In the past week, I have been repulsed by news of one of the biggest scams of all time. Bernard Madoff, head of Bernard L. Madoff Securities, allegedly conned scores of wealthy investors, lulled by promises of higher than average yearly returns. Madoff was the CEO of a company with over 200 employees. We don't yet have all of the facts. However, what is remarkable to me is that so many, including Madoff employees, did not question consistent financial returns that defy explanation. How could so many allegedly smart people believe that there are special algorithms that are immune from market forces? And how could so many ignore the red flags of a leader who became gruff and angry when questioned about his strategies?
Our economic and financial systems are in a state of collapse. One of the lessons that I have learned in my research on tangles is that leadership matters. A leader's job is to set direction, lead the way, and hold the organization responsible for results. A Board of Director's role is to hold company leadership accountable for results. What is missing in this equation is accountability for the process of getting results. The "how" really matters.
I predict that the window for truly ethical leadership now exists. However, we all need to finely tune our antennas. Madoff investors ignored the age-old investment maxim, "if it seems too good to be true, it is too good to be true." One characteristic of truly ethical leaders is that they invite discussion and are transparent about their decisions and direction. This engenders trust, which in turn helps prevent Crooked Tangles.
