Howard Putnam, the former CEO of Southwest Airlines and Braniff International discusses ethics in business:
“Turbulence is inevitable and misery is optional” in business and in your personal life. Some turbulent situations can be very painful when you stick to your ethics and integrity and do the right thing. Others can be costly financially. We took on the challenge of trying to save financially failing Braniff International Airlines, a billion dollar a year company that had over expanded after airline deregulation. Due to some questionable accounting techniques and poor management of their cash, we had only ten days of cash when we arrived. That will bring a lump to your throat.
The FBI was investigating the purchasing agent for jet fuel, for taking kickbacks. He was later convicted. There was a theft ring at DFW Airport on the ramp with pilfering from luggage. We hired off duty police officers to work as baggage agents. And thanks to a tip I got from one of the baggage handlers when I was helping unload a B-727 one morning, we caught 22 of them on Christmas Eve. I had them all fired and had them spent Christmas in jail to send a message to everyone else. We also put out a press release stating the facts. When management ego and poor strategy guide a company, turbulence and unethical behavior are close behind.
The US Transportation Dept. was investigating another airline for utilizing dirty tricks in reservations and customer service to discredit Braniff with its passengers. Everywhere we looked there was unethical behavior. But we stayed the course, not lowering our standards and kept the company alive for seven months before restructuring and reorganizing it successfully through chapter 11 bankruptcy.
Nearly every organization I interact with shares with me their core competencies and core values. They all center around Integrity, Honesty and Accountability, which are all worthy beliefs and values. Every employee or associate has to understand them and believe them, in order for them to be woven into the fabric of your department or organization. If you, as a leader, believe in them, you must also be an example of them 24-7. Otherwise, it is an exercise in futility and will only end up hurting morale and productivity. How many times have you eaten an apple which was OK until you got to the core…and it was “rotten?” The same thing can happen with core values if they aren’t true all the way through.
Some people have asked me “What’s the difference between ethics, and business ethics?”
Ethics start with each of us as children. If we don’t get the proper guidance and course corrections, we begin to see life as a game where we win in any way possible. As a parent we have the responsibility every day to engrain that in our children. Over and over and over again.
As a leader in business you have the same responsibility. You don’t write an ethics code, have one meeting, give everyone copies and expect it to happen. It has to be a part of your daily routine. You have to believe it and live it 24/7. Ethics are ethics – at home, at the office, on the playing field, on the golf course, or on the freeway in traffic. Honesty, integrity, and accountability are a team and not “situational” to fit the occasion. Right is right. Wrong is wrong.
When I speak on ethics, I give examples of real life situations I have faced and had to make unpopular choices. Audiences identify with reality and place themselves in the situation mentally to see how they would have handled it.
Most people would agree General Colin Powell has an impeccable record. He is admired worldwide, myself included. He has experienced leadership roles bigger and more far reaching than I can imagine. Sometime after he resigned as Secretary of State, he was interviewed and asked about his famous speech to the United Nations, where he stated there were weapons of mass destruction in Iraq, and later all that intelligence was questioned.
He replied: “Yeah, it hurt. Let me point out that’s the same intelligence that the Senate and House relied on four months earlier, that President Bush relied on, and that President Clinton used to bomb Iraq in 1998. I wasn’t alone in believing those stockpiles were there. When people ask me if this a blot on your record? Yeah, OK it is a blot on my record. But do you want me to walk around saying I have a blot on my record every day? I didn’t lie and I wasn’t misleading. The intelligence apparently was wrong.”
On a much smaller scale we all experience the same thing. We all have small blots on our record. But if we have gathered all the facts that were available and stick to the truth, then we have to make a decision and take the responsibility for the “blot” if it occurs.
Tony Brigmon was our Ambassador of Fun at Southwest Airlines when I was CEO. When his youngest son, Luke, graduated from high school in Texas, he was a championship wrestler with a record of 55-5 his senior year. He did not get to the state championships, losing a close match. He received more than one scholarship for his scholastic and wrestling efforts, along with a great letter from the Father of one of his biggest competitors, whom he beat on more than one occasion. Here are a few excerpts from that letter, which I have Tony’s permission to reprint here:
“Luke, you have shown us what it means to be a competitor and a gentleman, what a caring and devoted son you are, and that hard work and dedication do pay dividends. When you lost, you lost with dignity and humbleness, not anger and spite. Take comfort in knowing that there will be more challenges ahead of you in life, but your attitude, conviction and perseverance will serve you well as you reap far greater, eternal rewards. Luke, these are attributes that are not left on the mat at the end of a tournament, but are very valuable characteristics that will serve you well for the rest of your life. Strange as it may seem, 10 years from now, people will not remember Luke Brigmon by his won-loss record, or whether he won a State championship. You will be remembered by who you were as a person and what impact you had on those folks around you. It has been a pleasure to watch you mature into an awesome person over the past couple of years. And, it has been fun to see you wrestle (except those times when you beat my son!). You and your family have been, and will continue to be, what this sport is all about: discipline, honor, community, respect, competition and camaraderie.”
How refreshing it is to hear a competing Father congratulate, versus complain, and what a legacy to leave in school, in business and most importantly in life. Competing fairly and taking the high road will reap the biggest rewards in the long term.
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Howard Putnam is a leadership speaker and his programs cover successful strategies, innovation, change, developing people and ethics. He authored the book, “The Winds of Turbulence“. The National Speakers Association inducted Howard into the CPAE (Council of Peers Award of Excellence) Speakers Hall of Fame in 2005. He also is accredited as a CSP (Certified Speaking Professional).
He is the former CEO of the highly successful Southwest Airlines and the first CEO to take a major airline, Braniff International, into, through and out of Chapter 11, getting it flying again in less than two years.
