Five Rules to Create a Character-Driven Company

help your team make character-driven choices this year. Here are the business implications of issues such as white lies, false impressions and forgiveness

This time of year, most people spend time reflecting on the past twelve months and anticipating a fresh start in the upcoming year. And if you own a business, you may have your own version of this custom. Right now you’re probably busy taking inventory, organizing your books, and evaluating what you did right (and not so right) in hopes of preparing yourself for a profitable new year. Instead of focusing solely on financial matters, why not take a good hard look at the character of your company?

When you really think about it, the Ponzi schemes and shady CEO scandals that made headlines throughout 2009 boil down to a lack of solid character. Character does matter in business. And right now, with the holiday season upon us, it’s a great time to sit down and define your goals for the character of your company with your employees.

That’s right. Business leaders need to get serious about defining what their company stands for—and share those values with employees.

It’s amazing how few leaders take the time to do this. They may feel uncomfortable discussing character issues, or maybe they’ve never given a lot of thought to what they really stand for themselves. But just resolving to sit down and articulate your beliefs is a powerful exercise—and one that yields powerful results.

Not exactly certain what constitutes good character? You’re in luck! There are five simple rules that every employee, from the top of the corporate ladder on down should follow to ensure that they have a rock-solid character next year:

Don’t Tell White Lies. We’re all guilty of telling a white lie or two. In fact, most of us do it on a daily basis and hardly even notice anymore! And while we may consider those little untruths to be harmless, consider that instructing your receptionist to tell a caller that you’re out of the office when you really aren’t is a reflection on your own character. White lies are still lies, after all. Think of all the business scandal stories from this past year and how many of them were the result of dishonesty—and how that dishonesty shattered the lives of so many people.

White lies are like the gateway drug to bigger offenses. And even though telling the truth is often the hard and unpopular thing to do, honesty is rule number one to developing sound character. Tell the truth because it is the right thing to do, and encourage your employees to do the same. In the end it protects your personal integrity, and honors, rather than diminishes, everyone who hears what you have to say.

Keep Your Commitments. Have you ever made a business promise that you didn’t keep? Perhaps you didn’t follow through with a promised promotion, or skipped out early on a day when you promised to work late. And given the past year’s turbulent economy, it’s even more likely that you found yourself in a situation where your mouth wrote checks in the good times that your bank account can no longer cash. Cutting expenses is necessary and understandable, but breaking promises is not—even if it turns out to be more costly, inconvenient, or time-consuming than you estimated.

Don’t take your promises casually and explain to your employees that they shouldn’t either. This is a real test of “practice what you preach,” as your employees will be less inclined to follow this guideline if they don’t see you doing the same. Before you commit to anything, make certain that you can live with the worst-case scenario resulting from what you’re agreeing to, and always, always follow through. Do what you said you’d do, regardless of the cost.

Go the Second Mile. One of the most common character flaws in leaders and their employees is that they do just enough to get by; they come to work and do just enough to get paid and just enough not to get fired. That’s not good enough. Think about it this way: If the majority of people are doing only the minimum, then those who give just a little bit more of themselves will stand out and be highly valued—a great asset for any company or individual to have. So think about what you can do to go the extra mile each day. It may mean volunteering to take on an extra project, coming in on a Saturday once in a while, or taking a night class to improve your skill set. Whatever that extra mile may be, the benefits will be well worth your sacrifice.

Some of the most successful business men and women will readily admit that they are no smarter than their less successful counterparts. They simply outwork them, outthink them, and, as a result, outperform them. By doing what others were unwilling to do, going where they were unwilling to go, saying what they were unwilling to say, learning what they were unwilling to learn, and risking what they were unwilling to risk, they earned a success and a lifestyle that the “just enough” crowd was unable to attain.

Don’t Give False Impressions. When it comes to business, false impressions are everywhere. From misleading advertising campaigns to padded resumes, you won’t be hard pressed to find examples of people trying to make others believe things are better than they really are. But you have to be upfront and honest with those you work with, or you may lose your credibility and build up bitterness and resentment in a once-valuable business relationship. Think about the ways that you or your company may be misleading others, and find ways to stop it.

There are a few simple things you can do to get your employees and organization on the road to transparency. For starters, stop any misleading advertising you may be engaged in—and if you’re not sure if it’s misleading, then it probably is! Make sure that you aren’t spinning feedback to make someone feel as though they’re doing better or worse than they really are. And certainly don’t mislead any potential job candidates or employees about realities concerning compensation, advancement, or future plans. Cultivating a culture of honesty in your organization will only bless your business.

Reconcile and Forgive Immediately. Holding grudges is a common and unfortunate consequence of competitive business. Resentment builds up when employees leave organizations, mistakes are made, or when coworkers feel slighted. This is an appropriate time of year to take an inventory of grudges you may be nursing, people you’re resenting, and those with whom you must reconcile. It doesn’t matter how far back the offense was. If you’re carrying it around, it’s affecting your performance, whether you realize it or not. Suggest to your employees that they think about any hard feelings they may be harboring from the past year, and encourage them to make amends.

When you are busy harboring resentment and holding onto grudges, you are taking time and precious energy away from the things you could be doing to increase your productivity and your business. Bring closure to past offenses. Identify amends you must make, with whom, and do it quickly. By holding onto these hard feelings, you aren’t hurting the other person; you’re hurting yourself! And having a clear conscience and a sound heart is a key component to having a solid character.

Still skeptical about your ability to pull off this end-of-year exercise—not to mention how well received it’s likely to be? Just give it a try. You’ll be pleasantly surprised by the results. But if you can’t bring yourself to discuss these matters openly, just living them sends a persuasive message.

It’s one thing to sit down with your employees and share your values, but the best way to get the message across is to make sure you are setting the example yourself. You have to walk the walk. If you haven’t been doing so, make a point to change that in 2010. Others in your organization will be sure to follow. And you’ll see firsthand that a business that is based on strong core values and a shared vision is one that’s headed for long-term success and prosperity.

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