SENSEI LEADER Movement Update: How do leaders become corrupt?

Jim Bouchard examines how corrupt leaders are created by the systems around them, using Theranos, Wells Fargo, Volkswagen, and Enron as examples. Fear of loss and incentive structures drive unethical behavior. He argues that middle managers must find the courage to confront it.
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Hey, Jim Bouchard here with your Sensei Leader Movement Update for this morning. It's Tuesday and it's beautiful outside. You know, one of the things that we always talk about in our workshops is the importance of having a day of reflection. And if you're up here in New England, today's the day. The temperature's perfect, there's a nice breeze out there. Wonderful day. If you haven't scheduled it yet and you want a chance to play hooky, consider doing your day of reflection today. Ask yourself two questions, really just two questions. And the first one I'm not gonna help you with it. Who am I? And that sounds like an inane question sometimes, but if you spend some time and just fish around with that question, it's amazing what you'll come up with. And I recommend that you do that at least once a year, if not more. And the second question is, who do I serve? When we say who do I serve, I mean specifically. Names, faces, that's what you want to think about. Hey Paul, Bill, nice to see you guys. Yeah, so the two questions, if you're going to get out, do a day of reflection today. Who am I and who do I serve? Leaders need to know exactly who they serve. Quick updates and then we'll get into today's topic by request today, which is kind of cool. Got a lot of stuff going on. First of all, we're going to be leaving in just a few minutes. We're going to head down to Boston for a meeting with Nana Wanjau. She's our partner from Kenya. She's flown in from Kenya partly to meet with us, then she's going off to— she's very involved with Rotary and she's going to a Rotary convention in Canada. And then she's going to join her husband and spend some quality vacation time, which is kind of cool. If you haven't seen her, go to brandingbeyondborders.com. Brandingbeyondborders.com. First of all, she does that and she also is leading a global initiative to help women become leaders, entrepreneurial leaders in particular, in Africa and around the world. And that's called Power Woman International. Terrific. Terrific organization. Hey Alan, how you doing? Eric. I say Alan, I'm reading you backwards. Nice to see you, Eric. Glad to see you too. It's nice to do this live stuff. It's a lot of fun actually. I was nervous the first couple of times but it's feeling pretty comfortable now. It's good when you chime in. And please chime in with any questions, comments, ideas, all that stuff. So we're going to meet with Nana, talk about the Kenyan tour coming up. Hey Walt, good to see you too. Kenya. We're going to have— we're looking at probably the end of August. I think it's the end of August and that's shaping up. So hopefully we'll be in Kenya there. Before that, we've got a couple of trips I want to make sure that I mention these folks. NAWIC in Orlando, that's coming up in just a couple of weeks. And make sure— get in touch before. We're planning on having some hospitality there. So glad to— you know, I'd love to be with you guys anyway. We had a great time with you down in Nashville. So if you want to spend some quality time, just get in touch before and we'll reserve some spaces for that. And CU Leadership Convention in Las Vegas, and that's coming up in August. And make sure that, you know, you again get in touch for that. We're going to have some hospitality there. Some folks have already chimed in and they're going to meet us there. We'll do that right in the hotel. We'll be at the Mirage, so we'll do the hospitality right there and have some time to really talk about what we can do to promote human-centric leadership, not only in your own organizations but beyond. That's what we're talking about, you know, when you get involved with this movement. We've changed this a lot. It's not just a program, it's a movement, and we need your help. We need you guys on board. We want to change— well, change or support your organization. I shouldn't always say change because most of the people we work with, most of the organizations we work with are already on board with this. It's about keeping that culture healthy and strong and moving it forward. And then where it's needed, changing it. And so that's what this is all about. All you need to do to be part of the movement is subscribe. Just go to thesenseileader.com and subscribe, and you're in. And that's how you get access to the free online workshops that we'll be doing. We got a couple more of those scheduled coming up, and all the other free ebooks and things that you get. A free online edition of The Sensei Leader as soon as you subscribe, and then we've got some more stuff for you. You'll see that in your email as you come along. Anyway, oh, and I forgot too, for the folks in Kansas City, yes, we're coming out early fall to do an Aspiring Leaders Workshop in Kansas City, and Alex is talking about a couple of more events there too. But we are doing the Aspiring Leaders Workshop in Kansas City with some of the CU folks out there. And that's going to be a lot of fun. Kansas City has become one of my favorite towns. We had a great trip the last time we did the— I think it was the— I'm not going to get the name right, so I'm not even going to try it. I don't want to insult anybody. But it was one of the big CU associations out there. Heartland. Heartland was it. Had tremendous hospitality there. Had a great time. So we're really looking forward to coming back and working with you guys again. Aspiring Leaders Workshop in Kansas City. Bob Comley, how you doing? I have to say, congratulations on the Eagles. I'm still licking my wounds, but hey, you waited a long time for that. I'm glad you had that moment. Next week on Walking the Walk, Jared Nichols. Somebody I met recently, he's a futurist. We're going to see what that's all about, all right? And I can tell you from talking with Jared a couple times now, it's not what I thought it was, and it's not what probably some of you are thinking. So Jared Nichols on Walking the Walk next week. We'll get that up early in the week. So now on to today's topic, corruption. Folks, I wanted to talk about corruption. It's interesting because we're getting some input from our friends in Kenya and Africa and also here in the States as well. It's, you know, this is a global problem. And I'm working on a blog for that. That'll be on the Sensei Leader blog, hopefully the end of the week when I get back. But the fact is this, this is the theme that I'm working on: We did it. There's corrupt leaders, we make them. We make them. And that's what we really need to think about. How do we make them? Well, in business, we work willingly for them without question. One of the stories I've been following, it'll be highlighted in that blog piece, is the Theranos story. If you're not familiar with that, Theranos was one of the one of the biggest, fastest startups in history, and Elizabeth Holmes became an overnight hero there. Basically what it was is they had said they had invented this machine that was able to do multiple blood tests with a single prick, a single drop of blood, and it seemed to be the next greatest, biggest thing in the medical world. Well, it turned out to be a sham. It was a fake from the beginning, really. I mean, I do believe that they started out with best intentions, but they never, never brought this thing to fruition. Fruition, and yet continued to just mine investors for billions of dollars. This is a huge, huge enterprise. She was just indicted, and it looks like there'll be some more action. Finally, we see that. But the reason I say that, you know, because it's easy to point the finger, and we should, at the top, but also, when the story comes out, and I'll do a lot more writing on this, you'll see it coming up on the blog, a lot of people went along with it. A lot of people went along with it. The similarities are striking. Same that you saw in the Wells Fargo case. The same that you saw in the Volkswagen fraud over the emissions. Same that you saw in Enron. It's the same, it's the same, it's the same every single time. That person at the top in a business sense just can't execute all this corruption by him or herself. It just doesn't happen that way. They've got to find people that are willing to go along with it. And that's certainly the case in Theranos. So we make our our corrupt leaders that way. We also make them politically. You know, it's horrible that the cliché has become, "Well, I'm always choosing between the lesser of two evils," all this and that. You know, in spirit of full disclosure, some of you might not know this, that I ran for Congress last cycle. I was nominated by the Libertarian Party here in Maine and ran as a third-party candidate. That gave me a pretty interesting study in the backroom end of the whole political process. And I'll tell you, I had my eyes open. Let me see what Eric's saying here. I feel corruption is partly based on the fear of loss. Yes, absolutely. And it's rational. That's a huge point. We're going to be working on this in an online workshop coming up. It's absolutely rational sometimes. For instance, let's take the Wells Fargo case. If you get a department full of people and you cause them to be fearful of losing their jobs, you cause them to be fearful of not getting the incentives that they need to make ends meet, well then they're gonna behave, you know, they're gonna respond to those incentives. And that's why we so often emphasize here the importance of inspiration over motivation. You can motivate with incentives and you're going to get an expected outcome. In that case, they incentivized bad behavior. And that's exactly what they got. Not that everybody there was a lousy person. They were— they had rational fears for their own career and supporting their families. So yes, absolutely, that's what happens. Fear motivates that. Inspiration is much more powerful and much more positive. If you can get people to dial in to that purpose, that emotional and intellectual connection to a higher purpose, then that becomes much more powerful. But you got to be careful there because that can be corrupted as well, can't it? I mean, there's many cases where extremely inspirational leaders ended up being very corrupt and caused a lot of damage and a lot of loss of human life even. So yeah, back to the idea that we elect the willing. I mean, we elect, we willingly elect corrupt leaders, and we do. And the reason is this: because they can purchase us. And again, it's a rational decision when a politician's running on the idea— well, one of the ones that I'm looking at right now is this idea of free college education. It sounds great, doesn't it? It sounds like a great thing to do. But there's nothing that's free. Everything that you have that may be free, someone else paid for. Someone else is paying for. And so I'd rather see it if a community decides they want to subsidize education and find that— let's talk about it that way. Let's say we want to offer subsidized education up to a certain point, whatever the case may be. But the point is that that politicians can use that type of thing to purchase— that's what I'm talking about, purchasing the votes. Okay, so when a better idea comes along, it's hard to fight that. And we do that with grants, we do that with tax breaks, we do that in business— but business people do it with regulatory favors and things like that. So we put these people in place willingly, and that's the thing that we really have to look at when it comes to corruption. Yeah, we do need to weed out and identify. There was a huge one in the CU world recently. There was a CEO of a big CU in New York who was found that, well, he was taking, skimming funds, lots of money too, in the millions, skimming funds for his own personal use for gambling and things like that. So in that case, you know, I don't know, I want to see the rest of the story. Did people know about it? It'll be interesting to find out. There are people that can hide these things. There are people that can move along pretty cleverly and we don't know. But that's the exception, not the rule. And of course we have to go out and we have to root out those folks. This guy was rooted out, thankfully. The cost to the organization, the cost to your community when we don't face corruption is enormous. We respond to short-term gains and at what cost? At the cost of, of, uh, of human life sometimes, but certainly in business the cost of thousands, millions, billions of dollars. The Volkswagen case is a perfect example of that. How much did that emissions fraud case cost Volkswagen? We don't know yet. They don't know yet. They're still incurring those losses and it's going to be quite some time before we really have the full accounting for that, but it's expensive. So anyway, that's the anecdote. Let's cut to the chase. We have to take more responsibility on the front lines, in middle management. When we see somebody that's operating corruptly, it's up to us to have the courage to face that and the courage to address it. And there may be fear, like Eric keeps saying, that fear of loss. Certainly if I oppose a corrupt leader in business, I might lose my job. They may challenge, they may taint my reputation. That's the way it is. That's the way it's going to be. But you have to make that decision to go forward, if we want to go forward that way. So anyway, hey Tim, I hope you got your hips back together now. Hope that Big Ass Rooster is going to be out on stage again pretty soon. I keep missing your shows. I want to see that pretty soon. If you don't know Tim Emery, Not only is he a friend, he is, I would say, one of the greatest guitarists in the United States, if not in the world. Tremendous, tremendous artist, and I mean that from the heart. Really, really great, passionate guy. Go out and see his groups, Tim Emery. And if you don't know Buck Dancer's Choice, if you're a musician and you're anywhere in the East, you know what Buck Dancer's Choice is. And that's where That's where Tim hangs out in the daytime, so make sure you check him out. So anyway, quick recap and then I'm going to wrap things up. We're off to Boston to meet with Nana Wanjau. She's the founder and CEO of Branding Beyond Borders, and they're the folks— she's the one who's going to bring us to Kenya in a few weeks. Other upcoming events, the NAWIC conference in Orlando. Can't wait to see you guys. We had a great time with you in Nashville. Can't wait to hang with you again. CU Leadership Convention in Las Vegas. And then the Aspiring Leaders Workshop in Kansas City. Next week on Walking the Walk, Jared Nichols, futurist, like I said, he surprised me, I think he's going to surprise you too. It's going to be a lot of fun. And blog series will be coming out based on what we were talking about today, based on how we can best face and address corruption. From the heart, I think one of the best things we can do is get together on this movement to promote human-centric leadership. If we bring the humanity back to leadership, we're going to be fine, we're going to be okay. All you need to do is go to thesensileader.com. And subscribe right there. You get the free ebook, The Sensei Leader, and then you're gonna get in the line, and that's how you find out about the free online workshops and whatnot that we're doing for subscribers. So there you go. Hey Luke, how you doing? Time for you to get back and strap some pads on again. Rick Daffrey, good to see you, Rick. And if I missed anybody, I apologize, and we'll do this— I'm gonna try to do an update tomorrow. We're gonna be in meetings most of the day, but if not, probably back with you on Wednesday or Thursday. So In the meantime, have a great time, and like I said, if you want the day of reflection that we're always talking about, take it today. It's gorgeous out there if you're in the Northeast, so there you go. Okay, thanks a lot, and we'll see you soon.
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