to get their bearings at sea, as they fix the direction of their travel with respect to the north. Principles enable leaders to prioritise their values and demonstrate which ones trump others.

After defining your leadership principles, you need a clear understanding of your ethical boundaries. These are the limits you place on your actions, based on your values and your standards. Where do you draw the line between the actions that are acceptable and those that are not?

ValuesThe relative importance of the things that matter in your life.
Leadership principlesA set of standards used in leading others, derived from your values. Principles are values translated into action.
Ethical boundariesThe limits placed on your actions, based on your standards of ethical behaviour.

Testing values under pressure

Perhaps you have engaged in exercises in which you list your values and force-rank them in order from the most important to the least. While these exercises are helpful in clarifying what is important, you do not know what your true values are until they are tested under pressure. It is relatively easy to list your values and to live by them when things are going well.

However, when it is under pressure — when your success, your career, or your life hangs in the balance — that you must decide what your values are. When you are forced to make trade-offs between your values under difficult circumstances, you learn what is most important in your life and what you are prepared to sacrifice for. Those who develop a clear sense of their values before they get into a crisis are better prepared to keep their bearings and navigate through difficult decisions and dilemmas when the pressure mounts.

Leadership principles

Principles are values translated into action. Having a solid base of values and testing them under pressure enables you to develop the principles you will use in leading. For example, a value such as “concern for others” might be translated into a leadership principle such as “create a work environment where people are respected for their contributions, provided job security, and allowed to fulfil their potential.”

All leaders operate with principles, even if they do so subconsciously. Take the basic question, “What motivates people?” Some leaders believe that people are motivated to do as little work as possible. They lead by a principle that establishes strict rules of conduct and behaviour and enforces them rigidly in order to force people to work. In response to the same question, other leaders believe that people genuinely want to do good work and find significance through their work. They operate with a principle of empowerment that gives people freedom to do their work, encourages them to excel, and trusts them to monitor themselves.

Setting ethical boundaries

Your ethical boundaries set clear limits on what you will do when you are tempted or are under pressure or when you start rationalising a series of marginal decisions. If you establish clear boundaries early in life, your moral compass will kick in when you reach your limits and tell you it is time to pull back, even if the personal sacrifices may be significant.

One way leaders understand their ethical boundaries is to use the New York Times test. Before proceeding with any action, ask yourself, “How would I feel if this entire situation, including transcripts of our discussions, was printed on the first page of the New York Times?” If your answers are negative, then it is time to rethink your actions; if they are positive, you should feel comfortable proceeding, even if others criticise your actions later.

Leading by values

Many companies these days are shifting from management by objectives to leading by values. IBM CEO Sam Palmisano used this approach to unite IBM employees as a powerful global force in information systems. When he took over from Lou Gerstner, Palmisano did not create new values or merely reiterate the values professed by founder Thomas Watson. Instead, he employed a company-wide online process in which all employees around the globe had the opportunity to participate for three days in determining what IBM’s values should be. Palmisano used the values emerging from this process to integrate IBM’s 350,000 employees into a global integrated network.

It is easy to get pulled off course. The pressures to perform, the ingrained fear of failure, and the rewards for success can cause us to deviate from our values. By knowing our ethical boundaries and testing our values under pressure, we are able to get back on track.

Adapted from

George, B., 2010. True north: Discover your authentic leadership (Vol. 143). John Wiley & Sons.

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