ROI (I = Integrity)

Anonymous act of honesty in Beijing

2008-03-21T23:12:00.000-07:00

Last year, while touring my parents to Beijing China to fulfill one of their dreams, we experienced an incident most tourists try to avoid, losing a wallet (literally). However, it was through an anonymous act of integrity by an ordinary Chinese, we believe to be a construction worker at the Beijing Olympics site, made for a memorable visit. Below is an excerpt of the trip by my dad:

Our visit to Beijing, China was a trip of a lifetime. The tours of Tianamen Square, the Forbidden City, the Heavenly Temple and the Great Wall of China, among others, were simply amazing. Our three-day visit was capped with a spectacular Chinese gymnastics evening show that we saw at a local theater and Mom’s shopping at what appeared to be the biggest mall on a large boulevard - closed to vehicular
traffic - not too far from the 5-star Beijing Hotel). We never expected to see so much free trade and capitalistic enterprise in a communist country that has been under authoritarian rule for almost half a century. This is truly mind-boggling.

As awesome as all these had been to us, the most amazing thing happened when we visited the site of the 2008 Beijing Olympics. While touring the huge area still under construction, my wallet slipped off my side pocket. As soon as we returned to the hotel, I called the credit card and banking companies about the loss and they promised to send immediate replacements. But shortly before we retired for the evening, my son received a call from the front desk informing us that the Olympics police headquarters, about 30 miles away, were in possession of my wallet.

After an hour trip in a taxi accompanied by a hotel receptionist who acted as our translator, we retrieved my wallet with everything in it - family pictures, credit cards, ATM cards, and about $200 cash in various currencies. Mom, my son, and I could not believe what had happened. My son offered to give a reward to the Chinese worker who apparently found my wallet but the officer-in-charge said it was not necessary.

4 months of absence, 5 things about me

2007-01-13T16:09:00.000-08:00

I apologize for the 4 month absence, but I've been caught up in life's juggling act and blogging was one of several balls I had to drop so that I can keep the other (albeit, more important) balls moving, i.e. family, work, health, etc.

I've also been unsuccessful to get someone else to drive for a while so I decided I'd keep driving while you guys continue to enjoy the scenery as we journey along. Instead of having a really cerebral discussion on integrity like friends in a university coffee shop, I thought of just blabbing away on all sorts of topics. A good friend of mine sent me an e-mail over Christmas tagging me as one of 5 individuals as part of this 5 things meme where he shared 5 things about himself that I'm unlikely to know about, and I reciprocate and pass on my 5 things to 5 other people.

Thanks Kevin for choosing me and below are 5 things about me (notice that I would rather be known by my alias - Synapse, since this blog was not intended to be about me nor promote anything or anybody else but the topic of return on integrity):

Like most teenage kids growing up in the U.S., cars are an important part of life. So following Kevin's example, my first car was a 1967 Mustang coupe which I drove home from Portland Oregon to Fremont California, a 12-hour trip without a functioning gas gauge and radio!
I now own a pet Cockatoo which my wife gave as a gift on my last birthday. I named him/her Noah. Noah makes sure I spend more time with him/her than my wife.
When I was around 10 years old, I joined a contest where I outdrank all others in finishing a large Coke bottle (less than 1 liter) the fastest. I won a basketball, but ended up throwing-up most of what I drank.
One of my favorite books was given to me by my dad - Self-Renewal, by John Gardner.
My first job was delivering newspapers for the San Francisco Chronicle to 50 subscribers at Escondido Village at Stanford when I was 12 years old. I got paid $50 per month and delivered 7 days a week, including the bulky Sunday newspapers!

Enough of me and look forward to more babbling on related topics.

Why do the right thing? Part 2

2006-08-05T16:45:00.000-07:00

Why do the "right" thing when everyone else is doing the "wrong" thing? The previous post talks about psychological reasons and character traits (upbringing, shame, religion), as well as physiological reasons why people do the right thing. I'd like to explore other factors that affect the choice of taking the right or wrong path: courage, caring for self or society, discernment (or wisdom), and mortality. These are all complex topics on their own and will take several posts. I've solicited assistance from others and I'm hoping to expand this 'conversation' to include these experts.

First of all, let's be clear on a couple of things. We described this introspection we're taking as a journey and I've just volunteered as our tour guide (for now), but have no claims on being the righteous guru. The other is that we have all decided to make it this far in our journey because we believe we will become better human beings as we travel together. Let me offer some words of inspiration from an unnamed French philosopher:

We are not human beings having a spiritual experience.
We are spiritual beings having a human experience.

Whether you're religious or not, it's hard to argue against the 'spirit' inside each of us that enables us to do amazing things. Any spirited child of the world, from whatever religious upbringing or none, affluent or poor, can easily be distinguished from a child that has given up on the world and spiritless. I believe it is this inner strength or courage that helps point us to the right path. A recent article entitled "New Rule: Hire a courageous CEO" highlights the shift from charismatic leaders to CEOs who "have the courage of your convictions" according to Cisco CEO, John Chambers. Intel CEO, Immelt agrees that you must be willing to spend time "in the wilderness with no love," describing the oftentimes lonely road to the right path.

Do the right thing. Why?

2006-06-24T20:41:00.000-07:00

In the preview to Dead Man’s Chest, the sequel to the hit movie Pirates of the Carribean, the heroine Elizabeth Swann tells Captain Jack Sparrow, “This will be a moment when you have the chance to do the right thing." The roguish Sparrow responds with, “I love those moments; I like to wave at them when they pass by.”

We go through these same 'right or wrong' decisions hundreds of times a day, most of it occuring subconciously. There are those that we don't even think about, such as allowing pedestrians to cross as you drive by an intersection. But we inevitably face decisions requiring sleepless nights since it may make the difference between continuing to struggle or experiencing some Earthly pleasure (e.g. money, sex, chocolates, etc).

Call me naive, but I believe humans are born to do the right thing, with the exception of a few genetic anomalies. One may arrive at the same conclusion by simply having a conversation with young children who have not been corrupted by adult misbehavior. An elder relative of ours offerred an advice to my wife and I by suggesting that we try to have more than one child. She said that you'll never know if one of them turns bad! I listened to this worldly advise, but deep down, I was listening to yet another adult who had not lived up to her responsibility for raising responsible children.

There are lots of books about HOW to do the right thing and live a life of integrity (Steven Covey) or ethics in business (Noel Tichy). But I think that most of us struggle with WHY make the right and oftentimes difficult decisions to:

pay the right amount of taxes
be truthful to your family even if no one will know
be honest about a product's shortcommings even if competitors lie about theirs

One of the posts talks about the last example which many of us have faced in a competitive sales situation. I somehow look at this as a spectrum of decisions between win-at-all-costs and the other -- a search for the customer who understands and therefore pay for the value of your service or product. The former could get you the sale immediately, the other one could take longer, but may provide you with repeat orders -- which most sales people know are the more profitable customers.

In my search for the answer to WHY people aim for integrity in public (e.g. work) and private (e.g. family) life, I've come across some postings on the web by Margaret Thorsborne, who is the Managing Director of Transformative Justice in Queensland Australia. In her book, The Seven Heavenly Virtues of Leadership, she referred to John Braithwaite, an eminent Australian criminologist, who attempted to answer the question: Why it is that most kids (and adults) do the right thing most of the time?

socialisation about ethics, morals and values, usually a product of upbringing, religion, school
conscience; it feels right; knowing the difference between right and wrong
beliefs about 'do unto others'
it's easier to do the right thing than the wrong; there are rewards for doing the right thing
fear of consequences: loss of liberty, income and fines
fear of disappointing significant others or being excluded
Braithwaite proposes a sociological view of these influences and has concluded that shame plays a significant role in the development of that mechanism which we call conscience---our sense of right and wrong.

Whatever your reason is for considering a life of integrity, it's good to know that there are corporate examples of integrity in action such as the recent Coke-Pepsi espionage case, where a potential leak of a secret Coke formula was prevented by the 'right' action by Pepsi executives who assisted undercover FBI agents.

Thorsborne went on to include other studies proposing biological mechanisms (such as shame, fear, anger, excitement) that governs our behaviour and motivation. She concludes with a description of the life of integrity as a journey:

From a sociological and biological perspective, it seems that the getting of integrity is determined by the kinds of influences we have been exposed to over time. But I think it's also fair to say that each of us is a 'work in progress'. The shaping of a person's qualities and character is surely a lifetime job, rather than the result of some static genetic trait like blue eyes or height. Of course, there are those who claim 'well, that's just the way I am', implying that change is not possible. I believe this is a cop-out, and an excuse for not doing the hard work needed to do things differently.
So, for me, integrity is rather more of a journey than a destination. I don't think I'm there yet. I'm not old enough for a start. I'm still learning.

Going back to the issue about honesty in competitive sales situation, my belief is as follows:
As the web evolves to include information about buyer and seller reputations, I see the world of selling achieve a higher level of equilibrium where buyers will get exactly as much value as what sellers have communicated to them. On the other hand, reputations of sellers will be determined by customer experiences which directly impacts buyers' future success. Our current imperfect world allows people to hide dishonest actions, but the Internet and the etailers reputation systems, blogs, Google Earth, and other forms of communication, will eventually render everyone -- naked. You might as well start your road to integrity and nakedness...today.

Life is Difficult

2006-06-11T02:47:00.000-07:00

Life is difficult' is the first sentence from a book entitled 'The Road Less Traveled' by Scott M. Peck. Once in a while, I remind myself of this line when I ponder about difficult choices in life. This is not to say that I don't indulge in a vacation in an exotic destination and stay in a 5-star hotel once in a while. It's just that from my experience, those vacations where I truly enjoyed myself, required a lot of hard work and preparation -- before the vacation. My interpretation of 'Life is difficult' by Mr. Peck, is that the worthwhile benefits of living is derived from hard work.

If you do a Google search on 'integrity in business' or 'honesty in business', you'll find millions of hits. There are pointers to organizations that promote these principles as 'Secrets of Success' such as the Impact XXI whose mission appears below:

To engage People of Influence in all major areas of society – Corporate, Business and Professional, Sports, The Arts and Media, Politics, Education,and Military – to be “BEST” leaders with integrity who use their influence, creativity, and resources to fulfill their life purpose, make a significant difference, leave a lasting legacy, and leverage their influence along with their peers to advance initiatives designed to help solve the world’s major issues.

I don't intend for this blog to change the world. As I stated a month ago, I simply wanted to thank those that helped point me the 'right' direction and see if I can have a conversation with others who like me, are thankful for choosing honesty more often than dishonesty.

I've come across other leaders and organizations promoting the path to honesty and integrity, and have even mentioned Warren Buffet as one of those in my previous posts. However, you will discover that some of these postings lead to a discussion on spirituality and religion. While I consider myself a religious person, one of my best friends is an atheist and a person I consider of high-integrity. It is my hope with this blog to have an inclusive conversation with others who have come to the same discovery that 'life is difficult' -- regardless of your spiritual state.

Worthwhile Returns

2006-06-02T16:48:00.000-07:00

I received an e-mail from a close friend and ex-college roommate who was excited that I had started this topic about the value of integrity in business. For 2 decades, he's served his company which promotes integrity as their key principles. However, he felt 'uneasy' about the mention of returns and I've taken an excerpt of his response:

Clearly, upholding one's Integrity is not the be$t way to maximize return$, but it is a great way to maximize the happiness of all involved in a corporation while being financially feasible.

Note that I copied his e-mail feedback verbatim, including reference to '$.' Another colleague whom I highly respect for his technical capability recently told me how he avoided the business side of things since he thought that the only way to succeed is to be good at 'BS' (he wasn't referring to a Bachelor of Science degree).

I'd like to thank my friends for getting us to focus on the other important factor of ROI which is on 'returns.' More specifically, what are worthwhile returns on the practice of integrity? My friend was rather skeptical about economic return$ and I would agree to a certain degree. He also alluded to other intangible returns which I would categorize as worthwhile returns. However, in the business of commerce, the measure of success is evolving, but clearly defined by our stock markets.

I'm confident that few would argue the track record of Warren Buffet and Charles Munger, Chairman and Vice-Chairman of Berkshire Hathaway, Inc. I've taken an excerpt from a Goldman Sachs report of the historical outperformance of Berkshire stock versus the Standard and Poor (S&P) index:

The annual percentage increase in the price per share of the Berkshire Class A Common Stock exceeded the annual percentage increase in the S&P Index by 1.5, 0.1, 11.1, 13.5, 13.8, and 17.1 percent over the 1, 3, 5, 10, 15 and 20-year periods, respectively, ending December 31, 1997.

Incidentally, Berkshire's compounded annual return according to the report was 35.51% for the 20 years ending June 17, 1998. Not bad for a company that practices good corporate governance and value integrity in business. I've taken an excerpt from the 2005 Annual Report and Buffet's famous Owner's Manual:

Berkshire’s long-held acquisition strategy is to purchase businesses with consistent earning power, good returns on equity, able and honest management and at sensible prices. Businesses with these characteristics typically have market values that exceed net asset value, thus producing goodwill for accounting purposes.

Buffet outlines 13 Owner-related business principles in his Owner's Manual. The 12th principle refers to their views about communications:

We will be candid in our reporting to you, emphasizing the pluses and minuses important in appraising business value ... We also believe candor benefits us as managers: The CEO who misleads others in public may eventually mislead himself in private.

My message is simple: you have several choices in life. One can take you to a path of great wealth. The other, albeit more difficult path, leads to wealth measured in economic and non-economic terms were "worthwhile returns" continue to accrue beyond our Earthly existence.

Integrity of Character

2006-05-27T17:00:00.000-07:00

My wife gave me a book entitled The Daily Drucker last year for father's day and it's one of a few books I see myself reading through retirement. As the title suggests, it contains '366 Days of Insight and Motivation for Getting the Right Things Done' authored by Peter Drucker. The first day deals with Integrity in Leadership and begins with:

The proof of the sincerity and seriousness of a management is uncompromising emphasis on integrity of character. This, above all, has to be symbolized in management's "people" decisions. For it is character through which leadership is exercised; it is character that sets the example and is imitated. Character is not something one can fool people about.

I believe many of us understand what it means to have integrity of character, but the challenge for all of us is how we consistently demonstrate integrity. I've mentioned before how lack of integrity has cost me my job as a teenager, and we now know after the Enron verdict what happens to top-level executives if they fail to demonstrate integrity even if they haven't broken any rules. I've always had a view that only 20% of business decisions are black and white, the rest is gray. For example, what would you do if you catch one of your top-performers cheating on his expense report or saying a sexist remark? Let's make it even more challenging and say that this top-performer has been delivering 110% of his targets for the last 4 quarters?

Most of us will probably ask, how much did the person cheat the company or what was the sexist remark. It's not black and white, but these are the "people" decisions that Peter Drucker referred to which symbolized integrity of character in an organization. In fact, I was faced with a similar decision just this week and I chose the path of termination over an issue of a couple of hundred dollars. I still hold some respect for the individual especially how he dealt with the separation, but I felt that it was simply the right thing to do.

I should highlight a more subtle message in Drucker's message which has to do with what happens to other people when a leader demonstrates integrity of character. He says, " it is character through which leadership is exercised; it is character that sets the example and is imitated."

I was having a discussion with a colleague who described the dilemma of his best-friend who was an officer in the military and a man of integrity. He said that he wants to be a role-model for the younger officers, but he realizes that those in more prominent leadership positions all the way to the generals, have compromised their integrity to move up the ranks. To be a more visible role-model, he finds that he would need to make a few 'practical' choices.

I've had my share of 'career-limiting' decisions, but I've also discovered that as I make the tough decisions such as firing a top-performer for cheating, I found more and more people deferring to my judgement. I didn't have to be a VP to influence people; as Drucker puts it, I just had to demonstrate character. Furthermore, my overwhelming goal as of 13 years ago when I got married and 10 years ago when our son was born, was to be the best role-model for my wife and son. I don't need to be a president or a general to achieve this.

Return on Integrity

2006-05-20T16:46:00.000-07:00

I'm hoping to compile anecdotes from business leaders out there who believe that personal integrity is key to success and it pays to be honest. I thought of using ROI (return on investment), but substituting 'I' with Integrity, as another way to state my objective. That is, if you believe as I do, that one can derive positive returns on his investment on living a life of integrity, then I ask that you help me be role-models for our future generation of business leaders.

The other reason why I'm writing this is to thank my parents for being wonderful role-models of integrity. Like all parents, they've had their share of wrong decisions, but they've made every effort to do the right thing even if it meant having less food on the table. In the end, they were blessed with five kids whom they've been able to put through college.

I've mentioned integrity several times, so just to make sure that we're talking about the same thing, I'd like to reference wikipedia with it's definition of integrity:

INTEGRITY, n. 1. quality of being honest and up-right in character : commercial ~ , 2. condition of being complete.

Integrity comprises the personal inner sense of "wholeness" deriving from honesty and consistent uprightness of character. The etymology of the word relates it to the Latin adjective integer (whole, complete). Evaluators, of course, usually assess integrity from some point of view, such as that of a given ethical tradition or in the context of an ethical relationship.

While this blog focuses on business, but by definition, integrity applies to ones personal life as well.

A quick blurb about me
I've been working since I was 12 delivering newspapers in Palo Alto (California), spent almost 2 decades working at a large software company, and now president of a startup company (in Asia). I've discovered 'easy' ways to make money and I've seen people of low-integrity move up the corporate ladder ahead of me. I was also fortunate enough to be fired from work in my teenage years for doing something dishonest. I've been married for 13 years and have been blessed with a wonderful boy. Just like my parents, I'd like to teach our son that it pays to be honest and there are lots of people in this world like his mom and dad.

I've got several stories to share, such as my first lesson in dishonesty - being fired at a place where my dad also worked, my corporate battles and trade-off with carreer mobility, and how twice I got my cellphone back after falling out of my pocket while watching a movie.

But, I'd like to stop now and find out if there's anyone out there who shares my views. I'm looking forward to hearing from anyone.