Oh, how the mighty fall.
Nissan chairman Carlos Ghosn, one of the world's most high profile executives, was arrested after an internal investigation revealed "significant acts of financial misconduct." Ghosn is accused of underreporting his income by millions, violating Japan's finance and exchange laws.
How would you feel if you worked for this guy? He was making $9.7 million a year, yet he lied in order to get more.
With headlines like this, are we surprised employee faith in leadership is eroding? A recent study from global consulting firm LRN found less than a quarter of employees think their managers exhibit the qualities and behaviors of moral leaders. Only 17% say their leaders normally tell the truth.
I'm guessing the numbers for Nissan are probably even lower. Nissan's web site says its corporate vision is "enriching people's lives." I don't think the board or shareholders meant for the CEO to apply the "enriching" part solely to himself. Nissan stock plunged after he was arrested.
Ghosn is not the first executive to erode his company's brand and cost his firm billions because he prioritized short-term money over long-term value.
Volkswagen CEO Martin Winterkorn resigned and seven other executives pleaded guilty in the Dieselgate scandal, after reports VW faked emission results to improve the bottom line. Wells Fargo CEO John Stumpf lost his $22 million a year job because his people were setting up fraudulent accounts to hit their sales targets.
The list of execs who've been caught is long. The list who haven't been caught is likely even longer.
I'm not shocked when lower-level people cheat to make more money. When you make $300 bucks a week, siphoning off an extra $100 from the cash register gives you a lot more money to pay bills or buy gas. If you make $50K and cheat the bonus system to get yourself another $5K, you can afford a better house. It's not ethical, but it's not surprising.
But when someone making $10 million a year lies to get more millions, it's not about money. It's about ego. The person doing it may think it's about money, but I can assure you, it's pure ego. And it's a widespread problem.
The LRN Moral Leadership study revealed only 14 percent of employees say their leaders acknowledge their own failings, and only 13 percent make amends when they get things wrong.
That, my friends, is ego on overdrive. When you decide you're the smartest person in the room and you're above making mistakes, customers and employees cease to matter. The organization is merely a vehicle to showcase how smart you are, and ranking up more and more dollars proves it.
Ego-based leadership is a recipe for disengaged employees and lack of innovation. Longer-term, it leads to a "money is everything culture" which incites the kind of cheating that makes headlines. If you can't put ego aside at the top of a company, it's only a matter of time before the rest of the company falls apart.
Leaders who do keep their egos in check reap major benefits. The Moral Leadership Study found, "When managers lead with humility, they are 22 times more likely to be trusted by their colleagues. When managers are able to make themselves small and create an atmosphere in which others can stand up and deliver a great performance, they are 11 times more likely to achieve their business goals."
If you want to avoid cheating, help yourself and your team keep the egos in check.