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Moral Intelligence : Enhancing Business Performance and Leadership Success
Doug Lennick and Fred Kiel

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Format: Paperback, 336pp.
ISBN: 9780132349864
Publisher: Wharton School Publishing
Pub. Date: August 2, 2007

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Description and Reviews
From The Publisher:

There is a powerful correlation between strong moral principles and business success.

In this book, two globally respected leadership experts illuminate that connection, define the specific competencies that comprise "moral intelligence," and show exactly how to promote it throughout your organization.

Drawing on extensive original research, Douglas Lennick and Fred Kiel demonstrate how the best performing companies have leaders with a strong moral compass and the ability to follow it -- even in a world that may reward bad behavior in the short run.

Lennick and Kiel identify and help you build the moral skills leaders need most, including integrity, responsibility, compassion, and forgiveness. They offer realistic guidance on being a moral leader in both large organizations and entrepreneurial ventures: guidance reflecting decades of experience coaching executives at the very highest levels.

Moral Intelligence also introduces the breakthrough Moral and Emotional Competency Inventory (MECI): an indispensable metric to assess where you and your organization stand right now.

In recent years, companies have discovered the value of Emotional Intelligence (EI). But EI isn't enough: only leaders with strong moral intelligence can build the trust and commitment that are the foundation of truly great businesses. Be one of those leaders, lead one of those companies, with Moral Intelligence.

The business case for Moral Intelligence
How winning executives use "MI" to outperform their competitors

Promoting Moral Intelligence in your business
Step-by-step techniques for both established and entrepreneurial organizations

Understanding the core competencies of Moral Intelligence
Focusing on what matters: integrity, responsibility, compassion, and forgiveness

"Baking in" character, principles, and moral skills
Choosing principled leaders, and supporting them with a culture of principle

Breakthrough metrics for evaluating your organization -- and yourself
Using the powerful new Moral and Emotional Competency Inventory (MECI)

Discover the secret that makes great leaders and builds great companies:

Moral Intelligence

Master specific competencies for putting your principles into practice

Get past the false conflict between doing right and doing well

Promote moral intelligence throughout your organization, one step at a time

Endorsed by Daniel Goleman, author of the breakthrough bestseller Emotional Intelligence

Excerpt from Moral Intelligence

George Kline was a venture capitalist. For those who knew him in the business world, he seemed to be a person of high integrity and truly "Minnesota nice." But in 2003 George was sentenced to six and a half years in federal prison and fined $5.25 million for insider trading. His two sons were also convicted of felonies. News reports at the time recounted how trading stock tips over coffee breaks at the IDS Center in downtown Minneapolis had mushroomed into a massive deception that engulfed George, his sons and several business associates.

Contrast this to Craig Ueland's story. Craig is the CEO of the Russell Investment Group in Tacoma, Washington, a highly respected and admired international financial services company with over $100B in assets under management. It is owned by Northwestern Mutual Life Insurance Company in Milwaukee. Craig told us that when he was in college, it occurred to him that it would be useful for him to decide what principles and values he would honor as he entered his business career. He was an undergraduate at Stanford at the time and said he can still recall where he was walking on campus when he had this insight. Craig explained, "I decided that I would live by three principles. First, when faced with a major business decision, I would try to do what was best for society, next what was best for the business and finally, I would consider my own needs. Secondly, I decided that until I was thirty (later he changed this to age 35), when faced with a career decision, I would choose the opportunity that allowed me to learn the most and secondarily would consider the money involved." Then Craig told us his third principle. "I vowed that I would take all my vacations!" This formula has obviously worked very well for Craig. He's at the peak of his career, is happily married and is a very engaged father for his two small children.

When George and Craig were both young college students, we imagine it would have been difficult to see any major differences between them – both from good homes, both very ambitious and both excited about moving into a business career. But Craig deliberately charted his life course in a way that George apparently neglected. One is now the CEO of a major global business and the other is participating in a government sponsored residential program – a federal prison camp!

In the middle nineties, well before the scandals of Enron and WorldCom and before the dot.com bubble burst, we had a conversation both authors vividly recall. Doug was then Executive Vice President of what?, for American Express Financial Advisors. Doug was well-known for developing a high performing sales force of financial advisors, and was an early champion of emotional intelligence skills training at American Express. Fred, a pioneer in the field of executive coaching, was a psychologist and co-founder of a leading executive development company, and then as now, actively engaged in helping senior executives improve their personal performance as leaders.

As we talked, we realized that we had some common ideas about the ingredients of high performance that we were both struggling to conceptualize. We agreed on the importance of emotional intelligence—the constellation of self-awareness, self-management, social awareness, and relationship management skills that are now commonly regarded as critical to success in the workplace. 1 We discovered, though, that neither of us thought emotional intelligence was sufficient to assure consistent, long-term performance.

In the course of nearly thirty years we had collectively worked as business executives, entrepreneurs and leadership consultants to chief executives and senior leaders of Fortune 500 companies, large-privately held companies, and start-ups. We had each coached hundreds of leaders. The most successful of them all seemed to have something in common that went beyond insight, discipline, or interpersonal skill. We also spoke about noted public figures with masterful emotional intelligence skills who would sway like a reed in the wind when faced with morally loaded decisions. We hypothesized that there was something more basic than emotional intelligence skills-- a kind of moral compass--that seemed to us to be at the heart of long-lasting business success. We decided to label this "something more" moral intelligence.

Moral intelligence is "the mental capacity to determine how universal human principles should be applied to our values, goals and actions." In the simplest terms, moral intelligence is the ability to differentiate right from wrong as defined by the universal principles. Universal principles apply to all people, regardless of gender, ethnicity, religious belief or location on the globe.

Our shared notion that moral intelligence was key to effective leadership led us to wonder: How do leaders get to be moral—or not? Are people born that way? Does our human 'hardwiring' predispose us to be concerned for others? What accounts for the wide differences in moral behavior among leaders? Have we learned anything new about human nature over the past few decades that could help us understand the impact of moral sensibilities on leadership behavior? What do the fields of philosophy, social biology, developmental psychology, cultural anthropology and the neurosciences have to say about these questions?

Before progressing to further develop our hypothesis, we hired crackerjack researcher Orlo Otteson, to help us review the academic literature on the moral dimensions of human nature and experience. Orlo first reviewed 1800 article abstracts referencing moral leadership from the fields of business, religion, philosophy, anthropology, sociology and political science but found few in-depth moral leadership discussions. Most articles focused on a specific kind of leadership (business, political, religious), on a specific leadership problem, or on the general need for honest and upright leadership. He then surveyed nearly 400 books and articles on morality from the disciplines of philosophy, psychology, biology and neuroscience, distilling their insights as they applied to leadership and organizations.

Meanwhile we began to organize our observations of the many hundreds of leaders we had encountered in our work. As our conviction about the importance of moral intelligence grew, we conducted in-depth interviews with 28 CEOs and 42 other senior executives to learn the precise ways that they deployed their moral intelligence to achieve important personal and business goals. We also discussed our ideas with many talented leaders and colleagues whose penetrating feedback helped us deepen and refine our approach to moral leadership.2

Scientific research supported our initial notions about the importance of moral intelligence for individuals, organizations, and societies. But it was our interviews and observations of leaders that taught us exactly how the best of them used their moral intelligence to overcome obstacles, consistently outperform their rivals, and quickly pick up the pieces when they occasionally missed the mark.

Analyzing their experiences, we have concluded that strong moral skills are not only an essential element of successful leadership, but a business advantage as well. Indeed, the most successful leaders in any company are likely to be trustworthy individuals who have a strong set of moral beliefs and the ability to put them into action. Furthermore, even in a world that occasionally rewards bad behavior, the fastest way to build a successful business is to hire those people with the highest moral and ethical skills you can find.

Business leaders have gotten a bad rap in the first years of this decade. Yes, of course, there are the "bad eggs" and they get a lot of press. But most business leaders are not like those in the newspapers. Consider, for example, a story we heard from Peter Georgescu, Chairman Emeritus of Young & Rubicam, who built a large advertising and marketing company and is widely known as an inspiring leader.

Back in the 1980's, Warner Lambert approached us because they wanted to diversify their consumer products by selling sunglasses. They already had a celebrity spokesperson lined up, and they wanted us to advise them on how to roll out the new product. They told us we were competing with five other agencies to produce the best campaign. After we did the research, our group concluded that Warner Lambert wasn't going to be able to get enough market share to make the new product line successful. We had a lot of debate about whether to present a campaign anyway, but finally, our group went to Warner Lambert and said, "We know this isn't what you want to hear, but we think the sunglasses line is a bad idea." We explained our reasoning. They looked a little surprised, said, "thank you," and that was the end of the meeting—we had no idea what they thought.

Then a few weeks later, Warner Lambert called us and said, "You know, we agree with your analysis. No other agency was smart enough or honest enough to tell us, but you did. We have decided not to launch the line. Because of your honesty, though, we are going to give you some other business with us, and you won't have to compete for it."

Of all the executives we have queried about their beliefs and values, not one has hinted that they are driven to get to the top at all costs, or that diddling with the books is a reasonable tactic for achieving results. Likewise, none have stated that their work is only about increasing shareholder value. True, we might have been hearing politically correct answers, but with only a little bit of further questioning, we discovered all the leaders we interviewed had a moral compass—a set of deeply-held beliefs and values—that drives their personal and professional lives. They revealed beliefs such as: being honest no matter what; standing up for what is right; being responsible and accountable for their actions; caring about the welfare of those who work for them; owning up to mistakes and failures. They told us vivid stories about how such beliefs played into the choices they made and the way they behaved. For some, it was the first time they had spoken out loud about their moral compass and its contribution to their business performance, because many of those we interviewed think they shouldn't wear their beliefs on their sleeves, and that discussions of moral values don't belong at work. We think work is exactly where moral values should be—and be discussed.

Why? All the leaders we interviewed recognized the importance of values to their business success. But the courageous ones who routinely communicate about their core beliefs and values – personal values as well as universal human principles they endorse – have discovered a great source of organizational energy. When a leader is explicit about what he or she believes and values, it becomes much easier for others to hold him or her accountable. Furthermore, it allows others who share those beliefs and values to say to themselves, "Hey, I agree with that. This is why I come to work, too! This is a place I can be myself and really be inspired to produce results." When a leader is explicit about what he or she believes and values, creates a vision, strategy and goals aligned with those values, and then behaves in alignment with all of that – followers respond with deep trust of their leader.

Four years into our research and experimentation with moral intelligence tools, the new century began and with it the corporate accounting scandals that dominated its headlines. We realized it was time to go public with our findings about the relationship between morality and business performance. While business practitioners were now defensively eager to discuss compliance-based ethics, no one we knew was focusing on the personal character, principles and moral skills that must be baked into every leader and every organization that wants to ensure long-term sustainable results.

The research which forms the basis of this book is largely observational and case-based.

Over the next several years, we plan to conduct quantitative research in partnership with academic and business institutions. We will be studying the relationship between leaders' moral intelligence and the long-term financial performance of their companies. But leaders who face today's urgent business challenges can't afford to wait for further research to confirm the importance of moral intelligence to their success. Countless leaders we have coached and trained in the last few years have told us that our methods for enhancing moral intelligence are making a difference in their own performance, helping them inspire higher performance in their workforces, and contributing to better financial results.

We offer this book as a roadmap for leaders to find and follow their moral compass. Although we believe that doing the right thing is right for its own sake, we are convinced that leaders who follow their moral compass will find that it is the right thing for their businesses as well. This book is not about telling you what is right or wrong. And it's not about helping you try to become a moral paragon. We are all imperfect, none more so than your authors. Though we all want to be our best, most ideal selves, we face daily obstacles and temptations that threaten our performance as leaders and our integrity as human beings. In this book we hope you will find the tools to become the best leader you can be. You—and your organization—deserve nothing less.

Leaders Interviewed

We are deeply indebted to the large group of leaders who contributed to our thinking and research. Our interview subjects were especially generous with their time and candid in their self-assessments.

Douglas Baker

CEO, Ecolab Inc.

Dan Brettler

CEO and Chairman, Car Toys, Inc.

Kenneth Chenault

CEO & Chairman, American Express Company

Stan Dardas

CEO & Chairman, Bremer Financial Group

Lynn Fantom

CEO ID Media

Paul Fribourg

CEO & Chairman, Conti-Group Companies

Peter Georgescu

Chairman Emeritus, Young & Rubicam

Harvey Golub

Chairman of the Board of Directors, Campbell's Soup Company, and Chairman and CEO (retired), American Express Company

Brian Hall

CEO, Thomson Legal & Regulatory Group

Don Hall, Jr.

CEO & Chairman, Hallmark Cards

Dick Harrington

CEO of The Thomson Corporation

David Hubers

CEO American Express Financial Advisors (retired)

Ken Kaess

CEO, DDB Worldwide

David Kenny

CEO & Chairman, Digitas, Inc.

Mike McGavick

CEO & Chairman, Safeco Insurance Company

Mark Oja


Larry Pinnt

Chairman, Cascade Natural Gas

Keith Reinhard

Chairman, DDB Worldwide

Spenser Segal

CEO ActiFi

Dale Sperling

CEO, Unico Real Estate Company

Jay Sleiter

CEO and Chairman, BWBR Architects

Jim Senegal

CEO & Chairman, Costco, Inc. (scheduled)

Mayo Shattuck

CEO & Chairman, Constellation Energy

Lynn Sontag

CEO MENTTIUM Corporation

Craig Ueland

CEO, The Russell Investment Group

Charlie Zelle

CEO & Chairman, Jefferson Bus Lines

Ed Zore

CEO & Chairman, Northwestern Mutual Ins. Group Christine

Steve Adler,

Senior Editor, Wall Street Journal

Jim Berrien

President, Forbes Magazine

Brenda Blake

VP International Payment Group, American Express

Walt Bradley

Financial Advisor, Thrivent Financial for Lutherans Sam Samuel Bronfman Former SVP of Seagrams, Inc.

George Brushaber

President, Bethel University

Kevin Carter

Director of Diversity, Safeco Insurance

Rick Clevett

VP HR, The Carlson Companies

Eric Drummond-Hay

Safeco Insurance

Dave Edwards

SVP International Information Management, American Express

Patrick Grace

Former SVP, The Grace Corporation

Jim Greenawalt

SVP Executive Development, Thomson Legal & Regulatory Group

Brian Heath

SVP & General Manager, American Express Financial Advisors

Lori Kaiser

SVP, Cray Computer Co.

M'Lynn Hoefer

SVP, MENTTIUM Corporation.

Mike Hughes

SVP of Underwriting, Safeco Insurance

Gary Kessler

SVP Human Resources Honda America

Diane Kozlak

Sales Executive, MENTTIUM 100 Group

Ken Krei

President, Wealth Management Group, M&I Bank

Karen Lane

Former Governor's Staff, State of Washington

Mike LaRocco

President Personal Lines, Safeco Insurance

Dale Lauer

President, Small Business Insurance, Safeco Ins.

Harvey Leuning

Associate Pastor, Gloria Dei Lutheran Church, St. Paul, MN

Ann Levinson

Deputy Director, Seattle Monorail Authority

Don MacPherson

Co-President of Modern Survey

Christine Mead

Chief Financial Officer, Safeco Insurance

Pam Moret

EVP of Products & Marketing, Thrivent Financial for Lutherans

Eric Morgan

SVP Lawson Software (Former)

Rowland Moriarity

Founding Director, Staples and Petsmart

Allie Mysliwy

SVP Human Resources, Safeco Insurance

Gary O'Hagen

President of Coaches Division, IMG

Carla Paulson

SVP of Human Resources, Bremer Financial Group Jim Porter SVP HR, The Carlson Companies

David Risher

Former SVP Amazon.com

Pat Roraback

VP, M&I Bank

Jim Ruddy

Chief Legal Officer, Safeco Insurance



Joe Schiedt

VP, M&I Bank

John Schlifske

SVP Northwestern Mutual Insurance

Jim Thomsen

SVP Distribution, Thrivent Financial for Lut

Resource People

We greatly appreciate our many colleagues and mentors whose input has helped sharpen our thinking about the moral dimensions of leadership. They include:

Rick Aberman, Ph.D., psychologist, emotional intelligence expert and coauthor of Why Good Coaches Quit - And How You Can Stay in the Game

Jeffrey M. Baill, Attorney at Law, Yost and Baill LLP

Reuven Bar-On, Ph.D. , University of Texas Medical Branch, in the Department of Psychiatry and Behavioral Sciences, where he directs research in emotional and social intelligence.

Richard Boyatzis, Ph.D., Professor and Chair of the Department of Organizational Behavior at the Weatherhead School of Management at Case Western Reserve University, and coauthor of Primal Leadership: Realizing the Power of Emotional Intelligence

Robert Caplan, Ph. D. Director, Beach Cities Health District, an organzation charged with promoting mental and physical wellness in three adjacent communities in Southern California.

Cary Cherniss, Ph.D., Director of the Rutgers University Organziational Psychology Program, professor of Applied Psychology and coauthor of The Emotionally Intelligent Workplace

Stephen Covey, Ph.D., author of The 7 Habits of Highly Effective People whose conversations with Doug in the early 1990's reinforced early versions of our alignment model

Robert Emmerling, PsyD, consultant and researcher specializing in the application of emotional intelligence concepts in the workplace.

Jim Garrison, president and cofounder (with Mikail Gorbalhev) of the State of the World Forum and author of America as Empire

Roy Geer, Ph.D., psychologist, consultant, and co-author (with Doug) of "How to Get What You Want and Remain True to Yourself"

Daniel Goleman, Ph.D. Codirector of the Consortium for Research on Emotional Intelligence in Organizations at Rutgers University, author of Emotional Intelligence, Working with Emotional Intelligence, and coauthor of Primal Leadership: Realizing the Power of Emotional Intelligence

Marilyn Gowing, Ph.D. Vice President for Public Sector Consulting and Services with the Washington office of AON Consulting.

Jennifer Hugstad-Vaa , Ph.D., professor, St. Mary's University Minnesota

Stuart Kantor, Ph.D. , co-founder and principal of Red Oak Consulting, an executive development firm..

Kathy Kram, Ph.D., professor of Organizational Behavior at the Boston University School of Management.

Richard Leider, founding partner of The Inventure Group and author of Repacking Your Bags, the Power of Purpose, and Life Skills

Jim Loehr, Ph.D., performance psychologist and coauthor of The Power of Full Engagement: Managing Energy, Not Time, Is the Key to High Performance and Personal Renewal and author of Stress for Success

Fred Luskin, Senior Fellow at the Stanford Center on Conflict and Negotiation cofounder of the  Stanford University Forgiveness Project and author of Forgive for Good

Rowland Moriarty, Ph.D., Chairman and Chief Executive Officer of Cubex Corporation and former professor, Harvard Business School.

John Nicolay MBA, MBA instructor University of Minnesota

Richard Price, Ph.D. professor of Psychology and Business Administration at the University of Michigan and Senior Research Scientist at the Institute for Social Research

Tony Schwartz, coauthor of The Art of the Deal and The Power of Full Engagement: Managing Energy, Not Time, Is the Key to High Performance and Personal Renewal and

author of What Really Matters: Searching for Wisdom in America

Hersh Shefrin, Ph.D., professor of Finance at the Leavey School of Business, Santa Clara University and author of Beyond Greed and Fear

Lyle Spencer, Ph. D. President, Spencer Research and Technology, co-founder of Competency International, Cybertroncis Research Fellows, Director, Human Resource Technologies, author and independent

Jeff Stiefler, CEO Digital Insights

Kathryn Williams, Ph.D., co-founder and principal, KRW International

Redford Williams, Ph.D., Professor of Psychiatry and Behavioral Sciences, Professor of Medicine, and Director of the Behavioral Medicine Research Center at Duke University Medical Center.

Larry Wilson, founder of Wilson Learning and Pecos River Learning Center , author of The One Minute Sales Person, and Changing the Game: The New Way to Sell, and coauthor of Stop Selling, Start Partnering

1 These skills were highlighted in Goleman, D. (1998). Working with emotional intelligence. New York: Bantam Books.
2 List of those we interviewed and with whom we discussed book concepts appears at the end of the Introduction

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About the Authors

Douglas Lennick led 14,000 professionals and support teams at American Express Financial Advisors to unparalleled success. Today, in addition to his work as a partner at Lennick Aberman, he continues to work directly with American Express CEO, retaining the title of EVP and focusing on workforce culture and performance. He is known worldwide for his expertise in driving business results by improving managers' emotional competence.

Fred Kiel, Ph.D., co-founder of KRW International, Inc., brings over 30 years of experience to his work with Fortune 500 executives on building organizational effectiveness through leadership excellence and aligning organization with mission. Kiel is often called the "father of executive coaching" for his pioneering work in this field. Before founding KRW, Kiel worked with senior executives in private practice, developing a rigorous data-gathering and customized development process designed to provide executives with transformative feedback. Several of Kiel's clients have achieved the rank of CEO.

Table of Contents
1Good Business3
2Born to Be Moral19
3Your Moral Compass37
4Staying True to Your Moral Compass63
7Compaqssion and Forgiveness105
9The Moral Leader
10Leading Large Organizations
11Moral Intelligence for the Entrepreneur185
Epilogue: Becoming a Global Moral Leader207
Appendix A: Strengthening Your Moral Skills215
Appendix B: Moral Competency Inventory (MCI)227
Appendix C: Scoring the MCI235
Appendix D: Interpreting Your MCI Scores241

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