Admit Mistakes

Nothing suggests strength so much as the ability to admit when you are wrong. It is nothing unusual for CEOs to make mistakes. It is a rare, indeed, for a CEO to admit mistakes. Strong leaders can admit their shortcomings.

Studies show that consumers respect a company that admits mistakes readily and corrects mistakes quickly. Think about product recalls and auto recalls. Most customers willingly return or exchange their product for a new or repaired version. And they tend not to hold these mistakes against the manufacturer for long. As Steve Jobs noted, “. . . when you innovate, you make mistakes... Admit them quickly and get on with improving your innovations.”

Of course, if you attempt to cover up or hide them, the company opens itself not only to any legal liability for the underlying actions, but also to the cover-up charges as well.

To be sure, litigation, class actions and other risks are important considerations. But as a leader, you need to find a way with your lawyers to recognize your mistakes and address them publicly. Your personal stock will soar, and your company will be known as a good corporate citizen. It can be a win-win.

(c) 2008 Adonis E. Hoffman

Reject Bad Behavior

“The truth is that good ethics sometimes is good business, but sometimes it's not. It depends on one's goals and how one defines good business. Sometimes, good ethics can end in bankruptcy. Of course, so can bad ethics. A fairer statement is that good ethics can be a very powerful business asset and that good things tend to happen to companies and individuals that consistently do the right thing and bad things tend to happen to those that even occasionally do the wrong thing. The moral obligation to live according to ethical principles is not dependent on whether it's advantageous. People of character do the right thing in the pursuit of virtue, not self-interest.”

--Michael Josephson, Founder & President Josephson Institute


Throughout history, it was perfectly acceptable for companies to engage in a conspiracy of silence. See no evil, hear no evil, speak no evil was a familiar veil behind which most companies could hide and get away with virtually anything.

But that is not the standard or expectation in today’s world. Bad corporate behavior by one company hurts all companies within that sector. It colors the public perception of corporations, leads to a lack of investor confidence, and invites unwanted regulatory scrutiny.

While no one wants to be known as a snitch, calling something out of bounds is not quite the same thing. Blowing the whistle on the bad guys sets you up as a leader with a conscience. Telling the referees that a corporate player is violating the rules of the game not only is responsible, but it is the right thing to do. Of course that makes you fair game for others. But the bottom line is that you must establish yourself as a straight shooter—a tell-the-truth-at-all-costs type of leader or you will face a credibility gap.

Don’t be afraid to step up to this level of leadership.
On the upside, you gain immense credibility among shareholders, investors, customers, the media and policymakers. The choice is yours.

(c) 2008 Adonis E. Hoffman